BY GURDIAL SINGH NIJAR
(Deputy President, HAKAM)
In the last 12 months, two key banks were fouled for non-compliance of laws. AmBank Group was slapped with a fine of RM53.7 million. The CIMB Group was required to initiate an independent review of its processes relating to the transfer of US$7 million for questionable purposes. The chairman of AmBank Group, which is at the centre of the 1MDB money trail, said that money launderers are getting smarter despite tougher regulations.
Bank Negara’s freshly-minted guidelines include a detailed whistleblowing policy that all banks and financial institutions must implement. They must set up a comprehensive system that allows for complaints to be made not only within the bank structure but to other regulators or law-enforcement agencies. Third parties dealing with banks – such as contractors and consultants – must be informed of this policy. And there must be periodic reporting and monitoring to oversee and assess that the policy is implemented and working effectively.
These guidelines could not come at a more propitious time – given the battering of Malaysia’s image internationally involving money laundering.
The guidelines actually operationalise the 2010 Whistleblower Protection Act – which was put in place to combat corruption and other wrongdoings. It is meant to encourage employees and others to report certain kinds of wrongdoing – whether in the public or private sector. As a whistleblower you’re protected by law – you shouldn’t be treated unfairly or lose your job or suffer any form of direct or indirect adverse consequence because you “blow the whistle”.
The wrongdoing you disclose must be in the public interest. This means it must affect others – the general public. You can raise your concern about an incident that happened in the past, is happening now, or you believe will happen in the near future.
There must be a reasonable belief that a person is engaged or about to engage in improper conduct. And the disclosure must not be specifically prohibited by any written law.
The complaint can be made even if the wrongdoer cannot be identified. The information given, and the whistleblower’s identity, must be kept confidential.
But he can lose the protection for a number of reasons: if it is found out that the blower participated in the improper conduct; or he knew, or believed, the complaint to be false; or the complaint is frivolous; or principally involves questioning the merits of government policy; or is made with the motive of avoiding some action against himself such as dismissal or other disciplinary action; or the blower commits an offence in the course of making the disclosure.
Given the pitfalls and the complexity of the law – for example how would a lay person know for sure whether the disclosure is prohibited under any written law – it may not be surprising that there is no rush to blow the whistle.
A member of Parliament has been charged when he blew the whistle with regard to the existence and use of funds in a bank for allegedly extraneous purposes. As an MP he was obviously acting to further public interest and publicising an impropriety. He should have been protected. Instead he was charged for obtaining confidential information of a customer’s accounts in violation of a bank secrecy law.
The whistleblowing must be to an enforcement agency – such as the police or other federal government bodies.
Recently, a lawyer and his client were charged for seeking the help of a foreign regulatory authority over an alleged illegality. Their crime? For referring the matter to a foreign institution rather than to the inspector-general of police.
The enforcement agency is obliged to investigate and act against the person against whom the whistle has been blown. This is where the snag lies. There is a lack of confidence that the complaint will be properly investigated and the wrongdoer charged, especially if the wrongdoer is a well-connected official. There are widely reported cases of the police acting against those who “leak” documents. Even if they reveal serious improprieties. The whistleblower, and not the identified culprit, ends up getting (or threatened with) prosecution. The messenger gets shot instead!
The upshot is that unless there is sufficient confidence and trust in the institutions and regulatory policing bodies, the Whistleblowers Protection Act will remain a potentially good, but practically, a dead law. Many a flower is born to blush and bloom and fade away unseen.
Gurdial, a former law professor is currently a legal consultant, and Deputy President of HAKAM.