Emerging unscathed from whistleblowing, utopia or reality?
Date : 08/03/2017
Wrongdoings in organisations usually do not go by unnoticed. Yet, it is not obvious to benefit from the eyes and ears on the work floor to stop the damaging effects of corruption and fraud. In Belgium and many other countries alike, whistle blowers are more often punished than rewarded. Crimilumni Gent and Transparency International Belgium joined forces by organising a panel debate around the topic. Our objective was to learn more about reporting mechanisms implemented by different organisations in the public and private sector. What are the opportunities, obstacles and results?
This debate took place on 8 March 2017 in Ghent. Dr Wim Vandekerckhove, expert to Transparency International and Reader in Business Ethics, Human Resources and Organisational Behaviour at the University of Greenwich kindly accepted to moderate the evening. Dr Vandekerckhove has researched business ethics, and in particular whistleblowing, for many years. He obtained a PhD on the topic in 2001, when the concept was still relatively new. In the meantime, a lot has changed.
Introduction to whistleblowing
Dr Vandekerckhove first introduced the topic of the evening to the more than 100 participants in the audience. The term whistleblowing first emerged in the 70-ties in the US, when Ralph Nader, a young activist and later independent candidate running for president, criticizes a number of corruption cases. He defines whistleblowing as “an act of a man or woman who, believing that the public interest of the organisation he serves, blows the whistle that the organisation is involved in corrupt, illegal, fraudulent or harmful activity”. He refers to organisations in the public and the private sector, that develop into a ‘world’ with dynamics that are disrespectful of the common good.
Now, 45 years later, this is still the heart of the issue, but note the difference in tone of two business leaders at different times in history. It illustrates how whistleblowing shifted from espionage to an asset for a company:
James Roche, Chairman of General Motors in 1971, mentioned:
“Some 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. However, this is labelled – industrial espionage, whistleblowing or professional responsibility – it is another tactic for spreading disunity and creating conflict”.
Warren Buffett writes in 2005 in his annual letter to shareholders of Berkshire Hathaway:
“The second reform concerns the ‘whistleblower line’, an arrangement through which employees can send information to me and the board’s audit committee without fear of reprisal. Berkshire’s extreme decentralisation makes this system particularly valuable both to me and the committee. (In a sprawling ‘city’ of 180.000 – Berkshire current employee count – not every sparrow that falls will be noticed at headquarters.) Most of the complaints we have received are of “the guy next to me has bad breath” variety, but on occasion I have learned of important problems at our subsidiaries that I otherwise would have missed. The issues raised are usually not of a type discoverable by audit, but relate instead to personnel and business practices. Berkshire would be more valuable today if I had put in a whistleblower hotline decades ago.”
In the 80s, scientists generated many interesting insights on whistleblowing. Marcia Miceli, psychologist, Janet Near, sociologist and Terry Dworkin, legal scholar, were key actors in developing research, and it is their definition for whistleblowing which is the standard one in research:
“Whistleblowing is the disclosure by organisation members (former or current) of illegal, immoral, or illegitimate practices under the control of their employers, to persons or organisations that may be able to effect action.”
New was the concept of a whistleblower being a loyal employee with the desire to stop a wrongdoing but being unable to do this on his/her own steam. Miceli, Near and Dworkin for the first time described whistleblowing as a process, starting with an internal message that potentially could escalate, depending on the type of reaction the whistleblower would get.
Attempts to define personalities of whistleblowers, remained without strong academic results so far. Today, interesting insights are being developed by researching the process, rather than the whistleblowers themselves. To whom does a whistleblower report, via which channel and what is the response?
Dr Vandekerckhove mentioned two important elements evidenced by international research:
- Whistleblowing in most cases starts within the organisation.
- Although many whistleblowers face severe financial and social consequences after reporting wrongdoings, emerging unscathed from whistleblowing is possible.
Legislation around whistleblowing
A short overview was given of legislation regulating whistleblowing over the past 40 years:
- At the end of the seventies: first legislation was developed in the USA. Initially, to oblige stock listed companies to implement internal reporting mechanisms. After many amendments and extensions, a financial reward for whistleblowers was also included by the Securities and Exchange Commission.
- In Australia, mid-nineties: legislation for whistleblowers, without any financial reward.
- In the UK, 1998: law adopted, no financial reward but (conditional) protection of whistleblowers.
- As of 2000: trend worldwide, many countries implement whistleblower legislation (South-Africa, Japan, Canada, Romania, The Netherlands, Malaysia, France, ….). Most of them contained diluted versions of previous examples and characterised by weak implementation.
