Policy

IDEAS
№ 36
Febraury 2017

A critical look into the

Whistleblower Protection Act 2010

Christopher Leong

MAINSTREAMING MARKET IDEAS

2 A critical look into the Whistleblower Protection Act 2010
 Policy IDEAS № 36

Abstract:
Despite the introduction of the Whistleblower Protection Act 2010 (the
Act), whistleblowing is still a rare occurrence in Malaysia. In fact, the
annual report from the Malaysian Anti-Corruption Commission (MACC)
in 2012 indicates that out of a total of 8,953 complaints received by the
Commission only 28 were from whistleblowers. However, data from the
US suggests that as a method of detection whistleblowing is the single
most effective means of uncovering graft. Considering the importance
of whistleblowers in discovering cases of fraud the low number of
whistleblowers as observed through the MACC statistics suggest that
whistleblowers in Malaysia remain hesitant.

In order to encourage more individuals to come forward and whistleblow, there must be
several changes made to Whistleblower Protection Act 20101. To achieve this, the following
three areas need to be reformed under the Act:

1
Protection for
2
Independence of the
3
Whistleblowing
Whistleblowers - Act - Mechanism -
the level of protection for the Act still remains a more
whistleblowers needs to be vulnerable to Ministerial comprehensive
improved and reinforced. action and it needs whistleblowing
to be made entirely mechanism needs to
independent of such be created - one that
influence. is more robust than
the current model.

Christopher Leong is a Board member at IDEAS and an advocate and solicitor of the High Court of
Malaya of more than 25 years standing. He is also the Managing Partner of Chooi & Company.

Christopher has extensive experience in the fields of corporate and commercial litigation, shareholders’ disputes,
banking litigation and insolvency. Additionally, he practices in the area of constitutional and administrative law.

In the field of dispute resolution, Christopher has been named as a Leading Individual/Lawyer in Malaysia by
Asia Pacific Legal 500 since 2004, Chambers Asia since 2009, by The Asialaw Leading Lawyer since 2008, and is
a Recommended Individual in the 2015 edition of Asialaw Profiles.

Christopher was the 30th President of the Malaysian Bar and the immediate past Chairman of the Bar Council
of Malaysia.

1
This paper is an adaptation of Christopher Leong’s speech at a Whistleblower Forum organised by the Malaysian Anti-Corruption Commission (MACC) on July 21, 2014

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1. Introduction
As corruption is usually covert, it is difficult to combat it According
if there is limited access to crucial evidence in the form to the US
of confidential or insider information. The success of our Association of
enforcement agencies such as the police, or the Malaysian Certified Fraud
Anti-Corruption Commission (MACC) would in many Examiner's
instances depend on the information specifically given report to the
by people who are willing to come forward and inform Nation in 2008
enforcement agencies of a corrupt act or of organised
crime. These people are known as whistleblowers. 46.2%
of fraud cases are
David Lehmann, the former Head of Deloitte Forensics at Deloitte
Malaysia, has described whistleblowing as ‘the most significant means
discovered by
by which serious misconduct, such as fraud and corruption is detected’ tipoffs.
(Lehmann, 2015). The Watergate scandal would have never surfaced
in the United States (US) were it not for inside information from a
whistleblower, Deep Throat. He was an ex-Deputy Director of the FBI
and White House counsel, who gave crucial evidence which resulted in
the criminal prosecution of 69 government officials and the impeachment
of President Nixon (Marsh, 2005). In Malaysia, the financial scandal in the
early 1980s involving Bumiputra Malaysia Finance (BMF)2 which led to the
murder of its internal auditor, may have been uncovered before such a
fatal occurrence had there been a decent whistleblower protection law
in place.

Data from the US suggests that as a method of detection whistleblowing

is the single most effective means of uncovering graft. The US
Association of Certified Fraud Examiner’s Report to the Nation in 2008
revealed that 46.2 percent of all fraud cases discovered in that year were
through tip-offs from whistleblowers. The next most common means of
discovery, being internal controls, was only half as effective, at 23.3 percent
(Association of Certified Fraud Examiners, 2008).

However, we have to consider that safety is a concern for an individual who

is contemplating whistleblowing. For a whistleblower to come forward,
they must have the confidence that they will be guaranteed protection
before, during, and after the disclosure; that the enforcement agencies are
independent; and that action will be taken after the disclosure of improper
conduct.

2
In this case it was discovered that Bumiputra Malaysia Finance, a Hong Kong based subsidiary of state-owned Bank Bumiputra Malaysia Berhad, engaged in a wide range of suspicious dealings with the Carrian Group, a
major player in Hong Kong’s then booming property market. This case occurred in the mid-1980s. Details of this case included fiscally imprudent decisions such as lending to “connected” borrowers.

4 A critical look into the Whistleblower Protection Act 2010

 Policy IDEAS № 36

1.1 Existing Legal Framework for Whistleblower

Protection
The Securities Commission Act 1993, Section 140, provides confidentiality
for whistleblowers to the Securities Commission with regards to
their identity and information. The Capital Markets and Services Act
2007 extends additional protection to auditors and CEOs (Securities
Commission Malaysia website). Additionally, under Section 65 of the
Malaysian Anti-Corruption Act 2009, the same protection is extended
to whistleblowers reporting any fraud in the public sphere. In 2010, to
complement the existing legal framework, the government enacted the
Whistleblowers Protection Act 2010 (hereinafter referred to as the “Act”).

