Author Name:   gauravsharma

Country success is not only dependent on the economic progress; it should be coupled with effective governance and transparency in the administration of the government. Both Good governance and transparency are inseparable twins which must co-exist together...

‘The Public Interest Disclosure and Protection to Persons Making the Disclosures Bill, 2010’ - Is the scope of the proposed legislation on public interest disclosure is sufficient?

The history and experience of most nations show that no matter a country’s level of development, while there is government, there will always be some degree and variation of corruption, with officials using public office for private gain. Creating effective governance in the country is a complex matter. Country success is not only dependent on the economic progress; it should be coupled with effective governance and transparency in the administration of the government. Both Good governance and transparency are inseparable twins which must co-exist together. Improving Governance is a part of a development process. It is argued that corruption can be curbed by systematic changes in governance through introducing participation, transparency, accountability and probity in administration. The right to good governance is also considered as an essential part of the citizen’s rights that one can expect from the government. Accordingly, a number of initiatives have been taken by the government to incorporate citizen’s concerns as inputs in the formulation of policy as well as in the quality and reliability of services. These can be brought through various tools, including the Citizens’ Charters; Right to Information, e-Governance and new proposed one is law on whistle blower protection. Law on whistle blower and his protection is a welcome step towards better good governance and transparency in India. Whistle blowing is the act of disclosing information by an employee or any stakeholder about an illegal or unethical conduct within an organisation. It is highly important that people who are willing to fight against corruption in both public and private sector, should be protected by law and that their interest are safeguarded.

2. Need for Legislation on protection of whistleblower
Corruption is a social evil which prevents proper and balanced social growth and economic development. One of the impediments felt in eliminating corruption in the Government and the public sector undertakings is lack of adequate protection to the complainants reporting the corruption or wilful misuse of power or wilful misuse of discretion which causes demonstrable loss to the Government or commission of a criminal offence by a public servant. The Law Commission of India had in its 179th Report, inreralia, recommended formulation of a specific legislation titled "The public interest Disclosure (Protection of Informers) Bill, 2002 to encourage disclosure of information regarding corruption or maladministration by public servants and to provide protection to such complainants. The Second Administrative Reforms Commission in its 4th Report on "Ethics in Governance" has also recommended formulation of legislation for providing protection to whistleblowers. The Government of India had issued a Resolution No. 89, dated the 21stApril, 2004 authorising the Central Vigilance Commission as the designated agency to receive written complaints from whistle-blowers. The said Resolution also, inter alia, provides for the protection to the whistle-blowers from harassment, and keeping the identity of whistleblowers concealed. It has been felt that the persons who report the corruption or wilful misuse of power or wilful misuse of discretion which causes demonstrable loss to the Government or commission of a criminal offence by a public servant need statutory protection as protection given to them by the said Resolution of the Government of India would not suffice.

There have been multiple instances of threatening; harassment and even murder of various whistleblowers due to which there is a crying need of legislation in this area arises. There are so many murder cases of whistleblower reported in the media which becomes a matter of concern for the government to come up with the law on the protection of whistleblowers. Some of them are mentioned as follows:

Case 1: The Satyendra Kumar Dubey murder case, 2003 had triggered off great demands for a Whistle-blower Protection Act, but basically it was a war fought by media alone. Late Mr. S.K. Dubey was working as deputy general manager in National Highway Authority of India, and had written a letter to the then Prime Minister Shri Atal Vajpayee complaining of the corruption which was going on in a particular project. The government kept silent on the issue and the ends of justice could not be met with. However the whole case certainly did bring in the limelight the entire “protection of whistleblower‟ issue. The case was supported by many NGO‟s and Voluntary Organizations. “No other incident has brought the demand for a Whistle Blowers Act into such a sharp focus as Dubey’s case did and yet nothing happened” What the legislature has to realize is that it is not a matter of one Mr. Dubey, there are thousands of such cases every single day in India but people are reluctant to raise their voice as they are aware that there is no law to protect their interests. The need of enacting legislation on whistle-blower protection is at an all-time high and the government as well as the legislature should work upon it. Our legislature should take effective steps in this direction as have been taken by many countries now and provide legal safeguards to people who are willing to blow the whistle. Such a step would certainly lead to if not a corruption free state; at least it would lead to a right minded state. The government should ensure that there are no more cases like that of Mr. S.K. Dubey who lost his life for he was a responsible citizen of this country. It is astonishing and quite worthwhile to take a look at the steps taken by the legislatures of certain countries in order to regulate the functioning of whistle blowers and their security.

