A Global Unions Anticorruption Network

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 A Global Unions Anti-corruption Network

• Whistle blowing OECD Experience
• Anti-Corruption Network for Transition Economies
• 26th-29th March 2002

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Whistleblowing Structure

• UNICORN aims, activities, whistle blowing study
• Whistleblowing definition importance
• Link to corruption
• National initiatives overview, model and
  principles
• International initiatives OECD Anti-bribery
  Convention
• Top five discussion points

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Whistleblowing UNICORN

• What global trade unions anti-corruption project
• Mission to mobilise trade unionists to combat
  corruption
• Focus multinational companies and the payment of
  bribes
• Activities empirical and policy research
• Compiling bribery cases involving MNCs and
  public finance
• Supporting the OECD Anti-bribery Convention
• Writing policy papers on initiatives aimed at
  deterring international bribery public
  procurement, export credit agencies, whistle
  blowing

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Whistleblowing Research project

• Mapping and classifying current legislation and
  practice
• Identifying roles and cases of trade union
  involvement
• Drawing out the lessons loopholes best practice

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Whistleblowing Shoot the messenger

• US study of whistleblowers found
• 100 were fired - most were unable to find new
  jobs
• 17 lost their homes
• 54 harassed by peers at work
• 15 were subsequently divorced
• 80 suffered physical deterioration 90 reported
  emotional stress, depression and anxiety
• 10 attempted suicide

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WhistleblowingDefinition/understanding

• UK Committee on Standards in Public Life
  Raising a concern about malpractice within an
  organisation or through an independent structure
  associated with it
• Australian Senate Select Committee what is
  important is not the definition of the term but
  the definition and conditions under which the
  employees who disclose wrongdoing should be
  entitled to protection from retaliation

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WhistleblowingImportance

• Protect the public interest
• Provides an alternative to silence
• Key to organisational accountability

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WhistleblowingLink to corruption

• Workers best placed to know of corruption
• Whistle blowing increases the risk of detection
• Corruption Monopoly Discretion
  Accountability
• (Robert Klitgaard)
• Whistleblowing deterrent

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WhistleblowingCases

• Who Eddie Cairns, Management Accountant
• When 1994
• Where Enterprise Ayrshire, UK
• What financial irregularity
• Blew the whistle to the police after following
  advice of professional accountancy body
• Consequences for whistle blower sacked for
  breaching confidentiality professional body
  powerless to help

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WhistleblowingCases

• Who Internal auditor, Colin Cornelius
• When 1992
• Where Hackney Council, London
• What fraud
• Blew the whistle to internal management
• Consequences for whistle blower sacked for gross
  misconduct employment tribunal ruled against
  employer

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WhistleblowingCases

• Who Assist. Auditor Paul Van Buitenen
• When 1998-1999
• Where European Comm., Luxembourg/Brussels
• What Fraud and mismanagement
• Blew the whistle to MEP, then the Press
• Consequences for whistle blower suspended
  half-pay reinstated/banned from
  auditinghanging on ...

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WhistleblowingCases

• Who Assist. Auditor Antonio Fernandes
• When December 1999
• Where Netcom Consultants
• What Chief Executive false expense claims
  (370,000)
• Blew the whistle to
• Consequences for whistle blower dismissed
  tribunal ruled unfair dismissal under PIDA (first
  case awarded 300,000).

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Whistleblowing OECD overview

• Public sector (demand side of corruption)
• Private sector (supply side of corruption)
• N.B. privatisation and liberalisation policies
  have i) blurred and ii) increased the boundaries

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Whistleblowing OECD public sector

• OECD Public Management Committee (PUMA) Survey
• Public services employees 14 provide protection
• Citizens 23 provide mechanisms for public
  complaints
• USA - Whistleblower Protection Act first (Office
  of Special Council 1979 (Watergate, defence
  scandals)
• UK- Public Interest Disclosure Act comprehensive

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Whistleblowing OECD private sector

• Sectoral initiatives
• Corporate compliance programmes (e.g. USA under
  the Foreign Corrupt Practices Act)
• Codes of conduct e.g. OECD guidelines on MNCs
• Private sector employees not covered by
  legislation
• Private sector employees do not feel protected in
  spite of internal codes/procedures

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WhistleblowingExamples of Legislation
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Whistleblowing UK PIDA - description

• Public Interest Disclosure Act July 1999
• Scandals collapse of Bank of Credit and Commerce
  International (BCCI) Lyme bay drowning Clapham
  rail crash
• Concern gagging clauses
• Culture secrecy

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Whistleblowing UK PIDA - description

• Public/private sector workers bring a legal claim
  against employers so long as make a qualifying
  disclosure
• a criminal offence, a failure to comply with any
  legal obligation, a miscarriage of justice, the
  health and safety of any individual endangered,
  damage to the environment, deliberate concealment
  of information relating to any of the above has
  been, is being, or is likely to be committed

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Whistleblowing UK PIDA - description

• Protects disclosures made i) internally and to
  responsible departments iii) prescribed bodies
  (Inland Revenue, the Financial Services
  Authority) iii) wider disclosures to the police
  or the media where reasonable
• Makes gagging clauses in employment contracts
  void where they conflict with the Acts protection

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Whistleblowing UK PIDA - description

• Tied into employment law
• The existence of external disclosure routes
  provides an incentive for employers to put in
  place internal whistleblowing procedures NHS
  taken the lead.

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Whistleblowing UK PIDA - strengths

• Consultative and consensual process
• Exists major step forward to changing culture
• Cross-sectoral public and private sector
• Focuses on the message and not the messenger
• No upper limits on compensation
• Clear guidance on procedures

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Whistleblowing UK PIDA - weaknesses

• Individuals not protected if disclose to TUs
• No provision for class action
• No central compilation of cases no monitoring
• Limited disclosure routes - e.g. for health
• Implementation weak promotion high up-take of
  procedures but low support

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Whistleblowing Issues consensus

• Legislation de-stigmatises, provides legitimacy
  and facilitates a change in culture
• Internal disclosure should be first step - good
  industrial relations
• Procedure for internal disclosure necessary, not
  sufficient
• Anonymity is not the way forward

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Whistleblowing Issues controversy

• Inclusion of private sector - recent legislation
  passed in The Netherlands excludes private sector
  
• Confidentiality balance internal external
  disclosure
• Who is covered e.g. students/changing work
  practices
• Motivation good faith / bad faith
• Workers versus society employment covers certain
  people circumstances/ freedom of information

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Whistleblowing OECD Anti-bribery Convention

• Requires signatories to enact national
  legislation that criminalises the act of bribing
  a foreign public official (1999)
• Member countries not required to enact
  legislation aimed at protecting whistle blowing
• OECD review of national measures opportunity to
  examine provisions for whistle blowing

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Whistleblowing Discussion points

• Adequacy of legislation as an instrument
• Challenge of implementation procedures
• Link to freedom of information workers v society
• Importance of culture
• The challenges facing the accountancy profession

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Whistleblowing Resources

• UK Support Organisation
• Public Concern at Work, UK - http//www.pcaw.co.uk
  /
• UK Research on implementation of PIDA
• David Lewis, University of Middlesex, UK
• USA Whistleblowing information
• National Whistleblowing Center
  http//www.whistleblowers.org/