ATC170315: Report of the Select Committee on Security and Justice on the Protected Disclosures Amendment Bill [B40B– 2015] (National Assembly – sec 75), dated 15 March 2017

NCOP Security and Justice

Report of the Select Committee on Security and Justice on the Protected Disclosures Amendment Bill [B40B– 2015] (National Assembly – sec 75), dated 15 March 2017:
 

The National Assembly referred the Protected Disclosures Amendment Bill [B40B– 2015] (hereinafter referred to as the Bill) to the National Council of Provinces for concurrence on 22 November 2016. The National Council of Provinces referred the Bill for consideration and report to the Select Committee on Security and Justice on 22 November 2016.

 

Enquiry into subject of the Bill

The Select Committee enquired into the subject of the Bill and invited the Department of Justice and Constitutional Development to brief the Select Committee on the purpose and content of the Bill on 30 November 2016.

 

Subject of the Bill

The Protected Disclosures Amendment Bill, 2015 (the Bill), emanates from the South African Law Reform Commission's report on protected disclosures. 

The Bill aims to:

1. Extend the application of the Protected Disclosures Act, 2000 (Act No. 2 of 2000) (“the principal Act”), beyond the traditional employer and employee relationship, 
2. Amend the principal Act in order to regulate joint liability,
3. Introduce a duty to inform employees or workers who have made disclosures,
4. Provide for immunity against civil and criminal liability under certain circumstances; and
5. Creating an offence in the case of false disclosure.

 

Public Involvement

The Select Committee, in keeping with the principle of facilitating public involvement in the legislative processes of the NCOP, agreed to facilitate public participation by advertising the Bill in print media in both national and provincial newspapers and on the Parliamentary website and other social media online platforms between 12 – 20 January 2017.

 

The Select Committee received 3 submissions:

1. Open Democracy Advice Centre (ODAC),
2. Whistleblowing International Network – represented by ODAC as they are partners, and
3. Corruption Watch.

On 15 February 2017, the Committee met with the aforementioned organisations and the Department of Justice. On 23February 2017, the Committee met to deliberate the issues related to the Bill. For ease of reference, the key issues have been summarised in the table below for the Committee’s deliberations on the Bill:

 

NAME OF INSTITUTION	COMMENTS / RECOMMENDATIONS	DOJ RESPONSE
Open Democracy Advice Centre (ODAC)	Disclosure of false information 9B (1) An employee or worker who intentionally discloses false information – Knowing that information to be false or who ought reasonably to have known that the information if false; and With the intention to cause harm to the affected party and where the affected party has suffered harm as a result of such disclosure, Is guilty of an offence and is liable on conviction to a fine and such imprisonment. (2) (a) The institution of a prosecution for an offence referred to in subClause (1) must be authorised in writing by the Director of Public Prosecutions. (b) The Director of Public Prosecutions concerned may delegate his or her power to decide whether a prosecution in terms of this Clause should be instituted or not. ODAC argued[1]: for this provision to be scrapped as it will create a criminal offence if persons intentionally disclose false information. They argued that it is inconsistent to have a punitive criminal sanction within a framework of promotion of whistleblowing. In South Africa, there are a variety of risks to whistle-blowers such as physical harm, family strain and significant financial losses in the context of high unemployment. The only envisaged harm, according to ODAC, is ‘reputational harm’. Within South Africa, there are a variety of pre-existing laws that can be used to sanction or deter a false disclosure eg within contract law, crimen injuria and civil law. No adequate evidence has been provided to support the necessity of such a provision, nor evidence that it could deter false disclosures in a manner more effective than other remedies	The Department of Justice[2] responded as follows: What is meant by a false disclosure? It is a disclosure made by a person who knows it is false. There are persons who knowingly spread false information because he or she has an axe to grind. It is this situation, the Act seeks to remedy. Negative consequences of false disclosures include irreparable reputational damage and also the social phenomenon of the distribution of fake news. The impression could be created that such false disclosures are made in terms of Clause 9 of the Act. The false information is believed to be true and the perpetrator is believed to be a bona fide whistle-blower and the innocent person or institution is compromised. Such false disclosures could lead to prejudice to members of the public and infringe upon their right to know. The potential harm could even extend to an international level.
Whistleblowing International Network (WIN)	Win[3] urges the removal of Clause 9B, just as ODAC does and presents the following arguments in support of its recommendation for removal of the provision: Most countries have provisions in their laws to protect against false accusations – whether in the law of defamation or in the criminal code. Available research indicates that actively promoting safe reporting channels increases the likelihood of the authorities properly investigating wrongdoing. The organisation agrees that whistle-blower protections should not extend to those who deliberately report false information, this is different to including a criminal offence of false reporting within a law designed to promote and protect whistle-blowers who still remain more vulnerable than they should in law and around the world. Introducing such a Clause would undermine the important steps being undertaken to ensure the Protected Disclosures Act is a more effective anti-corruption and good governance mechanism.	WIN’s emphasis on corruption does not take cognisance of the ambit of the principal Act which is broad and includes, for example, disclosures relating to the environment. Such disclosures could result in scarce resources being used to test the veracity of disclosed information. It should be noted that the original version of Clause 9B was tightened up to address Cosatu’s reservations to ensure that only intentional and malicious conduct be criminalised. The DOJ cites Australian examples where the legislation does in fact provide for criminal liability in respect of ‘false or misleading information’ and ‘false and misleading documents’ respectively.
Corruption Watch	Concerned about the implementation of the Amendment Bill and certain practical challenges which face employees and workers when making protected disclosures. The definition of occupational detriment and the new Clause 9 A which deals with the exclusion of civil and criminal liability needs to be aligned in order to ensure that there are no contradictions and anomalies in the legislation. The definition of occupational detriment is now defined to include: “being subjected to any civil claim for the breach of a duty of confidentiality or a confidentiality agreement arising out of the disclosure of a criminal offence.” Corruption Watch asserts that the Clause protects whistle-blowers from a civil claim where he or she breaches a duty of confidentiality only when disclosing a criminal offence. The organisation recommends that the wording should be substituted with the following: “being subjected to any civil claim for the alleged breach of a duty of confidentiality or confidentiality agreement arising out of a protected disclosure.”	The Department agrees with Corruption Watch that the definition of “occupational detriment” should be aligned to the proposed new Clause 9 A (1) (b).         The proposal of Corruption Watch in respect of criminal and civil liability should not only be excluded in limited circumstances, but should apply in respect of any “disclosure”. This is not supported by the DOJ as any breach of confidentiality is a serious matter and should be approached with care in order to avoid any possible negative consequences that are justifiably prevented by confidentiality agreements. The DOJ is of the view that the disclosure of a criminal offence or a substantial contravention of the law is of a serious enough nature to justify the alleged breach of confidentiality.