Despite the introduction of various legal frameworks, whistleblowing In 2012, out of a total of
in Malaysia remains rare in comparison to the number of complaints 8,953 complaints received
received by various enforcement agencies. Figures presented in Table 1
show that, in 2012, out of a total of 8,953 complaints received by the by the MACC only 28 were
MACC only 28 were from whistleblowers. For the Police, out of a total of from whistleblowers. For
1,475 complaints, 67 were from whistleblowers (MACC Annual Report, the police, out of a total of
2012). Considering the importance of whistleblowers in discovering cases 1,475 complaints, 67 were
of fraud, as exemplified by the US, these numbers suggest whistleblowers
in Malaysia remain hesitant. from whistleblowers.

Table 1: Number of whistleblowers complaints to various Malaysian enforcement MACC Annual Report 2012
agencies in 20123

NUMBER OF NUMBER OF
AGENCY
COMPLAINTS RECEIVED WHISTLEBLOWERS
Royal Malaysian
1,475 67
Police
MACC 8,953 28

KASTAM 375 0

JPJ 737 1

IMIGRESEN 125 0

SC 447 0

SSM 1,895 2

While the Whistleblower Protection Act 2010 has helped fill a key gap in
Malaysia’s anti-corruption landscape, it needs to be improved upon. This
paper discusses key features that can be incorporated into the Act to make
whistleblowing more effective and palatable to potential whistleblowers.

3
The latest MACC Annual Report available online is for 2012.

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2. An overview of the current
Whistleblower Protection Act
2010
2.1 An Act to Combat Corruption
The Act was enacted in 2010 as part of the Government Transformation
Plan (GTP)4 in a drive to eliminate corruption. The Act was aimed at tying
together previous whistleblowing legislations to create a more comprehensive
whistleblowing system.

Whistleblowing protection was and strengthening measures to

extended to those reporting prevent and combat corruption The preamble to the Act
corruption in the public sphere, more efficiently and effectively describes it as:-
complementing both the Securities (United Nations Office on Drugs An Act to combat corruption
Commission Act and the Capital and Crime, 2004). and other wrongdoings by
Markets and Services Act which encouraging and facilitating
focused mainly on the private The Act consists of 27 sections disclosures of improper conduct
sector. The Act also expanded grouped into 7 parts6. It sets out in the public and private
on the whistleblower protection a mechanism for whistleblowers sector, to protect persons
outlined in Section 65 of the MACC to make disclosures as well making those disclosures from
Act to create a more detailed as measures to protect detrimental action, to provide
and comprehensive system. whistleblowers, both in ensuring for the matters disclosed to be
All this was aimed at bringing their confidentiality and ensuring investigated and dealt with and
Malaysia closer to the targets it they are not the target of reprisals to provide for other matters
had agreed to as a signatory of via harassment, intimidation and connected therewith.
the United Nations Convention a variety of other actions that
Against Corruption (UNCAC)5. In would lead to adverse or negative
particular this included promoting consequences.

4
The Government Transformation Programme (GTP) is a broad-based programme of change to fundamentally transform the Government into an efficient and rakyat-centred institution.
5
Malaysia signed the United Nations Convention against Corruption (UNCAC) on 9th December 2003 and ratified UNCAC on 24th September 2008.
6
The sections include: Administration, Whistleblower Protection, Dealing with Disclosure of Improper Conduct, Complaints of Detrimental Action and Remedies, and Enforcement, Offences and Penalties.

6 A critical look into the Whistleblower Protection Act 2010

 Policy IDEAS № 36

2.2 Defining a Whistleblower

The Act defines a whistleblower – provided that such disclosure
as anybody with information is not specifically prohibited by
with respect to improper any written law. This can be As long as the person
conduct who discloses that interpreted to include any hearsay7 makes the disclosure to an
information to an enforcement statements or information as long enforcement agency, he is
agency. Improper conduct is as the informant has reasonable
defined as conduct which, if belief that the information is true.
assured protection.
proven, constitutes a disciplinary
or criminal offence (Legal Affairs Under the Act, protection given to
Division, Prime Ministers Office, the whistleblower is the protection
2010). Improper conduct under of confidential information.
the Act, therefore, comprises Confidential information is defined
of any corrupt practices or any as the identity of the informant, the
criminal offences (Legal Affairs information given by the informant,
Division, Prime Ministers Office, and the circumstance in which that
2010). information is received. As long as
the person makes the disclosure
A whistleblower, based on his to an enforcement agency8, he is
reasonable belief, can disclose any assured protection (Legal Affairs
information about any person Division, Prime Ministers Office,
that has engaged in, is engaging or 2010).
preparing to engage in such conduct

2.3 The Protections Granted

Anybody who takes
The protection given is protection whistleblower will be subject to a
detrimental action
of confidential information, fine not exceeding RM100,000.00
against the whistleblower
which includes the identity of the or imprisonment not exceeding
or anyone associated
informant, immunity from civil and 15 years or both. 11The protection
with the whistleblower
criminal action for the informant, extended by the Act to “any
will be subject to a
and protection against retaliatory person related to or associated
fine not exceeding
action.9 Such retaliatory action is with the whistleblower” recognises
RM100,000.00 or
termed as “detrimental action”10 in that the wellbeing and security of
imprisonment not
the Act. those close to the whistleblower is
exceeding 15 years
an important consideration for a
or both.
Anybody who takes detrimental whistleblower’s decision to come
action against the whistleblower forward.
or anyone associated with the
7
Hearsay statement refers to information which an informant does not have 1st hand knowledge of and has obtained it from a third party.
8
The five key enforcement agencies are the Royal Malaysian Police Force, Royal Malaysian Customs Department, Road Transport Department, Malaysian Anti-Corruption Commission and the Immigration Department of
Malaysia.
9
Section 7 of the Act.
10
This would cover any interference with the lawful employment and livelihood of any person including discrimination, discharge, demotion, suspension, and disadvantage. Termination or adverse treatment in relation to a
person’s employment, career, professions, trade or business also counts as retaliation.
11
Section 10 of the Act. Sections 14 to 19 cover the procedure for redress against detrimental action.

