Fighting fraud and corruption

THIS WEEK'S TOPIC: Does Singapore need a universal whistleblower protection law?

John Bittleston Founder and Chair Terrific Mentors International Pte Ltd

TOO much law leads to circumvention and abuse. Better that companies and business practices in general set a culture of protecting whistleblowers as a matter of ethical behaviour. However, financial power, ingrained traditions of loyalty and the fear of ostracisation are powerful weapons in the hands of the bully. Perhaps in 20 years' time, we can remove such a law. For now, we need it.

Kwek Chin Yong Associate MD, Business Intelligence and Investigations Kroll

STRONG whistleblower protections are necessary in any effective anti-fraud regime. As job security is invariably a key concern, having laws to govern this will help encourage whistleblowers to co-operate. In the US, there are even rewards to incentivise whistleblowing. Singapore also recognises the importance of incentivising whistleblower cooperation and have taken steps to do so. For example, the Inland Revenue Authority of Singapore (IRAS) offers monetary rewards to whistleblowers for tax evasion cases of up to S$100,000 or 15 per cent of tax recovered. The Prevention of Corruption Act also allows for anonymised whistleblowing for corruption cases. However, these measures are piecemeal - only applying to specific areas and not fraud in general. It would be encouraging to see a universal whistleblower framework implemented, one that covers all areas of corporate crimes, instead of the current ad-hoc approach.

Yeoh Oon Jin Executive Chairman PwC Singapore

WHISTLEBLOWING contributes significantly to the detection of fraud and other improper acts in companies.

Currently in Singapore, whistleblowing is addressed under the Corporate Governance Code, but companies are not required to disclose any internal processes relating to execution of the procedure, including those that relate to protection of the whistleblower. Hardcoding the whistleblowing policy into Listing Rules would be a bold step in the right direction as it would address confidentiality and whistleblower protection - a key change that will make a difference. We can draw from the experience of other regimes with universal whistleblower protection laws - such as the UK and Australia - in the development of our own, as it is often the implementation details that will contribute significantly to its success.

Veronica Shim Founder and CEO Envysion Wealth Management

THE encouragement and protection of whistleblowers versus claims that are unsubstantiated or even deliberately falsely made, to the detriment of the accused, is a delicate balancing act that needs to be considered carefully.

Whilst it strengthens existing checks and balances, many factors, including both employer and employee reputation and interests as well as the resources required to implement such legislation, may hinder its efficacy. In situations where there is ambiguity, there is no clear approach nor answer. While some levels of protection are already in place for whistleblowers, we should not risk hasty legislation or a universal policy that will be ineffective without a robust and well-defined framework in place.

Eryk Lee Chief Executive Officer AAM Advisory

WHISTLEBLOWING laws are not uncommon and are already found in jurisdictions like the United Kingdom and Australia. Encoding whistleblowing policy into the listing rules is a step in the right direction.

However, it is important to note its limitations given that companies not listed in Singapore, including SMEs and subsidiaries or branches of global MNCs, will not be covered by the ruling. These non-SGX-listed companies employ more than half of all workers in Singapore.

Some of the world's biggest frauds, such as the Enron and WorldCom cases, were detected through the intervention of whistleblowers. Whistleblowing is a fundamental corporate governance mechanism, and can be a very powerful tool to detect fraud, misconduct, and even environmental wrongdoing such as the illegal agricultural fires in Indonesia that were caused by Singapore-based companies. It can only work effectively if complainants know they are protected, and legislation will certainly help.

Edmund Lee Managing Director Singapore TMF Group

WHISTLEBLOWERS form an integral part of the checks and balances in today's corporate world. Some of the most significant financial scandals of the past two decades were uncovered by whistleblowers (Enron, Worldcom, and Olympus). Implementing a confidential, impartial and fair whistleblowing system is critical to strong corporate governance.

The current Code of Corporate Governance (2018) operates under a best-practice guideline, with a comply or disclose policy. Encoding this into the Listing Rules will give it teeth under the force of law, and can only serve to improve corporate governance efforts.

In Asia, conformity, hierarchy and obedience are highly emphasised. Conversely, whistleblowing is less common than in Western societies. Therefore, strengthening laws on whistleblower protection, confidentiality and non-retaliation is crucial to encourage whistleblowers to come forward.

That said, a universal whistleblower protection law must also strike an important balance of protecting whistleblowers who act in good faith, while also deterring or punishing those who might try to abuse this by making malicious complaints.