Case 2: Manjunath Shanmugam working with Indian Oil Corporation (IOC) was a graduate of the Indian Institute of Management, Lucknow. He refused bribes and ignored threats to his life in his fight against adulteration by the petrol pump owners. He paid the price. He was shot dead on 19 November, 2005 allegedly at the behest of corrupt petrol pump owners.

Case 3: A Karnataka official SP Mahantesh, said to be a whistle-blower in controversial land allotments by societies was murdered in May 2012. Mahantesh was working as Deputy Director of the audit wing in the state’s Cooperative department and had reported irregularities in different societies involving some officials and political figures.

Case 4: A senior police officer alleged that Mayawati's government was corrupt and had embezzled large amounts of money. Shortly thereafter, he was sent to a psychiatric hospital.

So in the wake of these murders, activists are seeking a quick passage of the Whistleblowers Protection Bill in Parliament. The demands are that a law should be framed to protect whistleblowers, facilitate the disclosure of information and uncover corruption in government organisations and ultimately need was felt to come up with this legislation.

3. Whistleblower Protection in India – Background
A bill for protection of Whistleblowers was first initiated in 1993 by Mr. N. Vittal (the then Chief Vigilance Commissioner). In December 2001, Law Commission recommended that in order to eliminate corruption, a law to protect whistleblowers was essential and submitted its report on ‘Public Interest Disclosure Bill’ to Mr. Arun Jaitley (then Minister of Law, Justice and Public Affairs) along with the draft bill. In January 2003, the draft of Public Interest Disclosure (Protection of Informers) Bill, 2002 was circulated. The murder of Satyendra Dubey in 2003 for exposing corruption in NHAI and the subsequent public and media outrage led to the demand for the enactment of a whistleblower’s bill. Following the event, in 2004, the Supreme Court directed that machinery be put in place for acting on complaints from whistleblowers till a law is enacted. Government of India notified a resolution to enable Central Vigilance Commission to receive complaints of corruption for Central Authorities in May 2004. Right to Information Act was notified in October, 2005. In 2006, The Public Services Bill 2006 (Draft) stated that within six months of the commencement of the act, the government must put into place mechanisms to provide protection to whistleblowers. In 2007, the report of the Second Administrative Reforms Commission also recommended that a specific law be enacted to protect whistleblowers. India is also a signatory (not ratified) to the UN Convention against Corruption since 2005, which enjoins states to facilitate reporting of corruption by public officials and provide protection against retaliation for witnesses and experts. On August 26, 2010 Union Minister of State for Personnel, Public Grievances and Pensions Prithviraj Chavan introduced the Public Interest Disclosure and Protection to Persons Making the Disclosure Bill, 2010, or the Whistle-blower Bill, in the Lok Sabha. Since 2010, at least 12 RTI activists have been murdered for seeking information to “promote transparency and accountability in the working of every public authority” of India.

4. Position of whistleblower law in various countries
Importance of law on whistleblower and his protection has also been felt by the International community. Most of the countries have already passed legislation on this aspect. Therefore an overview of global legislation and conventions is vital.

Ø Whistleblowers’ protection under United Nations Convention against Corruption (UNCAC): Enforced in December, 2005 the Convention has 140 signatories and amongst them 93 states has ratified the provisions. Article 8, 13 and 33 of the Convention enumerate the duties of public officials to report matters in case of non-performance of functions by other officials. It further lays protection regime for honest reporters and ensures the maintenance of their anonymity.

Ø Whistleblowers’ protection under OECD Convention on Bribery of Foreign Public Officials in International Business Transactions (OECD Convention): Ratified by 37 nations, the Convention aims “to address the supply side of bribery by covering a group of countries accounting for the majority of global exports and foreign investment.” Whistleblower regulations are a core part of the Convention where countries are mandated to establish complaint procedures, and to protect whistleblowers in the public and private sector. It is to be noted that India has not ratified this Convention.