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 2.4 Room for improvement
The Act has some positive do not extend protection to
features which are not included persons related to or associated
in whistleblower protection with the whistleblower. Whereas,
legislation in some other the Malaysian Act extends its
Commonwealth countries. For jurisdiction down to the state
example, India’s whistleblower level, provides fiscal incentives
protection act known as the Public and penalties as well as extending
Interest Disclosure and Protection protection to persons related to
to Persons Making the Disclosure whistleblower. The Malaysian Act extends
Act 2010, limits its jurisdiction to its jurisdiction down to the
the government sector at federal While the Act in Malaysia may be state level, provides fiscal
level, and does not provide financial said to be more comprehensive
incentives for whistleblowing than similar legislation in these
incentives and penalties as
or penalties for victimising a other countries gaps still remain. well as extending protection
complainant. The second example The whistleblowing mechanism to persons related to
is that of United Kingdom’s (UK) still has shortcomings. Further whistleblower.
Public Interest Disclosure Act 1998 modifications can strengthen the
(PIDA) (UK Legislation, 1998) and Act and increase the independence
the Employment Rights Act 1996 of the whistleblowing process. The
(ERA) (UK Legislation, 1996) proposals listed in the next section
which require the whistleblower aim to strengthen the Act and
to act in good faith and both encourage whistleblowing.

8 A critical look into the Whistleblower Protection Act 2010

 Policy IDEAS № 36

3. Proposals for Reform

In order to encourage more whistleblowing there needs to be a dedicated
channel for disclosure by whistleblowers and a more transparent process.
Whistleblowers must be confident that they will be treated seriously, and
will enjoy protection before, during, and after the disclosure. Additionally,
it must be ensured that enforcement agencies are independent, seen to
be independent and that proper action will be taken upon disclosure of
improper conduct. To achieve this, the following three areas need to be
reformed under the Act:

1
Protection for
2
Independence of the
3
Whistleblowing
Whistleblowers - Act - Mechanism -
the level of protection for the Act still remains a more
whistleblowers needs to be vulnerable to Ministerial comprehensive
improved and reinforced. action and it needs whistleblowing
to be made entirely mechanism needs to
independent of such be created - one that
influence. is more robust than
the current model.

3.1 Increasing protection for whistleblowers

While the Act is a step in the right direction some areas of the legislation
leave whistleblowers exposed. Keeping in mind that the purpose of the
Act is to encourage whistleblowers to come forward, protection should
be extended in the following three ways:-

• Allowing disclosure to non-enforcement agencies;

• Removing limits on the types of disclosures permitted; and
• Removing restrictions on the motive behind disclosures.

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 3.1.1 Allow disclosure by whistleblowers to a non-enforcement agency without
losing protection, or being subject to imprisonment or a fine

Disclosure to an enforcement agency is a condition for protection. Section

6(1) states that “a person may make a disclosure of improper conduct
to any enforcement agency”. Section 7(1) provides that a whistleblower Section 8(1) would be
who makes a disclosure of improper conduct to any enforcement agency pertinent in safeguarding or
under Section 6 shall be conferred protection. The Act in effect defines protecting the confidential
“enforcement agency” as any ministry, department, agency or body information provided by the
conferred with investigation and enforcement functions or powers and
established by the Federal or State governments, or by Federal or State whistleblower. This should
laws. not however prevent the
whistleblower from disclosing
It is implied that for whistleblower protection to be accorded, the the confidential information
disclosure must be made to an enforcement agency. The authorities have
in some instances denied whistleblower protection to persons who have to other appropriate
disclosed information of improper conduct to the news media.12 persons.

Moreover, Section 8(1) states that “any person who makes or receives a
disclosure of improper conduct or obtain confidential information in the
course of the investigation into such a disclosure of improper conduct
shall not disclose the confidential information or any part thereof ”. This
means that a whistleblower who has made a disclosure of improper
conduct to an enforcement agency may not at the same time or
thereafter disclose such information to anyone else. This would
presumably include a disclosure to the news media or a . Any person who
contravenes this rule, “commits an offence and shall, on conviction, be
liable to a fine not exceeding fifty thousand ringgit or to imprisonment for
a term not exceeding ten years or to both.

Section 8(1) would be pertinent in safeguarding or protecting the

confidential information provided by the whistleblower. This should not
however prevent the whistleblower from disclosing the confidential
information to other appropriate persons.

A potential whistleblower may consult confidantes before deciding

to approach enforcement agencies. Even upon deciding to make the
disclosure, he or she may seek the advice of a legal advisor or a or other
entities in which the whistleblower repose confidence. Protection is not
only about the identity of a whistleblower for purposes of security, it is also
about protection from detrimental action or reprisals. A whistleblower
may not be concerned to keep his or her identity confidential, but is
concerned that no retaliatory action is suffered for coming forward with
information of misconduct.

12
Member of Parliament Rafizi Ramli revealed information to the media about the National Feedlot Corp case and was unable to seek protection under the Act. He was subsequently charged under the Banking and
Financial Institutions Act 1989 (Bafia) on secrecy.

