Harassment, intimidation and sabotage: Can more be done to protect whistleblowers?
By DAVINA THAM
Channel News Asia, 15 October 2023
Harassment, intimidation and sabotage: Can more be done to protect whistleblowers?
Whistleblowers face possible retaliation at work, lawsuits and the stress of their identities being exposed. What needs to change to make the journey less painful?
- Besides retaliation in the workplace, whistleblowers face the stress of having their identities exposed and the uncertainty of whether their complaints are heard
- Singapore does not have universal whistleblower legislation that protects informants, and culture and attitudes towards whistleblowers are still negative
- Good whistleblowing systems can expose corporate wrongdoing earlier and make Singapore a safer place to do business, experts say
SINGAPORE: When Mr Pav Gill first found evidence of fraud at his employer, the German payments processor Wirecard, he set an investigation in motion from his office in Singapore.
Then the company’s head of legal for Asia-Pacific, Mr Gill was determined to remove the rot from within, confident he was just doing his job properly.
But senior executives thought differently. They blocked the investigation and unleashed a barrage of harassment and intimidation on Mr Gill, from shouting at him in the office to threats to investigate him instead.
At one point, even his life appeared to be in danger. Management tried to send him on a business trip to Indonesia. Mr Gill got a tip-off that he would not return home if he went. He did not go on the trip.
After three months of management “making (his) life hell”, Mr Gill left Wirecard and started interviewing for a new job. But the persecution did not stop there.
At some job interviews, he would be questioned about why he had left Wirecard instead of about his skills and experience.
Those hirers were friendly to Wirecard. They were trying to bait him into disclosures that would breach his separation agreement with his former employer, giving it a basis to go after him, said Mr Gill.
Pushed into a corner, Mr Gill’s mother got in touch with a journalist, and he took his tranche of evidence to the Financial Times.
In 2019, the British newspaper started publishing reports on Wirecard’s illegal activities, implicating senior executives in a series of suspicious transactions at the company.
Authorities sat up and took notice. Investigations culminated in Wirecard’s collapse in 2020, after it failed to account for €1.9 billion (US$2 billion) in missing funds.
Mr Gill, who went public with his identity as the Wirecard whistleblower in 2021, told CNA that his experience is a rare example of successful whistleblowing, where the perpetrators face criminal prosecution.
“The Germans, for example, they didn’t understand how a mum-and-son combo living in a subsidised housing estate in small Singapore could successfully expose a powerful €24 billion company.”
But it came at a huge personal cost to him and his mother, who suffered a stroke from the stress of the ordeal. It is also a reminder that informants have reason to fear retaliation and need protection from reprisal.
Singapore does not have universal whistleblower legislation that protects informants, unlike other economies such as Malaysia, Japan, the United Kingdom and the European Union.
Recent revelations about the alleged abuse of children at a preschool and a billion-dollar transnational money laundering case have raised questions about how wrongdoing connected to the workplace is reported here.
In both of those cases, tip-offs led to breakthroughs.
The alleged rough handling of preschoolers at a Kinderland branch was exposed by a whistleblower who taught there at the time. She filmed videos of the incidents, which were eventually circulated online.
The money laundering suspects were identified through intelligence including suspicious transaction reports – a reporting tool required for professionals in industries like real estate, banking and law.
“The question is, if you have good whistleblowing systems, I think a lot of things will be uncovered much earlier,” said corporate governance expert Professor Mak Yuen Teen.
A lot of corporate wrongdoing goes undiscovered because of the lack of whistleblower protection, said Prof Mak, who teaches at the National University of Singapore Business School.
Asked if corporate wrongdoing might be more common than thought in Singapore, he said: “Absolutely, I have no doubt at all.”
“DAVID VERSUS GOLIATH”
Despite not being required to by law, many private multinational corporations in Singapore as well as government agencies and non-profit organisations have whistleblower policies in place.
But in practice, Prof Mak said he is “not confident” that whistleblower policies are generally effective. He cited his own experience sending whistleblower reports to two companies in the course of his work on corporate governance.
Both companies – one in Singapore and one in Malaysia – did not acknowledge his complaints even though he identified himself and gave “substantial documentation”.
“You take the trouble to blow the whistle and then you find that it goes into this black hole, and they don’t even bother responding,” he said.
He has also been on the other side, as a board member of a non-profit organisation that received a whistleblower report.
The board responded by initiating forensic investigations and placing the CEO and COO on leave, and fired the officers after the allegations proved true.
Prof Mak said the effectiveness of whistleblower policy ultimately depends on individual members of an organisation’s board, especially its independent directors.
But some reports never even make it that far. In the Kinderland case, the whistleblower told the preschool’s principal how the students were being treated, but felt she was not taken seriously.
According to her, the principal’s response was that the implicated teacher – who has since been charged with ill-treating a child – had been with the school for years.
The whistleblower ended up leaving the preschool because she did not want to be part of the culture there.
“Before I resigned, I already voiced it out, but no action was taken. That’s why I chose to leave,” she told CNA.
If a company does not take a report seriously or blocks investigations internally, external options for the whistleblower can be limited, as Mr Gill experienced.
