Global approach in whistleblower protection

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3.1 Global approach in whistleblower protection

According to the Association of Certified Fraud Examiners (ACFE), whistleblowers are responsible for detecting about 40% of all occupational fraud cases around the world[1] but systemic setbacks make them vulnerable to retaliation. This evidence-based assertion aligns with claims by the American Ethics & Compliance Initiative (ECI) that reprisal attacks against whistleblowing-US employees are occurring “in ever-greater numbers”[2]. On this premise, the Council of Europe[3] developed two major legal documents (i) Civil Convention on Corruption and (ii) the Penal Convention on Corruption as mechanisms for receiving reports/disclosures and investigating wrongdoings in the public sector[4]. But a 2017 OECD survey found such laws to be incomprehensive, scandal driven, and ineffective because they are not in compliance with international standards[5].

Therefore, ineffective channels for internal reporting and lack of proper investigations increases fear of retaliation, which in turn, prompts employees to submit their disclosures to external bodies (such as the press and civil society organizations)[6].

3.1 The Role of European Council and EU Whistleblower Protection Directive

To deliver on its promise to protect whistleblowers, the European Council in April 2019 published the “Directive on the Protection of persons reporting on breaches of union law”[7], which is also known as the EU whistleblowing Directive.” The Directive is seeking from organisations with over 50 employees to take steps of protecting whistleblowers against retaliation by making provision of internal reporting channels with clear procedures[8]. The channels of disclosure are outlined as follows:

  • Internal reporting channels: need to be set by organisation with over 50     employees;
  • External reporting channels: appropriate EU institutions, bodies, relevant national authorities, offices and agencies; or
  • Public reporting channels: that can approach media as the last option.

EU member states are required to comply with the directives by April 2021. The EU Whistleblowers Directive will reduce the hurdle of internal reporting and entice people to willingly disclose breaches of Union law[9].

  •  The US

Many US firms will incur huge financial losses and possible enforcement action if whistleblowing measures are neglected during the Covid-19 pandemic. Despite efforts from Donald Trump’s government to revitalize its more effective whistleblowing programs on several fronts[10], steady increase in global financial crimes and attacks on whistleblowers during the pandemic show poor functionality of international legal frameworks established to protect whistleblowers[11]. In contrast, Congress has through the 1986 civil False Claims Act, which empowers whistleblowers—recovered over $62bn misappropriated fund[12], according to a 2016 report from the US Justice Department[13]. To encourage whistleblowing activities, the US government and Securities and Exchange Commission (SEC) also compensate employees who show commitment to accountability and transparency by reporting unethical practices. Under Dodd-Frank Act provisions[14], SEC in 2012 said 79 people (whistleblowers) got financial rewards worth $425m, with a whopping $27m offered to a single whistleblower. This highlights the role of government support in corporate governance[15]. How these mechanisms functioned during COVID-19 pandemic will be discussed in the research.

  •  United Kingdom

Despite the existence of whistleblower rights and protective measures in the UK, findings show the British government has been reluctant to support or offer incentives to people who report actual or suspected wrongdoings. Stalling implementation of whistleblower laws[16] will therefore, continue to have a negative impact on the UK economy, especially during COVID-19 pandemic[17].

Whistleblower rights in the United Kingdom was established by the Public Interest Disclosure Act 1998 (PIDA) which allows protected disclosures whether a non-disclosure agreement was signed between past or present recruiter and an employee or not. A debate on if there should be further restrictions on confidentiality clauses was held in 2019. But, most remarkably, the “Freedom to Speak Up Review” outlined twenty principles intended to improve whistleblower protection for NHS workers[18].

PIDA 1998 provides a comprehensive process for reporting wrongdoing but, in order to encourage the use of internal mechanisms, the statute outlines conditions which must be observed to ensure legal protection[19]. The provision also explains “a qualifying disclosure” which offers protections; when a ‘‘qualifying disclosure’’ changes to a ‘‘protected disclosure’’; and what category of employees are covered. Section 43B(1) ERA 1996 refers to a ‘‘qualifying disclosure’’ as one of the following: (1) a criminal offence; (2) an employer’s failure to comply with any legal obligation; (3) a miscarriage of justice; (4) actions that pose danger to the health and safety of any individual; (5) damage to the environment; and (6) an intentional concealment of information tending to show any of the events states above.

