Whistle-blowers under the Protected Disclosures Act (PDA) were not being safeguarded enough against reprisals from their employers, Open Democracy Advice Centre (Odac) Chief Operating Officer Alison Tilley said on Monday.
Even though corruption was widespread in South Africa, not enough employees were coming forward to disclose what they knew about wrongdoing in the workplace, Tilley said.
“Commentators are already asking whether the Brett Kebble saga will be South Africa’s own Enron. Randgold and Exploration released a forensic audit showing R2-billion was stolen while Brett Kebble was CEO, and JCI indicates R500-million was misappropriated,” she added.
“But no parallel to Enron has emerged in relation to whistle-blowers — where employees raised concerns about fraudulent goings-on inside the company to management, or attempted to raise those issues with the board,” Tilley said.
“Surely someone must have known of the fraud that [was] being enacted. Why did they not speak out?” she added.
“In the Enron case, Sherron Watkins — the company’s vice-president of corporate development — brought her concerns to attention of both her boss, Kenneth Lay, and the auditors, Arthur Andersen. She eventually became one of Time magazine’s people of the year, Arthur Andersen was liquidated, and Kenneth Lay faces six counts of fraud and conspiracy,” Tilley said.
Last year, various shortcomings of the PDA — which was enacted in 2000 — were identified at the National Anti-Corruption Forum, and a resolution was taken that the law-reform commission should address these.
The commission was due to have delivered its report on changes to the PDA to the Parliamentary committees on Justice last December, but no report has appeared.
Tilley said the PDA was good in many parts, but was inadequate overall.
Harry Charlton, Glenn Chase and Tatolo Setlai are just a few of the high-profile whistle-blowers who have been victims of ongoing harassment, despite the PDA’s prohibition of “occupational detriment”, that is, the harassment of whistle-blowers for making disclosures about workplace corruption.
Where an employee has been dismissed and has qualified for protection in terms of the Act, the compensation is limited to 24-months’ salary.
“This is a small amount when considering the ‘other costs’ to the employee of whistle-blowing, which can often include protracted and expensive legal proceedings, negative perceptions of the whistle-blower by the community and potential employers, not to mention the cost to personal and family life,” Tilley said.
The justice committee was aware of these shortcomings and had referred the question of damages to the South African law-reform commission.
Their investigation had looked at a number of issues, including widening the ambit of the Act to include a broader category of people, including contractors.
Many whistle-blowers were not in formal employer-employee relationships, and phenomena such as downsizing, outsourcing, and restructuring had taken their toll on the traditional employment relationship, Odac said.
The justice committee had also looked at extending the damages that might be awarded to the actual loss suffered, Odac added.
Other areas that the justice committee was looking at was allowing a remedy in the case of so called “citizens’ whistle-blowing”, where the person reporting the wrongdoing required the protection of the law, and protecting the whistle-blower against defamation actions, as well as actions in terms of the public service regulations, where whistle-blowers are disciplined for release of information that was not authorised.
The collapse of Enron and Worldcom led to a number of changes being made to the regulatory framework in the United States. One of the most important was the Sarbanes-Oxley Act of 2002, which significantly improved the legislative protection offered to whistle-blowers, Odac said.
“If there are no whistle-blowers in Kebble’s story of greed and theft, is it because the law does not provide them with an adequate shield?” Tilley questioned.
Transparency International South Africa and the Civil Society Network Against Corruption would be holding a meeting on Thursday to discuss a plan of action for civil society in response to corporate corruption, specifically relating to the Kebble fraud and issue of judges being paid for performing private work. — I-Net Bridge