Whistle-blowing is an old concept but relatively new term.
There have always been
informers or snitches who reveal information to enrich them or to get back at others. The term whistle-blower was first applied to government employees who go public with complaints of corruption or mismanagement in the public or government organizations. It is now used in connection with similar activities in the private business sector as well. usiness history is replete with the cases of corruption and mismanagement and! in turn! cases of whistle blowing. "or e#ample! the three whistleblowers- all women and the Time $agazine%s &'ersons of the (ear )**)% + ,herron Walkin -who warned .nron%s accounting scandals/! 0oleen 1owley -who pointed out how the bureau had ignored important clues to the ,eptember 22 bombing of the World Trade 0entre/! and 0ynthia 0ooper -who alerted the World0om board about accounting irregularities/ are well known whistle-blowers world over. ,atyendra 3ubey is one nationally known whistle-blower in India. The whistle- blowers take great personal risks and most of them! like above four! lose their lives. The fact remains that the whistleblowers% courage makes invaluable contribution to the good of the society. 4onetheless! while there are plethora of cases of corruptions and mismanagement prevalent every here and there! there are only a few whistle-blowers. 5s such! some obvious 6uestions crop up in the mind are7 -i/ Is whistle blowing ethical8 -ii/ Why do people not blow whistle informing about corruptions rampant in many of the organizations8 -iii/ 5re whistle blowers safe and protected8 -iv/ 9ow to protect the whistle blowers8 The present paper attempts to address to these issues. Whistle-blowing is an old concept but relatively new term. 9istory is witness that there has always been informers! or snitches! who reveal inside information to others. usiness world is not e#ception to it. It will not be less than correct to mention that unethical practices! or say! wrongdoings in business and whistle-blowing have been coeval since long time. :nly the e#tent and nature of the two have changed over the period. 5long with increase in unethical business practices! instances of whistle- blowing are also on increase though not on pari passu. 5s regards what is whistle- blowing! like other ethical driven human behaviour! it has also been understood and defined differently by different people! practioners! and ethicists. "or some! whistle- blowing may mean the disclosure of wrong doings! for some others protest against unethical doings! and for some yet others reporting untoward things to others. It%s a clich; to mention that there have been plethora of misconducts! wrongdoings! and unethical practices in business! yet there have been only a few whistleblowers! but unfortunately that is the case. The reason is not difficult to seek. 0ases of whistle-blowing are so wrenching precisely because they involve very sharp and strong conflicts and serious implications. usiness history bears evidences to confirm that whistle-blowers often pay a high price in many forms + from poor evaluation and demotion to dismissal to loss of life -3alal )**</. =iven such backdrop! then! certain obvious but ve#ing 6uestions arise7 ,hould employees violate their obligation to be loyal to their employer8 Is disclosing the confidential matters of one%s organization to outsiders ethical8 ,hould people be really encouraged to blow the whistle8 Is the whistle-blowing the only way to correct wrongdoingsin business8 5re there not other better ways to correct the wrongdoings without re6uiring employees to make high! of course! heroic personal sacrifices8 ,hould the whistle-blower be protected8 9ow can this best be done8 The present paper makes a presumptuous attempt to address to all these 6uestions. We shall begin with defining the term &whistle-blowing.% WHAT IS WHISTLE-BLOWING? The term whistle-blowing probably arises by analogy with the referee or umpire who draws public attention to a foul in a game by blowing a whistle! as in soccer. ,ome trace out its emergence from the practice of .nglish obbies who would blow their whistle when they noticed the commission of a crime. The blowing of the whistle would alert both law enforcement officers and the general public of danger. In simple words! whistle blowing is an act by a member or former member of an organization to disclose wrongdoing in or by the organization. >et us also consider some important definitions of whistle-blowing. 5ccording to oatright -)**<72*?/! Whistle-blowing is the release of information by a member or former member of an organization that is evidence of illegal and@or immoral conduct in the organization that is not in the public interest. ,ekhar -)**)72AB/ defines whistle-blowing as an attempt by an employee or a former employee of an organizationto disclose what he proclaims to be a wrongdoing in or by that organization. 