When the state fails to create a secure environment

Rudijanto, Contributor, Jakarta

President Susilo Bambang Yudhoyono's order to Indonesian police chief General Da'i Bachtiar to capture the alleged masterminds of bomb blasts, Nurdin M Top and Dr. Azahari, is a re-assuring sign to improve the nation's security, but suicide bombings are not the only danger for businesses.

When a bomb exploded in front of Australian embassy in Jakarta's busy Jl. Rasuna Said in September this year, many people strongly condemned the perpetrators of the attack, especially as many innocent people became victims.

The Australian embassy bomb blast occurred just as police were experiencing difficulty in bringing to justice the suspected swindler of Bank Negara Indonesia (BNI), Adrian Herling Woworuntu.

While not as dramatic as Australian embassy bomb blast, Woworuntu's alleged swindle is believed to resulted in a financial loss of about Rp 1.7 trillion (about US$188 million) to BNI, and heightened the feeling of insecurity of doing business in Indonesia.

Whether people like it or not, threats from bombers and swindlers, combined with a weak and unreliable judicial system, are a painful reminder of the reality of doing business in this country.

Hong Kong-based security consultant Hill & Associates' president director Nick Dudder precisely identifies the threats: an opaque and unreliable judicial system, weak standards of corporate governance, and security risks in the form of civil unrest and terrorist attacks.

The US$188 million fraud case involving Woworuntu well reflects the weak standards of corporate governance in this country. The involvement of BNI's internal staff is obvious in this case, prompting police to arrest some of the bank's executives.

"In the Indonesian environment it is common for employees to take pecuniary advantage of their position and benefit from illegitimate business deals. This not only results in significant financial loss for their employers, but also loss of reputation and damage to brand names," Dudder said.

Taking all these sources of threats into account, appropriate anticipatory action by companies operating in the country is a must if they want to avoid trouble that may seriously affect their bottom line.

President director of PT Securicor Indonesia (Securicor), Bill Thomas, said that compared to multi-national companies, local companies still lag far behind in terms of security protection for their employees, customers and premises.

"Common arguments used by such local companies who do not take security measures seriously are often along the lines of: 'there has never been an incident here before', or 'who'll pay for it', or 'we can't afford it'," Thomas said.

To anticipate all possible threats, Thomas said that companies should take several steps, including acknowledging the seriousness of major incidents, and assessing the threats and their impacts in order to devise a plan.

"If this is beyond the capability of existing staff, there are consultants and security companies who can offer advice," Thomas added.

Far from people's assumptions that a security company's staff consists of muscle-bound bodyguards, many personnel in fact come from professional backgrounds in finance, accounting, law and IT.

Hill & Associates offers services to new companies planning to enter the market. It also assists existing firms in helping them evaluate risks in a particular venture prior to commitment.

The company also provides a comprehensive range of compliance and corporate ethics related services, including assisting companies conduct 'due diligence' on potential partners, fraud assessment and fraud prevention programs.

Their range of high-tech services includes protecting data networks and computer systems, and computer forensics, especially in support of commercial enquiries where it is suspected that employees may have contravened corporate policies and practices.

Hill & Associates is more of security consulting company compared to PT Secom Indopratama (Secom). This subsidiary of Japan-based private security company is a provider of both security manpower as well as sophisticated security gadgets.

Secom offers three main services, namely Alarm Systems, Management Services, and Security Guard Services and Training. The Alarm Systems service includes 24-hour online security monitoring by the company's control center, as well as supply and periodic checking of Secom's equipment and systems.

"Secom has specialized in providing security services since 1964. We combine the systems, equipment, procedures and human factors in a 'Man Machine System,'" said S. Rahardja, Secom's president director.

Meanwhile, UK-based Securicor offers a full range of security services, incorporating consultancy, manned guarding, mobile security services, cash and high value transportation with processing and storage, electronic systems, alarms and alarm monitoring.

"All these services can be supplied on a stand-alone basis, or in any combination to provide full integration, with enhanced cost benefit as a one-stop shop," Thomas said.

With over 10 years of operation in Indonesia, Thomas stresses that the company has experienced all the conditions that prevailed over that period.

Rather than setting up their own security force, companies are advised to focus on their own core business, leaving day-to-day security in the hands of professionals.

"Companies should engage a security provider. Besides being more secure to outsource it, companies can concentrate on their core business activities," said Rahardja of Secom.

However, anticipating a more complex security situation, Rahardja, appeals to all security firms to form an association of security companies in order to keep industry standards high and also to assist the Indonesian police in maintaining law and order.

In the business of avoiding and minimizing risks, Rahardja said that security companies and the insurance industry need to forge better cooperation.