- In Belgium, 2005: a Flemish decree comes into force, protecting civil servants of the Flemish Government. The system had a difficult start, but due to a good collaboration with Audit Vlaanderen and the Ombudsman, we now have a good performing revised version since 2011. Dr Vandekerckhove mentioned that the Flemish institutional structure with an organ that operates independently from ministries and administrations, does not have its equivalent in Brussels or Wallonia. In his view, this remains a bottleneck to implement solid legislation at the federal level.
Whistleblowing in Belgium in the future?
A number of events and facts, create a sense of urgency for Belgium to act:
- Judgments of the European Court of Justice since 2008 are in favour of whistleblowers.
- 2010: Wikileaks
- 2013: Providing an alternative to silence: towards greater protection and support for whistleblowers in Belgium
- 2013: TI International Principles for Whistleblower legislation
- 2013: Snowden
- 2014: Recommendation on Protection of Whistleblowers by Council of Europe.
- 2015: Progressive legislation implemented in Ireland and Serbia, covering the public and private sector, including protection of whistleblowers towards the media and sanctions for those who retaliate against them.
- 2016: New legislation in the Netherlands and France.
- 2017: European Commission opens a public consultation for the protection of whistleblowers and orders an impact study to review if a European Directive would be appropriate. The Greens/EFA in the European Parliament has tabled a proposal for an EU Directive on the protection of whistleblowers.
Against this background, the timing for the debate could not have been better. It was a great pleasure four experts in the Belgian landscape agreed to share their views and insights:
- Mr. Thierry Gillis, Head Commissioner and Advisor to the General Commissioner at Federal Police Belgium
- Mr. Michaël Gillis, Director Strategy, Legal, Regulatory & Public Affairs at Engie Benelux
- Mr. Faroek Özgünes, Investigative Journalist at VTMNIEUWS
- Prof Antoinette Verhage, Professor of Criminology at UGent
Q: Police and journalists traditionally work with inside sources. What is your view on current evolutions in whistleblowing as a phenomenon? What is new?
Mr. T. Gillis: New is the attention in the media for whistleblowing, the act of whistleblowing is timeless. Regrettable, is that whistleblowers are still often perceived as traitors. Reporting wrongdoings being one of the main duties of the police, it may sound odd that such an organisation would need an internal whistleblowing mechanism for themselves. It is, however, an important element of our concept of Integrity Management.
Mr. Özgünes: Journalists are confronted with two types of whistleblowers; individuals that publicly come forward with an issue and those who want to report ‘off the record’. Reliable sources that can be verified are extremely important for the quality of our work. Reputations of all actors involved can be at stake.
Q: Referring to the illustration in the introduction; in 1971, James Roche compared whistleblowers with spies, in 2004, Warren Buffet mentioned if he would have implemented a whistleblower hotline 10 years earlier, Berkshire Hathaway would have been worth much more. A shift has taken place in companies’ opinions about whistleblowing. Why do think?
Mr. M. Gillis: Warren Buffet is known for saying that you need three things to be a good manager: intelligence, energy and integrity, adding that without integrity your energy and intelligence can ruin a company! Mr. Gillis adds that a lot has changed in the business environment since 1971. Our view on the importance of environmental issues is radically different, things like sexual harassment and other inappropriate behavior are no longer tolerated, etc. Companies need a performant system allowing people who observe unacceptable behavior to speak up without fear, whilst guaranteeing that they will be listened to in an impartial manner.
Q: Should we applaud legislation on whistleblowing?
Prof Verhage: In general terms, yes, we should applaud legislation on whistleblowing. It offers a clear framework for those who want to report. Ideally, this would be uniform for all Europeans and accessibility of procedures is key. Legislation should allow individuals to calculate the risk they are going to take by blowing the whistle.
Q: Is it more difficult to blow the whistle for an employee at the police than in other organisations?
Mr. T. Gillis: Having started his career at the police in the 80s, Mr. Gillis has witnessed a cultural evolution over time. Contrary to the past, today institutions outside of the hierarchy of the police support a different approach to whistleblowing. Trainings on deontology for instance, give guidance on how to act when confronted with unacceptable situations. Because police are bound by strict professional confidentiality, it creates an extra tension for whistleblowers. It still requires a lot of courage to blow the whistle, Mr. Gillis wants to be clear about that. But a lot of progress has been made compared to the old days. He adds that whistleblowers in our democratic society, have the option to look for support of the public opinion and contact Mr. Özgünes for instance. Now, it is important to find a system where we can guarantee whistleblowers their career and their normal lives. The PS recently submitted a proposal to the Brussels Parliament regarding this matter. Hopefully it will push for more positive change.
Q: To internally report a malpractice is not easy, to publicly blow the whistle, is an even more difficult decision. What motivates and/or holds people back to do so?
