Every Corrupt Practice, both in the Private and Public sphere ranging from bribery to price fixing or contract inflation, evidently involves at least a few insiders who were either aware, or had suspicions that something was amiss.  Security agencies and prosecutors globally, receive information from employees within government agencies and corporation within companies who detect wrongdoing, but not every case features a whistleblower. Given that many more incidents may go undetected by the authorities, it is obvious that they have every reason to encourage whistleblowers to come forward.

Only recently, precisely on the 21st of December, 2016, the Federal Republic of Nigeria through its finance Minister, Mrs Kemi Adeosun announced some form of policy which will encourage whistleblowing and planned remuneration not below 5% of the recovered loot resulting from divulging priced sensitive information useful to the government in its recovery bid. Several questions have been agitating most minds including the writer, which includes thus – whether a mere policy pronouncement by the federal Government can firmly sustain the whistleblowing concept without an enabling legal framework duly passed by the National Assembly.

After Edwin Snowden, which was perceived to be the biggest whistleblowing scandal with tremendous security exposures to the United States, these discussions have been ongoing in several jurisdiction including the UK on the appropriate legal framework and the means by which to promote same.

 

EXISTING FRAMEWORK

Presently, to the best of the writer’s knowledge there is no specific legislation that directly deals with whistleblowing in Nigeria.  However certain existing legislations can be construed to give some credence to the concept. Section 39 (1) of the Economic Financial Crimes Commission (Establishment) Act 2004 and Section 64 (1) Independent Corrupt Practices and Other Related Offences Act 2000.

However, during the tenure of the 7th National Assembly of Nigeria, two bills on this subject matter were pending before both Houses seeking to protect disclosures made in public interest and whistleblowers. The bills, as sourced from the official website of the National Assembly have not been passed into law. The first bill is captioned “WHISTLEBLOWER PROTECTION BILL, 2008” (H.B. 117). It seeks to provide for the manner in which individuals may in the public interest, disclose information that relate to unlawful or other illegal conduct or corrupt practices of others and to provide for the protection against victimization of persons who make these disclosures. The Record shows that the Bill was sponsored by Senator Ganiyu Olanrewaju Solomon.

The second bill is captioned “SAFEGUARDED DISCLOSURE (WHISTLE BLOWERS, SPECIAL PROVISIONS, ETC. BILL, 2009” (H.B 167).  sponsored by Honorable John Halims Agoda.

The Text of this bill seeks to make provisions for the procedure by which persons employed in the public and private sectors may disclose information regarding unlawful and other irregular practices and conduct in workplace and to provide protection against any occupational detriment or reprisals of a person making such disclosures.

The true state of the pending bills cannot be ascertained right now, but by the effluxion of the tenure of the 7th National Assembly those bills by logical implication automatically abates, unless represented to the respective houses. Albeit so, re-introduction of the Whistleblower Protection Bill is therefore highly welcomed. A single legislative instrument would be beneficial, as it would contain protective measures to bridge the gap where the other statutory provisions appear to neglect.

In addition, this single legislation could be utilised as an anti-corruption tool. It is possible that banks, knowingly or unknowingly are used as a mechanism for the purposes of money laundering. In the instance that members of staff are able to bypass certain security measures, it further affords money launders the ability to launder money through banks, undetected. If this then remains unreported by members of staff who witness their superiors bypassing these necessary checks, it also further enhances the operations of money laundering. Thus, the passing of the Whistleblower Protection Bills, with protective measures included, would assist in curbing corruption.

Consequently, it is in great doubt that without a subsisting duly passed Legislation, the Policy as announced by the esteemed Minister of Finance might suffer serious legal challenges as the framework would be inchoate or at best another toothless policy guideline without the requisite legal and enabling backing.

 

GLOBAL OUTLOOK ON THE CONCEPT

In countries like Japan, United States and South Korea whistleblowers are not only protected from victimization or dismissal, they are even rewarded and celebrated. Whistleblowing was statutorily recognized in the United States as early as 1863. In 1989, the Whistleblower Protection Act was passed. The Act protects Federal workers disclosing any information they reasonably believe violates the law, rule or regulation or any information disclosing abuse of authority, gross waste of funds, mismanagement, significant and specific risk to public health and safety. In order to encourage and support a whistleblower, the United States Office of Special Counsel (OSC) was established in 1979 and operates as confidential disclosure channel for whistleblowers in the federal employment. In 2007 the Whistleblower Protection Enhancement Act of 2007 was passed which by implication repealed the 1989 Act.  The Dodd Frank Act 2010 gives powers to the Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC) to pay awards to whistleblowers. SEC can award a person who supplies high quality information between 10% and 30% of the proceeds recovered, if the penalties surpass $1m. In its 2013 Annual Report to congress on Dodd-Frank Whistleblower Program, SEC reported that just one in ten whistleblower reports were from outside of the US, with 16 percent of those originating from the UK. The largest whistleblower payout to date, reported in September 2014 to amount to more than $30m, is due to be made an overseas whistleblower. The US department of Justice has a similar power to make awards to whistleblowers in relation to prosecutions under the Foreign Corrupt Practices Act.

In the UK, the Public Interest Disclosure Act (PIDA) 1999 was passed. PIDA protects both public and private sector employees who make a ‘qualifying disclosure’. Qualifying disclosure is any disclosure of criminal offence, of a failure to comply with any legal obligation, of a miscarriage of justice, danger to the health and safety of any individual, of damage to the environment or of a deliberate concealment of information relating to any of the above that has been, is being or is likely to be committed.

In 2013, owing to concerns in the UK that the whistleblowing framework may not sufficiently protect and encourage potential whistleblowers, both the Parliamentary Commission on Banking Standards (PCBS) and the Department for Business, innovation and Skills (BIS) issued a call for evidence on how the current whistleblowing framework is working, at the wake of the LIBOR rigging and mis-selling scandals. On the 19th of June 2013 it published its long-awaited report captured “ changing banking for good”. The PCBS reported that it was shocked that so many people turned a blind eye to misbehavior and failed to report it, and stated the people best placed to flag up emerging failings culture and standards are a bank’s own employees. Despite the widespread knowledge of the LIBOR-rigging on the trading floor, no employee apparently felt sufficiently concerned, or sufficiently confident, to whistleblow by escalating the problem internally, or informing the regulator. The PCBS stressed that more needs to be done to encourage whistleblowers to come forward. The report made a number of recommendations to ensure more effective support for whistleblowers in the banking sector.

To be continued…….