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As a form of the implementation of Good Corporate Governance, the Company has established and ratified the Corporate Governance Policy, which represents guidelines on the implementation of Corporate Governance; Board Manual, which represents guidelines for the Board of Directors and the Board of Commissioners in carrying out their duties and responsibilities; Work Ethics & Business Ethics, which represents guidelines for every Garuda Indonesia’s individual on the code of conduct and in implementing the Company’s business activities with the stakeholders. The Company has also determined and continuously improved the operational procedures and technical manuals on all lines of the organization so that each function of the organization is being guided by and subject to the rules and policies that have been determined in carrying out its duties.

The main objectives of Corporate Governance Policy to be as follow:

  1. To optimize the Company’s value in order to have a strong competitiveness, both at national and international level, so that it can maintain its existence and sustainability as well as achieving its goals and objectives;
  2. To promote a professional, efficient and effective management, while also empowering the function and enhance the independence of the Company’s organ;
  3. To encourage the Company’s organ to make decisions and to take actions based on high moral values and compliance with laws and regulations, as well as awareness of social responsibility towards its stakeholders, and environmental sustainability;
  4. To promote the Company’s contributions to national economy; and
  5. To promote conducive climate for national investment.


KTKP is the main policies applicable within the Company, it is observed periodically in order to adap to developments and internal as well as external issues within the company. It is contained the general principle in conducting the Company’s activity.

Further provision of the KTKP set forth in separate manual owned by related each work unit. Each manual shall not contravene with the KTKP.

KTKP shall be the reference for Board of Commissioner, Board of Directors and any work unit below, in conducting activities within the Company, as well shall be the guidelines to implement GCG within the Company 

Code of Corporate Governance (KTKP)  

Garuda Indonesia always supports compliance with Garuda Indonesia's Code of Business Ethics and Work Ethics, and is committed to implementing it, also requires all Executive Employees from every level in the company to be responsible for ensuring that Garuda Indonesia's Code of Business Ethics and Work Ethics is followed and implemented properly by all elements of Garuda Indonesia. Furthermore, every Garuda Indonesia employee is required to sign a commitment to comply with Garuda Indonesia's Code of Business Ethics and Work Ethics periodically every year. 

Garuda Indonesia's Code of Business Ethics and Work Ethics will always be adjusted to the development of legal, social, norms, regulations and business developments of Garuda Indonesia, and will be delivered within Garuda Indonesia so that all elements can understand and actively support the implementation of the Company's Business Ethics and Work Ethics Guidelines can run well. 

Garuda Indonesia personnel are obliged to implement Garuda Indonesia's Code of Business Ethics and Work Ethics, so that the moral values adopted by the company can be reflected in attitudes, behaviors and actions. Therefore, this guideline is equipped with examples of behavior that can and cannot be displayed by Garuda Indonesia personnel. 

Business and Work Ethics 


The company provides the opportunity for all employees to be able to reach a certain level in the company in accordance with their performance and potential. The company carries out the transfer of personnel from one department to another in order to give the employees the opportunity to increase their potentials. The process of determining the transfer and promotion of personnel shall be done through the mechanism of the Human Capital Committee . Such committee is formed in several levels following the rank levels in the organization. The company has established 4 Human Capital Committee levels whose governance implementation contained in the human capital manual.

For pilots, the process of promotion and demotion determination shall be conducted through the Board of Cockpit Crew Assessors. The Board of Cockpit Crew Assessors uses a bidding system for this process. The procedure of the Board of Cockpit Crew Assessors is contained in the manual for flight operating unit procedure and also in Pilot’s Manual.

As for the cabin crew, the promotion is also conducted through a bidding system publicly announced. The procedure of this bidding system is contained in the procedure manual for cabin service unit and Cabin Crew Manual.


The management of remuneration shall include Compensation and Benefits & Perk Components. The company uses the principle of MMC (Meritocracy, Market, Company Capability) in setting this transactional reward.

Salary scheme shall be determined based on the position, competence and accountability by creating internal equity based on objective criteria and also by considering external competitiveness (market price) in accordance with the Company's ability. Salaries in the Company are grouped based on professional groups namely pilots, cabin crew and Head Office - Branch Office (HO-BO) staff with salary components that consist of fixed pay and variable pay.

The company will conduct a review on the remuneration and communicate to the workers’ union so as to create mutually beneficial conditions.

The company gives authority to official one level below the Director level to do reviews and salary adjustment for officials who have been promoted or transferred to a new position and for employees under specified term employment contract or contract employees appointed as permanent employees. The remuneration procedure is contained in the human capital manual.

Pilot’s salary is determined based on competency. The company set up a layer system for Captain’s group and First Officer’s group that applies to all types of aircraft. Adjustments to higher-layer will be applied automatically every year.

