SINGAPORE is in desperate need of legislation to protect whistle-blowers if it is serious about reducing fraud in the workplace and bringing itself up to international standards, say a group of professionals.

'Singapore is like a Third World nation when it comes to the protection of employees' rights,' says corporate governance advocate Mak Yuen Teen of the Corporate Governance and & Financial Reporting Centre.

Speaking last Friday at the CPA Singapore Roundtable on detecting and preventing fraud in the workplace, Associate Professor Mak said Singapore lacks adequate legislation to protect the rights of employees, The Business Times reported.

The event was organised by the Institute of Certified Public Accountants of Singapore.

Studies have shown that tip-offs are the single most effective means by which organisations detect internal fraud.

Agreeing, Senior Counsel Harpreet Singh of Drew & Napier, also a participant in the roundtable, said some form of whistle-blowing protection is needed now, to send the message to the public that whistle- blowers will be protected and that corporate governance issues are taken seriously.

In Britain, the Public Interest Disclosure Act - unofficially theWhistle-Blowing Act - seeks to protect workers from recrimination by their employers if, when acting in good faith and in the public interest, they report actual or suspected wrongdoing.

The Sarbanes-Oxley Act in the United States protects whistle- blowers against wrongful dismissal and provides for job reinstatement and monetary relief.

In Asia, Malaysia is about to introduce whistle-blower legislation to protect informers.

In Singapore, the matter was brought up in Parliament in 2004. But a law was rejected as it remained unclear whether such legislation worked in countries that adopted it.

'Companies fear that a whistle- blowing hotline will turn into little more than a complaints hotline for disgruntled employees, suppliers and the like,' said Ms Grace Goh, chief financial officer and chief investment officer of Hyflux Water Trust Management.

Others worried that such a mechanism would be expensive.

But Prof Mak and Mr Bill Bowman, director of financial compliance at Infineon Technologies Asia-Pacific, noted that installation of the mechanism is not expensive, although resulting investigations could be.

Also, the public must be educated on the right way to blow the whistle for it to be effective, and companies in turn must be educated on the benefits of whistle- blowing and not stigmatise employees who dare to tell on suspected misdeeds, Assoc Prof Mak added.

Besides having some form of whistle-blowing protection, the roundtable participants agreed that having the right 'tone at the top' is crucial to reducing corporate fraud. This includes having a clearly independent chairman who is separate from the chief executive officer.

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