The Procedures of Due Diligence in KFTD’s Anti-Bribery System

With the aim of implementing Good Corporate Governance (GCG) and building healthy business practices, Kimia Farma Trading & Distribution (KFTD) ensures that the company has zero tolerance against  bribery and corruption. Therefore, an organized system—namely Anti-Bribery Management System—has been applied to monitor and administer any potential violation leading to gratification practices within the company.

To guarantee that the system runs properly, KFTD conducts a set of operational procedures, including due diligence. This procedure is believed to have specific purposes and significance  to support the implementation of the Anti-Bribery Management System. 

Due Diligence’s Purposes and Significances

To avoid violation which might lead to the potential cases, KFTD  performs due diligence. This process refers to organized activities consisting of identification, verification, and monitoring. All of them are administered by the company to ensure that every action and transaction complies with the customers’ profiles. 

In the system of anti-bribery management, due diligence is also administered to prevent corruption and bribery cases. When it is done properly, this procedure is considered effective to reduce the practices of gratification in some particular areas which carry  higher risks than the others. 

The Procedures of Due Diligence in KFTD’s Anti-Bribery System

The procedures of due diligence to prevent bribery and corruption are performed through the following activities:

1. Due Diligence for Human Resources, administered by the company during the recruitment process.
2. Due Diligence for Business Partners which involves suppliers, vendors, or contractors as the third parties and customers or joint venture as other partners. Due diligence for third parties is performed by filing the forms of the anti-bribery  system. Meanwhile, customer due diligence is done through short assessment in the forms of desktop study or reference check. 
3. Due Diligence for Company Activities with High Risks which is done in three stages:

• Monitoring financial transactions  through value and budget verification.
• Supervising new investment through feasibility study.
• Examining grand projects (with value over 200 million Rupiahs in total) during the project charter arrangement.

Following the due diligence procedures, KFTD has successfully managed the Anti-Bribery Management System to run more effectively when dealing with bribery violations . it proves that the company’s establishment is in line with the principles of good corporate governance.