Ø Position in U.S.A: After the collapse of giant corporate firms like Enron, WorldCom and Arthur Anderson, the American Congress passed the Sarbanes-Oxley Act in the year 2002. The main aim of the Sarbanes-Oxley Act is to meet absolute accuracy in financial statements. The Act has also given great importance to whistle-blower protection for employees of publicly traded companies. The Act strongly condemns retaliation against whistleblowers and it also encourages the act of whistle blowing. The Sarbanes-Oxley Act mostly deals with public companies and all of their employees are covered under the statute but eventually the employees of the private companies are also covered under Section 1107 of the Sarbanes-Oxley Act, 2002. The said section protects the employees of both public and private companies who make true disclosures which relate to the commission of a federal offence. The creation and implementation of Sarbanes-Oxley Act has had a great impact on global trade. The investors feel more secure as there is a law against corruption. The Act has certainly boosted the investment rate and USA even though not the first certainly has set an example for others to follow. Apart from the Sarbanes-Oxley Act there already is a Whistle-blowers protection Act of 1989, which protect federal employees who blow the whistle.

Ø Position in U.K: The United Kingdom also has a strict law for the protection of whistle-blowers. The Public Interest Disclosure Act 1998 which came into force in the year 1999 has been used on many occasions to protect the interests of whistle-blowers. The various details relating to disclosures and blowing the whistle have been intensively discussed in Part IV A of the Employment Rights Act of 1996. The legislature of U.K. has very clearly set out the rules for regulation and protection of whistle-blowers. It provides protection to all public, private and non-profit sectors.

Ø Position in Australia: Australia too is not behind in protecting the interests of its shareholders, it has enacted The Public Service Act of 1999. The act provides protection to the employees of the Australian Public Service, who blow the whistle. Various other countries have also enacted a Whistle Blowers Protection Act and in a way secured the interests of innocent shareholders. However in India there is a lack of non-profit organizations and voluntary organization who can lobby the rights of whistle-blowers until they are given legal status as there are in U.S.A and U.K. Despite the lack of proper legislation in this field and the irresponsibility of the legislature, there are certain companies who are resorting to whistle blower protection policy.

Ø Position in Canada: Legislation was enacted to create a new employment-related intimidation offence, protecting employees who report unlawful conduct within their company. But there is no legislation dealing with the private sector employees to speak out when their employer pays foreign bribes. Hence people like Allan Cutler ho exposed scams in federal contracts were never protected under legal regimes.

Ø Position in France & Germany: Even with exposure of Executive Life Scam in the year 2004 in France, no specific law governs in France. Similarly, two bills are pending before Bundestag in Germany regarding the civil servants approaching the prosecution directly, instead of their management. But the protection with regard to private sector is still under consideration.

Ø Position in Japan & Korea: The Unfair Competition Prevention Law enacted in 2004 which came into effect in 2006, in Japan, protects whistleblowers who file complaints about foreign bribery. In Korea, Anti-Corruption Act protects whistleblowers in state-owned companies, but no law encourages whistle blowing or protects them against reprisals for exposing corruption in the private sector. Thus, the reporting of bribery in private sector remains abysmally low.

5. Position in India – proposed law on whistleblower protection
The Government of India has been considering adopting a whistleblower protection law for several years. In 2003, the Law Commission of India recommended the adoption of the Public Interest Disclosure (Protection of Informers) Act, 2002. In August 2010, The Public Interest Disclosure and Protection of Persons Making the Disclosures Bill, 2010 was introduced into the Lok Sabha, lower house of the Parliament of India. The Bill was approved by the cabinet in June, 2011. The Public Interest Disclosure and Protection of Persons Making the Disclosures Bill, 2010 was renamed as The Whistleblowers' Protection Bill, 2011 by the Standing Committee on Personnel, Public Grievances, Law and Justice. The Whistleblowers' Protection Bill, 2011 was passed by the Lok Sabha on 28 December 2011. The Bill is however currently pending in the upper house of Parliament, Rajya Sabha for discussion and further passage. The Bill was introduced in Rajya Sabha on 29 March 2012 by V. Narayanasamy, Minister of State for Parliamentary Affairs.

Ministry of personal, public grievances and pensions.
Legislative Progress:

5.1 The Public Interest Disclosure and Protection of Persons Making the Disclosures Bill, 2010 – An analysis
The preamble of the proposed bill says that the bill is proposed to establish a mechanism to receive complaints relating to disclosure on any allegation of corruption or wilful misuse of power or wilful misuse of discretion against any public servant and to inquire or cause an inquiry into such disclosure and to provide adequate safeguards against victimization of the person making such complaint and for matters connected therewith and incidental thereto.