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 Policy IDEAS № 36

In some instances, people choose to communicate information of

misconduct to a , the news media or other appropriate 3rd parties due to a
lack of confidence in the authorities, a perception that the whistleblower’s OUR PROPOSAL
disclosure is not being investigated or taken seriously, or as a protective
step for their own safety or security.
The Act should be
In Australia and the UK the relevant provisions do not limit disclosure to amended, in particular
enforcement agencies, and whistleblowers continue to enjoy protection. Sections 7 and 8, to
Section 5(2) of the Australian Whistleblower Protection Act 1993 permit disclosure of
states that, “A person makes an appropriate disclosure of public interest
information…if the disclosure is made to a person to whom it is, in
improper conduct
the circumstances of the case, reasonable and appropriate to make the to non-enforcement
disclosure.” The Australian provision goes on to provide that a person is agencies without the
deemed to make an appropriate disclosure if it is make to an appropriate whistleblower losing
authority, however “this is not intended to suggest that an appropriate
authority is the only person to whom a disclosure of public interest
protection.
information may be reasonably and appropriately made” (South Australian
Legislation, 2013). In the case of the UK, the Public Interest Disclosure Act
1998 introduced amendments to the ERA. Sections 43C-43F of the ERA
states that a whistleblower can make a, “disclosure to employer or other
responsible person, to legal adviser, to a Minister of the Crown, and to
a person prescribed by an order made by the Secretary of State under OUR PROPOSAL
ERA.”

The Act should be designed to protect the whistleblower, rather

Allow an independent
than to suppress per se any information. If the information a statutory body to
whistleblower discloses is regarding a corrupt act by a public official or oversee protection for
within a government institution the law should not be concerned with whistleblowers like in
ring-fencing this information. The Act should be amended, in particular
Sections 7 and 813, to permit disclosure of improper conduct to non-
Australia and the US,
enforcement agencies without the whistleblower losing protection. independent authorities
such as the office of
Furthermore, at present, evaluation of whether protection should be Ombudsman and the
granted or withdrawn is currently carried out by the enforcement agency to
which the disclosure is made. In this regard, Section 11(1) of the Act provides
US Special Counsel,
that “the enforcement agency shall revoke the whistleblower protection ensure whistleblower
conferred under section 7 if it is of the opinion…”.The Act should allow for protection.
an independent statutory body to oversee protection for whistleblowers
like in Australia and the US, independent authorities such as the office of
Ombudsman and the US Special Counsel, ensure whistleblower protection.

13
Section 7 is Whistleblower protection and Section 8 is about Protection of confidential information.

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 Textbox: An Alternative Solution
• The disclosure to other persons comprises substantially the same
information provided to the enforcement agency;
• The identity of the whistleblower is made public by the whistleblower;
• The enforcement agency either decided not to investigate or did not
complete investigation within a reasonable time;
• The enforcement agency has failed to reasonably update the
whistleblower of the status of the investigation, or inform the
whistleblower within six months of the disclosure, as to whether the
matter is being investigated or not;
• The enforcement agency has investigated but not recommended any
action, or recommended no action to be taken;
• The appropriate disciplinary authority or other appropriate authority or
employer takes no action or decides not to take action; or
• The Public Prosecutor takes no action or decides not to prosecute.

Ultimately, the Act does provide safeguards against frivolous disclosures, and provides
that a whistleblower would not be accorded protection, or would lose protection,
under the Act in the event the whistleblower knowingly makes a false disclosure or
does not believe the information to be true, or the disclosure is frivolous or vexatious.

12 A critical look into the Whistleblower Protection Act 2010

 Policy IDEAS № 36

3.1.2 Do not limit the type of information disclosed and protected

Section 614 of the current Act provides that a person may make a
disclosure of improper conduct to an enforcement agency “provided that
such disclosure is not specifically prohibited by any written law”. A person who discloses
information or evidence
In the context of Malaysia, this proviso would in effect make it almost would not only be disentitled
impossible to whistle blow when it concerns acts or omissions of to protection under the Act,
public officials and governmental bodies. This is because a substantial
amount of government documents, information and data are automatically but would likely face arrest
classified as official secrets under the OSA, and any person who may or prosecution for alleged
observe or have evidence of misconduct or of any corrupt practices by breach of the OSA.
a public official would likely not be able to disclose such information or
evidence to the appropriate authorities. Such a person would not only
be disentitled to protection under the Act, but would likely face
arrest or prosecution for alleged breach of the OSA.

Additionally, the recent amendment to the Penal Code introduced

Section 203A which provides for the criminal offence of “Disclosure of
information”. It provides that it is an offence for “Whoever discloses any
information or matter which has been obtained by him in the performance
of his duties or the exercise of his functions under any written law shall be
punished with fine of not more than 1 million ringgit, or with imprisonment
for a term which may extend to 1 year, or with both.”

It is immediately observed that the commission of this offence is not

dependent upon the information being classified as secret under the
OSA. This amendment clearly weakens, if not makes the Act irrelevant,
bearing in mind that very often the information observed or obtained OUR PROPOSAL
by whistleblowers is observed or obtained in the course of their work.
Section 203A of the Penal Code would defeat the very purpose of the Remove section
Act. Therefore Section 203A should be repealed.
6(1) and instead
It is pertinent to note that Section 6(2)(c) of the Act provides that introduce provisions
“A disclosure of improper conduct under subsection (1) may also be that protect
made…in respect of information acquired by him while he was an officer whistleblowers who in
of a public body or an officer of a private body;” This appears to conflict
with the proviso to Section 6(1), as well as the new Section 203A of the disclosing evidence, may
Penal Code. The provisions of Section 6(1), read with the proviso, and breach laws like the
(2)(c) creates ambiguity. Such ambiguity does not instill confidence in OSA.
whistleblowers nor encourage them to come forward.

