whistleblowers/2007/in focus/news room

15 August 2007

Whistleblowers

Protecting courageous whistleblowers
TI in action
Honouring whistleblowers
Links and further reading
media contacts

With one telephone call to the media, one video on YouTube, one letter to the right public official, a corrupt company can be brought to its knees by a whistleblower.

In the post-Enron era, whistle blowing – the act of exposing fraud, waste, abuse or other misbehaviour in a company or organisation – is on the rise. In the United States, for example, more than US $8 billion has been recovered as a direct result of whistleblowers’ actions. Whistle blowing can be an effective way to deter and detect corruption both in the private and public sectors and it provides better information flows, which increase the chances of successful prosecutions in corruption cases. But in order for whistle blowing to be an effective tool to fight corruption, legislation and clear processes are essential.

Transparency International has helped whistleblowers in many ways, including recognising and honouring their actions, and lobbying for stronger legislation to protect them against retaliation. In addition, TI has set up whistleblower hotlines and encourages responsible organisations to promote whistle blowing as an integral part of risk management. But even with this work, much remains to be done to ensure whistleblowers do not become an endangered breed of corruption fighters.

Protecting the courageous

It takes courage to stand up and challenge the corrupt. But courage isn’t always enough. Powerful individuals and organisations can retaliate against whistleblowers, threatening their jobs, their families or even their lives.

Legal protection for whistle blowing is different in each country. In the United Kingdom, the Public Interest Disclosure Act 1998 protects whistleblowers from victimization and dismissal. In the United States, legal protections vary according to the subject matter of the whistle blowing, and sometimes the state in which the case arises.

Three international anti-corruption conventions offer a legal framework to help ensure that brave individuals who see something and say something do not become victims of corrupt power.

1) United Nations Convention against Corruption (UNCAC)

The United Nations Convention against Corruption obliges nations that have ratified it to implement a wide and detailed range of anti-corruption measures affecting their laws, institutions and practices. These measures promote the prevention, detection and sanctioning of corruption, as well as cooperation between countries. The UNCAC came into force in December 2005. One hundred forty nations have signed, of whom 93 have ratified.

Three UNCAC provisions address whistleblower protection:

Article 8: Codes of Conduct for public officials
4. Each State Party [ratifying nation] shall also consider, in accordance with the fundamental principles of its domestic law, establishing measures and systems to facilitate the reporting by public officials of acts of corruption to appropriate authorities, when such acts come to their notice in the performance of their functions.
Article 13: Reporting channels
2. Each State Party shall take appropriate measures to ensure that the relevant anti-corruption bodies referred to in this Convention are known to the public and shall provide access to such bodies, where appropriate, for the reporting, including anonymously, of any incidents that may be considered to constitute an offence established in accordance with this Convention.
Article 33: Protection of reporting persons
Each State Party shall consider incorporating into its domestic legal system appropriate measures to provide protection against any unjustified treatment for any person who reports in good faith and on reasonable grounds to the competent authorities any facts concerning offences established in accordance with this Convention.

Transparency International's work on UNCAC

TI monitors how nations implement their legal obligations under the UNCAC, and will submit its findings to the 2nd Conference of States Parties in Bali, Indonesia, in January 2008.

As part of this work, several of TI’s national chapters have prepared reviews, also known as ‘gap analyses’, of how countries are implementing the convention. Click here for gap analysis reports on countries in Africa and the Middle East.

TI has also developed recommendations on development of a UNCAC monitoring mechanism. Click here for TI’s 2006 report on UNCAC monitoring.

2) OECD Convention on Bribery of Foreign Public Officials in International Business Transactions (OECD Convention)

The OECD Convention is the most focused of the major anti-corruption conventions. It is intended “to address the supply side of bribery by covering a group of countries accounting for the majority of global exports and foreign investment”. It does so by providing a framework for developed countries to work together to criminalise the bribery of foreign public officials in international business transactions. Thirty-seven nations have ratified it.

Whistleblower regulations are a core part of the Convention. It requires countries to establish complaint procedures, and to protect whistleblowers in the public and private sectors.

Transparency International's work on the OECD Convention

TI’s national chapters produce an annual progress report on how well nations are enforcing the convention’s provisions. This year’s report has just been published. It concludes that the performance of almost half of countries surveyed is unsatisfactory in both the public and private sectors. Nonetheless, the trend is positive, with improvements reported in Italy, Japan, Norway and Switzerland.