The Bill was proposed with the following objectives in mind.

It has been decided to enact standalone legislation to, inier alia, provide-

(a) for bringing within the scope of the Bill, public servants being the employees of the Central Government or the State Government or any corporation established by or under any Central Act or any State Act, Government Companies, Societies or local authorities owned or controlled by the Central Government or the State Government and such other categories of employees as may be notified by the Central Government or, as the case may be the State Government, from time to time, in the official Gazette;
(b) adequate protection to the persons reporting corruption or wilful misuse of power or wilful misuse of discretion which causes demonstrable loss to the Government or commission of a criminal offence by a public servant;
(c) a regular mechanism to encourage such person to disclose the information on corruption or wilful misuse of power or wilful misuse of discretion by public servants or commission of a criminal offence;
(d) The procedure to inquire or cause to inquire into such disclosure and to provide adequate safeguards against victimisation of the whistle-blower, that is the person making such disclosure;
(e) Safeguards against victimisation of the person reporting matters regarding the corruption by a public servant;
(f) Punishment for revealing the identity of a complainant, negligently or malafidely.
(g) Punishment for false or frivolous complaints.

6. Whether Scope of Bill is sufficient?
The preamble of The Public Interest Disclosure and Protection of Persons Making the Disclosures Bill, 2010 read as:

“The bill is proposed to establish a mechanism to receive complaints relating to disclosure on any allegation of corruption or wilful misuse of power or wilful misuse of discretion against any public servant and to inquire or cause an inquiry into such disclosure and to provide adequate safeguards against victimization of the person making such complaint and for matters connected therewith and incidental thereto”.

1. The preamble of the bill itself narrow down scope of the bill by using the word complaints against public servants which means the complaints of corruption can be filed only against the public servants and not against the personals of private corporations. In India, the whistle blower policy is restricted to the public servants or in works connected with the Central and state governments and there exists no provision for corporate whistle blowers, except in clause 49 of the Listing Agreement.

2. Another reason why the scope of the bill is not suffecint is that the Bill defines the term public servant in a narrow way. The term public servant is defined under section 2 (i) of the proposed draft bill as follows:

"Public servant" means any employee of-

(A) the Central Government or any corporation established by or under any Central Act, any Government companies, societies or local authorities owned or controlled by the Central Government and such other categories of employees as may be notified by the central Government, from time to time, in the Official Gazette;

(B) the State Government or any corporation established by or under any State Act ,Government companies, Societies or local authorities owned or controlled by the State Government and such other categories of employees as may be notified by the State Government, from time to time, in the Official Gazette.

The above mentioned definition is to narrow which defeat the very purpose of the whistle blower bill. The definition given under the Indian penal code, 1860 and Prevention of corruption Act, 1881 must be adopted in the bill to broaden the definition of public servant and cover more and more government officials under it. The definition of public servant under these legislations is very broad in nature. The definition needs to be expanded to cover other public servants like members of the judiciary, legislature, council of ministers etc. This has also been recommended by the Department related Standing Committee on Personnel, Public Grievances, Law and Justice in its report presented on June 9, 2011.

3. The Bill covers only any complaint under the Prevention of Corruption Act, 1988; wilful misuse of power, and a criminal offence by public servant. It is important to broaden the scope of whistle blowing to cover not just offences related to corruption but also the cases related to maladministration and human rights violations. Specifically the bill should cover the accrual of wrongful gain to third party. It is important to broaden the scope of whistle blowing to cover not just offences related to corruption, criminal actions and/or misuse of powers or discretion etc. {Section 2(d)} but to other actions which have an impact on society (for example environmental destruction, threats to public safety or health). This has also been recommended by the Department related Standing Committee on Personnel, Public Grievances, Law and Justice in its report presented on June 9, 2011.Considering the widening of the scope of offences covered under the Act, it is not enough to restrict whistle blowing to only wrongdoing by employees and/or organisations. It would have to include any powers, provided there is reasonable apprehension that this individual has the capacity to harm the whistleblower in one or more of the measures covered under this bill. However, safeguards would have to be built in to ensure that this act is not invoked every time any complaint is made about anyone who could be abusive or could collectively threaten you.