14
Section 6 is Disclosure of improper conduct.

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Given that the objective of the Act is to encourage the uncovering of
misconduct and corruption, the proviso to Section 6(1) should be deleted.
Instead, provisions for in-built defenses for whistleblowers should be
included for where the disclosure of improper conduct involves disclosure
of information that may be protected or prohibited from disclosure under
other laws, if the disclosure is with respect to evidence of corruption or
a serious crime, and it is in the public interest to make such a disclosure.

3.1.3 Prior involvement in misconduct should not automatically lead to

revocation of protection

Section 1115(1)(a) should be amended to ensure that the whistleblower

may still enjoy protection even if the whistleblower was a participant in
the improper conduct as long as the whistleblower was not the principal OUR PROPOSAL
or mastermind of the misconduct. Often, a corrupt practice or criminal
activity is brought to light by an insider or a person who was involved Amend Section 11(1)
in the activity but who later decides to blow the whistle on his/her (a) to ensure that the
partners in crime. In such circumstances, there should be discretion as to
whether whistleblower protection should be extended to accomplices or
whistleblower will be
participants who whistleblow. At present, s.11(1)(a) of the Act is inflexible. protected even if he/
she was a participant
When dealing with whistleblowers who were participants or accomplices in the improper
in the improper conduct, there may be good reasons as a matter of
public policy not to provide them with automatic protection, however,
conduct as long as the
it would serve the fight against corruption, and the objective of the Act, whistleblower was not
if the Act provides for discretion in extending to them protection, and the mastermind of the
the extent of such protection, in appropriate cases and circumstances. misconduct.
This would encourage whistleblowers who were part of a nefarious
scheme to come forward, rather than confine ourselves to encouraging
innocent bystanders or those who stumble upon information or improper
conduct to step forward. The Act should provide for the discretion to
extend whistleblower protection, and the extent of such protection, to OUR PROPOSAL
be exercised by an independent authority or oversight authority. Such an
independent authority may receive and act upon recommendations of Amend Section
the relevant enforcement agencies when considering the exercise of such 11(1)(e) to allow
discretion. for disclosures by
Section 11(1)(e) should also be amended to allow for disclosures by employees motivated
employees motivated by fear of dismissal or disciplinary action. As long by fear of dismissal
as the disclosure is not frivolous or vexatious, motive should not be a or disciplinary action.
prime factor in denying protection. The Act’s objective is to bring forward Motive should not be a
disclosure of wrongdoing, the motive behind such disclosures should be
considered as secondary. prime factor in denying
protection.
15
Section 11 is Revocation of whistleblower protection

14 A critical look into the Whistleblower Protection Act 2010

 Policy IDEAS № 36

3.2 Establishing the Independence of the Act

As an Act seeking to protect whistleblowers and encourage them to OUR PROPOSAL

expose corruption both in and out of government, the framework of
the Act and the regulation of its mechanisms should be independent of Ministerial oversight
executive government. At present, the Act allows for the Minister (which
is not defined in the Act) to oversee the workings of the Act. It is of of the Act should
vital importance that the operations and implementation of the Act be be removed and an
independent and completely free of executive government involvement. independent authority
Ministerial oversight of the Act should be removed and an independent be established to
authority be established to oversee the Act and the whistleblower
protection provisions and mechanisms. oversee the Act and
the whistleblower
protection provisions
and mechanisms.

3.2.1 Remove Ministerial Oversight

Section 416 of the Act provides that the Minister may give to the
enforcement agency directions of a general character not inconsistent
OUR PROPOSAL
with the Act as to the exercise of the powers, discretions and duties
conferred on enforcement agencies, and the said agencies are required to
comply with such directions. The oversight function
of the Act should be
Section 1317(3) of the Act states that if an enforcement agency is not placed in the hands
satisfied with steps or action taken, or the inaction of any disciplinary or of an independent
other appropriate authority after the enforcement agency has provided
them with its investigative report and recommendations, the enforcement authority, such
agency may report or complain to the Minister.18 The Act does not as the office of
however provide for what the Minister is to do in such a circumstance. an ombudsman,
established for these
Section 2719 of the Act gives the power to the Minister to make any
regulations as may be necessary or expedient for the purpose of carrying specific purpose.
into effect the provisions of the Act.

It can be discerned from the above that the Minister plays an important
function in the workings and implementation of the Act. The manner in
which the enforcement agencies are to act and discharge their powers
and perform their duties under the Act should be free from Ministerial
oversight.
16
Section 4 is Power of Minister to issue directions.
17
Section 13 is Finding of enforcement agency after investigation of improper conduct.
18
Section 13(3) applies only to disciplinary offences. It does not apply to instances where the improper conduct constitutes a criminal offence, and which is referred to the Public Prosecutor.
19
Section 27 is Power of Minister to make regulations.

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In maintaining the overall independence of the operations of the Act
and securing the confidence of the public, as well as whistleblowers,
the oversight function of the Act should be placed in the hands of an
independent authority, such as the office of an ombudsman, established
for this specific purpose. This has been mentioned earlier in the context
of evaluating and conferring protection for whistleblowers.

Creating a more comprehensive

3.3
whistleblowing mechanism
Recognising the uncertainties, incredible stress and fears potential
whistleblowers face or undergo, it is imperative that a clear, understandable
whistleblowing mechanism and procedure be laid out in laymen’s terms
in order to encourage disclosure. As shown in Figure 1, a relatively clear
procedure for handling disclosures and subsequent investigation currently
exists in Malaysia.

