Pakistan urgently needs a law providing protection to whistle-blowers against losing their job and prosecution.
Recognising the role of whistle blowing in corruption-fighting efforts, many countries have pledged to enact whistle-blower protection laws through international conventions. And, ever more governments, corporations and non-profit organisations around the world are putting whistleblower procedures in place.
It is essential, however, that these policies provide accessible disclosure channels for whistle-blowers, meaningfully protect whistle-blowers from all forms of retaliation, and ensure that the information they disclose can be used to advance needed reforms.
Transparency International has been advocating for comprehensive whistle-blower protection laws. It must, therefore, be ensured that whistleblowers are protected, not prosecuted.
Whistleblowers play an essential role in exposing corruption, fraud, mismanagement and other wrongdoing that threatens public health and safety, financial integrity, human rights, the environment and the rule of law.
By disclosing information about such misdeeds, whistleblowers have helped save countless lives and billions of dollars in public funds, while preventing emerging scandals and disasters from worsening.
Whistleblowers often take on high personal risk. They may be fired, sued, blacklisted, arrested, threatened or, in extreme cases, assaulted or killed.
Protecting whistleblowers from such retaliation enables corruption to be exposed, while also enhancing openness and accountability in government and corporate workplaces.
The right of citizens to report wrongdoing is a natural extension of the right of freedom of expression, and is linked to the principles of transparency and integrity.
All people have the inherent right to protect the well-being of other citizens and society at large, and in some cases they have the duty to report wrongdoing. The absence of effective protection can therefore pose a dilemma for whistleblowers: they are often expected to report corruption and other crimes, but doing so can expose them to retaliation.
Transparency International works with whistleblower organisations and legal experts to implement and strengthen whistleblower legislation and raise public awareness of its importance.
As well as helping to serve the public interest, whistleblowing channels are in the best interests of organisations too, as whistleblowers can alert senior management to potential or actual misconduct and prevent further damage and future wrongdoing.
From the employer’s perspective, fostering an environment in which employees feel comfortable about raising concerns internally has proven to be an effective safeguard against risks such as financial loss, legal action and reputational damage.
Increasingly, the question for organisations across the public, private and non-profit sectors is not whether whistle blowing mechanisms are needed but how to ensure that they are designed, implemented and maintained effectively.
An organisation looking to answer this question can find information in a number of publicly available best practice guides and standards, issued by governments, institutions, commercial actors, NGOs and law firms, among others. Advice is also available from organisations specialised in providing whistle blowing services, both commercially and on a pro-bono basis.
A number of best practice guides and international actors use the term “whistle blowing” when referring to internal reporting, including the 2013 Transparency International principles for whistleblower legislation, 2011 OECD guidelines for multinational enterprises and the British Standards Institute’s 2008 whistle blowing arrangements code of practice.
However, given the negative connotations that the word “whistle blowing” can conjure, many guidelines instead use terms such as “speaking up”, “raising concerns” or making a “disclosure”.
In some instances, guidelines covering “organisational compliance” will also have advice on whistle-blowing mechanisms. It is worth noting that a disclosure and a complaint are different: a disclosure is defined as “provision of information as required under law or in good faith, regarding activities of a private individual, public official, company or organisation” whereas a complaint (within the context of whistleblowing) would be made, for example, about retaliation a whistleblower faces.
To help ensure that whistleblowers are afforded proper protection and disclosure opportunities, the principles presentedin this paper serve as guidance for formulating new and improving existing whistleblower legislation. They should be adapted to an individual country’s political, social and cultural contexts, and to its existing legal frameworks.
They also take into account lessons learned from existing laws and their implementation in practice, and have been shaped by input from whistleblower experts, government officials, academia, research institutes and NGOs from all regions. These principles are expected to be updated and refined as experiences with legislation and practices continue to unfold.
According to Transparency International’s first weekly newsletter of 2018and Daily Corruption News dated January 12 Luxembourg’s highest court quashed the conviction against Antoine Deltour in the LuxLeaks case ruling that his status as whistleblower could not be questioned.
Former PricewaterhouseCoopers employee Antoine Deltour was serving a six-month suspended sentence for leaking files related to tax-evasion schemes.
But Luxembourg’s highest court on January 11 rejected the sentence, ruling that Mr Deltour should have been recognised as a whistleblower.
