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A PATCHWORK OF LEGISLATION
Around the world, whistleblowing has a track record of protecting companies from errant employees.
A 2022 global study by the Association of Certified Fraud Examiners examined more than 2,000 cases of fraud committed by individuals against the organisations that employ them, totalling losses of more than US$3.6 billion.
It found that 42 per cent of such fraud was initially detected from tip-offs, compared to 16 per cent detected through internal audit. More than half of those tip-offs came from employees themselves.
In Singapore, whistleblowers are protected through pieces of legislation targeted at specific groups of informants or types of information, said Mr Abdul Jabbar, head of the corporate and transactional group at Rajah & Tann Singapore.
For example, the Prevention of Corruption Act protects those who report corruption. The Workplace Safety and Health Act protects those who report safety breaches and hazards in a work environment.
The Companies Act protects auditors from defamation suits and from liability for reporting fraud in good faith. Separate legislation covers specific whistleblowing on drug trafficking, terrorism financing, competition matters and income tax, said Mr Jabbar.
Some regulators also have rules. The Singapore Exchange Regulation (SGX RegCo) requires listed companies to maintain a whistleblowing policy, and to explain how they maintain independent oversight of it and protect whistleblowers’ identities.
MAS requires financial institutions to establish formal whistleblowing programmes that include procedures to ensure anonymity and adequate protection of employees who raise concerns.
But this still leaves gaps.
“The current patchwork of legislation in Singapore is inadequate to address several segments of whistleblowers,” said Mr Jabbar, who proceeded to point them out.
The SGX RegCo and MAS guidelines do not have the force of law and apply only to listed companies and financial institutions respectively. This leaves out a big group of employers such as private companies and government agencies.
Those who flag general wrongdoing in the workplace – which could include fraud, forgery, misappropriation of company funds, collusion and theft – are not protected under the scope of reporting on corruption or workplace safety.
There is also no specific legislation protecting those who report on environmental crimes.
Where there is protection, it is inconsistent and varies by circumstance, said Mr Jabbar. For example, some laws protect from retaliation while others afford anonymity.
There are also no express provisions that reduce the criminal sentences of whistleblowers who participated in the illegal activity they reported. Sentences are left largely to the discretion of the courts.
“One clear law that gives comprehensive protection on all fronts including against harassment, prosecution (and) civil actions like defamation will be helpful,” said the lawyer.
Mandatory reporting obligations are another aspect of legislation affecting whistleblowers. In certain situations, individuals and corporations must report information they possess, or be liable for an offence.
Such obligations can be found in Singapore’s Criminal Procedure Code, legislation to suppress terrorism financing and anti-money laundering legislation, said Ms Celeste Ang, principal at Baker McKenzie Wong & Leow.
Under anti-money laundering legislation, a person with reason to suspect that a property is connected to an offence under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act must disclose the information.
The obligation applies if the person came across the information in the course of their employment, and is also applicable to companies. There are penalties, including a fine and a jail term of up to three years, for breaching the obligation.
The same Act provides that the information and the identity of the informant are not to be disclosed.
Under the Criminal Procedure Code, there is an obligation to report information about the commission of or intention to commit an “arrestable offence”. This covers a wide range of acts, from murder and assault to extortion and robbery.
Acts of harassment, bullying and discrimination do not fall under the reporting obligation, Ms Ang noted.
Yet in Asia-Pacific, such acts dominate whistleblower complaints, making up 72 per cent of complaints in a survey of Japan, mainland China, Hong Kong, Singapore and Australia published by Baker McKenzie last year.
Ms Ang said it is important to have legislation that protects informants in the workplace given the retaliation they can face.
This retaliation can include dismissal from their jobs, disadvantageous changes to their positions or duties, emotional distress and difficulties being hired elsewhere if they are seen as a “known informer”.
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