As we emerge from the pandemic and employees revaluate their relationships with their employers, an increasing number are feeling emboldened to speak up against corporate misconduct. This trend has put the Asia-Pacific region under the spotlight, where organisations are playing catch-up with the evolving legal and regulatory landscape. The inadequacies strike even starker as jurisdictions within the European Union have been safeguarded by a comprehensive and unified legal framework for whistle-blowers since 2019.

According to a report by Baker McKenzie, 41 percent of 523 surveyed APAC business leaders saw an increase in whistleblower reports over the past year. Most companies in mainland China (74 percent) and Hong Kong (61 percent) registered a climb in cases, compared to respondents in Japan, Singapore, and Australia. Topping the pile were complaints about bullying, discrimination and/or harassment, which comprised 72 percent of the total case volume.

When handling whistleblower reports, 30 percent of businesses were found to have accidentally breached confidentially obligations. Most of them, again, were in mainland China and Hong Kong, with the jurisdictions rated the poorest performers in addressing whistleblowers’ concerns.

“It is clear that employers that lack the mindset and tools to navigate whistleblowing complaints will become more vulnerable to risks such as regulatory sanction, reputational damage and employee disengagement or claims,” the report notes.

Mini vandePol, Asia Pacific head of the Investigations, Compliance & Ethics Group at Baker McKenzie, also warns of “serious financial repercussions” if companies fail to ensure that their whistle-blower policies comply with evolving regulations.

But she observes “limited guidance on what elements need to be contained in a whistleblowing program, leaving companies to develop their whistleblowing policies on their own.” That void is left by the absence of a standardised reporting and protection framework for whistle-blowers across APAC jurisdictions.

For example, “there is no specific whistleblowing-related protection in Hong Kong, and an employee who is dis-missed unfairly or subjected to detriment due to being a whistleblower is protected under the general employment legislation instead,” notes vandePol.

So far, Hong Kong’s whistleblowing regulations have primarily focused on listed companies, which under a newly introduced rule are required to establish a reporting channel for employees and third parties to raise concerns of impropriety. The Hong Kong Monetary Authorities have ushered in a whistleblowing mechanism for banks only as part of its cultural reform.

That makes the international financial hub’s whistleblower framework pale compared to its APAC peers. Japan, for instance, has amended its Whistleblower Protection Act this year to provide additional support and protections to complainants against retaliation while also expanding company requirements.

Not to mention regional pioneer Australia, which since 2019 has expanded protections for whistleblowers, including mandating whistleblowing policies for many companies. As many as 67 percent of Australian respondents also claimed to have dedicated resources internally to follow up on whistleblower reports.

But even so, only 17 percent of Australian businesses reported increases in whistleblowing activity over the past year, with 59 percent encountering difficulty in establishing whether the enhanced whistleblowing laws applied to a particular report.

Australia’s experience has highlighted the multi-layered nature of any holistic and effective whistleblower regime, in which legislative remedies are only one piece of the puzzle.

Other factors impacting the number and handling of complaints include companies’ engagement with their programs. One way to gauge that is through the frequency of training provided to staff. On top of that, authorities in mainland China also used financial incentives to encourage exposure of alleged market misconduct, although scepticism lingers about the integrity of such measures.

Noting the compliance pressure compounded by the legal complexities, duelling enforcement priorities and cultural nuances of individual markets, vandePol cautions multinational companies against a one-size-fits-all approach when setting up whistleblowing programs within their cross-border networks.

“The majority of companies - over 53 percent - have one global policy applicable to all jurisdictions. Only 27 percent include additional country-specific pro-visions,” notes vandePol. “This may be increasingly inappropriate.”

To minimise non-compliance risks and achieve best practices, vandePol advises that companies work with an external legal advisor with a broad investigations practice to develop an all-encompassing whistleblowing program and processes that meet the local requirements across multiple markets.

“The appointment of external counsel evidences a strong tone from the top and demonstrates that the company is not just paying lip service to their governance commitments,” explains vandePol.

“Moreover, it will provide a layer of independence that is integral to giving confidence to the whistleblower that they are being heard and their concerns are being taken seriously,” she continues, adding that businesses also need to build trust with whistleblowers by enhancing transparency and bolstering confidentiality, be thoughtful in communications and expectation management, and investigate and remediate credible complaints.