Enactment of legislation towards transparency, legitimacy and credibility

Panos Argyrides*

The significance of Whistleblowing concerning the existence and preservation of legal and ethical practices/ activities within Public and Private Sector Organizations”.

The phenomenon of Globalization and the financial recession that most countries experience today are the main causes/factors that have led to the weakening and serious damaging of societal institutions and values and have also affected negatively an Organization’s legitimate activities. As it is mentioned the practical usage of whistleblowing reveals the commission/commitment of certain illegal acts within an Organization and therefore its strengthening and promotion are essential and of high level priority.

Whistleblowing is a British term which derives from the tendency of British law enforcement officers to blow the whistle whenever they observed the commission of a certain crime in order to alert the public.

Furthermore, whistleblowing is the disclosure of information by Organization members/ employees regarding illegal, immoral, improper activities/acts within the Organization to the appropriate Authorities.

As it is stated the use of whistleblowing involves the coexistence of the following four elements:

(a)  The employee who reveals/discloses the information regarding the illegal acts within the workplace.

(b)  The report of the complaint concerning the specific violation.

(c)  The violating parties might be either the Organization as a whole, a specific person or a group of people which are employed in the relevant Organization.

(d)  The Authority to which the concern is raised by the whistleblower.

According to the definition, a whistleblower is an employee of an Organization who reveals information and reports incidents/ facts concerning illegalities within the Organization. In addition, an internal whistleblower exposes the information to persons within the Organization (i.e. Directors/Supervisors) whereas an external whistleblower exposes the information to an External Authority (i.e. Governmental Authorities, Police, Office of the Attorney General).

Studies indicate that a whistleblower usually possesses the following characteristics:

(a)  High level of professionalism

(b)  Prestigious Job Title/Position

(c)  Long –term work

(d)  Strong trust towards the Organization – Belief that the Organization will respond positively to the concern which is raised.

As it is above mentioned, the effects of whistleblowing vary depending on each case and are the following:

a)    The correction and termination of illegal/unethical activities within the Organization.

b)    Possible sanctions and retribution against the whistleblower.

c)    Taking of measures by the whistleblower in order to protect himself/ herself from the violators.

d)    Prevention of similar unethical activities in the future.

Furthermore, an Organization’s top management might usually respond in the following ways once a concern is being raised:

a)    Full ignorance towards the whistleblower’s complaint.

b)    Imposition of sanctions on the employee in order to be discouraged.

c)    Doubt and Reservation regarding the whistleblower’s disclosure of information.

d)    Possible dismissal or disciplinary action against the whistleblower.

e)    Recognition and rewarding of whistleblower.

For many years whistleblowing was considered as an act that conflicted (was conflicted) with an Organization’s best interests. Some ethicists stated that whistleblowing and loyalty towards the Organization were contradictory terms and additionally a whistleblower was seen as a trador and an untrustworthy employee.

I would like now to emphasize the employee’s dilemma and concerns regarding the disclosure of illegal acts and malpractices due to the fact that the person might get fired, might be ostracized and might suffer disciplinary action/retribution. Having said this I would like to stress/outline the significance of the existence of an effective legislation and legal system regarding the encouragement and protection of a whistleblower.

Efficient US and UK whistleblower laws are the following:

(a)  Whistleblower Protection Act, 1989.

(b)   The Sarbanes- Oxley (SOX) Act, 2002.

(c)  The False Claims Act

(d)  Paul Revere Freedom to Warn Act, 2002.

(e)  UK Public Interest Disclosure Act, 1989.

Unfortunately studies indicate that the existing whistleblowing legislation in Cyprus is not specialized and complete. Furthermore, according to the conclusions drawn by the relevant Report “Providing an Alternative to Silence: Towards Greater Protection and Support for Whistleblowers in the EU” that was conducted by “Transparency International” regarding the whistleblowing legislation in Cyprus it was found that public- sector whistleblowing is protected in a more complete and effective way than private sector whistleblowing and as an outcome it is easier and more rational for a public sector employee to disclose information as opposed to a private sector employee.

