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Definition:
Defined as the process by which employees working in a public or
private corporation blow the whistle or disclose claims of
malpractices by or within the organizations. It is also disclosing
information about acts of corruption or dangers to the public or
environment. This is generally done where the interest of the
public is involved. This is particularly true where the projects
are financed by the tax payers money. Another definition made by
investigators in the field is the disclosure by organization
members (former or current) of illegal, immoral or illegitimate
practices under the control their employers to persons or
organizations that maybe able to effect action.
The term
whistle blowing
is a universal phenomenon. A person
goes public with the claims usually after failing to remedy the
matters from the inside, at great personal risks to themselves.
The person making the said allegations is termed as the
whistleblower. Whistleblowers cannot remain silent and usually
speak out on the face of improper behaviour. A person is termed as
a whistleblower only when he/she discloses serious malpractices.
India too has witnessed the appearance of whistleblowers from
V.P.Singh to Manoj Prabhakar to P. Dinakar. Such practices range
from corruption and fraud in defence procurement to cheating and
plagiarism in scientific research. It is in this context that a
whistleblower or whistle blowing is differentiated from other
related practices such as in-house criticism, anonymous leaks etc.
Object and consequences:
Since the primary object to be achieved by the disclosure of a
malpractice is to awaken the public about the wrongful acts of an
organization, it also serves the purpose of filling in gaps or
overcoming any lacunae which might have occurred due to
inefficiency on
the part of the corporation. Also, the goal is to stop the
improper
actions, penalize the wrongdoers and redress or compensate any
victims,
if any. This forms a reform perspective, in which the solution to
problems is to replace corrupt people with honest ones and to
establish
good processes for monitoring and dealing with problems.
The consequences suffered by a whistleblower after he discloses
the
information to the public is generally grave and irregular. It
varies
from ostracism to blacklisting. A whistleblower is subjected to
numerous
acts of cruelty ranging from petty harassment, spreading rumours,
formal
reprimands, transfer, suspension and can also become targets of
termination. This is commonly termed as Shoot-the-messenger
syndrome,
though not many whistleblowers are physically shot, barring a few
exceptions like Satyendra Dubey.
Taking the example of
Frank Serpico, who joined the New York
Police
Force in 1960, where payoffs and kickbacks were rampant in the
department at that time. When he refused to take the money, his
fellow
officers saw him as a potential danger. He approached the New York
Times
after his complaint about the corruption prevailing in the NYPD
was
ignored by the Police Commissioner and the Mayor. As a result of
this
brave act he became a target of his colleagues and criminals who
tried
to terminate him. The disclosure lead the then-Mayor John Lindsay
to
create an independent committee, the Knapp Commission, to
investigate
Police corruption in the NYPD. On June 18th of that year, Serpico
testified against a former partner. Death threats continued and it
all
came to a head when he was shot point blank in the face while
making a
drug bust in Brooklyn. His colleagues did not call for help. He
resigned
from the force on June 15, 1972 and was awarded a medal of honour
for
conspicuous bravery and action.
Also, when Jeffrey Wigand simply told the truth, about what he saw
and
experienced as the head of research and development for Brown &
Williamson Tobacco Corporation (B&W), the country's third
largest
tobacco company- How the company misled consumers about the highly
addictive nature of nicotine, how it ignored research indicating
that
some of the additives used to improve flavour caused cancer, how
it hid
and encoded documents that could be used against the company in
lawsuits
brought by sick or dying smokers. Wigand too become a victim of
his
honesty as he amid lawsuits, countersuits and an exhaustive smear
campaign orchestrated by his company, Wigand lost his family, his
privacy and his reputation. His wife divorced him, and their two
daughters went to live with her. Despite these consequences he
made
front page news when he revealed that his former employer knew
exactly
how addictive and lethal cigarettes were. He delivered an
impressive
deposition in a Mississippi courtroom that eventually lead to the
tobacco industry's $246 Billion litigation settlement. This
story lead
to the making of a critically acclaimed movie called, The Insider,
starring Russell Crowe.
Even in India when
G.R. Khairnar
a middle ranking public servant
was
reinstated at a time when he only had a month of service left
before
retirement. The object of pro-longing the appeal was to keep him
out of
service for most of his productive years.
This is generally the fate of those who decide to stand up against
the
system. Instead of evaluating the information provided by the
whistleblower, the full power of the organization is turned
against him.
