Global approach in whistleblower protection

3. Global approach in whistleblower protection

According to the Association of Certified Fraud Examiners (ACFE)[1], whistleblowers are responsible for detecting about 40% of all occupational fraud cases around the world 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.”. 

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3.1 The Role of European Council and EU Whistleblower Protection Directive

To deliver on its promise to protect whistleblowers, the European Council[2] in April 2019 published the “Directive on the Protection of persons reporting on breaches of union law”, which is also known as the EU whistleblowing Directive.”[3] The Directive is seeking from organisation with over 50 employees to take steps of protecting whistleblowers against retaliation by making provision of internal reporting channels with clear procedures[4]. The channels of disclosure are outlined as follows:

(i)      Internal reporting channels: need to be set by organisation with over 50     employees;

(ii)     External reporting channels: appropriate EU institutions, bodies, relevant national authorities, offices and agencies.

(iii)    Public reporting channels: that can approach media as the last option.

EU member states are required to comply with the directives by April 2021[5]. The EU Whistleblowers Directive will reduce the hurdle of internal reporting and entice people to willingly disclose breaches of Union law.

3.2     The US

False Claims Act (FCA), enacted in 1863, intended to control supply of substandard goods and services to US during the civil war, is the first and one of the strongest whistleblower laws in America. Since its promulgation, the FCA has undergone several revisions but one aspect of the law which remains unchanged from its conception is “the qui tam” or whistleblower provision[6].

Many US firms will incur losses from lawsuits if whistleblowing measures are neglected during Covid-19 pandemic considering that Congress has—through the 1986 civil False Claims Act—enhanced whistleblower protection and recovered over $62bn misappropriated fund[7].  To encourage whistleblowing activities, the US government and Securities and Exchange Commission (SEC) compensate employees who show commitment to accountability and transparency by reporting unethical practices under Dodd-Frank Act provisions[8]. This highlights the role of government support in corporate governance. How these mechanisms functioned during COVID-19 pandemic will be discussed in the research.

Whistleblower provisions in US vary from Britain’s. For example, statutory laws dedicated to protecting whistle-blowers in the US is categorized under State or Federal Statutes. Usually, the level of protection offered by states differ from what is obtainable under federal law. Additionally, many US states have institutionalized laws that prevent retaliatory actions—from employers—against whistleblowers, unlike the federal government. But some states only have protection for public employees whereas others safeguard the interest of whistleblowers in both private and public sectors.

3.3     United Kingdom

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 “The Freedom to Speak Up Review” outlined twenty principles intended to improve whistleblower protection for NHS workers[9]. The relevance of PIDA[10], which amends the Employment Rights Act 1996[11], and its enhancement of NHS performance during the COVID-19 pandemic will be discussed in the forthcoming research.

4.  Research Methodology

Data used in this study is sourced from a review of the literature. The researcher collated secondary information from relevant books, journals, legislations and case law. This implies that comparative data analysis will be theoretical and qualitative in nature to enhance understanding of available whistle-blower protection laws and their effectiveness.

5. Limitations of the Study

This study may have some limitations such as access to quality data from government/private institutions and dearth of previous research studies. Outcomes from the academic inquiry will, however, provide basis for further development in the area of study.

6.       Conclusion

Snowden, the computer security consultant who worked with CIA and National Security Agency, faced retaliatory actions for leaking classified data to The Washington Post, New York Times and UK’s Guardian after fleeing to Hong Kong. The former Dell employee claimed his efforts report ethical concerns internally was frustrated, forcing him to contact external institutions. He was charged with theft (of government property) and violation of the 1917 Espionage Act[12]. This example indicates that governments and stakeholders can uphold accountability by strengthening whistleblower protection[13]. The World Health Organization (WHO) and the Chinese government made several attempts to suppress the truth about COVID-19 thereby exposing the world economies to an avoidable pandemic.

7.       Recommendation

The new Supreme Court Sarbanes-Oxley (SOX) ruling, which offers protection for whistleblowers, has huge implications for private and public institutions[14]. So, employers/companies need to understand the whistleblower compliance guidelines and retain legal advice on the best approach to handling fallout with whistleblowers[15]: This will ensure protection against potential Sarbanes-Oxley whistleblower claims. To achieve this purpose, employers/companies should:

(i)      Invest in R&D, with focus on learning unfamiliar security laws.

(ii)     Hire a competent legal advisor.

(iii)    Apply caution and reason when dealing with first-time reporters of unethical practices. Instead of retaliating against potential whistleblowers, the company/employer should provide the necessary assistance to enable disgruntled workers air their concerns internally[16].

On the part of whistleblower policies, lawmakers should enact laws that:

(a)     Offer anonymity to whistleblowers to the extent possible.

(b)     Encourage whistleblowers to speak up with discretion but never discouraging them from reporting wrongdoing.

(c)      Ensure that evidence relating to suspected fraud, corruption or mismanagement is preserved.

(d)     Institutionalise procedures for carrying out internal investigations into suspected fraud.

Furthermore, employers/companies will be legally obliged to support whistleblowing activities by understanding that a part of the Sarbanes-Oxley Act entitles employees to huge financial compensations, including reinstatement, back pay and other benefits (such as litigation costs and attorney fees) if they file and win lawsuits for retaliation. However, whistleblowing standards/principles should be adapted to each country’s political, social and cultural contexts, including their existing legislative frameworks[17].

Published by Irobiko Chimezie Kingsley


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

[2] Council of European Union PE-CONS 78/19, 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)

[3] European Parliament “Whistleblower protection regulation” http://www.europarl.europa.eu/news/en/press-room/20190311IPR31055/first-euwide-protection-for-whistle-blowers-agreed (Date of use: 19 June 2020)

[4] Council of the European Union ST 5747/19 ADD 1 of 29 January 2019, “Proposal for a Directive of the European Parliament and of the Council on the protection of persons reporting on breaches of Union law : Mandate for negotiations with the European Parliament – Declarations from Members States” of 25 January 2019, pp. 1-6.

[5] Council of the European Union ST 12191/18 of 18 September 2018, “Proposal for a Directive of the European Parliament and of the Council on the protection of persons reporting on breaches of Union law – Further proceedings“, pp. 1-4, available at http://data.consilium.europa.eu/doc/document/ST-12191-2018-INIT/en/pdf.

[6] Alam M M, Said J and Abdul Aziz M A “Role of integrity system, internal control system and leadership practices on the accountability practices in the public sectors of Malaysia” 2019 Social Responsibility Journal (15) (7) 955-976

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

[8] 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

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

[10] ERA 1996 Section 43D and PDA 2000 Section 5.

[11] PDA 2000 Section 7.

[12] Espionage Act (1917) https://d1lexza0zk46za.cloudfront.net/history/am-docs/espionage-act-1917.pdf

[13] 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)

[14] Sarbanes-Oxley Act of 2002 [Public Law 107–204, Approved July 30, 2002, 116 Stat. 745, As Amended Through P.L. 112–106, Enacted April 05, 2012].

[15] NEAR J. P., MICELI M. P. (2016), After the wrongdoing: What managers should know about whistleblowing, in Business Horizons, Vol. 59(1), pp. 105-114.

[16] STOLOWY H., GENDRON Y., MOLL J., PAUGAM L., (2018), Building the Legitimacy of Whistleblowers: A Multi‐Case Discourse Analysis, in Contemporary Account Research (2019), Vol. 3(1), pp. 7-49.

[17] 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

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