1. 295A. J. Diale
THE ROLE AND IMPORTANCE OF
WHISTLE-BLOWING IN BUILDING
ORGANISATIONAL INTEGRITY
IN THE PUBLIC SECTOR:
A THEORETICAL EXPOSITION1
A. J. Diale
Department of Public Management
Tshwane University of Technology
ABSTRACT
C
onstant media exposure of organisational wrong-doing; unethical
dealings and illegal practices have come to dominate the discussions
on corporate governance. Such exposures are normally brought about
by, among others, stake-holder activism and organisational employees. Usually,
in such cases, employees have had prior knowledge about the organisational
misdeeds, but chose not to, or were afraid to speak out. If they did speak out,
then organisational retaliation would befall the individual whistleblower without
any attention to the issues raised; which tends to bring the organisational integrity
into question. Numerous case studies and research initiatives have demonstrated
that whistle-blowing can and does play a positive role in strengthening
accountability mechanisms in organisations, and, by extension, helps build
organisational integrity (Jos, 1991:105-118; Johnson & Kraft, 1990:849-874).
The aim of this article is to explore theoretically the nature of whistle-
blowing as it transcends across legal, ethical/moral and social fields. This will
be demonstrated using documented South African cases of organisational
misfortunes. This exploration will be used to highlight aspects to be considered
for a framework in building whistleblower infrastructure as an integral component
of the organisational integrity, both in public and private organisations.

4. 298 Journal of Public Administration • Vol 45 no 1.1 • June 2010
behaviour compliant with moral values, standards, norms and rules, accepted by the
organisation’s members and stakeholders (Kolthoff: 2007:42).
In this era of modern technological revolution and the expanding global village,
organisations and their leaders have come under increasing pressure to demonstrate their
moral and ethical pedigree. KLM Inc (2007) rightly observed that, until recently, few
organisations seriously considered ethics to be a legitimate topic for enterprise planning
and strategic thinking. Organisational top management prioritised and placed emphasis
on organisational and functional strategies. Ethics and regulatory compliance were left to
human resources departments, finance departments and legal counsel to deal with. This
was not considered an integral part of the planning and implementation process. Another
observation is made by Navran (2003) referring to organisational collapses and misfortunes,
like the fate suffered by United Way, WorldCom, Tyco, Enron, namely; that organisational
misconduct, whether by an individual CEO or the organisation itself, attacks and undermines
the fundamental agreement between the organisation and society; it violates trust.
South African organisations and institutions have not escaped scandalous publicity either.
The Travel-gate, Oil-gate and the Fidentia scandals are some of the cases to hit the headlines
in recent times (from early 2002 to date). The respective cases are briefly outlined below:
Case # 1 – The Travel-Gate –
SA Parliament’s unfortunate episode
This is one of the most unpleasant organisational misfortunes to ever hit South Africa
in the post-apartheid era. The situation involves Members of Parliament (MPs) who
defrauded their parliamentary travel benefits by fraudulently claiming for expenses other
than travelling. During that period, they were working in cahoots with some travel agents,
hence the name Travel-Gate. The amount estimated is around R20 million and 20 MPs
have so far admitted guilt in the scandal – and some of them continued to serve in
Parliament until the end of the term in 2009.
As is usually done in most damning public disclosure cases, you shoot the messenger
and hope that the problem will fade. The whistle-blower in this case, was a Parliamentary
Chief Financial Officer, who, after he blew the whistle, was shown the door on trumped-up
charges of financial mismanagement. Interestingly; when the whistle-blower approached
the Labour Court in terms of the provisions of the Protected Disclosure Act, 2000 to seek
protection, the same Parliament opposed the action, not on the substance of the case but
on a technicality. The technicality in this case was that MPs were neither employees nor
employers and, therefore, the complainant could not claim protection under the PDA.
The court subsequently ruled in favour of the whistle-blower with the presiding judge
proclaiming “… it would be a national embarrassment if an official could not be protected
for blowing the whistle on crooked MPs”. (Business Day, June 15 2007).
The following are some of the observations made from this case:
Parliament in a constitutional democracy like South Africa, is a legislation-making body
and an embodiment of public trust. It has financial and compliance policies and codes of

