INDIAN JOURNAL OF LAW AND POLICY REVIEW

Transcription

1 INDIAN JOURNAL OF LAW AND POLICY REVIEW VOL. 1 August 2016 WHISTLEBLOWER LEGISLATION IN INDIA: COMPARISION WITH INTERNATIONAL STANDARDS ANSHUL AGNIHOTRI, SANKUL KABRA B.COM.LL.B.(Hons.), Institute of Law, Nirma University, Ahmedabad ABSTRACT: Silence is a powerful enemy of social justice remarked AmartyaSen in his book Argumentative Indian. The principle that is closely associated with whistleblower laws is an alternate remedy to silence. When a public officer indulges into corrupt practices or misuses his power, the person having the note of the same may inform the relevant authorities, prescribed by the act, which is known as whistleblowing. As the whistle is blown against the person who holds public office, such an official may misuse his power, as he is in a habit, and threaten the whistleblower. Therefore, this law aims at safeguarding the whistleblowers from getting victimized and falling prey to the harassment from the public officials against whom the whistle is blown. In a welcomed step from the Parliament, this legislation is very rigid and does not stand against the International standards. This paper aims at analyzing the whistleblower legislation in India and brings out the comparison with international standards and practices.the main theme of this paper revolves around the comparative study of this Act with the international best practice standards in countries like United States of America, U.K., Canada, South Africa, Australia, Ghana for the laws regarding protection of whistle blowers. No doubt, the legislation for the protection of the whistle blowers is the need of the hour but the legislation having so many lacunas cannot be proved an effective legislation neither to protect the whistle blowers nor to increase and reward the efforts of whistle blowers. Keywords- Whistle blower, protection, International standards.

2 2016] IJLPR 32 INTRODUCTION The Whistle Blowers Protection Act, 2011 (hereinafter the Act) received the assent of the President on 9 th May The basic objective of this Act is to protect the people who are blowing the whistle against corruption in public sector. An important objective of a whistleblower law is to provide a safe alternative to silence. Unless the law has sufficient strong provisions that compel the appropriate authorities to investigate the allegations of wrong doing and protect the honest whistleblower from any kind of victimisation the task of combating the corruption would be a dream in today s scenario. Few countries in the world have actually adopted very strong provisions regarding whistleblower s protection which are aimed at controlling corruption 1 in both private and public sector. The preamble of the act provides that this it is a legislation to establish a mechanism to receive complaints relating to disclosure, to inquire into such disclosure and to provide adequate safeguards against victimisation of the person making such complaint. The disclosures may be an instance of corruption or wilful misuse of power. The Act lays down who may make disclosure, about what they may make diclosure, to whom they may make disclosures, inquiry into the disclosures, powers of the competent authority, protection of the persons making disclosure, offences and penalties and other provisions. WHISTLE BLOWERS & WHISTLE BLOWING In this era of globalisation, economic motives precedes over all virtues and morals. Whistleblowing literally means blowing the whistle or make a noise to alert others for the misconduct going on in any organisation. In the context of business ethics, whistleblowing means that one person alerts the organisation that some fraud or scam is going on which is harming both the organisation and stakeholders. Therefore, a whistle blower is a person who raises his voice against the wrong doing taking place in an organisation or a body of people. Usually this person would be from the same organization. There is no legal definition of what constitutes whistleblowing provided by the Act. 1 Section 77 of the Anti corruption Act, 2008.