Click here to download the Third Progress Report.

WHISTLEBLOWER PROTECTION VARIES BY COUNTRY

§ Argentina must strengthen its whistleblower protection programme, according to the Committee of Experts of the OAS Convention Follow-Up Mechanism.
§ Canada enacted legislation three years ago to create a new employment-related intimidation offence, protecting employees who report unlawful conduct within their company. But there is no legislation to encourage private sector employees to speak out when their employer pays foreign bribes.
- Case: CBC News reported that up to US$100 million out of a US$250 million fund was misused in a Canadian sponsorship scandal for a program promoting federalism in Quebec, through federal contracts that were paid for but for which little or no work was done. The scandal was revealed by Allan Cutler, a federal employee responsible for negotiating federal ad contracts, and was responsible for bringing down the Liberal Party of Canada in the 2006 elections, after 13 years in power. Cutler was subsequently fired, although later reinstated, CBC News said.
§ In France, although the law protects civil servants who blow the whistle good faith, its effectiveness remains uncertain. No law protects employees in the private sector.
- Case: In France, a long standing secret was revealed in 2004: the identity of ‘Mister X’, the whistleblower who broke the Executive Life scandal. This scandal involved the illegal purchase, including kickbacks, of US company Executive Life by Credit Lyonnais. In the 1990s, Francois Marland, an intermediary between Credit Lyonnais, a French bank, and French insurer Maaf, blew the whistle to US prosecutors on the purchase of Executive Life, which violated restrictions on foreign ownership of US insurers, according to the Insurance Journal. That scandal and the ensuing settlement cost the bank US $771 million, including US $475 million paid for by French taxpayers. For his role in revealing the scandal, Marland received a US$715 million payout from a consortium of French bankers in 2005.
§ The German federal government approved a bill to allow civil servants to report serious crimes – including corruption – directly to a prosecutor instead of to their immediate superior; a second bill will cover civil servants. Both are pending before the Bundestag. No specific whistleblower-protection legislation applies to the private sector, though this is under consideration.
§ Despite the recommendation of the OECD Working Group on Bribery, Italy has yet to introduce stronger protection for public sector whistleblowers.
§ A Japanese law enacted in 2004 that took effect in April 2006, offering protection to public and private sector whistleblowers. The Unfair Competition Prevention Law protects whistleblowers who file complaints about foreign bribery.
§ Korea’s Anti-Corruption Act protects whistleblowers in state-owned companies, but no law encourages whistle blowing or protects whistleblowers against reprisals for exposing corruption in the private sector. Reports of bribery in the private sector therefore remain uncommon.
- Case: In 2006, a whistleblower famously uncovered South Korea’s most respected scientist, Dr. Hwang Woo Suk, as being a fraud. He became renowned worldwide for his landmark stem-cell and embryonic research in 2004 and 2005, The New York Times published. An inside whistleblower, first only known as Mr. K, Hwang’s former underling Ryu Young-june, who co-authored a 2004 research paper, informed a local broadcasting station of the malpractices.
§ In New Zealand, the Protected Disclosures Act covers employees who report serious wrong-doing in the public interest, including bribery. But the legislative provisions have not been tested and may be no stronger than existing law.
§ New laws on whistleblower protection in Norway have been in force since January 2007, applying to both the public and private sectors. Although they seem to provide adequate protection against retaliation, they require that the whistleblower act defensibly or justifiably ("defensible whistle blowing"), meaning that the whistleblower is unlikely to be well protected in practice.
§ There is no protection for whistleblowers under Spanish law. Of the 35 large Spanish companies listed on the stock market in Spain, only four (Repsol, Ferrovial, Cintral and BBVA) have whistleblower protection systems.
§ Sweden has no specific whistleblower protection. Public servants are protected if they tip off journalists, and cannot be dismissed without "grounds of fact". However, the many other ways of harassing a whistleblower are not prohibited. A regulation in the Penal Code concerning "interference in a judicial matter" may offer some protection.
- Case: Ingvar Bratt, an electronics engineer at Bofors AB, a subsidiary of Nobel Industries, a leading Swedish weapons manufacturer, reported that his company was selling weapons to embargoed countries in the Middle East. This revelation set in-motion a police investigation in the 1980s, according to an Illinois Institute of Technology case study. Bofors AB also was involved in a series of other scandals, including one that involved a US$250 million bribe to the Indian government for a howitzer gun contract, the Financial Times reported. Bratt was originally ostracized by his company, although later he was reinstated. Also, as a result of his actions, Nobel Industries sacked its old management, and the ensuring debate led to a new code of engineering ethics in Sweden.
§ The Swiss government is moving to strengthen whistleblower protection, as recommended in the OECD’s Phase 2 report. In February 2007, the Swiss Agency for Development and Cooperation opened a compliance office to motivate whistleblowers to report bribery and other malpractice. More and more private companies are opening whistleblower hotlines.
- Case: Switzerland’s most famous whistleblower is Christoph Meili, a Zurich night watchman who noticed that files documenting Jewish Holocaust bank accounts were systematically being destroyed by UBS Switzerland. His actions led to breaking the secrecy in banking circles and to an US $1.25 billion payment to Holocaust survivors. Meili suffered personally from exposing the truth, however. He was fired, received death threats and was investigated by the police for breaking Swiss banking secrecy laws, forcing him to seek asylum in the US, The New York Times reported. Although he successfully sued his former employer, resulting in an US$1.25 billion settlement, he never received much of that money, and is currently still working as a watchman in California.

