Inside Out: The Whistleblower’s Loyalty Tradeoff
By Ishi Jain
Satyendra Dubey, the man who revealed the corruption behind the National Highways Authority of India’s (NHAI) Golden Quadrilateral Project, was found murdered. Another man called Shanmughan Manjunath, the Indian Oil officer who sealed a petrol pump for selling adulterated fuel in Uttar Pradesh, was put to death. A senior police officer, who alleged corruption and embezzlement in Mayawati’s government, was sent to a psychiatrist hospital for the same. These are all instances of whistleblowing.
What is whistleblowing in the sense of business ethics?
Whistleblowing basically involves an employee bringing to light when any rules and regulations are being broken knowingly or unknowingly, and are important enough to prove damaging for the society, its consumers, or even the company itself.
Whistleblowing can be of two types, internal and external. Internal implies reporting the wrongdoings or misconducts of the company to a superior authority in the organisation itself, while external whistleblowing means reporting to an outside agency like media houses, government officials or other law enforcement agencies. The reporting employee is generally a part of the decision-making and/or the execution group and they decide to break out of the group and disclose the wrongs to impose a relook at such practices. This is a serious issue and might be threatening to the financial success or even the very existence of the organisation, bringing its entirety under scrutiny. This might also mean destabilisation of the whistleblower’s life and career as it means going against the company bond and culture of loyalty, which is highly valued in Indian companies. The consequences may range from outright termination to subtle pressures, and even threat to life in extreme cases, as stated above. And, why go to this extent, is it not bad enough to harass the whistleblower, just for the reason that they tried to bring the true picture to light? The saddening part is that these are just a handful of cases, flouting the principles of humanity that managed to come into the public eye. Many more cases of injustice remain under sand and make people fear if whistleblowing is even worth it.
What makes whistleblowing justifiable?
Corruption and frauds are the termites of the system that cause it to decay and cause maximum harm to the economy. When courageous insiders step out and bring out important information, it is great service to the government and the taxpayers, as ultimately, the brunt of all economic drains has to be borne by the responsible citizens of the country.
When we allow for an environment where the wrongdoers commit illicit or immoral acts, but still manage to get away with huge profits, it leaves no incentive for the honest people to continue being honest.
Hence, whistleblowing prevents the system from setting the credence that cheating is the pathway to success.
So, how to keep whistleblowing justifiable?
It can be tricky to justify whistleblowing especially when so many cons come with it as baggage. Still it is worth it when the employee genuinely feels that any product or practice is of serious threat to the customers, society or state which can also prove detrimental for the organisation sometimes. Then, even after legitimate efforts by the employee to seek remedy for his complaints, the internal committee or personnel do not take satisfactory measures. Hence, as the last resort, the aggrieved has to involve external parties in it. It becomes even more relevant when the employee has enough documents and evidence to support his claims in the court of law. While blowing the whistle, the chances and risk of reputation and other damage to the company might be equal to the chance of bringing a change or finding a remedy for the situation. Hence, there must be valid reasons to support taking such a step.
Generally, whistleblowers must abstain from making unnecessary and unrelated comments about the product or service. The complainant must make sure that they don’t leak or bring out confidential information that was crucial for the efficiency or competitive advantage of the company. They must be able to keep aside personal bias and not indulge in slandering the company out of personal grudge to bring down its morale. They must do their homework well and weigh in all the consequences of the same. It is not reasonable to take such steps only in cases of disagreement or conflict of opinion. There is always a proper way of handling situations and the whistleblower must respect all such mechanisms.
The Fundamental Right of Speech is for all to exercise but when to draw a line must be known, and this highly depends upon the intellect of the employee. Clarity of intention is of extreme importance as parameters of ‘fair’ differ in everybody’s books. They must attempt to collect evidence to support their claim and not depend on hearsay. It is also preferred for the complainant to take the internal route first, and in case of dissatisfaction from the same, proceed to external.
Given all the precautions and reservations, it is an undeniable fact that whistleblowing serves a very crucial purpose in the corporate or government setting. It allows for things to come out that otherwise would’ve never found their way to the surface. It acts like a watchdog, empowering employees and making entities realise their accountability and responsibility towards the society as a whole.
Law in India for whistleblowing
The Whistleblowers Protection Act, 2014 was enacted to provide protection to any person who wishes to bring to light any wrongdoings and also serve as a framework to investigate the alleged corruption or any abuse of power by a public servant.
Under this act, no anonymous complaints are acted upon, and the whistleblower is bound to disclose their true identity for the information to be acted upon. Keeping in mind the various cases of victimisation in such situations, this act does not fully cater to the needs of the whistleblowers as it doesn’t explain the extent of such victimisation.