Whistleblowers are generally hardworking, conscientious employees
who
believe in
the system. It is only when they see that there
has
been grave malpractice, they speak out in the expectation that
their
complaint will be treated seriously. When they are attacked
instead,
they seek immediate relief from some higher body that will
dispense
justice. But it has often been observed from experience that
formal
channels are part of the problem. The reason behind this is that
Appeal
bodies are part of the system and usually seek or reach
accommodation
with other powerful groups. Hence, such bodies are hesitant to
provide
protection to whistleblowers who are employees of certain major
organizations. Ideally, a government department and certain
enterprises
should voluntarily establish an internal procedure for
whistleblowers as
a matter of best practice. Providing for a speedy remedy within
the
organization is to be preferred for a number of reasons. Perhaps
the
foremost of these is that internal procedures may form part of a
strategy to remove the stigma associated with justifiable cases of
whistleblowing.
Employee's duty:
In this regard an article published in Fortune, noted that 200
major
U.S. Corps
have recently appointed ethics officers, usually
senior
managers of long experience, to serve as ombudsmen and encourage
whistleblowing. But this is highly dependent upon the truth in
the
statement made by the whistleblower. The individual who is making
the
disclosure must have sufficient information. If not, this can lead
to
consequences such as sound co-operative relationships in the
organization can be unduly damaged
Using force can
contribute to
an atmosphere or belief culture that the only way to get things
done is
through force. As noted, it would be considered as a mistake to
think
that the whistle blowing as a
forcing strategy
exhausts the
opportunities for making an appropriate response to wrongdoing.
The
ideal framework is likely to include a combination of both
internal and
external reporting agencies. This will result in establishing
guidelines
that help to differentiate between circumstances when it is proper
to
utilize internal mechanisms or those when recourse should be had
to an
external agency. This however is inadvertently dependent upon
whether or
no the whistleblower should
go public. There would seem to
be a
consensus of opinion that in circumstances where public exposure
can be
justified by an overwhelming and immediate concern for the public
interest, such as when public safety maybe at risk or when there
is no
other alternative.
It is also required from employees that they should, as a matter
of
duty, be bound to disclose information or evidence in support of
any
acts of corruption. Therefore, the question arises of whether or
not
there should be a positive duty to report wrongdoing. It is worth
noting
that many corporations have now introduced codes of business
conduct.
The code of one such company Coca-Cola Amatil has the following
provision:
Each employee shall be alert to any action or omission in
Connection with his or her work which might constitute a
violation
Of this Code, shall attempt to prevent Code violations and
shall
Take prompt corrective action necessary to remedy and
prevent any
Recurring violation of this Code. Where personal corrective
action
is not possible or practicable, the employee should
immediately
bring the matter to the attention of his or her supervisor,
the
functional Executive Director or the Managing Director.
It goes on:
Any failure by an employee to report a Code violation in
accordance
with this Code section shall itself constitute a Code
violation.
Also, legislative provisions such as Section 11 of the Independent
Commission Against Corruption Act, 1988 (NSW) impose duties on
certain
officers to report incidences of suspected corruption.
Role of the media:
The media can play an essential role in uncovering and reporting
on
cases where a person commits the offence of taking detrimental
action
against another person making a protected disclosure. As such the
media
would be taking a positive position in the task of whistleblower
protection. Circumstances maybe as such that may arise where it is
essential that the public be informed immediately of the
allegations
made by a whistleblower. The Electoral and Administrative Reform
Commission in Queensland (EARC) has taken the view that
whistleblowers
should not be protected after disclosing information to the media
except
where there is a serious, specific and immediate danger to the
health
or safety of the public It is also argued that, except in
circumstances such as these outlined above, a whistleblower who
goes to
the media should bear in mind the consequences of that decision.
The
public interest is served, in part, by the ability of the media to
help
to ensure that matters of concern are given proper attention and
to act
as an additional safety net lest important matters be set
aside.
Lawyer's duties:
Recent corporate scandals in the U.S. brought the role of
accountants-and lawyers- into sharp focus. Many felt that with
accountants, securities, lawyers were also responsible for the
irregularities committed. Lawyers were, or should have been aware
of the
illegalities their corporate clients were perpetrating at the
expense of
shareholders, employees and creditors. It was time to bring them
under
direct suspension.
For example,
The Sarbanes-Oxley Act, 2002
thus required the U.S. Securities and Exchange Commission to
prescribe minimum standards of professional conduct for securities
lawyers. A particular requirement was to have a rule necessitating
lawyers who practice before the SEC (representing issuers) to
report evidence of a material violation of securities law or
breach of fiduciary duty "up the ladder"
to
the
company's Chief Legal Officer (or both CLO and CEO), audit
committee,
(if there is no audit committee), to another committee composed
solely
of independent directors; and if none, to the full board of
directors.