5ccording to Coehn -)**<7?DEA/! Whistle-blowing occurs when an employee informs the public of inappropriate activities going on inside the organization. 1. $. =reen -2BB?7 2?D-2?E/ has given a simpler definition of whistle-blowing7 5 whistle-blower is an employee who! perceiving an organizational practice that he believes to be illegal or unethical! seeks to stop this practice by alerting top management! or! failing that! by notifying authorities outside the organization. 0onsidering the above definitions together! whistle-blowing can now be defined in a long-winded manner as the voluntarily disclosure of non-public information! as a moral protest by a member or former member of an organization outside the normal channels of communications to outsiders who can correct the wrongdoing opposed to the public interest. "ollowing are some salient characteristics to observe in above definitions of whistle blowing7 1. There must be real information to release to be called whistle-blowing. That is merely to dissent publicly with an employer without the real information is not in itself to blow the whistle. Whistle-blowing necessarily involves the release of misdemeanor to the public. Thus! whistle-blowing is different from sounding the alarm in the sense that the former releases the information that the public do not know because it has been kept secret! while the latter tries to get people alarmed about the facts that are already known to the public. 2. The information is an evidence of wrongdoing on the part of organization. The matters that cause harm to the public interest usually fall under the purview of whistle-blowing. Thus! the matters that merely influence the course of action but are not contrary to the public interest are not commonly treated as &whistle-blowing.% 3. Whistle must be blown with moral motive to correct some wrongdoing. 5t times! members of an organization may go public for all sorts of reasons. Therefore! information released to public with a motive to take revenge does not constitute whistle blowing. 4. Whistle against wrongdoing of an organization can be blown only by its member or former member. Information about wrongdoings informed or snitched by an internal member of an organization is called whistle-blowing. It! then! means blowing whistle about wrongdoings of an organization by outsiders like a Fournalist! social activitist! political leader! etc. is not considered whistle-blowing. The reason is that such informers have incriminating information about the organizational wrongdoings and no obligation prevents them from making it public. ut! the situation is different for employees who! of course! are aware of wrongdoings in their organizations! but! at the same time! they also have obligations to their organizations. That is employees are e#pected to work as per pre-determined and agreed directives! go through the defined procedures! and act in manner that benefits the organization. Whistle-blowing is! thus! an action that takes place within an organization. 5. It must be clear to whom the whistle regarding wrongdoing is to be blown. :nly then a desired change or correction can be brought about. $erely revealing information about wrongdoing to an outside party does not necessarily constitute whistle blowing but simply an instance of ordinary snitching. 6. The information about the wrongdoing in the organization must be released outside through normal channels of communication prescribed by the organization. In many organizations! an established procedure is to be followed by the employees to report instances of wrongdoings to their immediate superiors or to the designated officials! like ombudsman in the >ife Insurance 0orporation of India. 9owever! following an established procedure for reporting wrongdoings is not called &Whistle- blowing.% Though! whistle-blowing does not necessarily involve going public and releasing wrongdoing outside the organization! going public is found often effective because the information ultimately reaches the appropriate authorities who can 0orrect the wrongdoing. 7. Information about wrongdoing must be released voluntarily. 9owever! there has not been clear distinction between information released voluntarily and forced >egally or when subpoenaed constitute whistle-blowing or not. 'hilosopher 4orman owie -2BG*/ contends that the following characteristics Fustify the whistle-blowing7 2. It is done based on an appropriate moral motive. ). The individual has e#hausted all internal channels of dissent. <. The individual%s belief regarding the inappropriate conduct is based on evidence that would persuade a responsible person. ?. The individual has carefully analysed the situation to determine the serious nature of the violation! the immediacy of the violation. D. The individual%s action is commensurate with responsibility for avoiding and @ or e#posing moral violation. TYPES OF WHISTLE-BLOWING 3epending on who and whom the wrongdoing is disclosed! researchers have classified whistle-blowing into several types -Hames 2BB</. These are7 Internal: When the whistle-blower reports the wrongdoing to the officials at higher position in the organization! it is called &internal whistle-blowing.