In the case of Wirecard, Mr Gill decided not to go straight to local or German regulators and authorities with the information he had.
The payments processor did not need a licence from the Monetary Authority of Singapore (MAS) to operate in the country at the time, and the fraud seemed to be happening on a global scale. In Germany, the firm was “well protected”.
Going to the police was a “scary” option because the tables could turn, and he could be questioned about the legality of his actions and his motives instead.
“Technically every whistleblower has committed an offence by virtue of taking confidential (information),” said Mr Gill, while noting that it may not be in the public interest to enforce this.
In the end, the Singapore Police Force was the only enforcement agency across the jurisdictions involved to act “right away” when the news reports came out, he said.
The regulator has since penalised three banks and an insurer, and seven people have been charged in relation to the case in Singapore.
But at the time of deciding whether to go to authorities, Mr Gill was on guard against unscrupulous tactics by Wirecard. “If a company is already faking contracts and forging documents, there is zero to prevent them from forging things that you didn’t do either.”
Whistleblowing is always a “David versus Goliath” scenario, he said. “With the resources companies have, they can launch a legal case against you, they can launch all kinds of offensives against you.
“So that’s why it’s very dangerous, because whistleblowers don’t know who to trust, and they don’t know who will weaponise the information that they have and use it to their own advantage.”
In the end, he felt that the only way to “shock everyone into doing something” across multiple jurisdictions was to give the scoop to a reputable international newspaper.
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”.
CULTURE AND ATTITUDES, NOT JUST LEGISLATION
Asked why Singapore does not yet have universal whistleblower legislation, experts pointed to the balancing act that Singapore plays between regulation and the ease of doing business.
“We have always catered more towards the business interests than the interests of investors, consumers, employees and other stakeholders,” said Prof Mak.
But introducing universal whistleblower legislation will not be enough, experts say. Corporate culture and social attitudes towards whistleblowing will also need to shift.
Prof Mak has seen the bad rep that whistleblowers get. When the non-profit board he was on wanted to rehire their whistleblower, the person did not want to return despite a good performance review.
The former employee thought his colleagues might know he was the informant. And while most members of the board were in favour of rehiring, some showed hesitation.
Singapore has so far preferred to encourage good governance through self-reporting and accounting oversight, said Mr Jabbar.
“Most of our organisations utilise an internal model of whistleblowing which focuses on internal resolution rather than external reporting. Such a model is influenced by our Asian culture, which could view whistleblowing negatively.”
He said that companies should in fact treat whistleblowers as an asset.
“This is because employees who sound the alarm about bad practices early can help to prevent an organisation’s reputation from being damaged through negative publicity, regulatory investigations or fines.”
Mr Gill echoed this. “If I saw a lady getting robbed, and I went all in and stopped that crime, and I reported it ... everybody thinks I’m a hero.”
This changes when the robber is your own employer. “Culturally, it's very complex” because of the association with “biting the hand that feeds”, he said.
“But the difference is you're actually not biting the hand that feeds, you’re trying to guide it, because the hand’s currently soiled.”
More and more, whistleblower protection also makes business sense on an international scale.
Strong whistleblowing policies and legislation are becoming important considerations by multinational companies deciding where to do business, said Mr Jabbar.
Governments around the world increasingly view whistleblowing as a way to improve regulatory compliance and accountability, and have legislation guaranteeing whistleblower protection, he said.
“This, coupled with comprehensive laws on anti-corruption, will help enhance Singapore’s reputation as a safe and corruption-free jurisdiction, helping to attract further investments into Singapore.”
MAKING WHISTLEBLOWING LESS PAINFUL
By protecting informants more comprehensively, universal whistleblowing legislation would make it “less painful” for people to come forward with information, said Prof Mak.
One place for this could be Singapore’s new workplace fairness law, which is expected to be ready in 2024. Lawyers pointed CNA to the recommendations made by the tripartite committee on workplace fairness.
The recommendations, which have been accepted by the government, include prohibiting retaliation against those who report workplace discrimination or harassment.
The committee also recommended that employers be required to have “grievance handling” processes, and to protect the identities of people who report workplace discrimination or harassment, where possible.
To accompany this, Singapore could also have laws that impose stronger obligations on companies to ensure that whistleblower policies work.
Prof Mak cited Malaysia, which imposes corporate liability on a company and personal liability on its senior management if a person associated with the company commits corruption.
Organisational culture can also change if employers give recognition to whistleblowers and start rewarding ethical behaviour in the company, he suggested.
For Mr Gill, his journey at Wirecard combined with his experience as a senior lawyer led him to create his new start-up Confide, a whistleblowing and risk management platform.
It allows organisations to provide staff, directors and vendors with a secure and anonymous whistleblowing platform to report any concerns.
The platform also has built-in triggers to move the investigation along while educating both the reporting party and case manager along the way.
Mr Gill may have been silenced inside Wirecard, but he said exposing what was happening from the outside has given him an “even louder voice” in the end.
“As long as you have truth on your side, then there's really nothing to fear, right?” he said.
“Because the people that should be fearing are those that are committing crimes, not those that are exposing them.”