Whistleblowers Protection Act

Whistleblowers Protection Act

 

Introduction

  • Whistleblowers Protection Act of 2014 empowers anybody (a whistleblower) to disclose an act of corruption, deliberate misuse of authority or discretion, or criminal offense committed by a public official.
  •  All public officials, including Ministers, Members of Parliament, the lower judiciary, regulatory agencies, federal and state government workers, and so on, are included. Whistleblowing is defined as an act of disclosing information by an employee or any concerned stakeholder about an illegal or unethical conduct within an organization.

 

Whistleblowers Protection Act - Historical Background

  • A whistleblower is someone who informs on someone or something that is doing something illegal.
  • In 2001, the Indian Legislation Commission proposed that a law protecting whistleblowers be enacted in order to combat corruption. It had also written a bill to address the problem.
  • In 2004, the Supreme Court of India urged the Central government to put in place "administrative machinery for acting on allegations from whistleblowers till a legislation is enacted" in response to a petition filed following the infamous murder of an NHAI official.
  • The government, in response, notified a resolution in 2004 named, ‘Public Interest Disclosure and Protection of Informers Resolution (PIDPIR)’.
  • The Central Vigilance Commission (CVC) was given the authority to act on allegations from whistleblowers as a result of this resolution.
  • The Second Administrative Reforms Commission's report from 2007 also urged that a separate statute be enacted to protect whistleblowers.
  • The United Nations Convention Against Wrongdoing, to which India has been a signatory (though not ratified) since 2005, encourages states to make it easier for public officials to disclose corruption and to safeguard witnesses and experts from reprisal.
  • The Convention also protects the individual filing the complaint from being victimized.
  • To comply with these laws, the Whistleblowers Protection Bill was presented in 2011 and passed into law in 2014.
  • Companies are required to take notice of any such complaints under the Companies Act of 2013, as well as the Securities and Exchange Board of India regulations.

 

Who are Whistleblowers?

  • They are individuals who come forward to disclose information about illegal, unethical, or wrongful activities within an organization.
  • They are typically insiders who have firsthand knowledge or evidence of wrongdoing, such as fraud, corruption, safety violations, or other forms of misconduct. Whistleblowers can be employees, former employees, contractors, or even external stakeholders who witness or uncover these activities.
  • By speaking out, whistleblowers aim to expose the truth, promote transparency, and prevent harm to the public interest. Their actions often involve significant personal risk, as they may face retaliation or adverse consequences for bringing misconduct to light. Whistleblower Protection Act 2014 was basically an effort in the direction of offering them protection.

 

What are different types of whistleblowers?

  • Internal Whistleblowers: These are whistleblowers who inform or report to the higher authority of the organizations where the wrongful act is being done. The discretion of checking that act is on the superior of the company or the organization only. Usually, the government is not involved with the inquiry and procedure to rectify the illicit work. It is taken care of by the organization itself without any interference from an outside party.
  • External Whistleblowers: They refer to the people who report illegitimate ongoing work in a specific organization to the external people including the media reporters, the concerned Government officers, etc. Public good and safety is the chief purpose of reporting it to the external authority. Another reason for accounting it to external authority could be the negligence in the redressal of such fraud or illicit activity within the organization.

Whistleblower Protection Act Salient Features

  • The Whistleblower Protection Act 2014 encompasses various provisions to safeguard whistleblowers and promote transparency and accountability. The key provisions of the Act can be summarized as follows:
    •  The Act establishes a mechanism to receive complaints related to corruption or misuse of power by public servants.
    •  The Act provides adequate safeguards to protect whistleblowers from victimization or retaliation for making disclosures.
    •  The Act defines various competent authorities to whom public interest disclosures can be made, with each authority assigned specific responsibilities based on the nature of the complaint For instance, the Prime Minister acts as the competent authority for complaints against Union Ministers
    •  The Act requires complainants to establish their identity and anonymous complaints are not permitted. Complaints can be made within a maximum time period of seven years
    •  Certain personnel, such as those belonging to the Special Protection Group, are exempted from the Act. Additionally, any person aggrieved by an order of the Competent Authority can appeal to the respective High Court within sixty days.
    •  Revealing the identity of a complainant can lead to imprisonment for up to three years and a fine of up to Rs 50,000. Knowingly disclosing false or misleading information may result in imprisonment for up to two years and a fine of up to Rs 30,000.
    • The Competent Authority is required to prepare an annual report detailing its activities and submit it to the Central of State Government, which is then presented before the respective Parliament or State Legislature
    •  The Whistleblower Protection Act overrides the Official Secrets Act, of 1923, allowing for disclosures that do not harm the sovereignty of the nation.