Related press release

Major exporters continue bribing abroad
OECD Convention needs greater enforcement, says new TI report
Berlin, 18 July 2007

3) Inter-American Convention against Corruption (IACAC)

The IACAC of the Organization of American States is the first international legal instrument dedicated to fighting corruption. It has been ratified by all OAS member nations except Barbados. The convention requires countries to implement measures in national legislation and public policies to prevent corruption and to end certain corrupt practices. Whistleblower regulations are part of the preventive measures.

The following provision of the IACAC addresses whistleblower protection:

Article III
For the purposes set forth in Article II of this Convention, the States Parties agree to consider the applicability of measures within their own institutional systems to create, maintain and strengthen:
[…] 8. Systems for protecting public servants and private citizens who, in good faith, report acts of corruption, including protection of their identities, in accordance with their Constitutions and the basic principles of their domestic legal systems.

Transparency International's work on the IACAC Convention

The IACAC adopted a follow-up mechanism to ensure that the convention’s provisions are fulfilled. Countries must demonstrate that they have put mechanisms in place to protect whistleblowers. Mechanisms such as facilitating anonymous reports, or reports where the identity of the whistleblower is protected, mechanisms to report threats or retaliation; and procedures for witness protection are being reviewed.

In the development of the country reports to the OAS, the MESICIC process requires governments to write a self evaluation in the form of a questionnaire. Civil society also can participate in this process and TI and its national chapters in the Americas have had an active role by answering a questionnaire, including questions referring to whistle blower protection. Country reports can be downloaded here: http://www.oas.org/juridico/english/mesicic_II_rep.htm

Other chapters from Chile, Colombia, Panama, the Dominican Republic have not yet handed in their reports, as their countries are part of later evaluation meetings (see: www.transparency.org/regional_pages/americas/conventions/oas/ii_round/calendar).

On the 10th anniversary of the IACAC, Transparency International, together with Transparencia Venezuela, organised a regional meeting to discuss developments, challenges and ways forward in the region. Mechanisms to denounce corrupt acts and to protect whistleblowers were among the issues analysed. Click here to see the presentation (in Spanish)

Related press release

10 years IACAC
In Focus March 2006
Governments in the Americas must eliminate corruption to create jobs and reduce poverty
Transparency International’s recommendations presented to OAS Secretary-General at Summit of the Americas
OAS must fulfil commitments to anti-corruption convention, says Transparency International Civil society seeks to support efforts to combat corruption in the Americas
Participation in process critical to implementation of the Inter-American Convention against Corruption

United States:

Whistleblower protection is covered by a patchwork of different laws and jurisdictions, as the Senate Judiciary Committee found when passing the Sarbanes-Oxley Act, which protects private employees. Government employees are primarily protected by the Whistleblower Protection Act and the No FEAR Act (Notification and Federal Employee Antidiscrimination and Retaliation Act, 2002), although this stops outside the US. So if a whistleblower worked for an overseas US company, this protection would not apply. Also, restrictions exist if the person were a government contractor, a so-called ‘Title 42’ employee. According to an article by MSNBC, this allows the government to pay research and medical experts as special consultants, allowing them salaries higher than civil servant maximums. However, in cases such as Dr. Fishbein, a researcher who was sacked after he blew the whistle on faulty AIDS research practices, this also strips them of legislative whistleblower protection.