Whistleblowers reporting to an enforcement agency, such as the MACC,

may report a disclosure through: walk-in, email, letter, fax, call, or a text
message. Once this disclosure is reviewed and approved by the Information
Review Committee, investigation begins. The enforcement agency
undertakes the investigation. If the investigations reveal the commission of
a criminal offence, the results of the investigation and recommendations
by the enforcement agency will be forwarded to the Public Prosecutor
(who is also the Attorney General). If the agency is not satisfied with the
action taken by the AG it may report directly to the Prime Minister’s
Department.20

Figure 1: How the Whistleblower Protection Act 2010 works

Whistleblower protection Act 2010

a Enforcement agency will investigate and
How it works prepare a report.
Prime Minister’s
Department b The report will be forwarded to the public
prosecuter or appropriate disciplinary
authority for further action

d if insufficient action/
f In case of detrimental action no action taken reports to c The result of the action taken will be revealed
to the enforcement agency.
seek assistance to apply for remedies

Whistleblower
Disclosure/ Enforcement d If the action taken is deemed insufficient,
Complaint Agency the enforcement agency may report to the
Minister in the Prime Minister’s Department.
a Investigate,
c Update prepare report
e The enforcment agency will continue to
e Update status/outcomes status/
outcomes update the whistleblower on actions taken.

Public Prosecuter/ b Prosecute/ f Any whistleblower suffering detrimental

take disciplinary actions,
Disciplinary Authority etc. action can complain to an enforcement
agency.

20
Please note that there is no provision for this in the Act. The report to the PM is only in respect of non-criminal offences. In the situation where the Public Prosecutor does not prosecute or take insufficient or no action,
there appears to be no recourse in the Act. Therefore, the diagram below is not entirely accurate.

16 A critical look into the Whistleblower Protection Act 2010

 Policy IDEAS № 36

Although this process for investigating disclosure has been set out it can
be vastly improved with amendments in the following areas:

• Creating specialised and dedicated units within

enforcement agencies to handle disclosures;
• Increasing the frequency with which a whistleblower is
updated on the progress of the investigation; and
• Offering greater remuneration to whistleblowers.

3.3.1 Creating specialised and dedicated units within enforcement agencies to

handle disclosures

Disclosing information about improper misconduct to anyone let alone

an enforcement agency can be a frightening and unnerving experience.
In order to ensure whistleblowers feel secure in making such disclosures, A whistleblower with
dedicated units within enforcement agencies should be established. A sensitive information should
general hotline, as is the current practice, is insufficient. It is in fact counter- know from the outset
productive to providing a secure means of disclosure communications. A that there is a dedicated
whistleblower with sensitive information should know from the outset
that there is a dedicated and secure channel to communicate with an and secure channel to
enforcement agency, whether it is by telephone, email or walk in. Trained communicate with an
units specialised in handling whistleblower disclosures will enable the enforcement agency.
proper reception and handling of sensitive disclosures as well as increasing
public confidence in making disclosures to such agencies.

The MACC has an easily accessible and readily available website dedicated to
helping whistleblowers, however it does not provide information regarding
a dedicated unit to which whistleblower can report to (Malaysian Anti-
Corruption Commission website). Unfortunately, enforcement agencies
such as the police do not even have a clear mechanism for potential
whistleblowers. Such inconsistencies on the part of enforcement
agencies must be improved, ironed out and made uniform.

Additionally, a layperson seeking to whistleblow may be unsure as to

which agency he should turn to. Some members of the public would
know whether they ought in any particular situation to approach the
MACC, the police, or the Securities Commission etc., but there are a
substantial number of the persons who do not. Members of the public
should be able to approach and make a disclosure to any enforcement
agency, irrespective of relevance to the purview of the particular agency.
There should therefore be a mechanism for enforcement agencies to

A critical look into the Whistleblower Protection Act 2010 MAINSTREAMING MARKET IDEAS | 17
channel disclosures made to them, but which are not within the purview
of the enforcement agency, to a centralised unit or body. At present,
section 521 of the Act provides that any enforcement agency may co- OUR PROPOSAL
operate with any other agencies in its investigations. This pertains only to
the situation where the enforcement agency has accepted the disclosure Establish a one-stop
and commenced investigations.
point for whistleblowing,
The centralised unit or body would assist and facilitate in a confidential this should be managed
manner the handling of the disclosure and the whistleblower to the by an independent
appropriate enforcement agency. This would avoid the situation where a centralised body to:
whistleblower is turned away by an enforcement agency or required to
start over again the approach, any formalities and re-make a disclosure • Make it more
to another agency. Again, such a centralised unit or body should ideally accessible for
take the form of an independent body, which may also have oversight whistleblowers
functions (in place of the Minister), for example, in the form of the office • Streamline and
of an ombudsman.
make whistleblowing
Such an independent body would also itself be empowered to receive process uniform
disclosures of improper conduct, with the attendant protections provided • Inform public and
to a whistleblower under the Act. It would also be the task of such a raise awareness
body to streamline and make uniform the procedures and mechanisms
for whistle blowing, to provide comprehensive information to the public on proper
as to how the whistle blowing provisions work, what it provides, how whistleblowing
information would be dealt with, how whistleblowers would be handled, procedures
what their rights are and what they may expect from the process. In
general, the entire process from the disclosure of information of improper
conduct until potential prosecution or disciplinary action should be clearly
set out and explained to the public. This independent body would thus
also function to educate and raise public awareness. In a way, this creates
a one-stop-point.