Pilots and cabin crew are entitled to a variable pay component in the form of production allowance (PA) that consists of flight allowance (FA) and travel allowance (TA). The PA component shall depend on flight hours productivity of the crew per month.

With evolving aviation industry in Indonesia, of course, the pressure in the business competition is even greater. This rapid development is also followed by external factors contributing to good or bad conditions of the Company. Such factors include macro-economic conditions, fuel price fluctuations, foreign currency fluctuations and lacking of infrastructures. The uncertainty of such factors will lead to higher risks in the aviation industry.

To overcome such challenge, it requires the implementation of Enterprise Risk Management (ERM) in the Company. As a whole, the risks that occur in an aviation company will have an impact on flight operations, customers, the company’s value, security and safety. With the implementation of risk management in every part of the Company, it is expected that the risks can be managed and controlled effectively and efficiently so as not to interfere with the achievement of the Company’s target.

Effectiveness of the Company's Risk Management System

The effectiveness of the risk management has been reviewed on a regular basis (quarterly). This review is conducted with the Company’s various lines contribution through PRO Team (Performance and Risk Officer Team) workshops, focus group discussions, and sharing sessions. The implementation of ERM is integrated with the corporate strategy. Therefore, any decision of the Company is made by considering and responding to the uncertainties in the business. Such implementation is carried out with the purpose of providing an overview of the risks that may occur so that the risk mitigation measures can be well implemented as an attempt to maintain the achievement of the Company’s expected goals.

To improve the effectiveness and efficiency of the risk management, the Company performs continuous improvement. Each year, the Company makes an assessment on the level of maturity of ERM roadmap implementation. In addition, to improve risk awareness throughout the Company’s human resources, there are some efforts that have been made. Such efforts include workshops, risk management forums with subsidiaries, banners, PRO Team certification and brochures.

Whistle Blowing System

Since 2010, the Company has built a web-based violations reporting system known as WBS (Whistle Blowing System). The implementation of the Company's Whistle Blowing System was authorized based on letter of decision of the President & CEO of the Company dated 13 August 2012 and was completed by letter of decision of the President & CEO dated 30 January 2014.

WBS (Whistle Blowing System) is a refinement system for handling reports of alleged corruption, collusion and nepotism, which has been implemented since 2006 and is adapted to the WBS Guidelines issued by the National Committee on Governance. WBS Development is one of the Company's efforts to uphold business ethics, work ethics, as well as an effort to combat corruption. The WBS system allows Insan Garuda Indonesia and other stakeholders to report alleged violations and fraud and other forms of ethical violations that occurred in the Company.

People can make an online report through a web-based system in website address: whistleblower.garuda-indonesia.com In the implementation of WBS, the Company has a policy that guarantees the protection of the identity of the complainant and will use a variety of ways to maintain the confidentiality of the identity of the complainant. This protection guarantee is intended to encourage reporting of violations that occurred in the Company and to ensure the safety of the complainant and his/her family.

Anti-Corruption Policy

The Company has established Business and Work Ethics that among others regulating anti-corruption. The anti-corruption policy has been agreed between the management and workers' union with the inclusion of one article in the Collective Bargaining Agreement regarding the rights and obligations of the parties. While the consequences for violations of anti-corruption policy are set in the human capital manual. Corruption-related violations can be categorized as disciplinary violation level II or even level III.

The Company has also signed a Memorandum of Understanding between the Company and the Corruption Eradication Commission (KPK) on 10 February 2011, to implement the Gratuity Control Program in the Company. Gratuity Control Program is an initiative program that has been implemented in order to internalize the values ​​of SINCERITY, especially the values ​​of honesty and integrity as well as good corporate governance principle.

Gratuity Control policy is based on the provision that each employee of the company is not allowed to accept gratuities and must make a report (disclosure) to the Company (when receiving any form of gifts since in difficult situation to refuse or decline). The Company has issued regulations concerning gratuity control through the Decision Letter of the President & CEO of the Company.

Wealth Report of State Officials (LHKPN)

Board of Commissioners, Board of Directors, Vice President, General Managers of Branch Offices, Officers and Chairmen of Procurement Units and the Board of Directors of Subsidiaries, are obliged to submit a wealth report to the Corruption Eradication Commission (KPK).

The Handling of Conflict of Interest

In light of the efforts to implement Good Corporate Governance (GCG), including the implementation business and work ethics as well as the efforts to eradicate corruption, collusion and nepotism (KKN) within the premises of Company, the Company is determined to create the company's operations which upholds business and work ethics and practices and which is free from corruption and conflicts of interest.

Conflict of Interest is a circumstance or condition in which there is a discrepancy between the interests of the Company and Garuda Indonesia's Personnel in individual or collective manner which potentially leads to abuse of position/title and/or which may affect the quality and objectivity of the tasks performed or decisions made that could be detrimental to the Company.

