Whistleblowers play a key role in exposing corruption, fraud, incorrect financial reporting and other wrongdoing in every business and public agency. Usually the first people to suspect unlawful or improper conduct are those who work within or with the organisation. A typical organisation loses five percent of its revenues to fraud each year1 and the longer the misconduct lasts, the more money the company or organisation will stand to lose.
Generally, whistleblowing is defined to be ‘… the disclosure of information about perceived wrongdoing in an organisation, or the risk thereof, to individuals or entities believed to be able to effect action’2. The ultimate goal of whistleblowing is to protect the public interest. It achieves this by informing people or organisations that are in a position to prevent harm to investigate or to take action against those responsible for wrongdoing.
Recently, the Omani judiciary, the State Audit Commission and other arms of the Government have been successful in identifying and rooting out bribery and other forms of corruption in connection with the tendering and award of public contracts. These high-profile cases have been widely reported in the local and international press. Criminal convictions have been obtained and civil fines have been imposed on the guilty individuals. We believe that it is the right time for senior management of both Omani public and private organisations to examine whether they have in place a comprehensive whistleblowing programme. It is important to make the employees and stakeholders aware of the programme and essential that such policies provide accessible disclosure channels to whistleblowers and protect them from all forms of retaliation. The policy should also make sure that the disclosures are beneficial to advance reforms, which may be required in the organisation.
The Extent of Whistleblowing Policy in Oman
Recognising the role of whistleblowing in detecting fraud, corruption and other non-ethical behaviour, many countries have enacted or pledged to enact whistleblower protection laws through domestic legislation and international conventions. Currently, specific whistleblowing legislation does not exist in Oman or in the other GCC countries. Where no legislation exists to encourage and protect the whistleblower, the burden then shifts to management of the organisation to respond to whistleblower allegations. There is no doubt that GCC countries will need to put in place whistleblowing programmes in order to comply with international expectations and requirements. In practice, this means directors and senior management will have to demonstrate that their system is fair, transparent and has adequate safeguards for the whistleblower.
In Oman, certain banks, government agencies and international corporates have adopted robust whistleblower protection programmes. Bank Muscat, for example, has had a comprehensive whistleblowing programme in place since June 2009. It provides protection for the whistleblower and sets out internal and external reporting channels and puts the Deputy General Manager for Audit in charge of managing and implementing the overall programme. He must report to the Bank’s Board and Executive Management quarterly providing a commentary on the type and volume of disclosures and serious issues arising and progress in bringing the disclosures to a satisfactory conclusion. Recently the Omani State General Reserve Fund, a sovereign wealth fund, adopted its own wide-ranging whistleblowing programme aimed at encouraging the reporting of illegal practices. Similarly, in the private sector, WS Atkins, a design, engineering and project management consultancy, maintains a comprehensive and widely publicised whistleblowers policy aimed at encouraging a culture of integrity and honesty within Atkins operations worldwide, including in Oman.
The concept of anonymous reporting is not widely accepted in the Middle East. Fear of unfounded allegations arising is the basis for such worry and the idea of informing on someone has hitherto been considered unacceptable. Cultural issues aside, it remains a fact that ‘tip offs’ still provide a significant percentage of fraudulent detections. Without domestic legislation, as in Oman, the whistleblower will have to rely on the organisation’s own whistleblower protection policy. A genuine whistleblower will need comfort from senior management of the organisation because they frequently take on high personal risks. It is therefore essential that any whistleblower policy provide effective protection against retaliation. Such retaliatory actions may include unfavourable personnel actions, for instance demoting, blacklisting, denying benefits, denying promotion, making threats and generally intimidation, reassignment to less desirable positions, pay reduction and suspension or termination.
Principles of Whistleblowing Legislation
The not-for-profit organisation Transparency International has prepared a set of key principles for drafting whistleblowing legislation. Some of the recommendations derived from these principles are:
- a single comprehensive legal framework is most effective;
- safety should be ensured for whistleblowers;
- internal and external reporting must be protected;
- enforcement is essential;
- strong and transparent internal policies are needed;
- confidential reporting must be ensured;
- impartial and accountable investigations need to be carried out;
- public support is needed to promote whistleblowing; and
- data on the public benefits of whistleblowing should be collected and published.
The lack of domestic whistleblowers legislation in Oman has resulted in the private sector taking the lead in enacting internal anti-bribery and whistleblowing programmes. Some forward-thinking Government departments have followed with equally robust whistleblowing programmes. Omani and international companies doing business in Oman that plan on implementing anti-corruption measures will undoubtedly find it difficult to do so without also putting in place a comprehensive whistleblowing programme.
1. As reported in 2012 Report to the Nations on Occupational Fraud and Abuse Association of Certified Fraud Examiners.↩
2. TI Policy Position, # 01/2010.↩