Whistleblowers

who is a whistleblower ?

A whistleblower (whistle-blower or whistle blower) is a person who exposes misconduct, alleged dishonest or illegal activity occurring in an organization. The alleged misconduct may be classified in many ways; for example, a violation of a law, rule, regulation and/or a direct threat to public interest, such as fraud, health and safety violations, and corruption. Whistleblowers may make their allegations internally (for example, to other people within the accused organization) or externally (to regulators, law enforcement agencies, to the media or to groups concerned with the issues).

Types of Whistleblowers :

• Internal whistleblowers – Report the misconduct or illegal behavior of a fellow employee or superior within a company
• External whistleblowers – Not directly involved in a company, but report their actions to entities such as the media, law enforcement, and watchdog agencies
• Current Whistleblower - One who blows the whistle while he/she is still a member of the organization
• Alumni Whistleblower - One who blows the whisle after leaving the organization
• Open Whistleblower - One who reveals his or her identiity and/or makes no attempt to hide identity
• Anonymous Whistleblower - One who keeps his/her identity a secret

Many whistleblowers, such as Erin Brockovitch, Sanjiv Chaturvedi (IFS) ,S.K. Lamba (exposed Adarsh scam), Satyendra Dubey(NHAI),Jeffrey Wigand,etc. are considered public heroes. 

Perception about the whisteblowers 

Whistleblowers are sometimes seen as selfless martyrs for public interest and organizational accountability; others view them as "traitors" or "defectors," solely pursuing personal glory and fame, or view their behavior as motivated by greed in qui tam cases.

The role of whistleblowing in the fight against corruption and risk involved

Corruption is a notoriously secretive activity and it is usually only those engagedin corrupt deals or those who work with them that are aware of it. Insiders are among the few people who are able to report cases of corruption (past or ongoing) and identify the risk of future wrongdoing. By helping to detect corruption cases, whistleblowers play a critical role in converting a vicious cycle of secrecy into a virtuous cycle .Major bribery and corruption scandals demonstrate the damage done by the failure to report wrongdoing as soon as it is discovered. Yet indifference, fear of reprisal, and misplaced loyalty as well as an overall culture of silence often deter potential witnesses and whistleblowers from speaking out.

“Whistleblowing” or “public interest disclosure” entails disclosure made in good faith that the information revealed is true, serves the interest of the public at large, and increases accountability within Government (and/or the private sector, depending on the legislation). Most countries vary on the types and scope of subject matter that are covered, with some countries clearly defining the scope and others, such as India, leaving it more vague. Coverage for protection also ranges from only Central Government employees, to both State and Central Government employees, to Government contractors and the private sector.

Whistleblowing is increasingly recognised as an important tool in the prevention and detection of corruption and other malpractice.By disclosing wrongdoing in an organisation, whistleblowers can avert harm, protect human rights, help to save lives and safeguard the rule of law. The clandestine nature of corrupt behaviour means that it may never come to light unless cases are reported by people who discover them in the course of their work. But reporting can come at a high price: whistleblowers often expose themselves to great personal risks in order to protect the public interest. As a result of speaking out, they may lose their jobs, dampen their career prospects, and even put their own lives at risk. 

Persecution of whistleblowers has become a serious issue in many parts of the world:

Employees in academia, business or government might become aware of serious risks to health and the environment, but internal policies might pose threats of retaliation to those who report these early warnings. Private company employees in particular might be at risk of being fired, demoted, denied raises and so on for bringing environmental risks to the attention of appropriate authorities. Government employees could be at a similar risk for bringing threats to health or the environment to public attention, although perhaps this is less likely.

Whistleblower protection

Whistleblower protection refers to laws and policies meant to protect anyone who exposes alleged wrongdoing. The wrongdoing might take the form of fraud, corruption or mismanagement.

While countries such as the USA and the UK had enacted laws to ensure whistleblower protection in the late 1980s and late 1990s (respectively), the early 2000s saw a surge in such legislation around the world, such as in South Africa (2000) and Japan (2004). At the same time, the Right to Information and anti-corruption movements gathered speed around the world. The United Nations’ Convention against Corruption (UNCAC) was also set up in 2005 and part of the Group of 20 (G20)’s Anti-Corruption Action Plan drafted in Seoul in 2010 specifically focused on whistleblower protection.

