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Whistleblowers became an important tool for regulators around the world in discovering corporate misconduct. Regulators in several jurisdictions have been revisiting local enforcement policies with the aim of boosting employees’ motivation to step forward and share valuable tips on corporate misconduct with regulators. Most notably, the Dodd-Frank Whistleblower Program established in August 2011, which encourages whistleblowers’ tips through award payments and enhanced protection against retaliation, turned out to be a successful program, producing 3001 tips in the 2012 fiscal year and 3,238 tips in the 2013 fiscal year (see the U.S. SEC 2013 Annual Report to Congress on the Dodd-Frank Whistleblower Program). As reported in the November 2013 In context, the UK Home Office is currently also considering the adoption of an award whistleblower program.
Working to facilitate further whistleblowing policy developments, Transparency International (“TI”) issued a report on 5 November 2013 to guide policymakers on how to formulate new and improving existing whistleblower legislation. The report presents major principles to be considered by policymakers when designing whistleblowing policies.
Major principles included in the TI report:
- a whistleblower’s identity may not be disclosed without that individual’s explicit consent
- whistleblowers whose lives or safety are in jeopardy are entitled to receive personal protection measures
- whistleblower regulations and procedures should be highly visible and understandable within the workspace
- when reporting at the workplace does not seem practical or possible, individuals may make disclosures to regulatory or oversight agencies or individuals outside their organisation
- a wide range of accessible disclosure channels and tools should be made available to employees and government agency workers and publicly listed companies, such as advice lines, hotlines, portals, compliance officers, etc.
- where a disclosure concerns a matter of national security, official or military secrets, or classified information, special procedures and safeguards for reporting that take the sensitive nature of the subject matter into account may be adopted in order to promote successful internal follow-up and resolution, and to prevent unnecessary external exposure
- whistleblowers who believe their rights have been violated are entitled to a fair hearing before an impartial forum, with full right of appeal
- if appropriate within the national context, whistleblowers may receive a portion of any funds recovered or fines levied as a result of their disclosure
Corporations around the world are aware of the increased importance of managing the risks and opportunities embedded in whistleblowing. Although the TI report is primarily addressed to policymakers, this report, along with the report “Whistleblowing in Europe: Legal Protections for Whistleblowers in the EU“, also issued by TI this month (see separate item in this In context) may serve as an important toolkit in identifying major considerations to be taken into account when establishing internal whistleblowing policies and adjusting them to local legal requirements.