5. 299A. J. Diale
conduct that guide the conduct of public representatives and the safeguarding of public
resources. The irony or reality thereof is that, parliament in itself could not escape the
scandalous ethical embarrassment of this nature and it is proven that it is not immune from
ethical meltdown. Instead of saving face, the inevitable happened. This involved shooting
the messenger on trumped-up charges and challenging the very legislation (PDA) that it
promulgated to protect those who expose unethical and illegal activities. It had to take a
court judge to enforce the provisions of the legislation and, by extension, to restore the
public trust. Lastly, the shortcomings of the legislative approach in building organisational
integrity is the tendency to divert the attention of aspects of whistle-blowing from real
issues to the personal attributes of an individual whistle-blower.
CASE #2 – The Oil-Gate Affair –
How political patronage dictated against good and ethical governance
The Oil-Gate saga revolves around a black economic empowerment company that goes
by the name Imvume that was set up to trade in hydrocarbons. This company was given
a contract to procure gas condensate for a subsidiary of a state energy company, PetroSA,
funded from the public purse and controlled by the National Department of Minerals
and Energy Affairs whose Minister then (in 2003) later as appointed the Deputy President
of the Republic (2005-2008), and the chairperson of the board happened to be a senior
party official from the ruling African National Congress (ANC) and the former Premier
of North West province. The saga unfolded when Imvume asked for an advance of R15
million (which was later declared irregular) to pay for shipment, to which PetroSA agreed.
Of the R15 million, in 2003, R11 million was passed on to the ANC coffers as donation for
the 2004 national elections campaigns (the funds were reportedly paid back, according to
the outgoing Treasurer of the ANC during the 2007 National Conference). PetroSA had to
pay for the same shipment twice. When the heat was turned on, Imvume used what has
become a worrying trend in South Africa’s transparency efforts, that of using the country’s
high courts to gag the media and anybody else in exposing questionable business
dealings. The subsequent inquiry by the country’s Public Protector (Ombudsman) saw
nothing amiss about the deal and concluded that the deal did not constitute any illegality.
However; the subsequent legal battles between PetroSA and Imvume indicated a different
picture altogether. In this legal battle, PetroSA sought recourse on the costs it incurred and
has subsequently attached the assets of Imvume. (Business Day, August 3, 2005).
Observations from the case can be summarised as follows:
Private companies that do business with government are required by law to observe and
adhere to the principles and practices of Corporate Governance as recommended by the
King Commission’s Reports 1 and 2, regardless of their political or any other affiliation.
Corporate greed and political patronage undermine the principles of corporate governance
and ethical business practices at the expense of taxpayers and the broader stakeholder
community. What should be borne in mind is that, Imvume is a beneficiary in terms of
the Black Economic Empowerment (BEE) initiative aimed at economically advancing the