Soon after its enactment in 2014, in May 2015, the Lok Sabha passed a bill to amend this Act, despite decent opposition. The Act stated that any person, including an NGO or a public servant, is allowed to make disclosures in public interest irrespective of the provisions of the Official Secrets Act (OSA) of 1923. Conversely, the amendment bill stated that the whistleblower must not be allowed to reveal any documents, even in regards to cases of corruption, abuse of power or criminal activities, if it is classified under the OSA.
Many believe that this amendment dilutes the very purpose of the previous Act and heavily questions the rationale of even having the former, which was modelled around the prohibited categories of the RTI Act. But even the RTI Act has provisions like exemptions to those categories if the case is proven to be in public interest, or it provides for alternate routes to carry out the same. The OSA is devoid of any provisions of this kind.
Comparison with laws in the US
1. Protection of Whistleblower against Retaliation
In the US, under the Occupational Safety and Health Act, or other relevant acts, an employee can file a whistleblower complaint. The investigating party is a neutral individual and unlike India, is not related to the complainant or the respondent. The investigator will then peruse through the whole crime and suggest remedies, if any. The parties, in case of dissatisfaction, can also object to such findings with the law judge.
In India, a big problem is that the complaint of victimisation is generally made to an official senior in the hierarchy which makes it challenging for the complainant to seek protection upon retaliation.
2. Protection of Whistleblower’s Identity
In the US, most laws allow the anonymity of the whistleblower. Hence, the complainant can receive claims through their attorney upon submitting all relevant proofs and documents while being anonymous. All information is treated as confidential and strict rules are applied on dealing with such data.
Whereas in India, anonymous complaints are not allowed and no such claims are investigated.
3. Independent Reporting Channel
All whistleblower concerns are reported to an independent arbiter in America. There are specialised offices built for maintaining neutral investigators specifically trained for this purpose.
In India though, any complaint must go to the Competent Authority which in most cases is the senior official of the same hierarchy of the accused. This hinders the unbiasedness of the conducted investigation and there are high chances of manipulation.
4. Reward Mechanism
Various laws in the US provide for different systems for paying out rewards to the whistleblowers the claims of which turn out valid. It is uniquely dependent on the amount of money that the authorities were able to save or recover because of the complaint. A certain percentage, around 10-30% of the amount is given to the whistleblower as a reward. Hence, this number is capped at any level which has led to some huge payouts to whistleblowers in the past.
In India, there is no provision for a reward to the whistleblower upon proven genuineness of the complaints. There is a single statute, called SEBI (Prohibition of Insider Trading) Act, 2015 which states that purely at its discretion, 10% of the amount proceeds may be extended to the complainant. Still, this number cannot exceed ₹10 Cr.
The Way Ahead
The main reasons due to which a reporter might decide not to cry foul of the misdeeds are: fear of consequences (reputation on the line, hampering further professional growth, legal action etc.); hopelessness that the act will bear no fruit and the system will continue doing it; and unsurety and confusion as to when and whom to report.
Hence, this gives us a pretty clear picture as to what needs to be done.
Interact, not transact! These whistleblowing reports are not with an ill intention of slandering or hurting the reputation of an organisation. The aim is that the authorities and decision-makers listen to the grievances to help beat the termite-like practices in an organisation to make for a better corporate individual. The listener needs to understand the reporter with empathy and try to reach the bottom of the concern rather than worry about legal risk with relation to such information. Set up efficient and cooperative grievance redressal cells that actually carry out quality investigation to reach the root. Sometimes even as little as employee resentment about workload can lead to such situations. In today’s time, it is heartening to see entities investing in trained listeners which makes the whole process smooth and increases the effectiveness multifold.
Even the incorporation of technology and artificial intelligence can serve as an innovative way of reporting and interacting. This may result in a higher uptake for internal portal channels as well as assist in collating and analysing the data.
With adequate amendment in protection laws and assurance given to reporters about safety in personal and professional lives can go a really long way.
As talked about earlier as well, looking at it from the global perspective gives much better standards to measure our level of success. Until recently, the Asia-Pacific region was mostly considered not conducive for whistleblowers. But with the introduction of new laws and policies in various countries of this region, this is becoming increasingly untrue.
India must also take cues from the policy structure in other countries to strengthen Indian laws. Inspiration can be the Australian fine of $125,000 AUD upon the failure of an in-scope company to have a compliance whistleblowing policy, or the Korean amendment to increase penalties if the identity of a whistleblower is revealed improperly, or the New Zealand declaring wrongdoings for which the reporters can directly report to appropriate authority at any time. The vision must be to strike a balance at the workplace, with conscious efforts from both ends, employer and employee. Unless this is done, the status quo is likely to continue.
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