% In this A case! the very purpose of whistle is to get the wrongdoings investigated as per the procedures of the organization in this regard. The usual subFects of internal whistle-blowing are disloyalty! improper conduct! indiscipline! insubordination! disobedience! etc. External7 Where the wrongdoings are reported to the people outside the organization like media! public interest groups or enforcement agencies! it is called &e#ternal whistle-blowing. %While some favour outside whistle blowing! others oppose on the ground of morality and loyalty on the part of the employee toward his@her organization. Alumni: When the whistle-blowing is done by the former employee of the organization! it is called &alumni whistle-blowing.% Open: When the identity of the whistle-blower is revealed! it is called &open whistle- blowing.% Anonymous: When the identity of the whistle-blower is not revealed! it is called &anonymous whistle-blowing.% Personal7 Where the organizational wrongdoings are to harm one personally! disclosing such wrongdoings is called &personal whistle-blowing.% Though this is not Fustified morally! it is desirable only when there is danger to one%s freedom or dignity or esteem. Impersonal: When the wrongdoing is to harm others! it is called &impersonal whistle- blowing.% Government7 Where a disclosure is made about wrongdoings or unethical practices adopted by the officials of the =overnment! it is called &government whistle- blowing.% Corporate7 When a disclosure is made about the wrongdoings in a business corporation! it is called &corporate whistle-blowing.. CAUSES OF WHISTLE-BLOWING e that as it may be! whistle-blowing by disclosing wrongdoings of an organization to outsiders causes harm of one type or other to the organization. 9ence! whistle-blowing is not welcome. This! then! means that organizations need to avoid whistle-blowing to take place. It is always better for an organization to be proactive than reactive in the matters of whistle-blowing. ecause! prevention is cheaper and better than cure. :ne way to be proactive in this regard is to have the knowledge about what actually causes whistle-blowing in an organization. 1esearchers -4ader et.al. 2BA) and 3andekar 2BB</ have listed the following as the usual causes of whistle-blowing in organizations7 2. $isuse of official funds for private purposes. ). :fficial powers used for private gain. <. 3iscrimination by age! race! or se#. ?. 0orruption. D. 3umping of industrial pollutants causing harm to public. E. 3eceptive advertising. A. 4on-enforcement of laws. G. 5dulteration. B. ,e#ual harassment. 2*. $onopolist price-rigging. 22. Ise of official funds for political campaign. In case of India! items )! ?! B and 22 are the more common causes of whistle-blowing. WHETHER OR NOT WHISTLE-BLOWING? Whistle-blowing is essentially an ethical work. 9ence! it involves both costs for some and benefits for other. esides! given the principle of loyal agency and maintaining confidentiality in the matters of organization by the agent! i.e. employee! on the one hand! and internally prescribed procedure! wherever e#ists! to deal with wrongdoings in the organization! on the other! underline the need for and necessity of whistle-blowing in the organization. 5s such! there has been a debate! however! inconclusive on whether or whistle-blowing. It is hoped that an e#amination of arguments against and Fustifications in favour of whistle-blowing will help us make an opinion whether whistle-blowing should take place in the organization or not. The same follows in the subse6uent paragraphs. ARGUMENTS AGAINST WHISTLE-BLOWING =iven the great harm whistle-blowing does and can cause to both individual! i.e. whistle-blower and organization! it is decried by some. They oppose whistle-blowing mainly on the grounds of loyalty and confidentiality. 5ccording to them! as per the >aw of 5gency! an employee is the agent of his@her employer @ organization. Who is an agent8 5ccording to one e#pert on the subFect -'owell 2BED7 A/! an agent is a person who is authorized to act for a person -called &principal%/ and has agreed so to act! and who has power to affect the legal relations of his principal with a third party. In practice! people hire agents to carry out the tasks that the principal are either not willing or able to carry out by themselves. "or e#ample! we hire a lawyer under a contract to represent ourselves in legal matters where we lack the re6uired e#pertise to present our matter effectively. The agent is e#pected to act as the principal would himself @ herself. The agent is paid -i.e. fee/ for the task done by him for principal. The main