Mr. T. Gillis: People expect their leaders to solve deontological problems. When they report internally, they believe in their organisation. If those signals are ignored, the risk increases that employees become ill from working in an environment that does not correspond with their own values. It also encourages people to report externally.
Mr. M. Gillis: A culture of trust is very important as well as a reporting mechanism that is well communicated and accessible, with guarantees of non-retaliation. The company culture must also ensure that the importance of ethical behavior is promoted and emphasized on a regular basis. Further, is preferred, that whistleblowers have the option to report in anonymity/confidentiality. At Engie, those elements are considered very important. If not, it is likely to easily shift into a situation where people do not report to protect themselves. This is obviously a place where organisations do not want to be.
Dr Vandekerckhove mentions the difference between anonymity and confidentiality (when reporting is not anonymous, but will not be disclosed).
Q: Are whistleblowers able to assess the risks they take?
Prof Verhage: Currently, it is very complicated for whistleblowers to assess what the effects will be on themselves, their colleagues, their organisation, their families. One will never be fully able to predict the consequences, as there can be many, but it would help if individuals would have a clear view on the different steps in the process.
Mr. T. Gillis: A whistleblower expects his/her reporting to be received positively. But, the situation can take a different turn and is by then out of their control. It happens that the hierarchy turns against the whistleblower, or the person is excluded from the professional group he/she is part of. In large organisations, one can look for a transfer to take the person out of the precarious situation. In structures with less than 300 staff, it is more complicated to offer this type of protection to the whistleblower. The group dynamics in response to a whistleblower can be strong and very difficult.
Dr Vandekerckhove mentions that the situation Mr. Gillis described is similar in other sectors.
Q: Why is it extra difficult for individuals external to your organisations to report malpractices?
Prof Verhage: The term that is used today, is ‘bell ringers’ which does not yet have a translation into Dutch. Their situation is more complicated as their motives are often different. Often, a financial interest is involved and the level of access to information is not the same as for a whistleblower. Research states that one of the most important motives of bell ringers is their frustration over unfair competition through unfair play of their colleagues or competitors. This is an important difference with whistle blowers.
Q: Should anonymous whistleblowing be encouraged?
Mr. Özgünes: Anonymity makes it difficult to assess the motives of the whistleblower. Is he/she looking for revenge or reporting out of ethical principles, defending the common good? Mr. Özgünes is therefore not in favour of anonymous whistleblowing.
The site Nieuwsleaks.be, from VTM, offers the option to report anonymously in a secured environment. The server for instance, is not in Belgium. One can enter anonymous contact details and chat with a journalist without disclosing an identity. Pictures, documents or videos can be uploaded. After 14 days, the system automatically erases all traces of the report. Mr. Özgünes adds to this explanation, that users must install a ‘tor browser’ to use the system. (A tool that is most commonly used by criminals and other groups that like to stay away from daylight). This is an uncomfortable thought for people that want to report a malpractice. A final remark is that whistleblowers who go to the media, often have quite a history behind them. The press is their last resort. Anonymity is in those circumstances very difficult. Often, persons involved can easily trace back the source without the name being disclosed.
Dr Vandekerkchove referred to a trade secrets directive that was implemented last year which caused investigative journalists to stress the importance of protection of their sources.
What is the pressure like in investigative journalism?
Mr. Özgünes: Because of scandals around the Olympic Games, Panama Papers, cases in the gambling industry, investigative journalists started to associate internationally and look for each other’s support. The risk in this profession is quite high. Based on a source, one starts to investigate - uncertain about results. If the case becomes a ‘story’, it always creates turmoil, with litigations, etc.
Q: What is an effective reporting system?
Prof Verhage: The ideal system has three components: internal, external and the media. It is important not to only focus on the reporting system. Potential whistleblowers must have a clear idea of the values and the norms of the organisation. Referring to the basic principles as in Transparency International’s guidelines, Prof Verhage also mentions that a correct system offers all elements of procedural justice, transparency, feedback and clear explanations. She adds that the system must be of such a quality, that whistleblowers are encouraged to use it again if needed.
Mr. Özgünes: Support for the whistleblower is very important. When a journalist has reported a case based on whistleblowing, the day after his/her professional life focusses on new news items. There is no professional support for whistleblowers to help them to get their life back on track. Journalists often note they seek for emotional support, but it is not possible for the profession to fill that role. Whistleblowers deserve to be better respected and protected, as some of them are even facing threats.
Q: Should whistleblowers that act for the common good be protected?
Mr. T. Gillis: The trade unions can function as an effective control mechanism as well. Employers can learn a lot from them. It is also within their mission to defend the common good and in Belgium a lot of trade unions are well organised and have good structures. They also report to the outside world, but about cases and facts rather than about individuals.