How TI takes action

Retaliation against whistleblowers has become a serious issue in many parts of the world. Although whistleblowers are often protected under the law from retaliation, there have been many cases of punishment, and in some cases criminal prosecution, for reporting wrongdoing. Many TI chapters, including Israel, Germany and the Netherlands, are working on the issue of whistle blowing, focussing on how to improve the legal situation in their countries, or giving whistleblowers an anonymous reporting process, such as hotlines, in order to protect them.

Romania: Whistle blowing legal, but still unsafe

Sometimes introducing a law into the national legislation is not enough. Raising awareness among public officials and providing a consulting service on corruption issues, such as TI’s Advocacy and Legal Advice Centres (ALAC), can help make legislation more effective.

An official from the Romanian Child Protection Agency who suspected that a child in state foster care was the victim of illegal adoption and trafficking was unaware of her rights and the laws in place to protect her. She was fired from her position after reporting her suspicions. She should have been protected by legislation known as the whistleblower law, drafted and successfully lobbied for by TI Romania, and adopted by parliament in December 2004. Under this law, public employees are protected against retaliation by their superiors when they lodge official complaints about suspected corrupt or unethical practices.

Two customs officials were dismissed from their jobs as a result of investigating a case of suspected bribery in their department. Not only had their superior refused to look into the case; he also had forbidden them to take it any further and fired them when they did. Although no law protecting whistle blowers existed at the time, TI Romania’s Advocacy and Legal Advice Centre (ALAC) lawyers counselled the two on how to formulate a complaint against their dismissal and advised on how to present their case in court. their boss' decision was overturned by the magistrate and one of the customs officials was reinstated, while the other chose not to return to the job. Successes such as this helped TI Romania to convince lawmakers there was a gap in legislation, leading to the creation of the whistleblower law.

Meanwhile, the former employee from the Child Protection Agency remains on suspension while her case is dealt with by the courts. This and other complaints show that even with a legislative framework in place to assist whistleblowers in reporting corruption, much remains to be done to educate public workers about the law.

Morocco: Letter to the prime minister

Without whistleblower laws or other legislative protection in place, action on concrete cases is difficult. Transparency International and its national chapters in Africa and the Middle East sent an open letter to Moroccan Prime Minister Driss Jettou protesting the recent removal of three lawyers, Abdellatif Kenjaa, Lahbib Hajji and Khalid Bourheil, and the suspension of two other lawyers.

These lawyers were punished because they blew the whistle on corruption in the judiciary of the Tangier-Tétouan region in north Morocco. In the letter, TI asked the Moroccan government to reinstate the lawyers and establish an impartial investigation into the accusations, and to implement the necessary reform to ensure an independent justice system. To date there has been no response and no action taken by the government.

Switzerland: Hotlines helping whistleblowers

TI Switzerland has been crusading for the rights and protection of whistleblowers for four years. In an encouraging move, the chapter developed and supported legislation demanding better protection for whistleblowers against unfair dismissal and other forms of discrimination that was adopted by the Swiss Government earlier this year. The chapter launched an anonymous hotline for whistleblowers in March, a first point of contact where whistleblowers can learn their rights and find out who to contact with an allegation of corruption.

Although it receives the calls through the hotline, TI Switzerland does not investigate cases. It is up to the police or relevant authority to decide how to proceed. In cases where a whistleblower is hesitant or frightened to go public, the chapter may forward the case anonymously to the relevant authority. Where warranted, after examination of the cases the chapter may transfer them to the Institute of Law at Zurich University, which will also monitor the hotline’s efficiency in fighting corruption.

Algeria: Anti-corruption Day focussing on protecting whistleblowers and the victims of corruption

In November 2006, Bououni Achour, General Secretary of the National Union of Electricians and Electro-technicians Working in Aerial Security and a member of TI’s national chapter in Algeria, the Algerian Association for Fighting Corruption (AACC), was illegally held in detention for several days after denouncing the embezzlement of public funds and bad management at the National Group for Aerial Navigation (ENNA).