obligation of an agent is to act in the interest of the principal. In the similar vein! an employee is also an agent of his @ her organization employer. Therefore! an employee as an agent has an obligation to work for the benefit of his @ her employer as per directions by protecting the confidential information. In nutshell! the employee has to work Fust like a loyal agent. ,ince whistle-blowing violates the law of agency! i.e.! loyalty! hence it is condemned. Whistle-blowing by violating the law of agency seems to some as disloyalty! i.e., to bite the hand that feeds one. 9ere is a vigorous condemnation of whistle-blowing by Hames 1oche! the former 0hairman of the oard of =eneral $otors 0orporation7 ,ince critics are now busy eroding another support of free enterprises the loyalty of a management team! with its unifying valued co-operation. ,ome of the enemies of business now encourage an employee to be disloyal to the enterprise. They want to create suspicion and disharmony and pry into the proprietary interests of the business. This may be whistle-blowing J but it is another tactic of spreading disunity J. Whistle-blowing is not courageous and not deserving of gratitude and protectionK it is corrosive and impermissible -1oche 2BA27 ??D/. 5 more temperate statement of typical condemnation of whistle-blowing along the same lines of 1oche comes from ,issela ok as 6uoted by oatright -)**<7 2*E- 2*A/. That is7 "urthermore! the whistle-blower hopes to stop the game! but since he is neither referee nor coach! his act is seen as a violation of loyalty. In holding his position! he has assumed certain obligations to his colleagues and clients. 9e may even have subscribed to a loyalty oath or a promise of confidentiality. >oyalty to colleagues and clients comes to be pitted against loyalty to the public interest! to those who may be inFured unless the revelation is made. $ilton "riedman -2BE)72<</ has made a manager%s obligation to the stockholders! i.e. owners imperiously clear. 9e says! In a free-enterprise! private property system! a corporate e#ecutive is an employee of the owners of the business. 9e has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires! which generally will be to make as much money as possible while confirming to the basic rules of the society! both those embodied in law and those embodied in ethical custom. JUSTIFICATIONS IN FAVOUR OF WHISTLE- BLOWING It is important to mention that the supporters of whistle-blowing do not disagree with the law of agency! i.e.! the obligation of whistle-blower toward his @ her organization. They also admit that the employees have obligation of loyalty toward their organization! but the obligation is not without limitation. The limitation is to obey all reasonable directives of the principal! i.e. employer-organization. "or e#ample! an employee is hired as an agent with a purpose to sell life insurance policies on commission. Then! it would be ludicrous to assume that the agent has also committed himself to washing dogs! cleaning vehicles! or doing anything else that happened to give his principal pleasure. The supporters of whistle-blowing also maintain that whistle blowing is not something to be done without ade6uate Fustification. ut at the same time! it is not something that can never be Fustified. The maFor Fustification forwarded in favor of whistle blower is that he @ she has obligation not only toward the employer organization! but to the society as well. They! therefore! view that if the act of whistle blower brings more benefit to the society at large than to for the organization by not blowing the whistle against its wrongdoings! whistle-blowing is well Fustified. 3uska -2BB*/ e#presses his disagreement with the opponents of whistle-blowing in the same vein in these words7 Isn%t time it to stop viewing corporate machinations as games. The activities not only affect the players but everyone J the appeal to loyalty though understandable is misleadingK in the moral sphere competition is not the prevailing virtue J. Whistle-blowing is not only permissible but e#pected when company is harming society. The issue is not of disloyalty to the company! but of whether the whistle-blower has an obligation o society and if blowing the whistle will bring retaliation. The condemnation of whistle-blowing at the personal! often high! cost of the whistle- blower is also not Fustified. If the whistle-blower follows the principle of universal ethic! the last &deontological% stage of one%s moral development -Cohelberg 2BG2/! it is good even at one%s personal sacrifice. This is also Fustifiable based on the utilitarian approach of ethics! i.e. the greatest good for greatest number. 0hakraborty -2BGE/ also in the similar vein! Fustifies and supports whistle-blowing even at the high self-sacrifice of whistle-blower. 9e says whistle-blowing is Fustifiable in business where individuals in organization undertake intense effort at great deprivation to themselves by yielding immense social benefits. 