3 2016] IJLPR 33 The International Labour Organisation (ILO) defines it as the reporting by the employees or former employees of illegal, irregular, dangerous or unethical practices by employers. 2 Experts defined whistleblowing as the disclosure by organisational former or current members of illegal, illegitimate and immoral practices under the supervision and control of their employers to the competent authority. 3 A whistleblower is the one who blows the whistle on corruption, crime and other unethical misconduct. It may be defined a whistleblower as the one who acts to prevent harms to others, not to him or herself or possess the evidence which would compel any reasonable person. Almost all the countries across the globe are facing the problem of bad governance both at government and corporate level. However, recently whistleblowers actions have some good impact on governance and reducing the level of corruption. Whether it is a public or private sector the whistleblower has an indispensable role to play. Their efforts and actions are being acknowledged as providing an useful public service. Due to liberalisation, modernisation and globalisation the frauds and scams of many numbers and types are increasing day by day which is need to be exposed in public by an honest whistleblower. The common key characteristics in whistleblowing include: (i) public interest dimension (ii) disclosure of wrong doing connected to workplace (iii) reporting of wrongdoings through designated channels or persons. 4 REASONS FOR ACTING AS WHISTLEBLOWERS It is believed that the reaction of employees towards illegal and unethical practices within the organisation fall into three wide categories. First one, is to blow the whistle; second one is to decide not to participate in unfair practices; third one is to participate in it for personal gains. According to a survey, most of the Indian people fall in the second category by avoiding the risks of their life in other categories. The question arises why only some employers prefer to blow the whistle in India. Firstly, there is a risk of life and job for an employee if they whistle about the malpractices going on in an organisation as mostly the top officials are involved in the 2 International Labour Organization Thesaurus (2005) 3Near, J.P. and M.P. Miceli, Organisational dissidence: The case of Whistle Blowing, Journal of Business Ethics, 4:4, (1985). 4 U4 Anti- Corruption Resource Centre, Good Practice in Whistleblowing Protection Legislation(2009) p.3

4 2016] IJLPR 34 illegal practices. Secondly, there is lack of evidence and witnesses to support their allegations against organisation. Thirdly, no effective laws are present in the country to protect the whistleblowers from victimisation. As it evident from the recent years, the person who blows the whistle in public sector is considered as accolade because the main beneficiary is public at large. NEED OF THE WHISTLEBLOWER S PROTECTION Life is not a bed of roses for a person who blows the whistle against corruption going on in an organisation. It requires the tremendous courage to expose the wrong doings going on in an organisation in which one is working as an employee. 5 Once the identity of whistleblower is revealed to the wrong doers then it is tough to protect the person from victimisation at the hands of employers and top officials. In this scenario, if laws also don t give support to the whistleblowers then their efforts will be in vain and in future no one will dare to expose the corruption going on in an organisation. 6 Satyendra Dubey was a Government Engineer working for the National Highways Authority of India (NHAI). In 2002, he blew the whistle against the corruption and irregularities by NHAI officials and contractors who were engaged in on the flagship Golden Quadrilateral roads project. Dubey disclosed the wrongdoings by writing a letter to the Prime Minister and requested to conceal his identity but his identity is revealed in the public. 7 In 2003, he was murdered in Gaya, his hometown. He paid the heavy price i.e. his life for standing against corruption. Shanmugam Manjunath, a marketing manager at Indian Oil Corporation was brutally murdered in 2005 after sealing the petrol pump that is selling the adulterated petrol.these two incidents shows that whistleblowing in India is a dangerous job. 8 Indian laws regarding the protection of whistleblowers are ineffective, narrow in scope and not properly enforced because they merely make recommendations instead of making mandatory strict provisions. Whistleblower s protection is imperative to encourage the reporting of misconduct, 5 Whistleblower Protection, Lawyers Update, Vol. XVIII, Part 5, May Id. 7VenkateshNayakPublic Interest Disclosure and Protection to Persons Making the Disclosures Bill, A Comparison with International Best Practice Standards, Commonwealth Human Rights Initiative (CHRI), Id.

5 2016] IJLPR 35 fraud and corruption. The risk of corruption is heightened in the environment where the reporting is either not supported or protected. This is the requirement in both public and private sector. Providing the effective protection for whistleblowers supports an open organisational culture where employees are not only aware about the procedure to report the corrupted and unfair practices but also have the confidence that they will not be victimised. International instruments aimed at combating corruption have also recognised the importance of framing and enforcing the whistleblower s protection laws. Whistleblower protection have been introduced in the United Nations Convention against corruption, 9 the 2009 OECD Recommendations of the Council for further combating bribery of Foreign Public Officials in International Business Transactions (Anti-Bribery Recommendations), 10 the 1998 OECD Recommendations on Improving Ethical Conduct in Public Services, 11 the Council of Europe Civil and Criminal Law Conventions on Corruption, 12 and the Inter American convention against Corruption. 13 Such international provisions have strengthened the legal framework of the countries to establish effective whistleblower s protection laws. COMPARISON WITH INTERNATIONAL STANDARDS In order to have a better understanding that why the improvement is needed in theact, it is necessary to understand the objectives of whistleblower laws enacted worldwide. Mainly, the whistleblowers cover two major areas:- (a) They provide a mechanism for a person to make a disclosure about a wrong doing that occurred, is occurring or likely to occur in a public body in the public interest. (b) They provide a mechanism for protecting the whistleblower from any victimisation may be caused by the accused persons. 9 UNCAC Articles 8, 13 & OECD Anti Bribery Convention, 2009 Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions, Section IX.iii. and Section X.C.v., and Annex II to the Recommendation, Good Practice Guidance on Internal Controls, Ethics and Compliance, Section A OECD Recommendations on Improving Ethical Conduct in Public Services, Principle 4 12Council of Europe Civil Law Conventions on Corruption, Article 9; Council of Europe Criminal Law Conventions on Corruption, Article Inter American convention against Corruption, Article III(8).

