1. Giving incentives for whistle blowing- what are the pros and cons?

PROS AND CONS OF GIVING INCENTIVES FOR WHISTLEBLOWING

PROS
1. It encourages exposure of fraudulent activity.One of the main sources of fraud
detection are whistleblowers,they are the insiders that witness those crimes.
Whistleblowers stand to loose alot if they disclose the illegal,unethical or
inappropriate activites within their organisation as they risk being reprimanded by
their superiors, loosing their jobs or even being sued for breaching their contracts of
employment which require confidentialiaty and non-disclosure by the employee. By
guaranting sufficient incentive to outweigh the risks involved,whistleblowing is
encouraged.
2. Whistleblowing is an important checks and balance system used by the government. It
ensures operations run correctly as they should and as is the case with any system,
funding needs to be availed for that system to operate effectively. Without incentives,
this checks and balance system would fail. It helps fill in the gaps that may be missed
by other watchdogs such as the auditors.
3. Since it is very difficult to protect whistleblowers from retaliation and it is also very
difficult for a court to ascertain this retaliation, financial rewards for whistleblowers
can be seen as compensation in this event.
CONS
1. Financial incentives could result in malicious reporting from opportunistic persons.
This in turn may result in innocent parties being unfairly damaged.
2. Entrapment. This is when a person is induced or persuaded to commit a crime of
which they had no previous intent of commiting. Some people may seek to entrap
others in order to blow the whistle and benefit financially.
3. Conflict of interest in court. If a whistleblower’s disclosure led to a criminal
prosecution which relied on the whistleblower’s evidence , the court could call into
question the reliability of their evidence because the witness stood to gain financially,
thus undermining the prosecutions case.
4. Undermines existing personal responsibility in that in essence you would be
rewarding whistleblower’s for performing what is arguably their regulatory duty. Also
whistleblowers ought to act in the public interest rather than in their own interest.
5. Increased administrative costs for the government. Inorder for the incentive to be
adequate to merit whistleblowing it must be of a substantial sum. This in turn ends up
causing the government to incur extra costs.
 2. Which other countries have the whistle blower protection? which ones give
incentives e.g.in form of monetary awards? What is the percentage
given?generally, the justification for incentives?Do comparative analysis

OTHER COUNTRIES WITH WHISTLELBLOWER PROTECTION

The country leading as far as whistleblower protection is concerned is the United States of
America. It offers the strongest protection for whistleblowers.
Other countries that offer whistleblower protection include the United Kingdom, Japan,
Iceland, South Korea, South Africa, Argentina, Brazil, Australia, Canada, China, France,
Germany, India, Indonesia, Italy, Japan, Mexico, Saudi Arabia, Turkey,Russia, Rwanda,
Eritrea, Mali, Nigeria, Bosnia & Herzegovina, Cuba, Egypt, Israel, Tunisia.
COUNTRIES THAT GIVE INCENTIVES IN MONETARY FORM
The first country that is popular for giving incentives is the United States of America
AUSTRALIA
Australian whistleblower protection rules are fairly comprehensive for the public sector under
the Public Interest Disclosure Act 2013. Private sector legislation is dealt with under a
different law being the Corporations Act 2001. Public sector legislation is strong in requiring
organisations to have internal procedures not only for facilitating disclosure, but also for
protecting and supporting employees who report wrongdoing. However, this protections did
not extend to disclosures made externally i.e media and also dont cover disclosures made in
relation to matters of national intelligence. However the new Treasury Laws Amendment
(Enhancing Whistleblower Protections) Bill 2018,which aims to create a single whistle
blower protection regime in the Corporations Act 2001 extending to the corporate, financial
and credit sectors, proposes the protection of disclosure made to the media where there is a
risk of serious harm if the information is not acted upon immediately. Before this bill private
sector legislation protection was considerably weaker.
Salient features under the Corporations Act 2001 include;
a) A broad group of informants which involves,current employees, current officers, a
contractor or employee of the contractor, former officers and employees,
suppliers,associates of the entity and family members of employees.
b) No ‘good faith’ requirment effectively allowing anonymous disclosure.
c) Disclosure to a lawyer for the purpose of obtaining legal advice is also protected.
d) Public companies and large private companies are required to have a whistleblower
policy.
e) Whistleblowers have the right to seek compensation for reprisals. But it is important to
note that this compensation is only for reprisals experienced and not for making
disclosures.
CANADA
Canada has two federal laws dealing with public interest disclosure, the Public Servants
Disclosure Protection Act and the Criminal Code of Canada (section 425). Canada’s
whistleblower protection systems have been criticised for being extremely
complex,restricted and innefective. The Criminal Code of Canada (s.425) makes it a
criminal offence for employers anyone acting on behalf of an employer, or a person in a
position of authority over an employee to take disciplinary action or threaten it in order to
force the employee to refrain from providing information to law enforcement officials
about the commission of an offence by his or her employer or by an officer, employee or
director of the employer. It also makes it an offence to threaten or retaliate against an
employee who has already provided information.
Salient features of the Public Servants Disclosure Protection Act;
a) It only protects employees if they approach a person whose duties include law
enforcement. They are not given protection if they contact a media source or an
outside agency or advocacy group.
b) This act only protects public servants and does not affect members in the private
sector. Therefore in essence private sector members have very little protection.
c) There is a good faith requirement and it does not allow for anonymous disclosure.
d) It also limits who can qualify to be a whistle blower in that people complaining
about issues pertaining to personal or personnel issues (i.e workplace bullying and
harassment) or simple mismanagement (i.e poor supervision) as opposed to gross
mismanagement that poses a risk to the organization or the public do not qualify to
be protected as whistle blowers. The threshold for qualifying as a whistle blower
has therefore been set very high.
e) They have internal disclosure procedures as the first remedy. In Canada,
employees have a legal duty of confidentiality and fidelity to their employer. The
offence must first be reported to the employer before going to the police or a
regulatory body. The employer also has no duty to disclose to you what they did
with this information. Only after this or in cases where their office does not have a
designated senior officer for disclosure can they make a disclosure to the integrity
commissioner.
f) The act limits the duration in which a person can file a complaint for reprisal to the
commissioner to only 60 days.
g) It does not offer incentives for whistleblowing and only grants compensation in
case of reprisals.
h) The burden of proof is also placed on the whistleblower in cases of reprisals as
opposed to on the employer.

