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Good Practice in Whistleblowing Protection Legislation (WPL)

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Good Practice in Whistleblowing Protection Legislation (WPL) www.transparency.org www.cmi.no Good Practice in Whistleblowing Protection Legislation (WPL) Query: “I am interested in good practices in law and practice for the protection of whistleblowers as provided for in UNCAC Art. 8.4, 32 and 33. Could you give some indications regarding model legislation or aspects to be considered for the development of whistle blower protection legislation? Further, do you know about good practices to implement such legislation especially from developing countries?” Purpose: An increasing number of countries is adopting I am working in Bangladesh on UNCAC Whistleblowing Protection Legislation (WPL), to protect implementation. One national priority is to develop whistleblowers from both the private and public sector from occupational detriment such as dismissal, sound legislation and mechanisms for whistle- suspension, demotion, forced or refused transfers, blower protection. So far, they are non existent ostracism, reprisals, threats, or petty harassment. apart from money laundering offences. Good practice WPL includes adopting comprehensive free standing laws that have a broad scope and Content: coverage, provide adequate alternative channels of reporting both internally and externally, protect as far as Part 1: Best Practice Whistleblowing possible the whistleblower’s confidentiality and provide for legal remedies and compensation. As WPL is still in Protection Legislation its infancy, little is known yet on its impact and the Part 2: Good Practice in Implementing conditions of effective implementation. Whistleblowing Protection Legislation The UK WPL is often referred to as an effective model Part 3: Further Reading of legislation, with early evidence of impact in promoting internal disclosure of wrongdoing. However, its replicability to the specific context of developing Summary: countries who do not always have an institutional framework in place that supports the rule of law and a Whistleblowing protection is growingly recognised as a culture of transparency and accountability remains key factor to promote a culture of public accountability questionable. and integrity. Authored by: Marie Chêne, U4 Helpdesk, Transparency International, [email protected] Reviewed by: Robin Hodess Ph.D., Transparency International, [email protected] Date: 1 July 2009 U4 Expert Answers provide targeted and timely anti-corruption expert advice to U4 partner agency staff www.U4.no Good Practice in Whistleblowing Protection Legislation Part 1: Best Practice Whistleblowing About 50 countries have adopted national laws on WB Protection Legislation (WLP) in one form or the other to address this situation. For example, Australia, Canada, France, South Africa, Why Does Whistleblowing Protection United Kingdom and USA have passed comprehensive Matter? legislations to protect whistleblowers in the public sector and sometimes in the private sector. Although the scope of protection is limited to certain type of By revealing concealed information that is critically persons or offences, whistleblowing provisions have important to public good, whistleblowers provide an also be included in sectoral laws such as anti- opportunity to address public interest concerns before corruption laws, competition laws, corporation laws, harm is done. For example, Dr Yanyong’s disclosure public servant laws, criminal codes, labour and to the media of the spread of the SARS virus in 2003 employment laws, freedom of information acts, etc. raised awareness on the gravity and imminence of the public health threat. As dramatically shown in this case, There is also strong international pressure to adopt failure to address concerns raised by whistleblowers whistleblowing laws, and WP requirements have been may result in loss of lives, damage to reputation, and introduced in many international instruments, financial costs. encouraging states parties to adopt measures to protect disclosures of wrongdoings. Most of these As employees are also more likely to detect requirements relate to anti-corruption instruments, such misconduct, fraud and corruption in the course of their as the Council of Europe Anti-Corruption Conventions, duties than outsiders, detection of wrongdoing heavily the Inter-American Convention Against Corruption, the relies on insiders’ tips and information1. Yet, employees African Union Convention on Corruption, the Anti- have the least incentives to report wrongdoing and, if Corruption Initiative for Asia-Pacific, the OECD they do so, often do it at considerable costs for their Guidelines, the Southern African Development careers, personal and professional lives. Inquiries into Community (SADC) Protocol, the United Nation tragedies