 

What are the measures taken by India to protect whistleblowers?

  • Protecting and enabling this “insider” class of whistleblowers is essential in defending democracy because they are the first witnesses to wrongdoing within governments or corporations.
  • Only a few states in India have such policies.
  • Law Commission of India – In 2001, the Law Commission of India, recommended a law to protect whistleblowers.
  • LCI its 289th Report in 2024 recommends for a special legislation for protection of Trade Secrets, with exceptions pertaining to whistleblower protection, compulsory licensing and government use, and public interest.
  • In the same report, it has proposed a separate legislation for Economic Espionage as well.
  • Supreme Court – In 2004, the Supreme Court directed the Central government to make interim measures for handling whistleblower complaints until a formal law was enacted.
  • This led to ‘Public Interest Disclosure and Protection of Informers Resolution’, granting the Central Vigilance Commission permission to deal with whistleblower complaints.
  • 2nd ARC – In 2007, the Second Administrative Reforms Commission also stressed the need for a dedicated whistleblower protection law.
  • Following international convention – India committed to the UN Convention against Corruption since 2005 called for encouraging corruption reporting and protecting witnesses.
  •  The Whistleblowers Protection Bill was proposed in 2011 which became a law as the Whistleblowers Protection Act in 2014.
  • Right to information Act 2005 to secure information under control of public authorities, in order to promote transparency and accountability in the working of every public authority.
  • Today, the Companies Act, 2013, and Securities and Exchange Board of India (SEBI) regulations mandate companies to address whistleblower complaints.

 

What are the current challenges in India?

  • There is no standard framework for receiving whistleblower reports, protecting whistleblowers, and bringing about corrective actions based on whistleblower reports.
  •  The WhistleBlowers Protection Act passed through parliament in 2014 and got as far as the president’s assent, but did not come into force yet.
  •  It fails to protect whistleblowers’ identities and establishes a flawed reporting and investigative framework.
  • Complainants providing false identities or anonymous complaints are not recognised.
  • There is no functional enforcement mechanism and it doesn’t cover armed forces and is not applicable to the private sector.
  •  The Whistle Blowers Protection (Amendment) Bill 2015 tried to revive the effort and sought to prohibit the reporting of corruption-related disclosures under 10 categories, but it subsequently lapsed.
  • The Companies Act 2013 (Companies Act), which mandates the incorporation of a whistleblower policy, but primarily only by listed companies.
  • To date, there are no specific laws dealing with the protection of whistleblowers applicable to private, unlisted companies or unincorporated entities and their employees.
  •  Employers are free to formulate and adopt a whistleblower policy.
  •  Environmental activists have been called “urban Naxals,” a name which suggests they are anti-national and are detrimental to India’s economic growth.
  • Some have even been arrested for sedition.

 

Recommended measures:

There are three major recommendations to improve whistleblower mechanisms.

  • Communication and transparency: Clear communication is key, be it about the policy or about action taken with respect to individual complaints.
  • Promotion of ethical behaviour: The second pillar is to use employees as a channel to promote ethical behaviour.
  • Rewarding system: When examples of ethical behaviour emerge, these should be rewarded publicly.

 

Way Forward

  • The details and processes of the Whistleblowers Protection Act must be spread across the country, with seminars being held in both government and private businesses to educate all individuals and employees about the Act’s value.
  • Employees must be informed of the different ways they can file a complaint under this Act.
  • While the Act provides for anonymous disclosures, it does not really address anonymity. It also allows the name of the complainant to be revealed, which may be dangerous for the complainant and subject them to victimization.
  • It is important to broaden the definition of ‘competent authorities’ and include various agencies/organizations, such as the lower judiciary, that do not fall under its definition yet.
  • The Act should create a Protection Agency that would not only protect existing whistleblowers but also encourage others to raise their voice against any illicit activity being carried out around them.
  • The state should build an effective screening system that helps deal with frivolous complaints. Removing the option to file anonymous complaints complicates the whistleblowing process and discourages more people from filing concerns.