UNITED STATES OF AMERICA

Dealt with by the Whistle Blower Protecton Act of 1989. It covers current and former
employees as well as applicants for federal government jobs. Disclosures are made to the
Office of Special Counsel which does not investigate the claim itself but rather determines
the likelihood of wrong doing after which it refers it to the appropriate authority for
investigation.
Salient features;
 It has strong laws protecting a whistleblowers identity.
 It also has actionable penalties against those who retaliate against the whistleblowers.
  The investigating body has a set time to report back to the Office of Special Counsel
on the investigation, which is 60 days.
 Whistleblowers have been provided with a range of incentives and protection. Section
922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
This section states, whistle blowers who provide original information to the Securities
& Exchange Commission that leads to a successful conviction shall be entitled to
payment out of the fund of;
(a) Amount equal to not less than 10 percent, in total what has been collected of
the monetary sanctions imposed in the action.
(b) Not more than 30 percent, in total, of what has been collected of the monetary
sanctions imposed.
The discretion of determining the amount to be paid is left to the commission.
 Section 922 goes on to provide a list of those who are not entitled to this payment as
being;
i. Officers of a law enforcement organization, department of justice,self
regulatory organization.
ii. Any whistleblower who is convicted of a criminal violation related to the
judicial action.
iii. Any whistleblower who gains information through performance of an
audit or financial statement which falls as part of his functions as a
professional.
iv. Any whisteblower who fails to submit information to the commission in
such form as the commission may require.
 Under the False Claims Act citizens who file a suit on behalf of the government under
the qui tam provision (latin term meaning “who sues in this matter for the king as well
as for himself”) can be awarded 15 to 30 percent of the damages that the government
is able to recover.
 The The Dodd-Frank statute assures that, no matter where they live, whether within
the country or in a different country, those who take the personal and professional
risks of stepping forward with valuable information will be rewarded by the SEC.

United Statesof America has dramatically increased its recovery from corprate fraud
by incentivizing citizens with a whistleblower reward. According to the SEC’s annual
report on the Dodd-Frank Whistle blower Program, in the 2013 fiscal year the SEC
received 3238 whistle blower tips, complaints and referrals – up from 3001 received in
2012 and 334 in 2011, the year the Whistle blower Office first opened.
The US government holds the position that financial rewards are crucial to
encouraging whistle blowers to come forward with information, despite the personal
risks involved.