Although the case was eventually dropped, Achour was fired from its position at the ENNA where he was also a member.

As a result, to raise awareness for the need for protection of whistleblowers and victims of corruption, AACC used the celebrations of 2006 Anti-corruption Day on 9 December to focus on this important issue. The law for the prevention of and fight against corruption, adopted in early 2006 as part of the UNCAC ratification process, has been seen as insufficient when it comes to protecting whistleblowers because of the lack of awareness of the new law.

Lebanon: Hotline for anonymous complaints

Post-war reconstruction phases with large influxes of aid funds, major procurement projects and public administration in disarray offer plenty of opportunities for bribing, bid-rigging and diverting resources. Without whistleblower protection legislation in place, willingness to report corruption cases is low. TI's national chapter in Lebanon has taken action. The Lebanese Transparency Association now offers an anonymous complaint channel for citizens to speak out against corruption.

A telephone hotline and an online comments box were established to collect complaints from Lebanese citizens affected by the misallocation of reconstruction resources. All collected information remains anonymous. This complaint mechanism will be supported by a group of volunteers. Collected information will be analysed by TI Lebanon and used as a basis for its campaign for transparency and integrity in resource allocation.

China:
SARS whistleblower and doctor, Dr. Jiang Yanyong, 72, exposed the extent of the SARS epidemic to the world in 2003, which resulted in the sacking of China’s Health Minister and Beijing’s mayor. He was dubbed “the honest doctor” by Caijing, a weekly magazine, and named one of TIME’s ‘People who mattered: 2003’. Believing he was safe because he was high up in the military, a veteran Communist Party member, and a doctor to boot, he was instead put under constant surveillance. When he denounced the 1989 Tian’anmen Massacre, he went one step too far: he was jailed for seven weeks together with his wife, and underwent ‘brainwashing classes’. His release was secured amid intense international pressure, The New York Times said, and was then put under house arrest. There are still restrictions on his freedom today: he was barred from entering the United States to collect a freedom award, according to the Star, one of numerous occasions when his freedom was limited.

Honouring the courageous

Launched in 2000, Transparency International’s Integrity Awards honour the bravery of individuals and organisations around the globe whose efforts are making a distinct difference in curbing corruption. The programme's goal is to give greater recognition to the efforts of journalists, civil society activists, government and corporate whistleblowers who work to unmask and fight corruption, often at great personal risk. Here is a selection of whistleblowers TI has honoured in the past, with updates on their lives.

*2004 Integrity Award Winners*
	*Constable Naftali Lagat, police officer and David Munyakei, former clerk, Central Bank of Kenya*

Constable Naftali Lagat (r) and David Munyakei (l) from Kenya helped to expose the Goldenberg scandal, one of the largest and most complex financial scandals in Kenyan history. Munyakei, a clerk at the Central Bank of Kenya (CBK), blew the whistle on Goldberg International by providing CBK documents to opposition members of parliament. Constable Lagat was one of the police officers on duty at the airport one night in 1991 when a director of Goldenberg International arrived carrying a suitcase full of gold. Lagat refused to follow orders from superiors to handover the suitcase because he believed that his superiors were corrupt.

According to a BBC News report in 2006, the two ministers who had resigned after these corruption allegations surfaced have been reinstated in the new government. In addition, BBC News estimates that Kenya lost up to US$600 million due to this scandal.

For his courage and valiant efforts, Munyakei was rewarded with arrest and dismissal from his position. In 2006, he succumbed to pneumonia after 13 years of unemployment, despite a promise in 2004 by the then Justice and Constitutional Affairs minister Kiraitu Murungi of re-instatement, and a campaign and online petition by Transparency International’s national chapter in Kenya. Lagat kept his job, but was subsequently transferred to a remote police station in the Rift Valley province. Currently, although some laws have been passed, there is still no effective legal protection in the country for whistleblowers, TI Kenya says.

*2004 Integrity Award Winner, Posthumous*
	Satyendra Kumar Dubey, (India) former Deputy General Manager, National Highway Authority

Satyendra Kumar Dubey, former Deputy General Manager of the National Highway Authority in India, was overseeing a road project worth billions of dollars when he was killed on 27 November 2003, at the age of 31. He was murdered after his name was leaked in connection with a complaint about corruption he had sent to the prime minister's office and the road network authority. His death caused an outcry of condemnation and sympathy in a country where public money is frequently siphoned off from large government projects through corruption.