The aim is to make sure that lawyers' in addition to
accountants and
company executives' do not violate the law and ensure that the
law is being followed.
The rules take an expansive view of "appearing and practicing"
before
the SEC. Attorneys must report evidence of a material violation by
the
issuer or any officer, director, employee or agent of the issuer.
This
reporting must be "up the ladder", as discussed above. At each
stage,
there must be categorical responses from the issuer.
An outside attorney who has not received an appropriate
response and reasonably believes that a material violation is
ongoing or
is about to occur and is likely to result in substantial injury to
the
financial interest or property of the issuer or the investors must
forthwith withdraw from representing the issuer, notify the SEC of
the
withdrawal ("noisy withdrawal") and promptly "disaffirm" any
tainted
submissions.
Should whistleblowers be protected?
It has often been argued whether protection should be given to
whistleblowers or not.
However, it seems that in light of the unfortunate detriment
action
being taken against any whistleblower has resulted in a public
outcry
for immediate relief from arbitrary actions being taken by public
and
private persons. The following examples establish sufficient evidence of the
necessity
for enacting legislations:
The following experience from an American study is fairly typical
of
the long-term impact of whistle blowing. In 1973 Joseph Rose became
an
in-house attorney for the Associated Milk Producers in San
Antonio,
Texas. He discovered illegal contributions to the committee to re-
elect
President Nixon. He reported his findings internally and was
rejected.
He knew that he could be implicated in a criminal conspiracy as
the
Watergate saga was unfolding, but, equally, disclosure could lay
him
open to charges of violating attorney /client privilege.
Thirty-five
years old with five children and an ill wife, he was dismissed for
raising his concerns, losing not only his job and undermining his
financial security, but also, he was deliberately isolated in the
community where his erstwhile employers had enormous influence.
Having
acted from ethical and professional considerations, he was shunned
by
other attorneys and blacklisted across the United States. Some
years
later he managed to establish a private practice and when a
favourable
article about him appeared in the Wall Street Journal new clients
sought
him out. In 1987, almost 15 years after his ethical activities,
finally,
he was offered a job by another corporation.
India has also recently witnessed the murder of Satyendra Dubey,
an IIT
graduate who was assassinated as a result of disclosing in a
letter
addressed to the PMO about the widespread irregularities and
corruption
that NHAI officials and contractors were engaged in. his request
for
keeping his identity secret was duly rejected by the officials.
Dubey
ended up paying with his life for drawing the PMO's attention to
the
corruption in the system. It is suspected that the contractor
mafia was
behind his killing. The PMO could have averted his death if they
had
kept his identity a secret, but denied the request. A public
interest
litigation filed in the Supreme Court has sought the setting up of
an
enquiry commission. According to reports, over the past decade,
57
engineers have been killed. It is important that the government
takes
steps to protect whistle blowers. In 1999, Prime Minister Atal
Behari
Vajpayee had advocated a Whistleblower Act. Although such
legislation
found support with the Central Vigilance Commission and the
Constitutional Review Commission, the proposal remains in cold
storage
to date. Public outrage has now prompted leaders across political
parties to express support for legislation to protect
whistleblowers.
Two years after the murder of the IIT graduate, Satyendra Dubey,
pressure from the Supreme Court which heard the PIL on the Dubey
murder
case, the NDA government announced an interim arrangement to
protect
whistleblowers pending the enactment of a law.
On 3rd March, 2006, The Whistleblowers (Protection in Public
Interest
Disclosures) Bill, 2006 was introduced to provide for protection
from
criminal or civil liability, departmental inquiry, demotion,
harassment
and discrimination of whistle blowers, i.e., the persons who bring
to
light specific instances of illegality, criminality, corruption in
any
Government, public or private enterprise. However the bill is yet
to be
passed and assented to by the President.
Every Nation or Commonwealth Parliament should legislate to
protect
bona-fide whistleblowers. Legislation may have both negative and
positive elements:
On the positive side:
1. Recognize the role of bona fide whistleblowers,
2. Promote the establishment of 'internal' mechanisms by which
relevant
issues of concern might be reported and addressed define the
conditions
under which a disclosure might be protected and
3. Any principles / prohibitions relating to the maintenance of
confidentiality,
4. Establish a framework to ensure that those subject to complaint
or
allegations are treated according to
principles of natural justice.
On the negative side:
1. Create an offence of engaging in acts of recrimination
against a bona
Fide whistleblower,
2. Fix penalties for such an offence.
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Whistle-blowers and the law
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The
author can be reached at:
abeerkumar@legalserviceindia.com /
