Whistle Blowing

Our lives begin to end the day we become silent about things that matter. Martin Luther King, Jr.

Whistle Blower- An Overview

A person who tells the public or someone in authority about alleged dishonest or illegal activities (misconduct)occurring in a government department or private company or organization

Whistle blowers may make their allegations internally or externally

1863 United States False Claims Act (revised in 1986)

Origin

The term whistleblower comes from the whistle a referee uses to indicate an illegal or foul play

Ralph Nader coined the phrase in the early 1970s

Definition
Whistle-blowing is

'raising concerns about misconduct within an organization or within an independent structure associated with it' (Nolan Committee on Standards in Public Life)
bringing an activity to a sharp conclusion as if by the blast of a whistle' (Oxford English Dictionary) 'giving information (usually to the authorities) about illegal and underhand practices (Chambers Dictionary)

Types of Whistle blowing

Internal Whistle blowing

Personal Whistle blowing

External Whistle Blowing

Criteria for Justifiable Whistle Blowing

The firm through its product or policy will do serious and considerable harm to the public, whether in the person of the user of its product, an innocent bystander, or the general public Once an employee identifies a serious threat to the user of a product or to the general public, he or she should report it to his or her immediate superior and make his or her moral concern known Unless he or she does so, the act of Whistle blowing is not justifiable

Contd
If one's immediate superior does nothing effective about the concern or complaint, the employee should exhaust the internal procedures and possibilities within the firm

This usually will involve taking the matter up the managerial ladder, and if necessary and possible to the Board of Directors.

Contd
Whistleblower must have accessible documented evidence that would convince a reasonable, impartial observer that

one's view of the situation is correct

and that the company's product or practice posses a serious

and likely danger to the public or to the user of the product

Contd
The employee must have good reason to believe that by

going public the necessary changes will be brought about.

The chance of being successful must be worth the risk one

takes and danger to which one is exposed

Why is it so difficult?
Ethical Dilemma The Mum Effect --reluctance to blow the whistle The Deaf Effect --reluctance to hear the whistle The Blind Effect --reluctance to see the need to blow the

whistle
Fear & Doubt -will I be viewed as a rat

Whistleblower protection in India

In 2003, the Law Commission of India recommended the adoption of the Public Interest Disclosure (Protection of Informers) Act, 2002 The Public Interest Disclosure and Protection of Persons Making the Disclosures Bill, 2010 was renamed as The Whistleblowers' Protection Bill, 2011 The Whistleblowers' Protection Bill, 2011 was passed by the Lok Sabha on 28 December 2011 The Bill is however currently pending in the upper house of Parliament, Rajya Sabha

Satyendra Kumar Dubey

Born on November 27, 1973 1994 -civil engineering graduate from IIT Kanpur Deputy General Manager - Centres National Highway

Authority of India
Case in point- the 60-km Aurangabad-Barachatti segment

of the Golden Quadrilateral in Bihar with headquarters in Koderma, Jharkhand

 November 11, 2002- letter to PMO , called the PMs highway

showpiece a dream project of unparalleled importance to the nation

Instances of loot of public money and poor

implementation
Requested his name be kept secret, but at the same time, let his

identity be known Just the opposite happened

Dubeys key complaints

Detail Project Reports (DPR) by design consultants are in very poor shape. Process of procurement completely manipulated and hijacked by the big contractors. Many contractors are submitting forged documents to justify their technical and financial capabilities. NHAI officials have shown great hurry in giving mobilisation advance to selected contractors.

 The entire mobilisation advance of 10% of contract value

(which goes up to Rs 40 crore in certain cases) has been paid to the contractors.

NHAI is going for international competitive bidding to procure

the most competent civil contractor for execution of its projects. When it comes to the actual execution, it is found that most of the works are being sublet or sub-contracted to small petty contractors.

 In 10 days, the PMO fowarded Dubeys complaint to his parent

Ministry of Road Transport and Highways.

Request for anonymity was apparently ignored December 4, 2002- Dubeys letter was sent to the National

Highway Authority of India with a copy to NHAIs Chief Vigilance Officer

November 27,2003- Dubey was shot dead in Gaya

After Effects..
The murder sparks protests across the country amidst calls for a

legislation to protect whistleblowers

Three persons sentenced to life imprisonment by a special CBI

court for murdering NHAI engineer

CBI statement: The accused had all assembled near Circuit

House, Gaya on the fateful night . Around 3.30 am on November 27, dubey robbed of his belongings and during the ensuing scuffle, Mantu shot him dead with a country-made weapon
4 found guilty of murdering the 31-year-old IIT graduate and

life term awarded to them

Giving Whistle blowing The Edge

A business that makes nothing but money is a poor kind of

business- Henry Ford

Encourage employees to talk about ethical violations so that

actions can be taken immediately

Acquaint employees with the ethical code of conduct and the

strictness on adherence

Contd
Top management must exhibit a strong commitment Create a culture in the organization that reflects the

commitment
Train managers and executives to encourage openness

which will help bring unethical and illegal practices to forefront.

The Hughes Whistle blowing Case

Overview

Manufacturing of Hybrid Microchips

Testing of chips along with the seal

Use of these chips

Whistle blowing by its own employees

The Hughes Whistle blowing Case

Background
Composition of the chip
Manipulation of testing of chips

The Hughes Whistle blowing Case

The Various Incidents
The Lisa Lightner Incident

The PLRS Incident

The AMRAAM Incident

The Hughes Whistle blowing Case

The decision to blow the whistle

Court Battles
Files Wrongful Discharge suit

Outcomes
Hughes was found guilty on June 15th, 1992 After effects on Goodearl and Ruth Ibarra

Laws In Foreign Countries

Public Interest Disclosure Act (1998) in UK

Sarbanes Oxley Act (2002) in US

Protected Disclosure Act (2000) in South Africa

When to Blow the Whistle

Knowledge of inappropriateness Making proprietary software available to public Back

door/booby-trap in code
Embezzlement or redirection of funds Bad claims

Unrealistic date projection Advertising hype Knowledge of impending doom

How to Blow the Whistle

Do it anonymously let the evidence speak for itself and protect yourself if possible Do it in a group charges have more weight and wont seem like a personal vendetta

Present just the evidence leave interpretation of facts to others Work through internal channels
Start with your immediate supervisor or follow the standard reporting procedure Work through external channels go public (biggest risk)

Strong Policy
Deter wrongdoing Pick up potential problems early Enable critical information to get to the people who need to

know and can address the issue

Demonstrate to stakeholders, regulators and the courts that

they are accountable and well managed

Contd
Reduce the risk of anonymous and malicious leaks

Minimize costs and compensation from accidents,

investigations, litigation and regulatory inspections

Maintain and enhance the businesses reputation

Weak Policy
A danger in the workplace Fraud in, on or by the organization Miss-selling or price fixing Offering, taking or soliciting bribes Dumping damaging material in the environment Misreporting performance data

Disadvantages
Retaliation

Firing
Blacklisting Demoting Intimidation Threats Conflicts of Interest

Trends in India
Whistle Blowing Policy Part of Corporate Governance Vigilance Department