Alternative to Silence: Whistleblowing - European …ec.europa.eu/.../anti_corruption/lisbon/whistleblowing_marques.pdfAlternative to Silence: Whistleblowing ... perception of whistleblowers

Alternative to Silence: Whistleblowing Lisboa, 17 de setembro de 2015 David Marques, TIAC ([email protected] ) Tiac(secretariado@transparência.pt )

Whistleblowing – Whistleblowing is the most common of detection of

fraud in Europe (Association of Certified Fraud Examiners, 2010)

– In the USA, whistleblowers have a more prevailing role in fraud detection and litigation that supervising authorities (Taxpayers Against Fraud, 2006)

– In Portugal, between 2004 and 2008, 64% of all corruption cases started with non-official sources (whistleblowers or equivalent)

Threats to Whistleblowing

1. Culture • Countries with recent dictatorships and history of secret police tend

to have a cultural distrust of WB’ers (snitch, bufo, chibo, delateur, etc.)

2. Law/Politics (lack of political will) • Lack of specific protection for whistleblowers, wide range of legal

mechanisms for retaliation (libel/defamation charges)

3. Education • Poor knowledge and awareness by public officials and citizens about

what should be reported, how should it be reported and their rights

4. Business culture • Large number of SME’s where the whistleblowing approach that has

been developed my multinationals doesn’t work

Common consequences for Whistleblowers

“42% of respondents would not report corruption due to fear of retaliation” (Source: De Sousa & Triães, 2008)

– Disciplinary sanctions – Dismissal of employee – Blacklisting – Professional marginalization – Social marginalization – Libel or defamation charges

Whistleblower protection

– International Conventions (hard law & soft law) • UNCAC, ETS 173, ETS 174

– Domestic Laws • Protection levels vary across Europe

• Portugal: lack of dedicated WB framework leads to different levels of protection

– Practices • Developed business communities are investing in

whistleblowing mechanisms to avoid financial and reputation damage (ex. Siemens)

Best practices (Portugal)

1. Specific channel for whistleblowing of corruption and fraud (Public Prosecutor’s Office)

2. Recent legal amendments now provide protection for private sector whistleblowers

3. Criminal sanctions for those who reveal WB identities • only applicable for money laundering and terrorism reports

4. Civil Society and Unions • Provide channels that help WB’ers maintain their

anonimity and safety

Weaknesses (Portugal) 1. Lack of a dedicated whistleblower protection framework

2. Negative perception of whistleblowers and of the judicial system in

general

3. Institutional Practices • Absence of a specific authority to deal with whistlelowers generates apathy

from criminal or supervising authorities, since it’s not their competente to deal with that

• Lack of publicly available information on how to report or where to report

(ex. CPC, MAI) 4. Vulnerability of whistleblowers to judicial remedies regarding moral

damages and protection of public image (libel/defamation). • ECHR decided in 2012 that the conviction of 2 citizens for libel due to having

reported a situation of abuse of power was a violation of article 10 of the European Convention for Human Rights (freedom of expression)

Example 1 Article 20, Law 25/2008 Disclosure of information protection 1- The disclosure in good faith by the entities covered by this Law, in compliance with the obligations laid down in Articles 16, 17 and 18, shall not constitute a breach of any restriction on disclosure of information, imposed by any legislative, regulatory or contractual provision, and shall not involve the persons providing it in liability of any kind. 2- Any person, who even due to mere negligence, reveals or favours the discovery of the identity of the person that provided the information, in accordance with the Articles referred to in the foregoing paragraph, shall be punishable by deprivation of liberty for a maximum of three years or by a fine.

Money laundering and terrorism compliance for financial organizations

Example 2 Article 4, Law 19/2008* 1. Employees belonging to the Public Administration and state-owned companies,

as well as employees from the private sector, who report information regarding the commitment of infractions, which were discovered in the performance of their duties or due to these duties, cannot, under any form, including involuntary transfer, be treated unfairly.

2. It will be presumed as abusive, until otherwise proven, any disciplinary sanction applied to the employees mentioned above, when those sanctions are applied within one year of the reporting date.

3. The employees mentioned above have the right to: – Anonymity, except for investigators, until a formal accusation is issued; – Transfer, at their request, without the possibility of refusal, after a formal accusation has been

issued; – Benefit, mutatis mutandis, from the witness protection measures.

*non-official translation

Political will and Peer Pressure Before – absence of a specific WB protection.

2006 – GRECO’s 2nd evaluation cycle – WB protection recommended

2007 - Bill 341/X providing WB protection (proposed by only one party)

2008 - Law 19/2008 – WB protection principle (article 4)

2009 – Temporary Parliamentary Commission for Corruption

2010 – Anti-corruption legal package – no legal measures regarding WB protection

2011 – Governmental report on corruption legislation (DGPJ) – did not mention WB protection or recommendations

2013 – TIAC’s report and recommendations on WB private sector protection

2014 – Portugal’s UNCAC evaluation – lack of protection in the private sector

2015 – Amendment to Law 19/2008 – protection broadened to private sector, and whistleblowers are now expressely given the same protection as witnesses

Recommendations 1. No more cardboard shields

• Specific regulation of WB protection

2. Organization specific whistleblowing channels • Providing WB with close proximity channels that protect their

identities

3. Education (for citizens and public officials) • Active guidance of what should be reported and how

4. Cultural change / awareness • Changing societies view on WB, cultivating transparency

5. Someone to watch for WB’ers • Institute specialized bodies to monitor the status of WB’ers and

collect reports on illegal activities of all kinds

Provedoria TIAC Transparência e Integridade, Associação Cívica [email protected] Tiac(secretariado@transparência.pt )

http://www.transparency.org/whatwedo/publications/