hope on the horizon?

The position of the whistleblower is not an envious one, and I am not referring here to the referee in sports matches. Despite the introduction of the so-called ‘Whistleblowers Act’, the Protected Disclosures Act, 26 of 2000 (PDA), it would still appear that the whistleblower in South Africa is not necessarily receiving the protection that he or she deserves, and that whistleblowers appear to be receiving elsewhere.

The PDA, which came into operation on 16 February 2001, sought to put mechanisms in place whereby employees may, without fear of reprisals, disclose information relating to suspected or alleged criminal or other irregular conduct by their employers¹. Judging by the number and extent of proposed changes being put forward by the South African Law Reform Commission in Discussion Paper 107, the Act has not been the success it was hoped it would be.

The proposed changes seek to extend the ambit of the PDA to go beyond the strict employer/employee relationship and include independent contractors, consultants, agents and other such workers. Some thought is also being given to extending such protection to all persons, the so-called citizens’ whistleblowing. Further proposed amendments relate to extending the form of victimization against which whistleblowers will be protected, and providing for the exclusion of criminal and civil liability of the whistleblower, something the current PDA does not do.

Some hope and encouragement therefore appears to be on the horizon for the whistleblower who up until now has had to face the wrath of his employer, who justifies the employee’s dismissal for whistleblowing on the grounds of a breach of the employee’s duties of fidelity and confidentiality towards an employer. But does the proposed protection go far enough?

Firstly, let us examine some of the developments overseas, and contrast them with the situation in South Africa. Some whistleblowers have achieved either fame or notoriety, depending on the view you take, and the names of Lynn Brewer, who recently visited South Africa, and Sherron Watkins, of the US energy giant, Enron, immediately spring to mind. Their revelations brought down the corporation, but have left them virtually unemployable in the formal sector. Their cases are typical of the average whistleblower scenario.

But contrast the position of Dr David Franklin, a medical researcher who left a position with the prestigious Harvard Medical School to join a drug manufacturing company in the private sector. Within a short space of time, he was being expected to participate in the company’s practices of increasing sales of certain medication by lying about their effects. He decided to blow the whistle on this practice, and entered a seven year battle to survive the trauma of doing so. Eventually he emerged victorious - and quite wealthy as well. In May 2004, he received a $26.6m reward under the United States’ generous whistleblowing legislation, this amount representing his share of the $430m legal settlement entered into by the pharmaceutical company.

Some commentators are of the opinion that this result could really help to change the culture of the pharmaceuticals industry, because it might encourage further whistleblowers to come forward, and indeed, this has already happened with a former executive of a company which manufactured a prostate cancer drug in the US revealing an alleged fraud in their marketing practices, and receiving $47,5m for his role in incriminating the company.²

The danger in this approach of rewarding whistleblowers, particularly with such seemingly large amounts, is that it may encourage whistleblowers to make spurious or frivolous charges against companies. However, most whistleblowing legislation provides safeguards against such practices. Furthermore, one should also not seek to trivialize the shattering effect the persecution of the whistleblower has on their lives. Dr Franklin became a recluse for four years, and despite his new wealth, warns that whistleblowing takes real staying power.

If we contrast this situation with the tragic tale of John Muller, a traffic official who blew the whistle in 1997 on corruption in the Mpumalanga traffic department, we come across a totally different story, where those implicated in the scandal received official support, have subsequently been promoted (some to very high places within Government), and continue to prosper. Muller’s revelations, not spurious at all but supported with documentary evidence, led to the establishment of an official Commission of Enquiry, and a number of top-ranking dignitaries being implicated in the illegal driving licence scam.

Instead of being rewarded, Muller was branded a troublemaker, and although later cleared of trumped-up disciplinary charges, was effectively driven out of the public service and financially ruined. Poverty stricken, Muller lost his car, almost forfeited his home, and eventually died as he could afford neither the necessary medication nor the heart operation that would have extended his life.³

If South Africa is to shake off the shroud of corruption which seems to cover the continent of Africa, and embrace the moral regeneration advocated by the authorities, we certainly need to treat, and be seen to be treating, our whistleblowers in a more sympathetic manner. The current review of the PDA is seeking to extend the protection afforded whistleblowers, by granting them immunity from prosecution, both civil and criminal, where their disclosures have been made in good faith. Perhaps the review needs to go further, and offer them some form of compensation as well. A climate conducive to encourage legitimate whistleblowing would also be fostered if those in authority set the tone. A

3 Kadalie, R "Death of John Muller, a hero who shamed the ANC" Business Day, 13 May 2004.

Jan Dijkman,
BA LLB LLM HDip Tax ADL CFP Advocate of the High Court of South Africa,
is SAICA's Project Director: Ethics and Discipline