The origin of the word whistleblower is from the German word ‘whistle’ which means to expose wrongdoing. ‘Whistle Blowing’ is any activity that is deemed illegal, unethical or not morally correct within an enterprise i.e. either private or public and a person who exposes any kind of such activity is known as ‘Whistleblower.
The International Labour Organization (ILO) defines it as “the reporting by employees or former employees of illegal, irregular, dangerous or unethical practices by employers.”
In the context of international anti-corruption standards, the 2009 OECD Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions (Anti-Bribery Recommendation) refers to protection from “discriminatory or disciplinary action public and private sector employees who report in good faith and on reasonable grounds to the competent authorities…”
The UNCAC refers to “any person who reports in good faith and on reasonable grounds to the competent authorities any facts concerning offenses established in accordance with this Convention.
The Council of Europe Civil Law Convention on Corruption refers to “employees who have reasonable grounds to suspect corruption and who report in good faith their suspicion to responsible persons or authorities.”
A whistleblower is a person who reports about the illegal activities done in the organization. Whistleblowers can be employees, suppliers, contractors, clients, or any individual who becomes aware of illegal business activities. Under Occupation Safety and Health Administration (OSHA), Sarbanes Oxley Act, and the Securities and Exchange Commission (SEC).
Whistleblowers at Infosys have flagged alleged corporate malpractices at the Indian IT giant, accusing executives in its top echelons of flouting norms and misreporting numbers. Indian Parliament passed the Whistleblower Protection Act in 2014, but it is yet to be operationalized. Further, an amendment introduced to the Act was criticized on the grounds that it dilutes protections to whistleblowers. But while the Act doesn’t cover corporate whistleblowers, India Inc has followed regulatory norms to put in place mechanisms to enable whistleblower complaints.
Whistleblowing in the Indian banking sector it comes to notice that, in terms of the RBI whistleblower policy, it has been prescribed that the complainants can lodge their reports to the designated officials in the Bank regarding corruption, misuse of office or criminal actions of his superior officer or employer Bank and failure to adherence to RBI guidelines. The identity of the whistleblower should be revealed to the designated officer because the anonymous complaints are not being entertained and it is advisable to the officer to keep the identity disclose. The activist in India is of the opinion that recent banking frauds would have been timely detected if there were laws for protecting whistleblowers, the activists in the banking sector are working relentlessly and are committed to blowing the lid off many wrongdoings by the senior executives of the banks.
The facts were communicated to PMO and state governors but no response was taken for the wrongdoings in banking. Due to which there was a great loss to the economy. This creates a perception in the activist that the government is against the concept of whistleblowing in the banking sector so that the voice of the whistleblower is silenced. The Indian Government should follow up action of the US for the protection of whistleblower.
After the fallout of Wall Street meltdown, the US has made strong laws for whistle protection through the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act which yielded better results in regulatory compliance. Whistleblowing is necessary for the governance, corporate or financial sector as it has to go long way in the Indian context because the people are not ready to accept the view is going to help in averting of major corporate financial scams. There should be an easy alternative route, for the outsider or the insiders to raise the concern for the function of the organization so that there is no fraud/ scam in the baking sector. There is a contrary view of the government and corporate India that giving protection to whistleblowers will only increase the blackmail of employer organizations or vested interests is not tangible. They stated that it is risky to give a license to put the trade secrets, fiduciary relationship or official secrets in open to the public because the employees of the Government or organizations have unlimited access to these documents. The same type of concerns was expressed by the authorities and corporate world in the western countries but was taken care of while enactment of legislation strengthening whistleblower protection in those countries.
It has also come to open now that in western economies the strengthening of the whistleblower protection has helped in bringing into limelight various unlawful/unethical practices adopted by corporate entities thus helping it in cleansing the system. The health and security of the country are at risk because the corporate world is more in profit-making. There was a case from Maryland USA where a senior executive of an Indian pharma company after blowing the whistle fought for four years forcing a settlement of INR 3000 crore between various Government Departments and the company. He was also awarded a compensation of INR 270 crore by the Federal Court for the victimization and agony he had faced during the pendency of court proceedings. After this award policy, there were many cases of corrupt practices adopted by dishonest officials which have helped the scammers and swindlers to rob Indian Financial Institutions and evade the Indian criminal justice system. Whistleblowers have decided to be silent about the wrongdoing because of the management of the bank’s victimization of the whistleblower by way of unpleasant posting or termination resulting in loss of their jobs. The frauds and scams can only be stopped in India by encouraging whistleblowers and protecting them along with strengthening the regulatory compliances for banks and FIs of the country. To begin with such process the enactment of the Whistleblowers Act 2011 is a small baby step by the government.