4. Punishment for false and frivolous complaint: (Section 16) of proposed bill
The current bill provides for punishment for imprisonment for up to 2 years and a fine up to thirty thousand rupees. Punishment should be limited to a fine and the terms ‘false’ and ‘frivolous’ should be clearly defined to prevent misuse of this provision. The Department related Standing Committee on Personnel, Public Grievances, Law and Justice in its report presented on June 9, 2011 has recommended reducing the quantum of punishment. And at the same time Penalty for frivolous disclosures will discourage the persons reporting corruption. ‘Frivolous disclosure’ has not been defined anywhere in the proposed bill.

5. No Definition of whistleblower and ambiguity regarding its scope
Under the present bill it is not mentioned about who is whistle blower and there is no definition of whistleblower under it. Due to this a lot of ambiguity is being there regarding who is whistleblower? And what is the scope of definition of the term whistleblower? However contemporary foreign legislation like U.S.A, U.K, Canada, Australia, Korea and Japan provide an extensive definition of term whistleblower in their respective legislations.
Here are three major issues relating the scope of term whistleblower –
a. Whether people not working within an organisation would be considered whistleblowers if they expose wrongdoing in the organisation (or by individuals within the organisation)


b. Whether Right to Information Act users by virtue of their filing applications under the RTI Act with the purpose of exposing or preventing wrongdoing, as defined in this act, would be considered whistleblowers

c. Whether employees of non government organisations (private sector companies, NGOs etc.) who expose wrongdoings within their organisations would be considered whistleblowers.

6. No Definition of victimization
The term ‘Victimization’ has not been defined; making it highly susceptible to manipulation. No penalty for victimization has been prescribed. Punishment for revealing the identity of whistleblower is insufficient. Standing committee in its report also suggested that the term victimization should be defined in the Bill and whistleblower should be provided with sufficient protection to protect him from violence.

7. No separate special provision for the protection of the women whistleblowers
First of all provisions made for protection of whistleblowers is inadequate. Besides, there should have been separate provisions for safety of women whistleblowers as they will be more vulnerable to harassment. Time magazine dubbed 2002 the "Year of the Whistleblower," and named Watkins, Cooper, and Rowley as its "Persons of the Year." Their stories fuelled the observation that women are more likely to become whistleblowers not for the potential for fame and financial gain, but out of a sense of duty. Sherron Watkins was Enron vice-president who blew the lid on accounting scandals in 2001 which led to downfall of energy trading giant. Cynthia Cooper exploded bubble at WorldCom when she informed its board that the company had covered up $3.8 billion in losses through the prestidigitations of phony bookkeeping. Coleen Rowley was an FBI staff attorney who caused a sensation with a memo to FBI Director Robert Mueller about how the bureau brushed off pleas from her regarding investigation of Zacarias Moussaoui, later indicted as a 9/11 co-conspirator. So, scope of the bill should be widened by providing a separate special provision for the protection of the women whistleblower.

8. Scope of the bill is insufficient because it does not enable multiple points for receiving disclosures:
The whistleblowing legislation must encourage people with privileged information about wrongdoings, waste of public resource, hazardous practices, etc. to make public-interest disclosure before a wide range of authorities, and also to the media (which is a legitimate way of putting the disclosure into the public domain). This legislation must empower and mandate a wide range of authorities to receive public interest disclosure, property record them and quickly initiate corrective action. Does the proposed PIDP bill do this? No. PIDP empowers only central and state vigilance commissioners to receive public interest disclosure, and requires the whistleblowers to maintain strict confidentiality while submitting disclosure. In short, it goes against the whistleblower’s need for seeking quick and effective remedial measure and for putting the information in public domain. It puts the whistleblower at the end of a lengthy queue, frustrating the need for swift investigation and action. A major shortcoming of DIPP 2010 is that it ignores the need to make a large number of existing forums responsive to whistleblowers. It overloads everything onto the vigilance commissioners alone, thereby creating a system that is predestined to collapse and fall.

