LAWS TO PROTECT WHISTLE-BLOWERS

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LAWS TO PROTECT WHISTLE-BLOWERS

42.

Mdm Halimah Yacob asked the Prime Minister and Minister for Finance whether his Ministry will consider introducing laws to protect whistleblowers, akin to the laws in the UK and US in order to improve the standards of corporate governance and disclosure in Singapore.

Mr Lee Hsien Loong: Employees can play a vital part in preventing fraud because often they have intimate knowledge of what is really going on in the company. For large and complex organisations, it would be extremely difficult to uncover fraud without some help from within the company. Enron and WorldCom are just two examples where so-called corporate whistle-blowers have been instrumental in surfacing corporate fraud. Indeed, the UK through its Public Interests Disclosure Act and the US through the Sarbanes Oxley Act have, amongst other things, tried to provide some form of protection for whistle-blowers.

It is too early to say whether such legislation has had the desired benefits or whether it has led to some unintended consequences. For instance, there could be a proliferation of unfounded allegations of fraud from employees who may simply have an axe to grind but who now have the protection of the law. This would not only undermine our companies but also cause disruption to operations. Second, it is not clear that we need specific legislation to protect whistle-blowers given the many other reforms, especially in the area of internal controls, which we have put in place in recent years to enhance corporate stewardship. For instance, auditors are required under the Companies Act to report to the Minister for Finance should they come across, in the course of their duties, a possible fraud or act of dishonesty by officers or employees against a public company. The authorities, such as the Accounting and Corporate Regulatory Authority, the Monetary Authority of Singapore and the Commercial Affairs Department have also been able to rely on anonymous complaints and tip offs to surface possible fraud cases.

Even so, it is important that we continually review our practices in the light of developments here and experience elsewhere. The Accounting and Corporate Regulatory Authority (ACRA) has been studying the whistle-blowing legislation in other countries, to see if they have had the desired effects, check if there have been unintended

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consequences, and assess if Singapore should adopt a similar law to protect whistle-blowers.