New rules offer greater protection, incentives to whistleblowers

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On 30 March 2016, the Supreme People’s Procuratorate (SPP), Ministry of Public Security and Ministry of Finance released Several Provisions on Protecting and Rewarding Whistleblowers for Reporting Duty Crimes, offering greater protection and incentives to the whistleblower. This is likely to encourage more whistleblower reports and further strengthen the central government’s efforts to crack down on corruption involving government officials.

The new regulations aim to protect whistleblowers who provide tips about state working personnel who commit crimes such as corruption, official bribery, embezzlement and malfeasance. The regulations also provide increased protective measures to whistleblowers.

Story_1_pic_1Greater confidentiality. A comprehensive set of confidentiality protection measures through the whole process of handling whistleblower reports has been established, as well as rewards
for whistleblowers.

Retaliation more broadly defined. The definition of retaliation has been extended to cover not only threats to the safety or property of whistleblowers and their close relatives, but also other covert measures such as terminating employment, demotion or withholding approval of applications without proper justification.

Increased safety and protection of assets. The protection of whistleblowers and their close relatives has been enhanced, including protecting personal safety and property, proposing rectification measures to authorities, and co-ordinating with relevant authorities for assistance or subsidies.

The new regulations, jointly issued by the Ministry of Public Security and the Ministry of Finance, also indicate that local police will play an important role in protecting whistleblowers and their close relatives, and that rewards to whistleblowers will be supported by government funding.

Story_1_pic_2RECAP OF REGIME

PRC Constitutional Law grants Chinese citizens the right to report misconduct by government officials and provides protection against retaliation. Other PRC laws and regulations provide more details on the incentives, protection mechanisms and reporting channels for whistleblowers:

1. Whistleblowers are incentivized by the potential to earn social honours and monetary rewards of up to RMB200,000 (US$30,000), and between RMB200,000 and RMB500,000 for significant contributions. With SPP approval, rewards can be unlimited for “extraordinarily significant contributions”.

2. Whistleblowers are protected under the retaliation provisions of the Criminal Law, which provide that a government official who retaliates against a whistleblower can be subject to a fixed-term of imprisonment of up to seven years.

3. To facilitate and encourage reporting, the government has set up various whistleblowing channels. The Central Commission for Discipline Inspection (CCDI) launched an official website in 2013 for whistleblowers to report government corruption and other wrongdoings. In 2015 and 2016, the CCDI created a mobile-phone application and a social-media account on WeChat as additional platforms to encourage reporting.

4. In relation to economic crimes, including commercial bribery, public security bureaus may award monetary rewards of between RMB500 and RMB50,000 to whistleblowers. For reports involving commercial bribery activities, some local administration for industry and commerce authorities may grant monetary rewards ranging from RMB300 to RMB300,000.

PRC labour laws also specifically prohibit retaliation against whistleblowers. The Regulation on Labour Security Inspection provides that an employer who retaliates against a whistleblower should correct his or her wrongdoings and can be subject to administrative penalties or even criminal penalties.

Business Law Digest is compiled with the assistance of Baker & McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker & McKenzie by e-mailing Danian Zhang (Shanghai) at: [email protected]