9. The bill does not offer clear remedial measures and protections
The whistleblowing legislation must offer realistic hope to people making public interest disclosure. The real power to make a difference lies at different nodes of the administrative framework. It lies mainly with the heads of relevant public authority and also law enforcement authorities. These authorities are the only persons who can take remedial measures within a meaningful time-span and also the one who can offer substantial protection to the whistleblower within his context and environment. They must be mandated to do so. Does the proposed PIDP bill 2010 do this? No. the bill recognises and mandates VCs, whose powers are the only investigative and recommendatory. Worse still, it puts heads of relevant public authorities on the defensive vis-à-vis the whistleblower and locks public servants and whistleblowers in an adversarial role. Thus far from offering remedial measures and protections, it creates resistance to remedial measures and endangers whistleblowers.

10. The two central things -- “public interest” and “protection” -- are not even defined in the definitions i.e. Section 2. So nobody knows what exactly constitutes a “public interest disclosure”, and nobody knows how exactly what “protection” a person making such a disclosure is supposed to receive under this Act. Other than a vague promise of confidentiality and a threat to punish those betraying the whistle-blower’s identity, the Act promises no protection.

11. The “person making public disclosure” mentioned in the title is defined in the narrowest possible sense as a mere “complainant”. Section 2(c) defines him/her as a person “who makes a complaint relating to disclosure under this Act”. Thus, the “person making public disclosure” against a larger systemic malaise is demeaned to a mere “complainant” pointing a finger at a public servant, so that he can be legally victimized. The duty of probing the motives and background of the “complainant” is then cast upon the “competent authority” i.e. CVC or SVC as the case may be. So the competent authority is empowered to: Firstly, put the complainant’s identity under a scanner to comply with Sec 4(1)(a): Secondly, demand supporting documents and use its civil-court like powers to summon his attendance at hearings as per Sec 6, Thirdly, threaten to dismiss his complaint as being “frivolous” or “vexatious” or otherwise not worth investigating as per sec u/s 4(6) OR Finally, find the complainant guilty of false and misleading disclosure, and award up to two years imprisonment and up to Rs 30,000 fine as per Sec 16. In other words, the whistle-blower who approaches the Vigilance Commissioners to help him do their job, namely, clean up the system, must do so at the risk of being branded as a criminal! This is on top of other practical risks that whistle-blowers already face.

12. Section 2(d) then defines disclosure essentially as a “complaint” that pertains to an offence under the Prevention of Corruption Act 1988, wilful misuse of discretion that causes loss to the government, and commission of a criminal offence by a public servant. The PIDP bill 2010 does not explicitly say in any section to who this complaint should be addressed, in order to be considered as a “complaint under this Act”. However, the definition of “competent authority” in Sec. 2(b) suggests that only direct complaints to Central and State Vigilance Commissions (CVC/SVC) will qualify for this definition.

13. The Bill perversely gives protection to corrupt persons. Section 3(6) expressly disallows anonymous complaints and tip-offs, no matter what evidence the anonymous complainant may be provide. By laying restrictive conditions for complaining and receiving protection and by specifying deterrent penalties and imprisonment to complainants in the event that their complaint “fails”, the Bill deters whistle-blowers from making a complaint to Central or State Vigilance Commission.

14. Section 3 (1) (b) excludes from the scope of such complaints the police force, where abuse of discretionary powers routinely happens.

15. Sec. 4(4) allows the CVC or SVC to disclose the complainant’s identity to the head of the department or organization where he may be working, and Sec. 4(5) shifts the onus of protecting his identity to this head. Worse still, after doing so, if the CVC or SVC is “of the opinion” that there are no “sufficient grounds” for proceeding with the enquiry, then, as per Sec 4(6), it shall close the matter. In such an eventuality, the whistle blower will be left exposed and in a deadly situation with no protection.

16. Further the scope is limited as protection can be sought only after a complaint to the CVC or State vigilance commission is made. This is not conducive for RTI activists who are threatened just by virtue of filing an RTI application, as their protection will not be sought till a complaint is registered by them. Terms like “Maladministration’ or ‘gross negligence’ which were proposed in the 2002 draft, do not find a place in the proposed bill.