Helen Ng CEO Lock+Store

WHISTLEBLOWERS perform an important function in the financial world. They expose rogue practices and cover-ups, so that prompt action can be taken by regulators to protect investors and other stakeholders. Without adequate protection, potential whistleblowers would be deterred from reporting offences. I support the implementation of a universal whistleblower protection law in Singapore with built-in checks - such as ensuring all reports are investigated fully and fairly without the automatic presumption of guilt - to prevent indiscriminate whistleblowing.

Maren Schweizer Director Schweizer World Pte Ltd

YES, to make whistleblowing work, there needs to be a protective legal setup in place. Such a setup will protect the reporting person from any menaces of retaliation, safeguard the whistleblower's identity and ensure anonymity. Without a robust legal framework, many employees in public and private sectors have shown to be reluctant and afraid. Whistleblowing is an essential tool in discovering and dissuading crime and corruption. It should not be perceived as something shameful or treacherous.

Instead, it's valuable to encourage good corporate governance and behaviour. Likewise, all whistleblowers who make their reports in good faith should be protected by the law, without fear of punishment.

Chia Ngiang Hong President Real Estate Developers' Association of Singapore (REDAS)

WHISTLEBLOWING is a useful source to help organisations identify and prevent wrongdoings, malpractices or unprofessional conduct and minimise hidden or latent risks within organisations. But the multiple drawbacks hindering complainants - such as fear of litigation, defamation suits, reprisal in the workplace, adverse consequences or loss of job - can prevent those who genuinely want to speak out from doing so. Fostering a top-down management approach and an open culture that ensures transparency, good governance and commitment to the inclusion of fair employment framework would help to promote responsible behaviour without undermining potential whistleblowers. A robust and comprehensive protection regulation would certainly give companies compelling reasons to use whistleblowing more seamlessly to foster an open corporate culture that reduces fear and enhances transparency, accountability and integrity.

Dileep Nair Independent Director Thakral Corporation Limited

WHISTLEBLOWING deters corporate misconduct. Studies in the West have shown that whistleblowers spur companies to change their ways by promoting a more ethical culture. But to encourage whistleblowers to come forward, there has to be effective protection against retaliation and disclosure of identity. In Singapore, such protection is not uniform, leaving some potential whistleblowers in the lurch. The Prevention of Corruption Act protects whistleblowers in corruption cases, while whistleblowers on health and safety violations are covered by the Workplace Safety & Health Act. Protection is uncertain, though, when it comes to issues such as collusion, fraud, forgery, harassment or even stealing. Promulgating a universal whistleblower protection law is essential to encourage whistleblowers to come forward. Indeed, it is often the widespread knowledge that whistleblowers need fear no reprisal that will deter corporate misconduct and promote a culture to behave and work ethically and responsibly.

Alvin Chiang Consultant, CEO & Board Advisory Russell Reynolds, Singapore

TRUST and safety are sacrosanct when it comes to whistleblowing. An individual willing to step forward and call out misconduct must feel safe to do so, and trust that there will be no retaliation whatsoever.

Having a regulatory environment that affords such protection is not only important, but also a necessary safeguard against errant companies that may say one thing yet do another. While we do have legislation that protects whistleblowers under certain circumstances, the underlying principle should be for whistleblowers to be protected regardless, so long as the whistle was blown in good faith. How else can there be trust?

Claudia Teo Partner and Head, Corporate and Financial Services Eversheds Harry Elias

WITH more than 800 listed companies and countless more unlisted firms, it is impossible to expect regulators to scrutinise the conduct of every company. Entrenching whistleblower protection in legislation will naturally create an environment of self-surveillance, which will send a message to errant companies that they must change their ''do whatever you want, just don't get caught'' mentality. The concept of legislative protection of whistleblowers is not new in Singapore, and it is time to harmonise our current regime of whistleblower protection under various Acts by enacting a universal whistleblower protection legislation.

Henry Tan Group CEO Nexia TS Group

Whistleblowing has served investors and employees well in many jurisdictions. Where informants feel it important to do so, they will have no hesitation to whistleblow.

A whistleblower protection law is not required in such cases. Although US and Japan have separate protection Acts, Australia incorporates protection provisions within their corporation Act. We have seen examples of these in practice - for example, the public can provide direct feedback to MAS and SGX RegCo on IPOs, etc, on the Catalodge or MAS OPERA. Having a whistleblower protection law may unwittingly encourage frivolous or unwarranted complaints. Any organisation that wishes to give greater comfort to whistleblowers can engage an independent firm to be the gatekeeper for the whistleblowing channel of reporting, ensure a certain level of confidentiality and give assurance that matters will be dealt with in an appropriate manner.