According to an Indian Express report in 2006, India’s Central Bureau of Investigation (CBI) testified before the Supreme Court that there was no evidence linking Dubey’s murder with local contractor mafia, attributing his death instead to a robbery. Parivartan, a local NGO involved in anti-corruption, however, disputed the claim, stating that there had been no progress and a “lack of political will to unearth the truth,” and that the CBI ignored evidence contrary to the official findings.

The S.K. Dubey Foundation to Fight Against Corruption was inspired by Dubey’s case. It has spearheaded reform together with Parivartan since 2003 including advocating India’s Supreme Court to review and identify the necessity for whistleblower protection, which resulted in the establishment of an independent commission for whistle blowing, as well as a tabled whistleblower legislative act. Other achievements include reopening his murder case, compensating Dubey’s next of kin, and raising awareness for the plight of India’s whistleblowers.

For more information about other Integrity Award winners go to: http://www.transparency.org/news_room/award/integrity_awards

Israel:
Mordecai Vanunu has been in jail since the 1980s for revealing Israel’s nuclear programme. He is a former Israeli nuclear technician who revealed the programme to British journalists in 1986. He was abducted in Rome by Mossad and tried for treason, and subsequently jailed for 18 years, 11 of which were spent in solitary confinement. Since his release in 2004, he has been subjected to various restrictions on his movement and freedom of speech, and was most recently arrested in July of this year for speaking with journalists and travelling to Bethlehem, the Guardian reports. Amnesty International says his human rights have been violated.

India:
In an attempt to save her husband’s life, J.N. Jayashree did the only thing she could think of: she built a website www.fightcorruption.wikidot.com. After seeing several high-profile cases of whistleblowers being killed – see ‘Honouring the courageous’ for more information – Jayashree wanted to build an Internet ‘fortress’ that would record her husband’s case. According to The New York Times, her husband, M.N. Vijayakumar had seen corruption from the first day he started his position as a bureaucrat in the southern state of Karnataka, India, and had not been shy about chastising his co-workers openly about taking bribes. While the website has been lauded as ‘path-breaking for India’ by Transparency International, it has not been an easy road for the couple, who have recently moved from their home of 13 years because of threats to their family.

Links and further reading

Selected literature on whistle blower protection:
www.u4.no/document/literature.cfm?key=19

Whistle blower workshop on 10th IACC:
www.10iacc.org/content.phtml?documents=120&wrks=59

Presentation by Guy Dehn on Whistleblowing: A New Perspective
www.10iacc.org/content.phtml?documents=120&art=79

Pierre-David Labani, TI France, “Déclenchement d'alerte" (2004)
http://www.transparence-france.org/LLT26.pdf

Related Organisations:

Public Concern at Work:
www.pcaw.co.uk

Government Accountability Project:
www.whistleblower.org

Related TI Material:

In Focus: Strengthening international and regional anti-corruption conventions. Nine UNCAC and AU Convention Implementation Reviews:
www.transparency.org/news_room/in_focus/2007/uncac_africa

TI Global Priority on International Anti-Corruption Conventions: www.transparency.org/global_priorities/international_conventions

Civil society statement to the UNCAC First Conference of States Parties: www.wbde.org/documents/2006Dec14UNCAC_CivilSocietyStatment.php

AU Convention:
www.transparency.org/publications/publications/au_convention

TI Conventions Advocacy Guides:

Anti-Corruption Conventions in the Americas: What Civil Society Can Do to Make Them Work (2006) (English / spanish)
Anti-Corruption Conventions in the Middle East and North Africa: What Civil Society Can Do to Make Them Work (2006) (Arabic)
Anti-Corruption Conventions in Africa: What Civil Society Can Do to Make Them Work (2006) (English) (French)

Wikipedia article on whistleblowing:
http://en.wikipedia.org/wiki/Whistleblower

Wikileaks (Wiki site on corruption & whistleblowers):
http://wikileaks.org/mirror/static/w/i/k/Wikileaks.html

media contacts

Gypsy Guillén Kaiser
ggkaiser@transparency.org
Tel. +49 30 34 38 20-662