New Whistleblowing Legislation

Approximately two years after it was enacted to protect public and private sector employees who report wrongdoing, the Whistleblower Protection Law, 2015 went into effect on February 1, 2018. One reason advanced for the delay in implementing the law was the inadequacy of mechanisms and institutions to enforce the law. These inadequacies will be addressed in part by the merger of the Office of the Complaints Commissioner, which has not had a permanent leadership for years, with the Information Commissioner’s Office. An ombudsman will oversee the merged commission and will have responsibility for monitoring whistleblower cases.

The proposal for whistleblower legislation in the Cayman Islands was prompted in part by a 2014 report from the Complaints Commissioner’s office, which focused on allegations of wrongdoing within the civil service. According to news reports, the then complaints commissioner had allegedly identified a culture in which government workers were refusing to report instances of wrongdoing that they observed because of fear that they—not the wrongdoers—would be punished. The prospect of civil servants only being allowed to take their vacation leave at the rate of one day per month was among the apprehended punishments for reporting wrongdoing. The new law seeks to allay such fears by providing a formal process for reporting wrongdoing to an ombudsman.

Along with the new whistleblower protections, the Cayman Islands government has implemented a new anti-fraud policy and launched a whistleblower hotline. Tipsters who call the hotline will be given a tracking number that they must mention if they wish to reconnect to the toll-free number for updates. Calls will be monitored by a trained operator in an overseas location.

Some commentators on recent high-profile leaks of confidential information have speculated that the release of the records in question was not the result of cybersecurity hacks, but the work of disgruntled employees who simply copied private information and passed it to the media. Whilst this suggestion is pure speculation, such risks may be mitigated by the existence of effective whistleblower legislation.

Comment

The Cayman Islands, in common with other offshore financial jurisdictions, has been under pressure in a number of different quarters. The jurisdiction is constantly reviewing and reforming its legislation and bringing it into line with international standards. It will be interesting to see how the whistleblowing legislation develops once reports are made to the ombudsman. We suspect that reports made in relation to the government may be treated differently from whistleblowing in the banking and financial sectors. In any event, this legislation could have far-reaching consequences for the jurisdiction.

Written by Philip S. Boni of Higgs and Johnson and Roger James of Ogletree Deakins