6 2016] IJLPR 36 COMPARATIVE ANALYSIS This comparative study is based on 10 best practice standards across the globe. These 10 best practice standards will be compared with India s whistleblowers protection Act. For comparison, five countries are chosen i.e. United States of America, U.K., Canada, South Africa, Ghana. By taking these 10 international standards and comparing it with five countries there is a comparative analysis below:- (1) Public Interest Disclosure must include wrong doings committed or likely to be committed by Ministers. (A) INDIA- The Act does not cover the wrong doings done by the Ministers. This Act empowers the person to disclose any wrong doings by a public servant. (B) U.S.A.- This standard does not apply to U.S.A. It is possible for the person in this country to disclose about the wrong doings of the persons who are appointed by President and approved by Senate. 14 (C) U.K.- There is no specific provision in this country related to this standard but there is no bar to disclose the wrong doings committed by the Ministers. 15 (D) CANADA- There is no bar in the disclosures related to Ministers i.e. only providing adequate information with proper evidences are enough to put the allegation against any person. 16 (E) SOUTH AFRICA- In this country also, there is no bar against the disclosures about the corruption by Ministers The Whistleblower Protection Act: An Overview, Congressional Research Services Report to US Congress, op. cit., p.2 (accessed on ). 15For the complete text of UK s Public Interest Disclosure Act, 1998 see the website of the Government of the United Kingdom: (accessed on ). 16For the complete text of the Public Servants Disclosure Protection Act, 2005 see the website of the Department of Justice, Government of Canada: /index.html (accessed on ). 17 For the complete text of South Africa s Protected Disclosures Act, 2000 see the website of the Department

7 2016] IJLPR 37 (F) GHANA- In this country also the law does not bar the disclosures against Ministers if they have reasonable grounds on believing it. 18 (2) Public Interest Disclosure must include all bona fide warnings of various types of acts, unlawful practices including all serious human rights violation. (A) INDIA.-The Act does not cover any wrong doings in nongovernmental sector. The private and social sectors have been left out. (B) U.S.A.- The Sarbanes Oxaley Act, 2002encourages corporate whistleblowing. 19 (C) U.K.- In this country, the protection is provided in the private sectors except educational institutions who make disclosures about wrong doing. (D) CANADA- There is no specific law which permit the the employees of private sector to blow the whistle. (E) SOUTH AFRICA- The Act covers the whistleblowing even in private sectors. (F) GHANA- The act does not specify any specific law as to which sector the law applies. But the combined reading of provisions indicates that it covers private, public as well as social sectors. 20 (3) Public Interest Disclosure must cover the wrong doings in the private sector as well as members of armed forces and special services. of Justice and Constitutional Development, Government of South Africa: legislation/acts/ pdf (accessed on ). 18 For the text of Ghana s Whistleblower Act, 2006 see the website of Ghana s Parliament: (accessed on ). 19 For the complete text of the Sarbanes-Oxley Act, 2002 see: (accessed on ) 20Supra note 18.