There are still several countries, however, including India and Russia, which have yet to enact such legislation. In India, for example, while the proposed Public Interest Disclosure and Protection to Persons Making the Disclosure Bill, 2010 (PID Bill, 2010), was passed by the Lok Sabha (Lower House) in 2010, it has not yet been ratified by the Rajya Sabha (Upper House) of Parliament. 

Need/relevance of appropriate whistleblowing legislation of legislation

There have been multiple instances of threatening, harassment and even murder of various whistleblowers.

RTI activists are vulnerable human rights defenders (HRDs) in India. Unlike other HRDs, a majority of the RTI activists are not part of an organisation; they often act alone, moved by anger at corruption and other illegal activities. RTI activists are vulnerable because they live in the same areas as public authorities and political leaders who do not want information about their activities to be disclosed. For the most part, human rights defenders receive media attention only when killed or seriously injured. When complaints are made by RTI activists, law enforcement personnel (who often work with corrupt officials) do not take appropriate action. The Right to Information Act, 2005 provides inadequate protection to whistleblowers. The Central Information Commission and the State Information Commissions are not mandated to deal with such threats or attacks or to provide protection when needed.

So the demands are that a law should be framed to protect whistleblowers.

Appropriate whistleblowing legislation and the means to enforce it are necessary to support a culture of compliance and integrity. Several international conventions recognize whistleblowing as an effective tool for fighting corruption,fraud and mismanagement, and commit the signatory countries to implement appropriate legislation.However, existing legal provisions are fragmented and weakly enforced in most jurisdictions.Only in rare cases do they provide sufficient protection for whistleblowers. Many laws may cover only the public sector or may be not tailored to the specific needs of whistleblowers.Comprehensive legislation, as provided under the United Kingdom’s Public Interest Disclosure Act, is the exception rather than the rule.

There may be an over-reliance on general criminal laws that oblige individuals to report criminal offences to a country’s law enforcement authorities.In such circumstances, the assumption is that individuals would automatically be exempted from any form of retaliation if a crime was involved. Practice has shown, however, that the existence of a legal duty to report is seldom a satisfactory alternative to a proper whistleblowing policy and protective measures. The same problem applies to the reliance on witness protection mechanisms. Not all whistleblowers are witnesses. They often do not have any concrete evidence, but only suspect wrongdoing. As a result, witness protection mechanisms do not provide sufficient protection to whistleblowers, nor do they pursue the same goal.At the same time, the overall legislative framework needs to provide sufficient protections and compensation for those wrongly accused, even by whistleblowers who report in good faith. The assumption of innocence needs to be respected until responsibility is sufficiently proven.

The Public Interest Disclosure and Protection to Persons Making the Disclosures Bill, 2010

Analysis :

According to Indian law reports, the bill has faced considerable criticism because its jurisdiction is restricted to the government sector and encompasses only those who are working for the Government of India or its agencies; it does not cover the state-government employees. However, the draft bill aimed at protecting whistleblowers is seen as a welcome move.

The proposed law has neither provisions to encourage whistleblowing (financial incentives), nor deals with corporate whistleblowers; it does not extend its jurisdiction to the private sector (a strange omission, after the fraud at Satyam). The Directorate of Income Tax Intelligence and Criminal Investigation is one of the only agencies empowered for whistle blower protection.

The bill aims to balance the need to protect honest officials from harassment with protecting persons making a public-interest disclosure. It outlines sanctions for false complaints. However, it does not provide a penalty for attacking a complainant.

The Central Vigilance Commission (CVC) was designated in 2004 to receive public-interest disclosures through government resolution; there have been a few hundred complaints every year. The provisions of the bill are similar to that of the resolution. Therefore, it is unlikely that the number of complaints will differ significantly.The power of the CVC is limited to making recommendations. It cannot impose penalties, in contrast to the powers of the Karnataka and Delhi Lokayuktas.

The bill has a limited definition of disclosure, and does not define victimisation. Other countries (such as the United States, United Kingdom and Canada) define disclosure more widely and define victimisation.

It differs on many issues with the proposed Bill of the Law Commission and the Second Administrative Reform Commission’s report. These include non-admission of anonymous complaints and lack of penalties for officials who victimise whistleblowers.

If enacted, the law to protect whistleblowers will assist in detecting corruption, ensuring better information flow and paving the way for successful prosecution of corrupt individuals through clear and protected processes. However, the public in India have a low level of confidence in fighting corruption because they fear retaliation and intimidation against those who file complaints. Another worry pertains to the delay in disposing of these cases. Without public debate on the provisions of this proposed law, it is clear that people cannot measure its effectiveness when the draft bill comes into force as law.