The Company has issued regulations concerning Guidelines for Handling of Conflict of Interest. The types of conflict of interest situations in the Company shall include, among others, gratification, misuse of company's confidential information, prohibited concurrent holding of positions, abuse of office, commercialization of the services, and so on. Garuda Indonesia's personnel must be familiar with various types of conflict of interests, the causes of which, how to prevent it and what actions should be taken and how to report conflict of interest situations.

In order to ensure that the handling of conflicts of interest is brought to the attention of all Garuda Indonesia's Personnel and all stakeholders associated with the Company, all Senior Staff in the Company shall act as a role model in enforcing the handling of conflicts of interest, and shall socialize and supervise and monitor the implementation of the Guidelines for Handling of Conflict of Interest.

Any violation to the provisions of the Guidelines for Handling of Conflict of Interest will be subject to sanctions applying as provided for in the Collective Employment Agreement (PKB) and/or the prevailing regulations.

Guidelines for the Handling of Conflict of Interest 

The rights of creditors

  • To receive annual consolidated financial statements that have been audited, semi-annual consolidated financial statements, and quarterly consolidated financial statements in an agreed period in accordance with the agreement with each creditor.
  • To receive a financial covenant compliance certificate in accordance with the provisions stipulated in the agreement with each creditor.
  • To get information about court proceedings or ongoing disagreement that could potentially have a material adverse impact on the Company.
  • To receive a written notice concerning, as stipulated in the agreement with each creditor:
    • Any occurrence that may affect the smoothness of payment obligations
    • Delay in payment obligations
    • Any occurrence of default, which could potentially lead to events of default or change of control
    • Change of the company’s status
    • Business consolidation, capital investment or shares purchase from other companies
    • Dividends or profit distribution of more than 50% to the shareholders
    • Investment/business expansion outside the Company’s business field, according to the Articles of Association will be done by transferring share ownership to the subsidiary, so that share ownership of the subsidiary is up to 51% of the paid up capital in the subsidiary concerned.

  • At any time after an event of default or event of potential default, creditors or their representatives may have an access to the Company’s and its subsidiaries’ books of account at any reasonable time during normal working hours, and will only use such information in accordance with the transaction documents/loan agreements and applicable law.
  • To receive information as required by the Creditor in the implementation of functions and duties in accordance with the transaction documents/loan agreement and applicable law.
  • To receive a certificate stating the absence of events of default and the list of main subsidiaries by complying with the provisions set forth in the agreement with each creditor.
  • To examine the business and financial activities of the Company, as well as to review the business premises.
  • To receive information in writing concerning General Meeting of Shareholders that will be conducted with the agenda of the amendment of the Articles of Association, shareholders and/or the members of the Board of Directors and/or the Board of Commissioners.
  • To receive alerts when the Company will be generally subject to the jurisdiction of taxation in any region/ political sub-division or any institution in that jurisdiction or when the Company has an authority over taxes other than or in addition to the territory of the Republic of Indonesia.
  • To receive a list of authorized representatives of the Company whenever there are changes to the list.

Supplier Selection

Garuda’s policy in the procurement of goods/services is to prioritize direct procurement to the manufacturer, authorized distributor or sole agent and to avoid using intermediaries who do not add value.

Small and medium enterprises, the use of domestic production, nasional design and engineering shall be prioritized provided that the quality, price, capabilities and qualifications are in accordance with the Company’s requirements and can be accounted for.

Suppliers involved in the procurement process of goods/ services must meet the requirements as follows:

  • Preferably in the form of a legal entity
  • Meet the legality aspect in accordance with its business field
  • Have expertise, experience and technical capabilities and management in accordance with its business field.
  • Have necessary resources required in the procurement of goods/services
  • Not engaged in or still undergoing criminal sanctions.

Suppliers wishing to enroll as Garuda’s partners are required to register through the website http://eproc.garuda-indonesia.com/and must meet all the requirements, further evaluation and selection of candidates is done through due diligence or pre-qualification process.

Garuda has the policy and the rights to set the number of suppliers in Garuda’s Partner List of as well as the suppliers in Garuda’s Partner List of that will be evaluated on a periodic basis.

Vendor’s Capacity Building

In an effort to promote the ability of vendors and also as part of supplier management, Garuda set a Supplier Performance Assessment System that aims to ensure the quality, transparency and continuous improvement in the relationship between suppliers and Garuda.

Garuda will evaluate the performance of its partners on a periodic basis based on criteria that has been set including, among other things, aspects of quality, innovation, compliance with obligations under the agreement, as well as active participation in the procurement process in Garuda.

Supplier performance evaluation results will be the basis for the determination of rewards and also consequences for suppliers and also as the basis for the evaluation of Garuda’s Partner List.

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