3.3.2 Increasing the frequency with which a whistleblower is updated on the

progress of the investigation

Whistleblowers should have the right to be informed regularly regarding

the investigation which resulted from their disclosure. Section 13 of the
Act says that the whistleblower will only be told about the result of their
disclosure after the investigation has been concluded. This is not sufficient.
They should be kept informed throughout the process from the start,
rather than only at the end. This is not to say that whistleblowers should
be informed of the details of the investigations, as this may affect the
integrity of the investigations, but rather, that they should be updated as
to the general progress of stages of the investigations and the steps taken,
sufficiently so that they are aware that the matter is being actively looked
into and progressing at a regular pace.

21
Section 5 is Co-operation with other agencies.

18 A critical look into the Whistleblower Protection Act 2010

 Policy IDEAS № 36

It is also important for enforcement agencies to provide general

timeframes for stages or steps in the investigation as part of its update to
the whistleblower. As of now, there is no timeframe for an investigation OUR PROPOSAL
to begin, proceed and conclude once the disclosure has been made. In
fact Section 12 only sets out the duties of the enforcement agency as Create general timelines
“prepare a report which contains the finding of the investigation and
recommendations…”. of investigations and
update whistleblowers
The only timelines to be found are in Section 13(2)(a) and (b) which on the status of
provides that an appropriate disciplinary authority or other authority shall, investigations
within 6 months of receiving the report and recommendations for action
from the enforcement agency, inform the enforcement agency of the steps accordingly.
and action taken or to be taken by the appropriate disciplinary authority
or other authority; or shall inform the enforcement agency within 14 days
of a decision by the appropriate disciplinary authority or other authority
for not initiating any action or for not taking steps as recommended by
the enforcement agency.

It is understood and accepted that it is not possible to set firm timelines for
the investigation of a matter or to set a date for its conclusion. However,
providing for and informing the whistleblower of general timelines as a
guide for attending to the investigations is important because it reassures
the whistleblower that action is being taken, that the information is not
being suppressed, and that there is an ongoing investigation into the matter,
especially if the disclosure pertains to high-level corporate executives or
government officials.

22
Section 26 is Rewards

A critical look into the Whistleblower Protection Act 2010 MAINSTREAMING MARKET IDEAS | 19
3.3.3 Offering greater remuneration to whistleblowers

Section 2622 of the Act provides discretion to enforcement agencies to

order rewards as it deems fit to whistleblowers for disclosure of improper
conduct which leads to the prosecution. The amount and nature of the
The amounts of such awards
reward should be decided on for certain categories of offences, for should not be meager.
example, corruption, and such reward should be made known to the It should be sufficiently
public as a standing offer. The amounts of such awards should not be substantial to reflect the
meager. It should be sufficiently substantial to reflect the seriousness of
the fight against corruption and the gravity of the offence. This may lend
seriousness of the fight
encouragement for whistleblowers to take the sometimes difficult step to against corruption
come forward.

In the USA, the Dodd-Frank Act authorises the US Securities Commission

to pay rewards of 10-30 percent of recovered funds (Dodd-Frank Act,
2009). In South Korea, the Anti-Corruption and Civil Rights Commission
is able to provide whistleblowers with rewards of up to USD 2million
(Anti-Corruption and Civil Rights Commission). The potential reward for
whistleblowers should be increased to encourage those to take the risk OUR PROPOSAL
of whistleblowing.
Increase the
potential reward for
whistleblowing in order
to encouragee and
properly compensate
those that take the risk
of whistleblowing.

20 A critical look into the Whistleblower Protection Act 2010

 Policy IDEAS № 36

4. Conclusion
While the Act fills a vital gap in Malaysia’s anti-corruption
landscape, whistleblowing statistics continue to show
Malaysians remaining hesitant to come forward. In
order to encourage whistleblowing and the discovery
of corruption, it is imperative that the Act is further
improved upon.

Sections 4, 6, and 11 need to be amended to:

Ensure the extension of whistleblower protection by allowing for disclosures to non-

enforcement agencies;

Repeal the proviso to Section 6(1) of the Act, and allow disclosure of information
that may in normal circumstances fall under restrictions of other legislation;

Remove the automatic disqualification from protection for whistleblowers who

had been part of or participated in the improper conduct, and instead provide for
a discretion to allow for protection as well as remove the importance placed upon
the motive behind the disclosure;

Allow for the removal of Ministerial involvement and oversight.

Additionally, to complement the above Section 203A of the Penal

Code should also be repealed.

An independent statutory body should be set up to oversee

whistleblower protection. Furthermore, a clear whistleblowing process
and mechanism must be established with dedicated whistleblower units
within enforcement agencies. Whistleblowers should be updated on
the status of their investigations throughout the process. A substantial
reward system should be announced and made public in order to
encourage potential whistleblowers.

By increasing whistleblower protection, reinstating the independence of

the Act, increasing its transparency, and setting out a clear whistleblowing
mechanism whistleblowers can be encouraged to come forward.These
are steps that can and must be taken in order to achieve the objectives
of the Act, ensure whistleblowers are protected and to successfully
root out corruption in Malaysia.