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previously disadvantaged individuals and groupings. Lastly, the relations between private
companies and the dominant political establishment provide a fertile ground to put to test
whistle-blowing initiatives and the political leadership support for them to flourish. The
central contention in this case is whether or not political affiliation and patronage exempt
organisations from ethical business practices.
Case #3 – The Fidentia Fiasco –
How public trust was taken to the cleaners
This is one case that may be referred to as South Africa’s version of Enron. It makes one
wonder whether indeed any idea of corporate governance exists in the minds of some
company officials and board members. It involves one Fidentia Holdings (a little-known
and unlisted entity), with its two subsidiaries; Fidentia Asset Management and Bramber.
The episode goes like this: The Financial Services Board (FSB), an independent institution
established by statute to oversee the South African Non-Banking Financial Services
Industry in the public interest, mandated a team to probe the affairs of this company as
per its mandate. Fidentia, by then, was looking after R1,6 billion of other people’s money.
Among its investors were the Living Hands Umbrella Trust (R1,47 billion), which pays out
money invested with it by the Mineworkers’ Provident Fund to orphans and widows of
people killed in mining accidents, and the Transport Training and Education Authority (Teta)
(R245 million). What the investigation team discovered includes what is referred to as
misrepresentation to clients, misappropriation of client funds, misrepresenting investments,
inadequate corporate governance and material conflicts of interests (Business Day,
February 2, 2007). In addition, about R406 million of “clients’ funds unaccounted for”.
The FSB further applied to the Cape High Court for Fidentia Holdings and its
subsidiaries to be placed under curatorship. This was partially granted and the final
curatorship was granted on March 27, 2007. This fiasco claimed the directorships (held
in other prominent companies) of one black prominent businesswoman in South Africa,
when it emerged that a loan was advanced to her from the coffers of the company she
had fiduciary responsibilities at, and the criminal charges brought against the two Fidentia
executives. It would be highly improbable for one to suggest that the board members of
this company had no clue of what was happening.
In the cases cited, organisational members were aware of the some of the dealings
but apparently chose the ostrich approach. One can only imagine the effect that these
scandals had on both the public and investor confidence and trust.
In response to the ethical challenges that befell them, organisations in turn spent
resources on drawing up ethical codes; the end-product being compliance-based ethical
regimes, aimed at preventing, detecting and punishing legal violations. Organisations
embraced punitive legal compliances (Nadler, 2007; Paine, 1994; Busakwe, 2006). They
became overzealous in advocating an approach that prioritised the threat of detection and
punishment in order to channel in a lawful and acceptable behaviour. As expressed by
(Nadler, 2007; Andrews, 1989; Navran, 2003), ethical codes do not stand alone and they
should not serve as a flu-shot to prevent a problem nor should be used as an antibiotic to

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The point of departure in efforts to making whistle-blowing part of the ethical fibre is
to advocate for a different and positive interpretation of what whistle-blowing is about,
what it should be, and what its place within the organisational value system is. Since the
topic is whistle-blowing and its importance in building organisational integrity, a complete
approach to the notion of whistle-blowing needs to be embraced. Some suggestions on
building the proposed framework revolves around the following aspects:
Making integrity a governing ethic• : As Busakwe (2006:18) and Paine (1994:111)
highlight, organisational integrity is based on the concept of self-governance in
accordance with a set of guiding principles. The role of managing ethics, in this
instance, will be to give life to organisational guiding values, make them the life-blood
of the organisation, and make them a driving force to foster continuity and conformity.
Let this aspect be what defines the organisation, what it stands for and what it wants
to achieve. All these aspects should be contained in the mission statement, vision and
values.
Identifying and communicating the value of whistle-blowing• within the framework
of organisational values. This aspect is related to the interpretation of the notion of
whistle-blowing; its new and positive image that should be advocated. This should
help to foster responsible conduct among organisational members. This is important
to counter the accusations that are normally levelled against whistle-blowers and the
negative reaction to whistle-blowing activity. This should provide guidance when faced
with ethical uncertainty and dilemmas.
Leadership:• This aspect should recognize and encourage whistle-blower leadership at
all levels and in all divisions of the organisation. It refers to giving space and recognition
to developing whistle-blowing champions. In most instances, top management of the
organisation is expected to play the leading role on ethical issues, to lead by example
and to portray observable behavioural actions. This view is an addition to such
proclamations. Therefore, top officials will have to demonstrate that whistle-blowing is
in the interest of all and for the good of all.
Systems, processes and policies:• Theses aspects relate to creating and sustaining the
ethical (whistle-blowing) organisational climate and culture. In the cases cited and
others that have been widely publicised, the most damning acts of whistle-blowing
were done externally. These scenarios painted either of the two aspects; the lack of
internal mechanisms supporting whistle-blowing or the deliberate acts of disregarding
whistle-blowing and the information provided, with the ultimate aim of silencing those
who speak out. The prevalence and maintenance of these whistle-blower systems,
processes and policies will be an easier task to embark on because the culture and
climate will have been cultivated.
Continuous monitoring, appraisal, review and training:• These measures are suggested in
recognition of the fact that, to have a sustainable whistle-blowing system, efforts have
to be made to monitor its success or failure, its strengths and weaknesses and; what
members need to know about how their whistle-blowing actions have enabled the
system to achieve its objectives. Training opportunities in whistle-blowing and related
aspects would enable organisational members to gauge their actions and contributions

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