UNITED KINGDOM
Dealt with under the Public Interest Disclosure Act 1998. The British government relies
solely on the good moras of its citizens, taking the approach that people will report
wrongdoing regardless of the presence or absence of financial awards. It does not give any
financial rewards for whistleblowing. The British government has seen whistle blower tips in
the United Kingdom decrease by 37 percent since 2014. The British government has rejected
the necessity of whistle blower relator rewards in a 2014 report. Regulators stated that such a
reward program would be costly and difficult to govern. Additionally, they are concerned that
the whistle blower relator rewards would give corporate employees an incentive to makeup
misdoings and undermining internal whistleblowing programs.
Salient features
 The wrongdoing you disclose must be in the public interest. This means it must affect
others, eg the general public.
 A confidentiality clause or ‘gagging clause’ in an agreement isn’t valid if you’re a
whistle blower.
 Personal grievances (eg bullying, harassment, discrimination) aren’t covered by
whistleblowing law, unless your particular case is in the public interest.
 The is a limited scope of matters protected under the whistle blower laws
being criminal offences, a health and safety violation, risk or danger to the
environment, a miscarriage of justice and a cover up of wrong doing.
 The law allows whistle blowers to sue for compensation if they have suffered harm,
such as unfair dismissal, as a result of speaking out.

REPUBLIC OF KOREA
Whistle blower protection is dealt with by the Anti-Corruption and Civil Rights Commission
of the Republic of Korea.
Salient features
 Employment guarantees. When whistle blowers have suffered or are expected to suffer
any disadvantage in their employment or discrimination in their working conditions
due to the reporting of corruption, ACRC takes measures to guarantee their continued
employment, including reinstatement to their original position, arrangement of a
transfer to a different post, and deferment of disciplinary measures against them.
 Confidentiality. The Act on Anti-Corruption and the Establishment and Operation of
ACRC makes it illegal to disclose personal information relating to whistle blowers
when there is a possibility of damage to them as a result of their reporting corruption.
 Physical safety. ACRC may ask the head of the competent police authority to take
relevant steps to protect whistle blowers, their collaborators, relatives, or cohabitants,
should they feel threatened as a consequence of reporting corruption.
 Financial rewards. ACRC will provide whistle blowers with rewards of up 3 million
USD if their report of corruption has contributed directly to recovering or increasing
revenues or reducing expenditures for public agencies. Also, ACRC may grant or
recommend awards if the whistleblowing has served the public interest. However they
do not have set compensation ranges as is the case in the USA and matters are decided
on a case by case basis using the judges discretion.
  Whistle blowers may make their allegations internally (within the organization) or
externally (regulators, law enforcement agencies, media or to group of persons
concerned with the issues.
The belief in this country is that higher rewards will attract more significant information. As
the rewards have risen, so have the numbers of informants. In 2013 alone, the NTS received
12,147 confidential reports through the end of August, up 60 percent compared to the same
period last year.

3. Commission on Administrative Justice being the responsible commission on

enforcing the proposed bill as opposed to the Witness Protection Agency
(WPA). Please see the file,(ask Esther- our Secretary to give you) and look at the
Bill, why shouldn't the WPA be the one enforcing the Bill? (hint: difference
between a whistle blower and a witness; the covert nature of WPA work)
This is because the two bodies have entirely different mandates;
The Commission on Administrative Justice which is also known as the Office of the
Ombudsman is established by Section 3 of the Commission on Administrative Justice.
One of its core mandates is to investigate complaints of abuse of power, unfair
treatment,manifest injustice, or unlawful,oppressive, unfair or unresponsive official
conduct. It addresses maladministration through effective complaints handling. This
are just some of its functions as set out in Section 8 of the Commission on
Administrative Justice Act.
The main objectives of the Whistle Blower Protection Bill are set out in Section 4
which include allowing for a conducive environment for disclosure of misconduct in
order to facilitate investigation,protect whistleblowers and enable complaints on
reprisal to be made. This are in line with the functions of the Commission on
Administrative Justice and so it is the best placed body to undertake the enforcment of
this bill upon its passing as an Act of Parliament as it is within its mandate.
The Witness Protection Agency has a different function which is a secondary function
in relation to the implementation of the Whistleblower Protection Bill. The Witness
Protection Ageny’s function as set out in Section 3C of the Witness Protection Act is
to establish and maintain a witness protection programme and its role is limited to
only this function by the act. It therefore would not be able to undertake the
enforcment of the Whistle Blower Protection Bill as this would require it to perform
functions outside of its mandate. It would only come in to supplement the Commission
on Administrative Justice functions after the whistleblower has made a disclosure and
is need of protection from harm that he may be exposed to.
4. Is it actually necessary to have a stand alone whistle blower protection
legislation? Why should we not spread the various provisions in existing anti-
corruption laws?
It is important to have a stand alone legislation on whistle blower protection because it
brings together all aspects relating to their protection, procedures to be followed and
all other matters relating to whistle blowers under one law. This in turn avoids
duplicity in the laws ,prevents confusion, reduces the bulk of laws to be relied upon
and avoid instances of conflicting provisions of the law relating to whistle blower
protection. It also allows for specialisation and ensures all aspects of the field are dealt
with and that there is no lacunna in the law relating to whistle blower protection