The court upheld a conviction against his fellow leaker, Raphaël Halet.
It said Halet, who received a 1,000-euro fine, did not meet the whistleblower criteria.
“This decision is a significant step in the protection of whistleblowers in Europe,” Mr Deltour’s lawyer, William Bourdon, told AFP news agency.
“For the first time in Europe, a high court recognises the jurisprudence of the European Court of Human Rights,” Mr Bourdon added.
Mr Deltour was convicted of passing information on PWC clients to French journalist Edouard Perrin, who first broke the Luxleaks story on French TV in 2012, in collaboration with the BBC’s Panorama.
The scandal cast a light on how Luxembourg had helped large corporations slash their global tax bills.
It was the biggest leak of its kind until the Panama Papers this year showed how the rich and powerful use tax havens to hide their wealth.
On 5 November 2014, the Washington, D.C.–based International Consortium of Investigative Journalists (ICIJ) released LuxLeaks investigation. Eighty journalists from media organizations around the globe had been involved in collaboratively reviewing 28,000 pages of documents. The documents disclose tax rulings between Luxembourg and more than 340 companies worldwide aiming at reducing their tax payments. The Luxembourg Leaks provide insight into 548 tax rulings, dating from 2002 to 2010.
The LuxLeaks revelations have had a worldwide impact, as ICIJ partnered its investigations with many media around the world.
After publishing LuxLeaks investigation, ICIJ was awarded one of the United States’ top journalism awards, the George Polk Awards in the Business Reporting category in February 2015. ICIJ was also awarded ‘Investigation of the Year’ for the LuxLeaks and SwissLeaks investigations at the Data Journalism Awards in June 2015.
LuxLeaks revelations shed light on the Luxembourgish tax regime, highly beneficial to multinational companies. Foreign corporations started settling in Luxembourg in large numbers in the early 1990s, when Luxembourg transposed in its national law a EU directive that allowed companies to pay taxes in a European headquarters country other than where their subsidiaries operated.
Tax rulings are set up by large accounting firms (the “Big Four”) for the benefits of their clients, multinational companies, and then approved by the Luxembourgish tax administration. Tax rulings include schemes to transfer revenues to Luxembourg. Transfer pricing is one of the mechanisms used by multinational corporations to reallocate profits. Intra-group loans are another possible mechanism: a company based in a high-tax country gives a loan at a low interest rate to a subsidiary in Luxembourg. The interest rate reflects the credit rating of the company group, for example 1%. The subsidiary in Luxembourg is typically set up with the purpose of loaning money at high interest rates, for example 9%, back to another subsidiary outside Luxembourg. Since the tax regime in Luxembourg is tailored to be advantageous for financial arm of multinational companies, the profits generated there are taxed at very low rates. Such mechanisms are effective means to erode tax bases in countries with high tax rates and to shift profits to countries where they are less taxed.
In many cases the companies’ presence in Luxembourg is only symbolic. For instance, 1,600 companies are registered at the same address – 5, rue Guillaume Kroll – in Luxembourg.
The TI is said to have followed LuxLeaks whistleblowers Antoine Deltour and Raphaël Halet since 2014 when they blew the whistle on aggressive tax avoidance schemes by corporations in Luxembourg.
The revelations had sparked international outrage and reform efforts from governments and global institutions alike. But Deltour and Halet faced criminal prosecution, fines and the threat of imprisonment.
While the court’s recognition of Deltour’s role as a whistleblower is a positive step, the case must now be referred back to the Court of Appeal.
Meanwhile, Halet’s conviction was upheld – the court did not recognise his status as a whistleblower and he now intends to take his case to the European Court of Human Rights.
For both men their long legal battle is still not over but it is a battle that should never have begun.
Time and time again, one sees evidence that whistleblowers provide a vital public service. In Ireland, according to TI,police whistleblowers Maurice McCabe and John Wilson revealed serious wrongdoing in the way traffic laws were being enforced which had lead to seven fatal road accidents and cost the taxpayer €1.5 million a year. In Italy, Andrea Franzoso’s revelations showed how the head of a transport company had embezzled €350,000 of public money. In Slovakia, Zuzana Hlávková exposed corruption at the heart of the Slovak Ministry of Foreign Affairs. They all faced retaliation for their actions.