Whistle officer raises a concern to whistle officer or CMD depending on the employee level. Then HR examines the allegation or the CMD appoints the committee for investigation. if the allegations are proved by them, they form a committee and if not, then whistleblower is informed about the same. The committee which is formed by the CMD carries out the investigation and submits the report in 2 Months. If it is proved the investigation is further carried and the culprit is punished but if not then the process ends.
Mostly the word whistleblower is considered as a synonym of an informer. The most important difference between the two terms is the liability of the person disclosing the information. Informer is usually involved in unethical activities but the whistleblower is there to stop wrongdoing. The whistleblower does not seek favor or remuneration for disclosure of information but the informant seeks favor and remuneration. But some laws provide a reward for the information provided by the whistleblower.
A SWOT model for practicing whistles was ready to take an initiative to blow the whistle when blowing in the workplace.
| STRENGHT |
1. Employees are conscious of ethical principles.
2. The Code of conduct is followed by the employees.
3. They are more encouraged to blow the whistle.
4. There is peer support.
5. There is confidentiality in the organization
| WEAKNESS |
1. Employees, use whistleblowing for personal interest and are used frequently.
| OPPORTUNITY |
1. Whistleblowers are encouraged for whistleblowing.
2. There is a career option for whistleblowers.
3. They are being recognized by the public.
| THREAT |
1. There is a lack of confidence in the peer groups.
2. There is a loss of job, life, and image.
The government of India is putting efforts to make laws for the protection of whistleblowers from so many years. The law commission of India in 2003 recommended the adoption of public interest disclosure (Protection of Informer) Act 2002. In 2010 the bill of Public Interest Disclosure and Protection of Persons Making the Disclosure bill was introduced in Lok Sabhas’ lower house of the Indian Parliament. In June 2011 the bill was approved by the cabinet. The bill of Public Interest Disclosure and Protection of Persons Making the Disclosure bill was renamed as The Whistleblowers Protection bill, 2011. Later the bill was passed by Lok Sabha on 28 December 2011 and by the Rajya Sabha on 21 February 2014. The bill got the approval of the President on 9th May 2014.
There was an issue related to wrongdoing which was detected by the whistleblower in the head office of Infosys in India. The case was directly taken to the headquarters in the USA as they stated that “We have not sent to the company (recordings and documentary evidence) as our identity will be revealed and the whistleblowing laws in India are weak so the case was sent to the USA”.
False Claims Reforms Act 1986: The USA first adopted this act for the protection of whistleblowers in the USA. This act opened the doors for citizens and entities who have evidence of fraud in the banks and other sectors.
Sarbanes-Oxley Act of 2002: This act was there for the protection of whistleblowers with a clause that the identity will not be revealed. It classified the wrongdoings. The act granted the whistleblower the right to trial and the decision should be given in 180 days.
Fraud Enforcement and Recovery act of 2010: The government strengthened the False Claim Reform Act to make it easy for the whistleblower to file a successful claim. The 2010 bill aimed to improve the country’s efforts to prosecute individuals; who harmed the USA economy.
Taking into consideration all the cases as mentioned above there is a need for a strong framework for the protection of whistleblowers in India. In India, there are many cases where the whistleblower is murdered and it is considered as suicide or they are being transferred. Some of the cases of 10 years ago but still are ongoing and no conclusion is given or the culprits are punished. So there is a need for proper and elaborate laws for the protection of whistleblowers.
In this paper, we have seen that there is a number of laws in the USA for the protection of whistleblowers as compared to India, whereas only one bill has been passed until now. In the USA the protection is given to family members of the whistleblower but in India, only the whistleblower is given protection not his family. So it is recommended that there should be laws for the protection of the family of the whistleblower.
There is a significant increase in awareness of the importance of whistleblowing activities in the organization, but many people choose not to report about the wrongdoing in the banking sector. It is not easy to blow the whistle as it needs courage, moral and has to put the public interest ahead than his or her interest. Still, there are so many whistleblowers who are being praised for their good faith in the banking sector and work. There are people who oppose the concept of whistleblowing it believes that employees should have prima facie duty of the employees that they should be loyal to their origination and not blow the whistle as it will tarnish the company’s image and reputation. For the betterment and effectiveness of the whistleblowing mechanism, it is necessary to be aware of the usability and reliability of the grievance reporting system among the Indian banking sector across various sectors. The whistleblower should use the proper procedure of disclosing wrongful acts in public. The evidence should not hinder the fundamental rights of the accused.
Whistleblowing helps in reducing white-collar crime and also in deterring the organization to collapse. According to the Indian perspective whistle-blowing landscape is relatively new and just being brought in the organization or institutes. Therefore, it would be sagacious for the organization to implement a legal framework, rule, and regulations for whistleblowers. India has no proper laws for the protection of whistleblowers, so there is a need for proper, elaborate and strong laws for whistleblowers. The legislation should strike fear into corrupt and unethical employees, give a sense that others are watching, they need to get their act together and work for the progress of their organization and country as a whole.