7. Some suggested recommendations to broaden the scope of The Public Interest Disclosure and Protection of Persons Making the Disclosures Bill, 2010

Scope of the bill is not sufficient to deal with the present scenario relating to whistleblower protection in India. The bill clearly falls short of international practices. Narrow scope of the bill defeats the very purpose for which it has been proposed. Some suggested recommendations to broaden the scope of bill are mentioned below as follows:

1. Proposed bill scope may be broadened by its application to the private sector i.e. by covering corporate sector under it. At present Clause 49 of the listing agreement which is titled ‘Corporate Governance’ and lays down the principles of Corporate Governance that are required to be followed by the listed company. In addition to a list of mandatory requirements that a listed company is obliged to comply with, there are a few non-mandatory requirements that have been specified in terms of Annexure I D of the specimen listing agreement. One such non-mandatory requirement relates to ‘Whistleblower Policy’. So a requirement relating to whistleblowing policy is non-mandatory in nature and there is no compulsion on the companies to come up with this policy. Corporate whistleblower should also be covered under the bill and at the same time we have to make the mandatory whistle blower policy for the corporate India. 4th report of the second administrative reforms also recommends as follows in para 3.6.4 as follows:

a. Legislation should be enacted immediately to provide protection to whistleblowers on the following lines proposed by the law commission:

Ø “The legislation should cover corporate whistleblowers unearthing fraud or serious damage to public interest by wilful acts of omission or commission……….”

Govt. on one hand accepted in principle before the bill is introduced in the parliament that the corporate whistleblower will be covered under the bill. However whistleblower bill introduced in the loksabha des not cover the corporate sector at all. So, the propose bill shows the hollowness of this decision of the government.

2. Bill should provide broad definition of the term “Public servant” so as to cover many government officials in it. A standing committee of Parliament has recommended inclusion of cabinet ministers, the higher judiciary and all government organisations, including the armed forces, regulatory authorities in the Public Interest Disclosure and Protection to Persons Making the Disclosures Bill, 2010. This change in the bill widens the scope and ambit of the Bill.

3. Define a new authority called “INSPECTOR OF PUBLIC INTEREST DISCLOSURE” to investigate – The CVs and SVCs cannot be the nodal authority for PIDP 2010, because their functions and effectiveness is restricted by the CVC Act, 2010. The new authority must have a multitude of “inspectors” rather than a small number of “commissioners”. These inspectors must not remain seated in one office; they should be on the move, to visit various public authorities concerning the disclosure, and to ensure that these authorities take note of the disclosures and take the necessary remedial and protective actions.

4. Another suggestion in order to broaden the scope of the bill is that – firstly term whistleblower must be defined in the bill along with the categories of whistleblower that is covered under it. Due to non-availability of definition of whistleblower it is very difficult to identify who is whistleblower?

5. Define credit and reward system for whistleblowers: Parliamentary standing committee in its report suggests that the whistleblowers must be provided rewards. The Act must be put in place a mechanism whereby outstanding whistleblowers must be awarded with cash awards.

6. Present bill provides that the complaint shall be made directly to the CVCs and SVCs. But this restricts access especially to population in remote areas. So the ambit of the bill must be made broad enough to as to establish complaint receiving authority at various level of the system and to provide smooth and convenient system.

7. Provisions should be designed to enhance the protection of RTI activists. Even though an RTI activist cannot protect his identity as a whistleblower, safeguards should be made in case he perceives a threat to his life or intimidation to his family members. In the face of any such complaint filed by the activist, it should be an incumbent duty of the policemen to ensure that he/she is not attacked. Such a duty of ‘due diligence’ and ‘duty to act’ on security forces will create greater deterrence and prevent attacks on activists. Any shortcomings in the performance of the police should be made accountable to Lokayukta or Collector. In case of any unnatural death of such whistleblower activists, expeditious investigations should begin self-automated and should be probed by competent authorities.

8. The Competent Authority designated under the Act, should be monitored continuously as it is subjected to continuous political pressure. An apolitical transparent committee should oversee its activities and it should be incumbent on the Authority to file compliance reports to the Income Tax departments. With regards to the cases filed with the body, a database should be maintained which contains the records of number of complaints filed over a period (both genuine and vexatious), the investigation process against the department and outcome of the same, details of whistleblower etc.

9. It is suggested that the seat of the SFIO (Serious Fraud Investigation Officer) set up in the year 2003 under the aegis of the Ministry of Corporate Affairs should be given more teeth to bite. As this multi-disciplinary organization is already addressing several cases of corporate scams including the Satyam case, its power and functions should be expanded to investigate in the cases reported by the whistleblowers. A provision shall be made under the bill with respect to joint working of SFIO and CVC’s in case a whistleblower belongs to the corporate sector and he/she blows the whistle of corporate scam. This organization should be made responsible for disclosures of scams by the whistleblowers and hence the anomalies of disclosure to a CVC officer will get redressed as SFIO comprises of experts in the field of accountancy, forensic auditing, law, information technology, investigation, company law, capital market and taxation. The enhancement in the functions of SFIO is already being contemplated in the form of amendments in the Companies Bill and the Apex Court has also strengthened its authority in the case of “Common Cause (A Regd. Society) v. Union of India” 18th August 2010, to investigate bank frauds. The authority of such an officer is broadly interpreted in other nations like USA and India should adopt similar role to facilitate better investigation and prosecution in cases of corporate malpractices.