9e goes to cite e#emplary cases of self-sacrifice. (ellapragada 1ao could never have given the world 5ureomycon if he had not had the willingness to sacrifice. The Indian chemist '. 0. 1oy lived an austere life but developed the basic pharmaceutical and chemical industry in India. To conclude! the maFor argument of loyalty of an employee given against whistle blowing does not prove that whistle-blowing can never be Fustified. There is no denying the fact that employees as agents have obligations toward their principals! but at the same time they do also have limits. lowing whistle against the violation of the law of agency by the principal is! therefore! Fustifiable even at the great self-sacrifice of the whistleblower. 9istory is replete with such Fustifications. EVIDENCES OF WHISTLE-BLOWING:- The term whistle-blowing is a relatively recent entry into the vocabulary of public and corporate affairs! although the phenomenon itself is not new. :f late! whistle-blowing has become common from government agencies to business corporations worldover. There has been heroic whistle-blowers worldover. >et us recapitulate a few of the more prominent whistle-blowers as illustrative ones. Frank Serpico: 9e is the legendary e#-cop of the 4ew (ork 'olice 3epartment -4('3/ whose story was the subFect of a best-selling book! and a film starring 5l 'acino + both titled Serpico. When he became a cop in 2BE*! payoffs! kickbacks and protection rackets were rampant in 4('3. 1efusing to look the other way! ,erpico complained to the 'olice 0ommissioner and the $ayor! but they ignored him. "rustated! ,erpico revealed 4('3%s dirty laundry to the New York Times in 2BA2! after which the cops as well as the criminals started gunning for him. $atters came to a head when he was shot in the face during a raidK his colleagues did not come to his help. ,erpico 6uit 4('3 in 2BA) but 4('3 has become a more honest force since his time. DR. STEPHEN BOLSIN: 9e is a former anesthetist at the I.C.%s ristol 1oyal Infirmary -2BGG-BD/ who blew the whistle on a large number of unnecessary deaths of children occurring during heart surgeries due to the incompetence of the hospital%s surgeons. :stracised by other doctors! 3r. oslin was forced to emigrate to 5ustralia in 2BBD. ut his disclosure led to en6uiries by the =eneral $edical 0ouncil and the =overnmentK the department from future practice of two surgeons and the hospital chief in 2BGBK and also several far-reaching reforms in the 4ational 9ealth ,ervice -49,/. It also acted as a catalyst for the enactment of the I.C.%s ublic !nterest "isclosure #ct of 2BBG. Cynthia Cooper of WorldcomK Sherron Watkins of .nrons who e#posed corporate financial scandals! and Coleen Rowley of the "I who later outlined the agency%s slow action prior to the ,eptember 22! )**2 attacks. 5ll three women were selected by the Time $agazine as its &'ersons of the (ear )**).% 5ll three lost their lives. SATYENDRA KUMAR DUBEY: ,atyendra Cumar 3ubey was a <2-year-old IITCanpur civil engineering graduate working with the 4ational 9ighways 5uthority of India -495I/ and assigned to former 'rime $inister LaFpayee%s pet and ambitious proFect! the =olden Muadrilateral! to connect the four corners of India. 9e was posted at Coderma! Hharkhand. :n discovering rampant corruption and poor implementation of work in the section where he had been posted! 3ubey wrote to the 'rime $inister e#posing the irregularities. In the letter! received by the 'rime $inister%s :ffice -'$:/ on 22 4ovember! )**)! he had named some companies. "earing retribution! he had re6uested that his name be kept as secret. ut the '$: officials circulated his letter along with details of his identity among the bureaucracy. The number of notings on the file bears witness to this -The !ndian $%press! <* 4ovember! )**</. While the file was making rounds! not one official thought about the threat 3ubey was being e#posed to. Why officials in the '$: did not heed . 3ubey%s re6uest for anonymity is not known. ut Fust over a year later! on )A 4ovember! )**<! he was murdered in =aya! ihar. SHANMUGAM MANUNATH: ,. $unFunath! a )A-year-old II$->ucknow graduate working as a sales officer with Indian :il 0orporation paid with his life for attempting to ensure that people did not get adulterated fuel. $unFunath had reportedly started proceedings against the owner of $ittal 5utomobiles in =ola =orakhnath in the state of Ittar 'radesh! after the outlet was found committing mass irregularities in supply of fuel. $unFunath%s killing in 4ovember )**D is another case of silencing a whistleblower in a large scam of petrol adulteration. 9e had unearthed gross irregularities being committed in supply of petrol at the filling station during surprise inspection in ,eptember and recommended strict penal action against the owner. ATUL TIRODKAR: 5tul Tirodkar was a man who! during the Cetan 'arekh scam of )**2! e#posed how the ombay ,tock .