resulting in losses of lives often reveal that Convention Against Corruption (UNCAC), etc. employees had known about health or safety risks, potential environmental problems, fraud, corruption, For example, Article 33 of the UNCAC requires states etc, but were too afraid to speak up out of fear of parties to adopt national laws to protect any person reprisals. In many countries, whistleblowing legislation reporting corrupt practices in good faith and on is passed in response to such scandals or disasters. reasonable grounds from any unjustified treatment. For examples, the US Sarbanes-Oxley act was adopted in the wake of the Enron scandal, while the UK Public Best practice legislation is starting to emerge with Interest Disclosure Act 1998 (PIDA) was influenced by regard to who is covered, which public interest a series of enquiries into a rail crash, a ferry accident disclosures are protected, procedures for disclosure, and the explosion of an oil platform. (Please see: the extent of protection, etc. The following section is http://www.corrupcion.unam.mx/documentos/investigaci mainly based on two recent papers that synthesise the ones/banisar_paper.pdf). state of knowledge on whistleblowing, “Whistleblowing: International Standards and Developments” (David Banisar) and “Whistleblower Laws: International Best Practice” (Paul Latimer and A.J. Brown). (For sources please see Part 4 “Further Reading”) 1 A study conducted to identify the most effective Objectives of Whistleblowing mechanisms for detecting corporate fraud looked at 200 Legislation reported fraud cases in large U.S. companies between 1996 and 2004. The study found that fraud detection primarily Employees have the best access to information on relies on several non-traditional players (employees, media, illegal or unethical practice and are usually the first to and industry regulators) rather than more obvious actors recognise wrong doings. The overarching goal of such as investors or auditors. (Please see: whistleblowing legislation is to provide employees with http://papers.ssrn.com/sol3/papers.cfm?abstract_id=891482) a safe alternative to silence, and to empower employees to report wrongdoing by providing adequate legal protection. A secondary benefit of WLP is to www.U4.no 2 Good Practice in Whistleblowing Protection Legislation encourage public and private organisations to adopt whether perpetrated by the employer or other effective whistleblowing procedures and policies to fellow employees; foster a culture of transparency and accountability. - As opposed to personal grievance, there is More specifically, WLP has five major objectives: often a public interest dimension2 to whistleblowing, the wrongdoing often - Supporting public interest disclosure by representing a direct threat for the security, facilitating disclosure of wrongdoing; health or safety of others; - Protecting whistleblowers against potential - Wrongdoings can involve a breach of the law, retaliation; unethical practices such as fraud, - Ensuring that public interest disclosures are health/safety violations, and corruption and properly assessed, investigated and acted even in some cases, maladministration. They upon; are typically liable to cause harm to persons - Promoting a culture of transparency, integrity outside the organisation they originate; and accountability (symbolic value of the - Wrongdoings may be reported internally legislation); (through internal complaints channels) or - Preventing abuse and misuse of available externally (to law enforcement agencies, protections for personal advantage or members of parliament, the media or other vendettas against the employer. stakeholders). Definition of Whistleblowing Increasingly, the literature excludes from the definitions the whistleblower’s moral standards, subjective or Whistleblowing generally refers to public interest ethical motives to focus more on his/her reasons to disclosure by employees about wrongful acts, illegal or believe – in good faith and on reasonable grounds - unethical conducts within their organisations. that there has been a wrongdoing. Whistleblowing has many different dimensions and Scope of Application implications. As whistle blowing is not per se a technical term, there are no common legal definition of International standards limit whistleblowing protections this phenomenon. However, a common understanding to disclosures by employees of the public and/or private of the concept emerges from the various definitions that sector, as opposed to across the board protection to have been developed overtime. The UK’s Committee any member of the public. This is justified by the fact on Standards in Public Life defines it as “raising a that although members of the public can also concern about malpractice within an organisation”, experience reprisals if identified as whistleblowers,
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