The protection of a public sector employee regarding whistleblowing is guaranteed by the Public Service Law (Law 1/90, Article 69A), Provisions and Parts of Criminal Code / Cap. 154 and possibly by the General Principles of the Administrative Law (N158(I)/99). More specifically in Article 69A of Public Service Law as amended, it is stated that when an employee becomes aware of an illegal act that is committed by his/her colleague he/she is obliged to report this in writing. Due to the fact that this specific provision discourages and prevents an employee to expose the information, and after the criticism of the GRECO Assessment Report, an instruction was adopted which allows the raising of the concern orally.

Moreover, the protection of a whistleblower in the private sector is guaranteed by the Unfair Dismissal Law (Law 24/67, as amended later) which is considered non-specialized, uncertain and ineffective.

The conclusion that can be drawn, based also on the above mentioned Report on Cyprus, is that it is essential and of high priority for the Appropriate Authorities and the Government to engage in the necessary acts towards the strengthening and modernization of the Legislative Framework regarding the encouragement and more thorough protection of Public and Private Sector Whistleblowing. At the same time and as it is mentioned above this will promote and establish the principles of transparency, legitimacy and credibility with regards to an Organization’s activities.

References:

(a)  Jubb, P. 1999,“Whistleblowing: A Restrictive Definition & Interpretation”.

(b)  Dasgrupta& Kesharwani.2010, “Whistleblowing: A Survey of Literature”.

(c)  Dworkin, T & Baucus, M.1998, “Internal vs. External Whistleblowers: A Comparison of Whistleblowering Processes”.

(d)  Vandekerckhove, W, 2009, “European Whistleblower protection: tiers or tears?”

(e)  Miceli, M.& Dworkin, T. & Near, J, 2009, “A Word to the Wise: How Managers and Policy-Makers can Encourage employees to Report Wrongdoing”.

(f)   Banisar, D.2011,“Whistleblowing: International Standards & Developments”.

(g)  Dworkin, T.2007, “SOX&WHISTLEBLOWING”.

(h)  Glaser, C. “Whistleblowing: What’s Gender Got to Do With It?”

(i)    Mesmer-Magnus, J& Viswesvaran C. 2005, “Whistleblowing in Organizations. An Examination of Correlates of Whistleblowing Intentions, Actions and Retaliation”.

(j)    Goel K., R & Nelson, M. 2013, “Effectiveness of whistleblower laws in combatting corruption”.

(k)  Bowden, P. 2005, “A Comparative analysis of whistleblower protection”.

(l)    Verschoor, C. 2013, “Whistleblowers Need Encouragement, not Roadblocks”.

(m) Hunt, L. 2010, “The challenges Women Whistleblowers Face”.

(n)  Lewis, D & Vandekerckhove, W. 2011, “The content of Whistleblowing Procedures: A Critical Review of Recent Official Guidelines”.

(o)  Lee K. & Kleiner B. 2011, “Whistleblower Retaliation in the Public Sector”.

(p)  Committee on Legal Affairs and Human Rights, Council of Europe’s Parliamentary Assembly (PACE), Council of Europe, Report on the Protection of Whistleblowers, 2009.

(q)  Miceli, M & Near, J. 1984, “The Relationships Among Beliefs, Organizational Position, and Whistle-Blowing Status: A Discriminant Analysis.

(r)   Pemberton, S, Tombs, S, Chan, M & Seal, L. 2012, “Whistleblowing, organizational harm and the self-regulating organization”.

(s)   Tavakoli, A, Keenan, J & Karanovic, B. 2003,”Culture and Whistlebowing. An Empirical Study of Croatian and United States Managers Utilizing Hofstede’s Cultural Dimensions”.

(t)    Transparency International- Providing an Alternative to Silence: Towards Greater Protection and Support for Whistleblowers in the EU.COUNTRY REPORT: CYPRUS.

(u)  www.sigmalive.com ,9th July, 2013, pp. 1-8.

(v)  www.24news.com.cy, 7th October, 2013, pp.1-3.

(w)www.myKypros.com, 14th November, 2013, pp. 1-3.

(x)  www.kathimerini.com.cy, 14th November, 2013, pp.1-4.

(y)  www.protothema.gr, 28th May, 2013, pp.1-2.

(z)   newpost.gr, 21st April, 2012, pp.1-3.

 

* Criminologist – External Researcher/Cyprus University of Technology (TEPAK)Transparency International Cyprus

Argyrides P. (2014) Enactment of legislation towards transparency, legitimacy and credibility, Accountancy Cyprus, Vol. 114, p86-87