#change%s high profile 'resident! 5nand 1athi! had been assessing sensitive market information from the surveillance department. The ,. immediately suspended him and made enormous efforts to terminate his services. The ,. fabricated charges against him. They accused him of dereliction of duty! absenteeism and even having links with the underworld. These fabricated charges were leaked to 040 and played every hour as an e#clusive report. >ater an independent en6uiry by a single Fudge was instituted. The single-Fudge en6uiry e#onerated him completely. ut some influential ,. directors again prevailed on the Fudge to give the e#change an e#it option by offering him a honourable discharge with compensation. Then the &oint arliamentar' (ommittee -H$0/ began to hear the matter and heard his testimony. ,tunningly enough! $'s cutting across party lines supported him. They condemned Tirodkar%s suspension in the strongest terms and asked that he be reinstated. Inlike other whistle-blowers as mentioned earlier! Tirodkar%s story had a uni6ue happy ending. WHISTLE-BLOWERS NEED PROTECTION It is 6uite clear from the above anecdotes that whistle-blowers bear big costs in the forms of demotion! punishment! suspension! retaliation! and eve forfeit to their lives for the good of the society. This calls for protection to whistle blowers. The I.,. enacted &)histle*blowing rotection #ct% way back in 2BGB -amended in 2BB?/ to protect the federal employees and Sarbanes*+%le' #ct in )**) for granting legal protection to whistle-blowers in publicly traded companies. The I.C. has enacted ublic !nterest "isclosure #ct in 2BBG to protect its whistle-blowers. ,outh 5frica follows the IC e#ample in providing protection to whistle-blowers in all organizations. y now! many countries such as Inited ,tates! 5ustralia! 0anada! ,outh Corea! 1ussia! $e#ico! and more have already enacted whistle-blowers protection legislation to protect them. 5s regards protection to whistle-blowers in India! it has so far no legislative protection to the whistle-blowers. The e#isting provisions in the form of vigilance officer and ombudsman do not seem effective in protecting whistle-blowers. ut! India needs more than other countries! the whistle-blowing protection act without delay. This need for strong protection to whistle-blowers was also echoed by the Nara'ana ,urth' (ommittee on (orporate -o.ernance set up by the ,ecurities and .#change oard of India -,.I/. India made attempts as well but failed to make legal protection available to the whistle-blowers. &ublic !nterest "isclosure /rotection of !nformers0 ill -'I3/% to provide protection to whistle-blowers was mooted at the same time when the re.ention of Terrorism #ct /':T5/ was mooted. oth ':T5 and 'I3 were drafted by the same man at the same time. ':T5 was enacted! but 'I3 went to the usual dusty shelf for political reasons. (es! it the 'I3 had been made into law! ,atyendra 3ubey might still have been alive today. ased on the e#periences of other countries! a few general principles are suggested to provide protection to whistle-blowers in India. With the consent of the re6uired number of state governments! 'arliament should try to enact a single 5ct for all employees working in all kinds of organizations. The +fficial Secrets #ct should be overridden to provide for a public interest defence and the &gagging clauses in employment or severance contracts should be declared void in respect of public interest disclosures. What constitute public interest disclosure need to be clearly defined8 :nly the genuine and reasonable whistle-blowers must be protected. Those caught making anonymous or pseudonymous leaks should not be protected. There should be fast track mechanism for adFudication of cases on the lines of the &Sarbanes*+%le' #ct 1221 of I.,. CONCLUDING REMARKS There is no denying the fact that whistle-blowers do a great service to the society at their great risk and cost! even at the loss of life. 9ence! whistle-blowers need to be protected to ensure the good governance of organizations. The fact is that while trying to protect whistle-blowers! we are actually trying to protect ourselves. $any employees may be afraid to speak out even when legal protection e#ists. ut! its very e#istence will deter government and corporate wrongdoings to a considerable e#tent and! in turn! will ensure good governance. 5s the type of scenario e#ists today in India! the chances of enacting legislation for protection to whistle-blowers seems remote. ut! given the growing corporate and government scandals in the country! the need for legal protection to whistle-blowers is gathering momentum day-by-day. It seems Fust a matter of time before we shift from our present culture of zero tolerance of whistle- blowing to a culture of zero tolerance of whistle-blower retaliation. ,ooner is obviously welcome.