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Make sure whistleblowing practices aren’t just hot air

Published on Friday, 03 Jan 2014
Pattie Walsh

The Background
Hong Kong prides itself on being a haven of corporate compliance and ethical business in a region where corruption and reputational damage are a significant business challenge. The current financial climate and the ongoing publicity around high-profile allegations of unlawful behaviour, however, have brought the topic of whistleblowers to the forefront.

Many of the largest corporate scandals have a whistleblower at their heart. Often the whistleblower is not taken seriously early enough. In the post-scandal analysis, the individual often talks of the immense pressure and difficulties he or she faced in raising their concerns internally.

Even at the more mundane level, simple breaches of internal policy or local legislation by senior management often put more junior or even peer-level employees in a difficult position. The employee worries that he or she will be viewed as a troublemaker and that his or her disclosure will have a negative impact on his or her career. This will increase the probability of that individual leaving his or her employment.

Many jurisdictions seek to address whistleblowers’ legitimate concerns by providing specific protection under their local law. Most corporate leaders would agree that those with legitimate concerns about internal misbehaviour should be given an avenue to raise such concerns. However, the opportunity for a disgruntled employee to use the anonymity usually afforded to a whistleblower to cause harm and mischief requires that a balance be made between individuals’ conflicting rights. Those implicated in allegations of inappropriate or unlawful conduct also need to be given adequate protection to ensure reputations are not wrongfully destroyed.

The Local Situation
In Hong Kong there is no express protection for those who blow the whistle. This is in direct contrast to Japan, where there exists the Whistleblower Protection Act; and China, with the Labour Security Supervision Regulation and the PRC Criminal Procedure Law.

However, Hong Kong employers do need to be aware of the workings of the Prevention of Bribery Ordinance. This provides a criminal process for those engaging in bribery when dealing with a public body, and of the very broad offence of soliciting or accepting a bribe or advantage when conducting affairs on business on behalf of an employer.

In addition, the broad powers of the Independent Commission Against Corruption (ICAC) must also be fully understood. Individuals can make a complaint simply by anonymously contacting the 24-hour hotline. The ICAC is a sophisticated and tenacious body which works closely with the Joint Financial Intelligence Unit, which is jointly run by the police and the Customs and Excise departments.

The Action Required
Notwithstanding the absence of whistleblowing legislation in Hong Kong, most sophisticated employers seek to ensure that they have in place adequate mechanisms to encourage employees to raise concerns internally, without feeling forced to go externally as an initial step.

Good clear processes are critical. These must provide a safe route to raise concerns anonymously, and make it clear that legitimate concerns will not result in any stigmatisation or victimisation of the employee. Even if suspicions are not established, as long as the intention of the employee was well motivated, he or she should be protected. An anonymous hotline, or way of reporting concerns outside of the employee’s working environment, is essential.

Once a complaint has been raised, it is then critical that it is handled with confidentiality and privacy very much in mind. However, the duties and responsibilities not only to the complainant, but also those being accused, need to be continually balanced.

The way an organisation then responds if inappropriate conduct is established is also critical. The Hong Kong preference is often for a low-key exit and “resignation” by senior staff, rather than any public sanction. However, this may undermine the integrity of the internal processes and willingness of individuals to come forward in the future. Those who lead the business have to be prepared to take the difficult decisions to make sure that both the corporate culture and intolerance for wrong behaviour is understood – both internally and externally.

Editor’s Note: For DLA Piper’s full report – “Whistleblowing: An employer’s guide to global compliance” – contact Yuming Lu at

DLA Piper is a global law firm with 4,200 lawyers located in more than 30 countries throughout the Americas, Asia, Europe and the Middle East. Pattie Walsh is a partner and head of DLA Piper’s Asia-Pacific employment practice. She writes extensively for legal and HR publications, with a particular focus on multi-jurisdictional employment work.

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