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Cayman Islands Enacts Whistleblower Protection Law Amid Concerns Over Lack of Effective Enforcement Mechanisms
The Cayman Islands has recently implemented its Whistleblower Protection Law, 2015, approximately two years after it was enacted to safeguard public and private sector employees who report wrongdoing. Despite concerns over the inadequacy of mechanisms and institutions to enforce the legislation, the law went into effect on February 1, 2018.
Background
The proposal for whistleblower legislation in the Cayman Islands was prompted by a 2014 report from the Complaints Commissioner’s office, which highlighted allegations of wrongdoing within the civil service. The report revealed that government workers were reluctant to report instances of wrongdoing due to fear of retaliation, with the prospect of being punished rather than the wrongdoers.
New Law and Protections
The new law aims to alleviate these fears by providing a formal process for reporting wrongdoing to an ombudsman. Additionally, 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.
How it Works
- Calls to the whistleblower hotline will be monitored by a trained operator in an overseas location.
- The ombudsman will oversee the merged commission and be responsible for monitoring whistleblower cases.
Impact on Offshore Financial Jurisdictions
The existence of effective whistleblower legislation may mitigate risks associated with high-profile leaks of confidential information, which have been speculated to be the result of disgruntled employees copying private information and passing it to the media. The Cayman Islands, like other offshore financial jurisdictions, has faced pressure from various quarters and is constantly reviewing and reforming its legislation to bring it in line with international standards.
Future Outlook
The development of the whistleblowing legislation will be closely watched, particularly as it relates to reports made to the ombudsman regarding government activities versus those related to the banking and financial sectors. This legislation could have far-reaching consequences for the jurisdiction, and it remains to be seen how it will be implemented in practice.