10. Section 3 (2) of the bill provides that Any disclosure made under this Act shall be treated as public interest disclosure for the purposes of this Act and shall be made before the Competent Authority. Conversely, this means that any public interest disclosure made before any other forum for vigilance, law-enforcement or justice, has no legitimacy for action under this act. So this sub section (2) of the bill needs to be changed.

11. Section 3 sub section (6) of the proposed bill provides that – “No action shall be taken on public interest disclosure by the Competent Authority if the disclosure does not indicate the identity of the complainant or public servant making public interest disclosure or the identity of the complainant or public servant is found incorrect or false.” It is suggested that this is a perverse clause. Even if the public interest disclosure made by an anonymous source is important and is supported with evidence, this clause ties the hands of the Competent Authority and actually forbids it from investigating and taking further action! This clause makes disclosure of complainant’s identity compulsory and not subject to the whistle-blower’s discretion. EXPLANATION: Given India’s past history of betraying the identity of whistle-blowers, it is natural for people to be afraid. So it important to allow anonymous complaints to be investigated if accompanied by substantial evidence. This clause actually forbids it.

12. “Proviso to section 4 (4) of the proposed bill Provided that if the Competent Authority is of the opinion that it has, for the purpose of seeking comments or explanation or report from them under sub-section (3) on the public disclosure, become necessary to reveal the identity of the public servant to the Head of the Department of the organisation or authority, board or corporation concerned or office concerned, the Competent Authority may reveal the identity of the complainant or public servant to such Head of the Department of the organisation or authority, board or corporation concerned or office concerned for the said purpose.” So the confidentiality is not absolute, but subject to the Competent Authority’s individual “opinion”. Please note that the CVC will not be penalized or imprisoned for betraying the whistle-blower’s identity. Very dangerous discretionary power, as it deeply affects the whistle-blower’s fundamental right to life and liberty. It is suggested that it should be removed from the proposed bill.

8. Concluding remarks:
The Public Interest Disclosure and Protection of Persons Making the Disclosures Bill, 2010 seems like a paltry gesture for protection of whistleblowers. It was uploaded on the website of Ministry of Personnel, Public Grievances and Pensions for receiving public opinions only after its introduction in Lok-Sabha so that the government can provide shoddy excuse of protecting parliamentary privilege for evading the responsibility to reveal the suggestions received and considered. This will help the government keep a significant stage of law-making away from the public gaze, even while keeping up the pretence of involving the public. The bill clearly falls short of international best practices. Important suggestions made in 179th Report of Law Commission, by 2nd Administrative Reforms Commission and Parliamentary Standing Committee were excluded, public opinions received were ignored. The bill has been passed by Lok-Sabha and transmitted to the Rajya Sabha for concurrence. Unfortunately it was stalled by the opposition on 29th March, 2012 by stating that the bill was highly technical, full of legal jargons and its provisions need further study.

REFERENCES:
# "Truth Silenced" pages on Satyendra Dubey Murder case". Rediff.com. Retrieved 8 September 2012
# Manjunath case: court commutes death sentence". The Hindu. Dec 12, 2009; "Manjunath murder: Death penalty commuted to life-term". Zee News. Dec 12, 2009.
# http://www.thehindu.com/news/states/karnataka/article3438966.ece, last visited 9 September 2012.
# "UP cop calls Mayawati’s govt corrupt, dumped in mental asylum - The Times of India", 5 November 2011. Last visited 15 September 2012.

The  author can be reached at: gaurav.25@legalserviceindia.com

Follow the Procedure Below To Submit Your Articles

Submit your Article by using our online form Click here
Note* we only accept Original Articles, we will not accept Articles Already Published in other websites.
For Further Details Contact: editor@legalserviceindia.com

File Your Copyright - Right Now!