A critical look into the Whistleblower Protection Act 2010 MAINSTREAMING MARKET IDEAS | 21
References
Anti-Corruption and Civil Rights Commission website. South Korea. Protecting and Rewarding Whistle-blowers. http://
www.acrc.go.kr/eng/board.do?command=searchDetail&method=searchList&menuId=020312

Association of Certified Fraud Examiners. 2008. Report to the Nation on Occupational Fraud & Abuse. Retrieved from
http://www.acfe.com/uploadedFiles/ACFE_Website/Content/documents/2008-rttn.pdf

Dodd-Frank Wall Street Reform and Consumer Protection Act. 2009.111th Congress of the United States. https://www.
sec.gov/about/laws/wallstreetreform-cpa.pdf

Legal Affairs Division, Prime Ministers Office. 2010. Whistleblower Protection Act 2010. Retrieved from http://www.
bheuu.gov.my/portal/pdf/Akta/Act%20711.pdf

Lehmann, David. 2015. Whistleblowing as Part of a Comprehensive Fraud and Corruption Control Framework and How
It Relates to the Investigation Process. Presented at the Australian Public Sector Anti-Corruption Conference (APSACC).
Retrieved from http://app.entegy.com.au/b4aa0fff-d1b5-4f47-a7ed-65a1c8755186/26/42

Malaysian Anti-Corruption Commission. 2012. MACC Annual Report 2012. Retrieved from http://www.sprm.gov.my/
images/laporan%20tahunan/LAPORAN%20TAHUNAN%20SPRM%202012.pdf

Marsh, Bill. 2005. The New York Times. IDEAS & TRENDS; When Criminal Charges Reach the White House. Retrieved
from http://query.nytimes.com/gst/fullpage.html?res=9904E7DF1F3FF933A05753C1A9639C8B63

Malaysian Anti-Corruption Commission website. Report Corruption. Retrieved from http://www.sprm.gov.my/index.

php/en/operation/report-corruption

Securities Commission Malaysia. Whistleblowing. Retrieved from http://www.sc.com.my/whistleblowing/

South Australian Legislation. 2013. Whistleblowers Protection Act 1993. Retrieved from https://www.legislation.sa.gov.au/
LZ/C/A/WHISTLEBLOWERS%20PROTECTION%20ACT%201993/CURRENT/1993.21.UN.PDF

The Star Online. 2010. Whistleblower Protection Act to come into force next week. Retrieved from http://archives.
thestar.com.my/archives/2010/12/7/nation/blower.jpg

UK Legislation. 1998. Public Interest Disclosure Act 1998. Retrieved from http://www.legislation.gov.uk/ukpga/1998/23/
pdfs/ukpga_19980023_en.pdf

UK Legislation. 1996. Employment Rights Act 1996. Retrieved from http://www.legislation.gov.uk/ukpga/1996/18/pdfs/

ukpga_19960018_en.pdf

United Nations Office on Drugs and Crime. 2004. United Nations Convention Against Corruption. Retrieved from
http://www.unodc.org/documents/treaties/UNCAC/Publications/Convention/08-50026_E.pdf

22 A critical look into the Whistleblower Protection Act 2010

 Policy IDEAS № 36

A critical look into the Whistleblower Protection Act 2010 MAINSTREAMING MARKET IDEAS | 23
Notes:

24 A critical look into the Whistleblower Protection Act 2010

IDEAS is inspired by the vision of Tunku Abdul Rahman Putra al-Haj, the first Prime Minister of Malaysia. As a
cross-partisan think tank, we work across the political spectrum to improve the level of understanding and
acceptance of public policies based on the principles of rule of law, limited government, free markets and free
individuals. On 2 September 2016, IDEAS was ranked as the 17th think tank to watch globally in a survey of
more than 6,800 think tanks in 143 countries by the University of Pennsylvania’s 2015 Global Go To Think
Tank Index Report.

Please support us by making a donation. You can make a contribution by cheque payable to “IDEAS Berhad”
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 Selection of IDEAS’ Publications (2016)

Policy IDEAS
Innovations in Vector-Borne Diseases by Philip Stevens, Policy IDEAS No. 35
(November 2016)

Separating the Attorney-General and Public Prosecutor: Enhancing Rule of Law in Malaysia
by Aira Nur Ariana Azhari and Lim Wei Jiet, Policy IDEAS No. 34 (December 2016)

Strengthening the Royal Malaysia Police by Enhancing Accountability by Nicholas Chan,

Policy IDEAS No. 33 (September 2016)

The Principles of Political Finance Regulations by Dr. Stefan Melnik, Policy IDEAS No. 29
(May 2016)

Financial Burden of Living with Autism by Shanuja Chandran, Policy IDEAS No. 28
(June 2016)

How Can Malaysia’s Budget Documents Be Improved?by Sri Murniati, Policy IDEAS No.27
(April 2016)

Economic Liberalism in Asian by Dr Razeen Sally, Policy IDEAS No. 25

Edisi BM: Pembebasan Ekonomi di Asia by Dr Razeen Sall ,Policy IDEAS No. 25 (June 2016)

School Autonomy Case Studies of Private School Chains in Malaysia, Policy IDEAS No. 24
(February 2016)

A Case Study of a Chinese Independent School by Nina Adian Disney , Policy IDEAS No. 23
(February 2016)

Brief IDEAS

Governing State-Owned Enterprises: Lessons learned from 1MDB by Rama Ramanathan,

Brief IDEAS No. 5 (August 2016)

The Potential of Independent Religious Schools Brief by Altaf Deviyati, Brief IDEAS No. 4
(June 2016)

Are FTAs bad for Health? by Sreekanth Venkatamaran, Brief IDEAS No. 3 (May 2016)

Lesser Government in Business: An Unfulfilled Promise? by Wan Saiful Wan Jan,

Brief IDEAS No.2

Policy IDEAS are IDEAS’ regular publications that introduce and propose ideas for
policy reforms based on analysis of existing policies or best practices.

MAINSTREAMING MARKET IDEAS

Institute for Democracy and Economic Affairs (IDEAS), F4 Taman Tunku, Bukit Tunku, 50480 Kuala Lumpur
Tel: +603 6201 8896 / 8897 Fax: +603 6201 2001