CEOs face Sh3m fines, jail for failure to set up whistleblower system
The Whistleblower Protection Bill, 2024, proposes Sh3 million fine and a prison term of up to 24 months for CEOs who fail to set up a whistleblower system.
Chief executive officers (CEOs) of public and private companies face a Sh3 million fine and a prison term of up to 24 months for failing to set up a whistleblower system, the Attorney General’s office has said in a proposed law as the government makes a fresh push to curb fraud and the loss of public funds.
Under the proposed law, chief executives will be required to establish a framework to protect employers who make disclosures of public interest, including the misappropriation of public funds or assets, bribery, corruption, or economic crime.
The CEOs will have the option of developing their own policies to aid in whistleblowing or adopt the model procedures prescribed in the Bill to avoid the accompanying general penalty.
“Any person who commits an offence under this Act for which no penalty is expressly provided shall, on conviction, be liable to a fine not exceeding Sh3 million or to imprisonment for a term not exceeding two years or both,” the State Law office notes in its Whistleblower Protection Bill, 2024.
Other prescribed penalties cover fines of Sh1 million or an imprisonment term of up to one year and relate to violations such as obstructing an investigation, engaging in reprisals, or giving false or misleading information.
The executives will have two years from the adoption of the Bill to come up with the procedures and make submissions to the Commission on Administrative Justice, which is tasked with the enforcing the Bill.
The whistleblowing system is expected to encourage employees or other relevant stakeholders to report information relating to improper conduct, while protecting whistleblowers.
The specific objectives of the procedures include the fostering a culture of transparency, accountability and integrity, providing avenues for any person to make disclosures of improper conduct, and protecting persons who report.
Offer rewards
Persons who make public interest disclosures should, for instance, be protected from reprisals, unfair treatment or other detrimental actions as a result of their disclosures.
“The objective of this Bill is to provide procedures for making public interest disclosures in public and private entities. The Bill seeks to encourage disclosure of information of public interest by providing a framework for the protection of the people making such disclosures,” the Bill adds.
The Commission on Administrative Justice will have powers to investigate public interest disclosures and complaints of improper conduct and recommend appropriate action, including prosecution.
Public and private entities may offer rewards to incentivise disclosures, with the commission expected to subsequently issue guidelines on the application of the awards.
Kenya has lacked a comprehensive whistleblower protection law, despite previous proposals including the Whistleblower Protection Bill 2024 and the Whistleblower Protection Bill 2023.
The anti-graft agency, the Ethics and Anti-Corruption Commission, has previously urged Parliament to pass a law on whistleblower protection to curb theft of public resources.
The lack of a comprehensive framework for whistleblower protection has been blamed for the runaway embezzlement of public funds and assets in both private and public entities.
“The absence of a comprehensive whistleblower protection law not only discourages potential whistleblowers from coming forward, but also perpetuates a culture of silence and impunity,” said Sheila Masinde, the Executive Director of Transparency International Kenya, in an earlier note, linking the lack of whistleblower protection legislation to threats and intimidation meted of those making disclosures.
Other conduct forming part of disclosures made by whistleblowers include the violation of human rights and fundamental freedoms, solicitation for bribes, unfair discrimination and the abetting of improper conduct.
The Bill describes public interest disclosures as any revealing of information on improper conduct relating to or relevant to the welfare of the public, made by a person who believes the information shared is relevant.
The Attorney General is empowered by the Bill to make regulations for the better enactment of the law in collaboration with the Commission on Administrative Justice.
The mechanism for the protection of whistleblowers provides for confidentiality of information, immunity from liability and protection against reprisals of any form because of a disclosure.
Private and public entities are required to maintain written procedures for the investigation of disclosures of improper conduct made by employees or other persons.