TI recommendations
A single, comprehensive legal framework is most effective

To ensure a safe alternative to silence for whistleblowers, the legal framework should be clear, comprehensive and easy to use for protecting the whistleblower.Ideally, a single legislative framework should be in place, but provisions in different bills can fulfil the same purpose if they do not leave loopholes or become too complicated. In all cases,the legislation should cover the public,private and not-for-profit sectors and provide for reliable reporting channels to communicate concerns. Legislation should include a broad range of issues, from criminal offences to the potential harm that wrongdoing can cause, such as to the health and safety of citizens and the environment. Whistleblowing legislation should provide that organisations in the public and private sector establish,maintain, and routinely publicise appropriate mechanisms for internal reporting.

Safety should be ensured for whistleblowers

Both public and private employees and those outside the traditional employee-employer relationship (e.g. consultants,temporary workers, trainees, etc.) should be protected from reprisal for honestly reporting concerns. Protection should also be extended to those attempting to report or corroborating reports and include a right to refuse participation in wrongdoings. Any individuals closely associated with the whistleblower, such as family members, should be covered as well. In case of retaliation against the whistleblower, the burden of proof to show that this discrimination is not related should lie with the employer. These protections should be guaranteed by access to normal court procedures.Whistleblowers should be protected against any damages suffered as a consequence of their disclosure. They should receive some kind of professional or social recognition for having prevented excessive harm to the organisation or society. Such a system, potentially in cluding financial rewards, should be carefully designed, taking the particular national and legal contexts into account.

Internal and external reporting should be protected

Where possible, reports or concerns should first be raised internally and to the appropriate body set up by the organisation with assurances that whistleblower confidentiality is clearly established. This allows organisations time and space to investigate the nature and substance of a report without unfairly exposing the subject of a report or the organisation to unfounded allegations.In many instances, however, initially reporting internally might not be a possibility.Whistleblowers may fear retaliation for filing an internal report, the report may not be followed up internally for various reasons (e.g. where malpractices are institutionalised or where managers are concerned about the negative impact on the image of the institution or on themselves), or the public interest may be best served by immediately filing the report externally to the authorities or other agencies. Whistleblowers should have a safe option to report externally to the regulator, enforcement authorities or to other competent oversight bodies. This is particularly important in cases where there is an immediate risk to the health and safety of people. As a last resort, disclosures to the media should also be protected.The British Public Interest Disclosure Act (PIDA), for instance, takes different factors and consequences of whistleblowing for people and organisations into account. It is an example of a model that allows for internal and external reporting, establishing three levels of disclosure.

Enforcement is essential

While the existence of a legal framework is a pre-condition for whistleblower protection, it is not sufficient. Legislation needs to be effectively enforced and should be as sound and consistent as possible. To ensure the proper implementation of legal provisions, an independent public body with sufficient autonomy should be set up or designated to oversee the functioning of the law and to receive and investigate complaints. Enforcement should include consultations with key stakeholders like trade unions, business associations and civil society actors so that whistleblowing policies can be agreed upon and put into effect.

The need for effective follow-up mechanisms in organisations

To realise the potential of whistleblowing legislation, the legal framework should be complemented with effective follow-up mechanisms in organisations. There also must be a willingness in organisations (whether a public in stitution, private company or not-for-profit) to provide sufficient resources, to investigate cases through independent bodies, to implement necessary changes and to hold those responsible for wrongdoing to account.In recognition of the potential of whistleblowing for effective risk management in organisations, a number of related provisions and guidelines have been developed. The Sarbanes-Oxley Act, a law in the US which sets financial reporting standards for public companies, mandates whistleblower protection mechanisms for public companies registered in the country.The International Chamber of Commerce also has adopted voluntary guidelines and the British Standards Institute has developed a code which establishes best practice for whistleblowing in organisations.But recent cases show that existing laws and practices are not enough and that much more needs to be done to realise the potential benefits of whistleblowing.For example, the multi-billion dollar fraud scheme of Bernard L. Madoff, a US- based hedge fund manager, was first detected in 1992, but no action was taken.An official investigation into the case found that six substantive complaints were filed by whistleblowers to the appropriate bodies but the government never followed up on them. Madoff’s scheme eventually cost thousands of investors billions of dollars.

