Whistleblowing
What is Whistleblowing?
Whistleblowing refers to the act of revealing information about illegal, unethical, or harmful activities within an organisation. Whistleblowers are individuals who courageously bring these issues to light, often at great personal cost. Their disclosures can lead to uncovering corporate fraud, corruption, environmental violations, or other misconduct that would otherwise remain hidden.
The protections given to whistleblowers:
The Companies Act provides three protections to whistleblowers.
- First, they get qualified privilege for their disclosure. This means that they cannot be sued for defamation for what they said, unless they acted with malice or an improper motive.
- Secondly, they are immune from civil, criminal or administrative liability for their disclosure. This means that they are protected from liability for making the disclosure of wrongdoing. But they are not immune from liability for their own conduct that may have been revealed by the disclosure.
- Thirdly, whistleblowers may claim compensation for any damages they suffer if anyone harms them or threatens to harm them.
Read more about the protections given to whistleblowers from:
Kreston SA Supports the Protection of Whistleblowers
Corporate misconduct often operates behind a veil of complex transactions, misleading records, and intricate company structures. This secrecy makes it difficult to detect and prove corporate crimes and corruption. However, corporate whistleblowers who possess inside information about misconduct play a crucial role in exposing such wrongdoing. These individuals, however, face personal and financial risks when they come forward, which highlights the importance of effective whistleblower protection measures.
Kreston SA would like to ensure and advance the reporting and protection of whistleblowers in the public and private sectors. These individuals play a pivotal role as stewards of integrity and transparency within the corporate landscape.
Impact of Financial Fraud on the South African Economy
In South Africa, the detrimental effects of financial fraud on the economy are substantial. Corporate corruption and fraudulent activities can erode public trust in institutions, deter foreign investment, and hinder economic growth. With a high level of corporate corruption in the country, it’s imperative to protect whistleblowers who expose such practices.
Please refer to originating article for more information: https://ddp.org.za/blog/2020/10/06/implication-of-corruption-on-economic-growth-in-south-africa/
Regulations Protecting Whistleblowers in South Africa
While whistleblowers are vital for accountability, the protection afforded to them in South Africa falls short of international standards. Although there are certain legal provisions, whistleblowers still face significant risks, resulting in low reporting rates of wrongdoing. Fear of retaliation and job loss are the primary reasons behind this hesitancy to come forward.
Section 159 of the Companies Act of 2008 and the Protected Disclosures Act of 2000 provides some protection to corporate whistleblowers in South Africa. This protection applies to those who disclose company or directorial misconduct in good faith and with a reasonable belief in the wrongdoing. Wrongdoing could encompass breaches of various legislation, non-compliance with laws, endangerment of health and safety, environmental harm, or discrimination.
The Companies Act extends protection to several categories of individuals, including shareholders, directors, company secretaries, prescribed officers, registered trade unions, suppliers, and their employees.
The regulation of corporate whistleblowing:
Whistleblowing in private and public sector companies, including state-owned entities, is regulated by Section 159 of the Companies Act of 2008.
It protects corporate whistleblowers who disclose wrongdoing by the company or a director or prescribed officer. But to be protected, the whistleblower must act in good faith and must reasonably believe that there was wrongdoing.
The wrongdoing could relate to breaches of the Companies Act or other legislation, a failure to comply with the law, any acts that endanger the health and safety of a person or harm the environment, or unfair discrimination.
The disclosure of wrongdoing must be made to specific persons. These include the Companies and Intellectual Property Commission, the Companies Tribunal, a director, prescribed officer, company secretary, auditor, legal advisor, the board or a committee of the company.
The corporate whistleblowers who are protected by the Companies Act include shareholders, directors, company secretaries, prescribed officers, registered trade unions, and suppliers of goods.
Read more about the regulations governing corporate whistleblowing by following this link to the originating article:
Contact Us
You can contact us:
- By email: risk@krestonsa.com