PwC Forensic Services director Trevor White

Kamini Padayachee

Whistle-BLOWERS are less likely to report crimes taking place in their companies because of fears of reprisals and victimisation.

This is according to the 6th PwC global economic survey released this week.

The survey is conducted every two years and this year there were 3 877 respondents from organisations in 78 countries.

The survey stated that the detection of crimes by external and internal tip-off methods and whistle-blower mechanisms had decreased dramatically to 20 percent compared with 44 percent in 2009.

The survey also says companies could improve the effectiveness of whistle-blowing mechanisms by making employees more confident to report crimes and aware of all the channels available to them.

PwC forensic services director Trevor White said people could be reluctant to report others because of victimisation. “Often it is a junior employee who has to report a senior employee, the whistle-blower is victimised and nothing happens to the person who has committed the crime.”

The survey also shows that in stark contrast to the global trend, in South Africa companies’ senior management are the key perpetrators of economic crimes.

In 2011, 36 percent of internal attacks were carried out by senior management compared to 17 percent in 2009; conversely, crimes committed by junior employees decreased by 6 percent.

White said the perpetrator profile of senior managers correlated with significant increase in tax fraud, market fraud, including price-fixing and insider training in 2011.

“These types of crimes would often suggest the involvement of senior management as it would require access to sensitive information which these employees often possess. It would also explain why there is drop-off in the crimes being reported by whistle-blowers and by tip-offs.”

The survey showed that while in 72 percent of the cases people were dismissed, in 20 percent of the cases, the perpetrators of the crimes were not fired.

In 9 percent of the cases either no action was taken or the respondents were not aware if anything was done, opted for transfers in 4 percent or warnings in 14 percent of the cases

White said it was a worrying trend that companies chose to retain employees who had committed crimes.

“It is a huge concern, because it sends the message to other employees that even if you commit a crime, you will not necessarily be dismissed and these perpetrators may be able to commit further transgressions. Organisations need to adopt a zero tolerance approach to set the right tone,” he said.