Excluding disclosures made to attorneys, the UK provisions apply only to whistleblowers who act in good faith. But PDA 2000 creates procedures to be followed by anyone disclosing irregularity in the workplace, especially if they wish to avoid retaliatory actions from their employers. The Act stipulates that employer may not retaliate against an employee for making protected disclosure in good faith. However, lack of a comprehensive and strong EU legislation—coupled with the fragmentation and differences among Member States in the area of whistleblower protection—has been a major discouraging factor for potential whistleblowers[20]. The relevance of PIDA, which amends the Employment Rights Act 1996, and its enhancement of NHS performance during the COVID-19 pandemic will be discussed in the forthcoming research[21].

References


[1] ACFE “Report to the Nations” https://www.acfe.com/report-to-the-nations/2020/ (Date of use: 19 June 2020)

[2] ECI “Increasing Integrity in Organization” https://www.ethics.org/

[3] Council Regulation (EU, Euratom) No 1023/2013 of the European Parliament and of the

Council of 22 October 2013 amending the Staff Regulations of Officials of the European Union and the Conditions of Employment of Other Servants of the European Union, (OJ L 287, 29.10.2013, pp. 15-62).

[4] Council Regulation (EC) No 1/2003 of 16 December 2002 (OJ L 1, 4.1.2003, pp. 1–25).

[5] Organisation for Economic Co-operation and Development. 2016. Committing to Effective (OECD) “Whistleblower Protection,” Paris: OECD Publishing, https://www.oecdilibrary.org/docserver/9789264252639en.pdf?expires=1544637676&id=id&accname=ocid77016197&checksum=5110B09709D19551EE60C446FF251D21 (Date of use: 20 June 2020)

[6] BERKEBILE C. (2018), The Puzzle of Whistleblower Protection Legislation: Assembling the Piecemeal, in Indiana International & Comparative Law Review, Vol. 28, pp. 1-30.

[7] Council Regulation (EU, Euratom) No 883/2013 of 11 September 2013 (OJ L 248, 18.9.2013, p. 1-22).

[8] Council Directive (EU) 2017/1371 of 5 July 2017 (OJ L 198, 28.7.2017, pp. 29-41).

[9] Council of European Union, DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the protection of persons who report breaches of Union law https://data.consilium.europa.eu/doc/document/PE-78-2019-INIT/en/pdf (Date of use: 18 June 2020)

[10] US Department of Justice “Justice Department Recovers over $3 Billion from False Claims Act Cases in Fiscal Year 2019” https://www.justice.gov/opa/press-release/file/1233201/download

[11] CALLAHAN E. S., DWORKIN T. M., LEWIS D. (2004), Whistleblowing: Australian, U.K., and U.S. Approaches to Disclosure in the Public Interest, in Virginia Journal of International Law, Vol. 44(3), pp. 879-912.

[12] US Department of Justice “Fraud Statistics – Overview” https://www.justice.gov/opa/press-release/file/1233201/download

[13] US Department of Justice “U.S. Attorney’s Office collected $62.3 million in fiscal year 2016” https://www.justice.gov/usao-ndoh/pr/us-attorneys-office-collected-623-million-fiscal-year-2016

[14] Dodd-Frank Wall Street Reform and Consumer Protection Act 12USC5301 of 21 July 2010

[15] Waheduzzaman W “Challenges in transitioning from new public management to new public governance in a developing country context” 2019 International Journal of Public Sector Management (32) (7) 689-705

[16] Davies “Advice on protective gear for NHS staff was rejected owing to cost” https://www.theguardian.com/world/2020/mar/27/advice-on-protective-gear-for-nhs-staff-was-rejected-owing-to-cost

[17] Barnes “Protection equipment for care workers is essential, says UNISON” https://www.unison.org.uk/news/2020/03/protection-equipment-care-workers-essential-says-unison/

[18] UK Government “Stronger protection from violence for NHS staff” https://www.gov.uk/government/news/stronger-protection-from-violence-for-nhs-staff

[19] DE GRAAF G. (2019), What Works: The Role of Confidential Integrity Advisors and Effective Whistleblowing, in the International Public Management Journal, Vol. 22(2), pp. 213-231.

[20] HØEDT-RASMUSSEN I., VOORHOOF D. (2018), Whistleblowing for sustainable democracy, in Netherlands Quarterly of Human Rights (NQHR), Vol. 36(1), pp. 3-6.

[21] As per 33