 

Intentional false disclosure (Clause 9B)

 

The stakeholders argued that the insertion of the Clause to create a crime was not necessary considering the repercussions that do exist if a person makes a false disclosure. However, the Department asserts that Clause 9B is aimed at deterring people from making false disclosures with the Department maintaining that reputational damage was a serious offence. The stakeholders were concerned that this would have the opposite effect and discourage legitimate disclosures for fear of arrest.

 

Deliberation on the Protected Disclosures Amendment Bill [B 40B-2015]

The Select Committee on Security and Justice invited the Department of Justice and Constitutional Development to a meeting on 23 February 2017 to deliberate the proposals submitted by the public submissions.

 

The Department of Justice and Constitutional Development agreed with the proposals from the public submissions to amend Clause 1 of the Bill to rectify the ambiguous wording.

 

CLAUSE 1

1.         On page 3, from lines 33 to 35, to omit all the words from “being” up to “offence”, and to insert:

“being subjected to any civil claim for the alleged breach of a duty of confidentiality or a confidentiality agreement arising out of the disclosure of—

(i)         a criminal offence; or

(ii)         information which shows or tends to show that a substantial contravention of, or failure to comply with the law has occurred, is occurring or is likely to occur;”.

 

The Committee had no objections to the proposed amendment.

 

 

Deliberation on removing Clause 9B

 

The majority view held that Clause 9B must remain in the Bill as it acted as a deterrent to anyone acting with the intent to report a false disclosure, with the intention to cause harm. The Committee noted that Clause 9B was not aimed at deterring protected disclosures but balancing the protection afforded by the Act to upstanding South African citizens making protected disclosures while also protecting against elements that wish to cause intentional harm to an institution or individual.  The Protected Disclosures Act protects the whistle blower when making a bona fide disclosure but if a disgruntled employee makes a malicious, false disclosure, the reputational damage suffered to the individual or company takes a long time and expense to clear. The disgruntled employee may be prepared to lose his employment to cause harm to the individual or company and the addition of Clause 9B adds a deterrent to this potential situation.

 

Opposition to the support of Clause 9B

The minority view agreed with the concerns raised by the public submissions on the possible chilling effect Clause 9B might have on protected disclosures.  The members argued that the punitive measures a company could impose by means of dismissal was a sufficient deterrent to prevent false disclosures. The members noted that the inclusion of Clause 9B could have a chilling effect on whistle blowing for fear of prosecution.

 

Adoption of Bill

 

The Select Committee considered the subject of the Protected Disclosures Amendment Bill [B 40B– 2015] (National Assembly – sec 75), referred to it, and reports that it has agreed to the Bill with the following proposed amendment.

 

CLAUSE 1

1.         On page 3, from lines 33 to 35, to omit all the words from “being” up to “offence”, and to insert:

“being subjected to any civil claim for the alleged breach of a duty of confidentiality or a confidentiality agreement arising out of the disclosure of—

(i)         a criminal offence; or

(ii)         information which shows or tends to show that a substantial contravention of, or failure to comply with the law has occurred, is occurring or is likely to occur;”.

 

The Democratic Alliance and the Economic Freedom Fighters did not support the adoption of the Bill.

Report to be considered.

 

 

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[1] Open Democracy Advice Centre, Submission on Criminal Sanctions for false disclosures in the amendment to the Protected Disclosures Act of South Africa, February 2016, presented to the SC Security and Justice Committee on 15 February 2017.

[2] Departmental Responses to issues raised by ODAC, Whistleblowing International Network (WIN) and Corruption Watch in the Select Committee on Security and Justice on 15 February 2017, Proposed New Clause 9B: False Disclosures, NCOP Note 1.

[3] Whistleblowing International Network, Submission in respect of including criminal sanctions for false disclosures within the Protected Disclosures Act of South Africa, January 2017, presented by ODAC to the SC Security and Justice Committee on 15 February 2017.