Jayaprakash Jagateesan Chief Executive Officer RHT Fintech Holdings

ORGANISATIONAL culture does not change overnight. While a new law may be a step in the right direction, it is still a long journey before whistleblowers will feel truly protected from any victimisation. With some listed companies still functioning like family businesses, employees are often expected to toe the line.

With expert guidance, whistleblowing policies can be implemented by an independent third party powered by technology to assure whistleblowers that their concerns will be handled professionally. Companies should welcome whistleblowing as a channel to safeguard good corporate governance. It allows serious matters to surface in its early stage, instead of emerging much later when it can potentially destroy the organisation.

Lim Soon Hock Managing Director PLAN-B ICAG Pte Ltd

HARDCODING whistleblowing into the Listing Rules is a timely step in the right direction. Companies, listed and private, will now have to think twice before committing any acts of commission or omission that contravene the law or are against good corporate governance. That said, for it to be effective, a carrot-and-stick approach will have to be taken. It is not good enough just to protect whistleblowers when the complaints or concerns are legitimate. It is also only fair that companies will need to be protected against frivolous or unfounded complaints, to ensure that unhappy employees, shareholders or investors will not abuse this provision. Whistleblowers must pass the test of duty of care. As potential ''internal policemen'', they will have to act responsibly and reasonably.

Mark Billington Regional Director, Greater China and SE Asia ICAEW

WHISTLEBLOWING is central to a company's system of checks and balances, and ICAEW has long been a proponent of its various benefits. We empower our chartered accountants to report unlawful conduct in their workplace, and encourage businesses to incorporate a positive whistleblowing policy as part of good corporate governance.

While there are already several different types of legislation in place that give whistleblowers protection in Singapore, having a universal protection law will allow for a more unified approach that can lower barriers for employees to speak up against wrongdoing. It will also send the right signals to the market on the importance of transparency and continuous improvement, inspiring increased confidence amongst employees, suppliers, and investors.

Lee Fook Chiew Chief Executive Officer Institute of Singapore Chartered Accountants

ISCA recently revised its code of ethics to adopt the Responding to Non-Compliance with Laws and Regulations (Noclar) Pronouncement, which comes into effect April 1. The Noclar Pronouncement may compel a professional accountant under certain situations to report a non-compliance to an appropriate authority - or, to whistleblow. To support this, whistleblower protection is critical, and must function well. Singapore does not have a general whistleblowing law.

Protection for professional accountants who whistleblow comes through various different pieces of legislations, depending on the nature of what is disclosed, and whether the protection is within its ambit. In exceptional circumstances where protection is not available, the accountant will have to exercise professional judgment to determine if the disclosure of the Noclar to an authority is an appropriate course of action.

Against this backdrop, a universal whistleblower protection law in Singapore could certainly be the catalyst for acting in the public interest.

Ronak Shah CEO QBE Singapore

SINGAPORE'S need for a universal law to protect and encourage whistleblowers is naturally to be expected. As an economy that prides itself on trust and transparency and markets itself as such to foreign investors, good governance should be the precedent. While there have been a handful of token initiatives across different disciplines and industries to institute whistleblowing protection rules for their own domain, there are still some who fall through the cracks.

A universal whistleblowing law will ensure accountability across the board and for all industries, creating a framework where misdemeanour is highlighted and dealt with appropriately, leaving no space for fraud or unfair dealings in our society.

Claudia Teo Partner and Head, Corporate and Financial Services Eversheds Harry Elias

WITH more than 800 listed companies and countless more unlisted firms, it is impossible to expect regulators to scrutinise the conduct of every company.

Entrenching whistleblower protection in legislation will naturally create an environment of self-surveillance, which will send a message to errant companies that they must change their ''do whatever you want, just don't get caught'' mentality. The concept of legislative protection of whistleblowers is not new in Singapore, and it is time to harmonise our current regime of whistleblower protection under various Acts by enacting a universal whistleblower protection legislation.

Toby Koh Group MD Ademco Security Group

SINGAPORE'S attractiveness has always been about its clear and efficient legal system and emphasis on good corporate governance. A whistleblower protection policy crafted in law will undoubtedly increase its attractiveness as an investment hub. However, the legislation must be robust and not simply scratch the surface.