Dr Vandekerckhove acknowledges that trade unions should not be forgotten, although he also commented that some have more solid structures than others.
Mr. M. Gillis: We should not aim for a system where whistleblowers are rewarded because this may create an incentive to come up with phony stories. However, rigorous compensation for lost future earnings should be granted to someone who has served the common interest by blowing the whistle and was subsequently rejected by the organization he or she worked for.
Mr. Özgünes: Scientists can also play an important role in evidencing facts. A good example is to do research on software that is used for emission tests.
Prof Verhage: Small rewards for whistleblowers have proven to be counterproductive. It leads to many ‘low quality’ reports. It also eliminates part of being able to do what is morally right. As Mr. Gillis mentioned, Prof Verhage agrees a compensation for lost earnings is the right solution.
Mr. T. Gillis: It should be underlined that in today’s digital world, unethical practices come to the surface sooner or later. It becomes more and more difficult to keep things ‘under the carpet’. Further, for the new generation, values are important. To attract young people with potential, an ethical culture is vital.
Questions from the audience
To Mr. T. Gillis:
Q: Police officers often work in twos when they are on the road. They must trust and count on each other. In such a situation, how can one encourage to blow the whistle?
Mr. T. Gillis: We do not have exact numbers for whistleblowing, they are included in the statistics of filed complaints. In the deontological training, we insist on the importance of integrity at work. If malpractice is kept under the carpet, one day it will come to the surface and have a negative effect both on the initiative taker as on the person who kept silent.
To Dr Vandekerckhove and Mr. M. Gillis:
Q: The focus is very much on the whistleblower. Is it not important to shift the attention to the malpractice itself and keep the whistleblower in the shadow?
Both Dr Vandekerckhove and Mr. Gillis fully agree with the comment. It is important to not focus on the motive of the whistleblower, but to verify whether the information is true or not. Mr. Gillis adds that the protection of the whistleblower should always be a key attention point.
Q: Protection of whistleblowers is often discussed. In practice, it often implies legal procedures that take years. What is your view?
Prof Verhage: This is an important issue. Beforehand, a whistleblower cannot judge how long his/her journey will be. There are also effects under the surface, that are difficult to capture. Not only formal support is needed, whistleblowers are often confronted with harassment, exclusion, that create undercurrents of tension. It is difficult to protect whistleblowers from such effects.
Dr Vandekerckhove adds that Tom Devine, who has represented whistleblowers in court for 35 years, states that a key element in the law is a provision of interim relief based on the plausibility that the whistleblower has been retaliated against.
To Mr. T. Gillis and Mr. Özgünes:
Q: Being a whistleblower myself, the debate did not touch upon two important aspects. The government and the magistrates. When I blew the whistle, the prosecutor refused to accept an anonymous report. After that moment, there has been no form of protection for me at all. What is your view?
Mr. T. Gillis: When a report is filed with Comité P – “Comité permanent de contrôle des services de police” -, one can be guaranteed anonymity. If the case becomes a legal intervention and protection of the whistleblower cannot be guaranteed, the system fails.
Q: How can a whistleblower control the procedure? If a problem is solved internally, a judicial procedure with all the consequences attached to it can be avoided.
Prof Verhage: What is the difference between a complaint and a report? When a complaint is made filed with Comité P, the internal phase is closed and one enters the complaint procedure. It is the border between internal and external whistleblowing.
Mr. Özgünes adds: Referring to the statement earlier “Would you publicly blow the whistle yourself?”, several cases show us that keeping a low profile is incentivised in Belgium. In fact, a whistleblower has no rights. Like the lady in the audience this evening, external whistleblowers often lose their job and have to face years of litigation. After a testimony in criminal proceedings, one can get a new identity, move abroad and start a new life. This might be a solution for whistleblowers as well.
Concluding the debate, Dr Vandekerckhove mentioned that the Irish whistleblower legislation is an interesting example to study.
Mr. Guido De Clercq, Executive Director of Transparency International Belgium, thanked Dr Vandekerckhove and the panelists for their valuable contribution to the debate. By candidly addressing many different elements, we all gained important insights. It is with those insights, that Transparency International can continue to advocate for better protection of whistleblowers in Belgium and hence a more transparent and fairer society. A word of thanks was also addressed to Crimilumni Gent for the fruitful and pleasant collaboration.
Those who would like to follow TI’s activities on whistleblowing or other topics related to transparency and anti-corruption, were encouraged to stay tuned via the website, social media channels or by becoming a member of Transparency International Belgium.
Hanneke de Visser, 04/04/2017