8 2016] IJLPR 38 (A) INDIA- Members of armed forces, employees of intelligence agencies are prohibited from reporting any wrongful action directly or indirectly to the organisation. (B) U.S.A.- The Military Whistleblower Protection Act allowed whistleblowers of the armed forces to make confidential disclosures about wrong doings. 21 (C) U.K.- In this country, the law covers both public and private sector including those who are hired on a contractual basis. But it does not cover the police forces, armed forces and national security related organisation. (D) CANADA- The Canadian armed forces, Canadian Security Intelligence Service are excluded from the Act. (E) SOUTH AFRICA- The police forces, armed forces and intelligence services are not excluded from the right of whistleblowing. (F) GHANA- The police forces, armed forces and intelligence services are not excluded from the right of whistleblowing. 22 (4) Issues in relation to the media law protection of journalist sources must be codified. (A) INDIA- Under the Act, the person can make the disclosure to the media but no clear provision guaranteeing the protection to journalist sources. (B) U.S.A.- The Act permits to disclose the wrong doings to any person. However, protection is not given to the sources History of Military Whistleblower Protection Act and Statute Preventing the Use of Mental Health Evaluations in Reprisal: Website of the Office of the Inspector General, US Department of Defense: (accessed on ) 22Supra note Supra note 14.

9 2016] IJLPR 39 (C) U.K. The Act does not specifically mention this principle butotherlaws relating to media permits the confidentiality to journalist sources. 24 (D) CANADA.- This principle is recognised in the Canadian law. (E) SOUTH AFRICA.- The Act permits the person can make the disclosure to the media 25 but does not guarantee the protection to sources but the protection is provided to the person under Freedom of Press. 26 (F) GHANA.- The Act is silent on this principle. However, the National Media Commission includes in the list of the persons to whom the disclosures can be made. (5) Public and private sector bodies must be incentivised to establish internal mechanisms of whistle blowing. (A) INDIA- The Act does not require public authorities to create internal whistle blowing mechanism. (B) U.S.A.- The Act envisages the possibility of disclosing the wrong doing to the head of the department. (C) U.K.- The Act encourages the whistleblower to disclose the wrong doing using the internal procedures of the organisation although it is not mandatory. 27 (D) CANADA- This principle is recognised in Canadian law in public sector. 24Supra note Speak out for Service Delivery; The protected Disclosures Act as a tool for Organisational accountability, ODAC, South Africa, p The Act of Rights in South African in Constitution, Section 16, Constitution of The Republic of South Africa. 27Supra note 15.

10 2016] IJLPR 40 (E) SOUTH AFRICA- The Act permits the whistleblowers to disclose the wrong doings to the employer for this purpose. The Companies Act,2008 encourages internal mechanisms for whistleblowing. 28 (F) GHANA- The Act encourages the whistleblower to disclose the wrong doing using the internal procedures of the organisation although it is not mandatory. 29 (6) Disclosures of wrong doing must be properly investigated and information must reach the senior management promptly. (A) INDIA- The Competent Authority can be asked to the Head of Department for making comments and opinions. It is not clear that inquiry will be conducted openly or secretly (B) U.S.A.- The disclosure can be made to the Special Counsel but he did not have the power to investigate about it. The disclosure will not be reported to the head of the agency. 30 (C) U.K.- The Act is silent on this principle. (D) CANADA- Disclosures do not need to be pass though official hierarchy unless the whistleblower elects to do so. (E) SOUTH AFRICA- The Act is silent on this principle. (F) GHANA- The Act permits the person to disclose the wrong doings to range of persons and authorities. 31 (7) The whistleblower must be informed about the progress of investigation in the disclosure and provided with the copy of final report and recommendations of corrective action. 28 For the complete text of South Africa s Companies Act, 2008 see the website of Acts Online: (accessed on ) 29Supra note Supra note Id.

11 2016] IJLPR 41 (A) INDIA- The Act does not place any obligation on the Competent Authority to inform any whistleblower about the progress of investigation. (B) U.S.A.- The Act incorporates the principle. (C) U.K.- The Act is silent on this principle. (D) CANADA- The law permits the Competent Authority to inform the public about the wrong doings after it is found true. (E) SOUTH AFRICA- The law is silent on this principle. (F) GHANA- The principle is not covered in this Act. (8) The whistleblower s identity must not be without his/her prior consent in order to prevent any kind of victimisation. (A) INDIA- The Competent Authority can reveal the identity of whistleblower if required. (B) U.S.A.- The Competent Authority can reveal the identity of whistleblower if required. (C) U.K.- The Act does not cover this principle. (D) CANADA- The identity is protected under the law. (E) SOUTH AFRICA- There is no requirement in the Act to maintain the confidentiality. (F) GHANA- The identity is protected under the law. (9) The law must create risks for the person who try to victimises the person who blows the whistle with strict penalty. (A) INDIA- The Act does not create any risks for victimising the whistleblower by the accused persons.