This will encourage bona fide whistleblowers to step forward and co-operate fully with the authorities with less fear of reprisals. Whistleblowers tend to remain anonymous for fear of being identified and the consequences thereafter - reprisals, civil lawsuits, loss of job, and so on. They are cognisant of the fact that a company policy is not the law, and there is always a chance that the company may not offer the whistleblower the protection set out in their policy, especially if senior management is the subject of the complaint.

Anonymous whistleblowing reports makes investigation more challenging and slows down the process, as the investigating officer is not able to obtain first-hand information from the whistleblower. Compliance costs will inevitably increase, but it is a small price to pay to enhance the attractiveness of SGX-listed companies to investors.

Mario Singh CEO Fullerton Markets

THE current debate hinges upon the seemingly low protection for whistleblowers when it comes to civil liability such as defamation suits. There are advantages and disadvantages in having a universal whistleblower protection law in Singapore. One advantage if it becomes law is that proper compliance becomes mandatory and companies have to ensure that safeguards are in place to protect informants. This will adequately dispel the current sentiment of fear of recrimination and reprisal in the workplace.

The disadvantage would be if the law implies protection for a complainant who deliberately lodges a false complaint. This can happen if the complainant is aggravated by other issues in the workplace. Hence, robust measures need to be in place to ensure that such false alarms are not triggered. If not, productivity and credibility at the company level can be severely affected and run counter to the purpose of the law in the first place.

Ultimately, a comprehensive universal whistleblower protection law will be helpful, provided the above issues can be solved efficiently.

Frankie Chia Managing Partner BDO LLP

WHILE there is no law currently to protect whistleblowers, whistleblowing programmes usually include specific assurance to informants that the company would protect them from unfair repercussions. A new law can help to provide assurance to support corporate policies.

A law protecting whistleblowers is fundamental, but it should perhaps also include an overall framework for whistleblowing programmes so as to be more effective or to encourage more participation. For example, assessing and dispensing complaints could sometimes be judgmental due to lack of evidence and or sufficient information. Some complaints could be frivolous, or made in bad faith. Oversight committees need to know their scope of responsibilities and parameters of assessment. Companies are sometimes reluctant to commission time- and resource-consuming investigations, so specific guidance on this would be useful. This will help to promote enthusiasm for the new law, not just from whistleblowers, but from companies as well.

Annie Yap CEO AYP Group

CURRENT policies to address the issue lack the depth and enforceability that a law has. Having a universal whistleblower protection law will warrant both private and public companies to comply by virtue of the force of law. With such a law, whistleblowers are protected through a veil of anonymity. This will embolden individuals to speak out and report unlawful practices without fear of recrimination and reprisal. As a result, corrupt practices are quickly weeded out, ensuring that Singapore remains safe and transparent. Perhaps what is equally important is to ensure that the law is comprehensive enough to prevent miscreants from being let off the hook.

Johnson Chng Managing Partner (Asia) QVARTZ

I STRONGLY believe that a universal whistleblower protection law is needed to ensure that people feel safe stepping forward. The media can play a powerful role of both education as well as - and probably more importantly - helping exposingto expose some of the wrongdoing by large corporates in Singapore. One area to start with may be property developers, where there could exist potential areas of misrepresentations - for instance, in marketing brochures, or how they cleverly pass the buck to the main contractor, who then passes it to the sub-contractor, who tends to conveniently go bankrupt after a while, leaving the buyer with little or no rectification or recourse options. Another commonly-seen tactic is to hide behind technical terms to get away from inferior quality - for example, stainless steel that rusts, but is somehow still within the specifications as they claim.

David Leong Managing Director PeopleWorldwide Consulting Pte Ltd

For aspiring companies gunning for public listing, whistleblowers' threats and acts can be detrimental and can derail their entire listing plans. By enshrining whistleblower protection in law, the authorities are giving whistleblowers a safe and ring-fenced ground to expose listing aspirants with no fear of backlash. The law will have pros and cons because this Act expects all organisations, private or public, to be whiter than white; any speck of dirt and grime can become threats. The risk tolerance will be needle-hole small. Hence, voluntary disclosures by listing aspirants will be the best remedy to spare themselves any embarrassing exposure.

Singapore should adopt such a law to improve its corporate governance, disclosures and protection to investors who rely on public companies to act in their best interests.