Recommendations:

Strong and transparent internal policies are needed in organisations

Trustworthy and effective policies and procedures are essential to create the right environment for honest reporting in organisations. As part of well-designed ethics and anti-corruption codes, organisations should implement a clear and distinct whistleblowing policy. Whistleblowing procedures should provide for a variety of easy and accessible channels that can be used to disclose information,such as to the line manager, an ethics committee, the ombudsperson, internal hotlines or web-based reporting tools.Policies and procedures should also clearly separate personal grievances from whistleblower reports, offer guidance and procedures for internal and external reporting, provide sufficient feedback to the whistleblowers, establish appropriate follow-up mechanisms with timeframes,and protect people from retaliation. It is essential that whistleblower procedures are supported by the top management and accepted and well-known by the members of the organisations.

Confidential reporting must be ensured

Reporting channels in an organisation should offer people the opportunity to report concerns confidentially or even anonymously. Confidentiality is needed to establish trust with the whistleblower who faces numerous risks when reporting,while also allowing the organisation to establish the facts of a case. The whistleblower’s identity should be protected and only be disclosed if she or he agrees to this or if it is required by law.Confidentiality also helps to protect thefundamental rights of the person suspected of wrongdoing.

Impartial and accountable investigations need to be carried out

After a disclosure is received, the organisation should focus on the nature and substance of a report, and not on the person making it. Reports should be fully and fairly investigated; while the organisation should also take suitable correctiveaction when a report is well-founded. A record should be kept on how a reportwas managed so the organisation can learn from the experience.

Good communication and consultation with staff is needed

Whistleblowing policies must be fully supported by the leadership of the organisation and should be adequately promoted and clearly communicated throughout the organisation. When designing and implementing the policy,employees, directors and other stakeholders should be properly consulted,briefed and trained. The achievements of whistleblowing mechanisms shouldbe regularly communicated to the members of the organisations and to the public, and staff should be consulted regularly in order to identify areas for improvement.

The demand for a shift in culture

The importance of whistleblowing in the detection and prevention of wrongdoing is still generally under-valued. It is an inexpensive risk management tool with particular benefits for emerging democracies with less established oversight mechanisms. Whistleblowing is also a tool to sound the alarm at early stages, potentially even before any damage has been caused.Nevertheless, whistleblowers are often perceived as disloyal, rather than as champions of the public interest. In many countries they are viewed as untrustworthy, and sometimes even as spies or traitors.

Recommendations

Public support is needed to promote whistleblowing To change this perception, whistleblowing needs to be promoted as an effective tool for stopping corrupt ion and serving the public interest.Governments should lend their support to public information campaigns as well as initiatives to promote whistleblowing that are carried out by professional groups, Ombudspersons,industry, media, trade unions and other civil society organisations. Whistleblowers should not only be protected by public authorities, but also honoured and actively supported.

Data on the public benefit of whistleblowing should be collected and published

Data from the United States show the relevance of whistleblowing for the recovery of public revenues (see side bar on page 6). Yet on a global scale there is little data available on the number of cases reported, the effectiveness of reporting channels and the financial benefits due to whistleblowing. This lack of data could be addressed by making more court and tribunal decisions public and by standardising whistleblowing procedures across the public sector. Given the central role of whistleblowing in detecting and preventing wrongdoing, gathering reliable statistics will greatly help decision-makers and the public to measure progress in uncovering corruption.

A proper societal and legal environment is needed

A legislative environment, ensuring freedom of expression, access to information and the existence of an independent media are critical to enable a culture of whistleblowing. Protection of journalists’ sources should include information provided by whistleblowers, even if journalists might base their reports at times on erroneous information given in good faith. The growing relevance of internet tools provides whistleblowers with new channels for reporting and thereby creates a global platform which increasingly can help ensure that whistleblowing becomes and remains an important issue in the public debate.

TI’s Recommendations for Whistleblowing: At a Glance

A single, comprehensive legal framework is most effective.
Safety should be ensured for whistleblowers.
Internal and external reporting should beprotected.
Enforcement is essential.
Strong and transparent internal policies are neededin organisations.
Confidential reporting mustbe ensured.
Impartial and accountable investigations need to becarried out.
Good communication andconsultation with staff isneeded.
Public support is needed topromote whistleblowing.
Data on the public benefit of whistleblowing should becollected and published.
A proper societal and legal environment is needed.