12 2016] IJLPR 42 (B) U.S.A.- The Act creates a clear risk for the employer who victimises the employee. (C) U.K.- The Act is silent about this principle. (D) CANADA- The employer who victimises the employee is liable to go through disciplinary proceedings. The compensation is paid to the victimised person. 32 (E) SOUTH AFRICA- The laws do not create any personal risks on the employer who victimises the employee but he is liable to pay the compensation. (F) GHANA- The laws do not create any personal risks on the employer who victimises the employee but he can ask for occupational restorement. 33 (10) In case of victimisation, the law must reverse the burden of proof on the employer. (A) INDIA- The Act is silent about the burden of proof in case of victimisation of an employee. (B) U.S.A.- The Act adheres to the principle. (C) U.K. -The Act makes it mandatory to show that it is the duty of an employer to show the grounds why the employee is fired from a job. (D) CANADA- The Act is silent about the burden of proof in case of victimisation of an employee. It is mandatory to show that it is the duty of an employer to show the grounds why the employee is fired from a job Supra note Supra note Supra note 16.

13 2016] IJLPR 43 (E) SOUTH AFRICA- The Act does not have any provision regarding burden of proof in the case of victimisation. However, it is mandatory to show that it is the duty of an employer to show the grounds why the employee is fired from a job. (F) GHANA- The Act reverses the burden of proof in case of victimisation of the employee. 35 OTHER LACUNAS The complaint can be made in the five years of the action only. There are not proper safeguards for the persons who are amking the disclosure. All is based on the will of Vigilance Commission. For false complaint there is a penalty of two years imprisonment and 30,000 compensation. Act does not provide any witness protection program which is present in other countries like U.S.A., Canada and South Africa. There is no proper definition of disclosure and victimisation. The time period after which Act will be reviewed is not provided. There is no time limit for inquiry. The anonymous complaints will not be entertained by CVC. Offence which is defined in the Prevention of Corruption Act are taken into considerations. CONCLUSION In general, the level of whistle blowing activity is likely to depend not just on the legal protection granted to whistleblowers but also on the regulatory response to whistle blowing. For instance, more prospective whistleblowers might come forward if the policy regime is deemed to be responsive that is, if there is a higher probability that whistle blowing will trigger enforcement action rather than be ignored or if the malfeasance uncovered by whistle blowing were expected to lead to severe penalties. No doubt, the legislation for the protection of the whistle blowers is the need of the hour but the legislation which is made in haste and having so many lacunas cannot be 35Supra note 14.

14 2016] IJLPR 44 proved an effective legislation neither to protect the whistle blowers nor to increase and reward the efforts of whistle blowers. However an important aspect here would be the tolerance of the society towards corruption and unfair practices. In the Indian context it is of high importance that organisations takes a serious view of instilling high sense of ethics and laws are formulated to protect the employees who play the role of whistle blowers against corruption both in the private and public sector. Comparing with the provisions of other countries, theact is very weak to protect the whistleblowers from the powerful and influential employer. REFRENCES Anthony Heyes and Sandeep Kapur, An Economic Model of Whistleblower Policy:, April 2007 Raising the alarm, Indian Business Law Journal, May 2009, Volume 2, Issue 10 Near, J.P. and M.P. Miceli, Organizational dissidence: The case of Whistle Blowing, Journal of Business Ethics, 4:4, (1985). Tavakoli, A, John P. Keenan and Cranjak Karanovic B Culture and Whistleblowing An Empirical Study of Croatian and United States Managers, Journal of Business Ethics For U.K s Public Interest Disclosure Act, see the website For U.S.A. Whistleblower Protection Act, 1989 see the website of http.//thomas.loc.gov/cgi-bin/query/z?c101:s.20.enr History of Military Whistleblower Protection Act and Statute Preventing the Use of Mental Health Evaluations in Reprisal: Website of the Office of the Inspector General, US Department of Defense: Timeline.pdf

15 2016] IJLPR 45 For Ghana s Whistleblower Act 2006 see the website For South Africa s Protected Disclosures Act, 2000 see the website of For the complete text of South Africa s Companies Act, 2008 see the website of Acts Online: (accessed on ) For the Canada s Public Servants Disclosure and Protection Act, 2005 see the websitehttp.//laws.justice.gc.ca./eng/p-31.9/index.html.