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Monday, September 9, 2024

Whistleblowing: Ethical Dilemmas, Legal Protections, and Organizational Challenges

 By: Juan, Princess Sañata & Sonico, Maricel N.

Divine Word College of Laoag

Abstract:  

            Whistleblowing serves a vital function in promoting more transparent and accountable organizations by unveiling illegal and unethical practices. This paper explores the complex concept of whistleblowing, navigating not just the protection laws on a national and international level but also the personal and professional challenges that potential whistleblowers may face or the dilemmas that come with speaking up. It assesses the current whistleblower protection laws, such as the US Whistleblower Protection Act, the Dodd-Frank Act, and the European Union’s Whistleblower Protection Directive, while presenting also that these protections are not always effective since whistleblowers still face ethical dilemmas and challenges such as retaliation and emotional distress.

            In today’s modern era, social media and technology shaped the changes in the way whistleblowing can be exposed to the public, however, it imposed a risk to privacy and security. The paper also emphasizes the terrible reality that whistleblowers may face including being isolated from the rest of the group or subjected to reprisals, which shows that these practices can affect organizational ethics and public trust. To build a supportive environment and a culture where whistleblowers feel safe, the paper provides actionable recommendations in response to these challenges, including strengthening compliance programs and ethics training. Finally, it advocates for continuous legal reform, better implementation of existing protection laws, and cultural changes to guarantee that whistleblowing continues to be an effective weapon against corruption and promotes ethical behaviour in society.

Keywords: whistleblowing, legal protection, egoism, deontology, utilitarianism, organizational culture, retaliation, compliance, and ethics programs

Introduction

Our actions lead to consequences greater than ourselves that affect our health, safety, economic, and human rights. When it comes to corruption, its greatest prevention is revealing the truth. Unfortunately, not all the time employees are left to do the right thing due to a significant risk.

In 2015, Sustainable Development Goal 16, “Peace, Justice and Strong Institutions” introduced by the United Nations played a significant function in streamlining whistleblowing as an instrument in promoting transparency (Høedt-Rasmussen and Voorhoof 2018). In line with the mission of SDG 16, it recognizes whistleblowing in curbing corruption (Sørensen et al. 2020) through elevated reporting of illegal, dangerous, or unethical actions within both government and private sectors. Whistleblowing has contributed to bettering organizational culture by preventing or uncovering errors and accidents (Banisar, 2011), and strategy for boosting the effectiveness and sustainability of organizations (Önder et al. 2019). However, despite the initiatives and protection, when it all comes down to a real situation, the company is more in an advantageous position than the whistleblower. In addition, instead of feeling empowered, mishandled cases of whistleblowing further diminish the conviction of blowing the whistle.

Definition and Concepts of Whistleblowing

Whistleblowing encompasses a variety of aspects. According to Near, J.P. and Miceli, M.P. (1985), whistle-blowing refers to the act of an existing or former member of an organization discovering an illegal, unethical, or irregular behaviour in an organization and whistle-blowing to an individual or organization that may affect the behaviour. On the other hand, US consumer activist Ralph Nader (1971) described it as “An act of a man or woman who, believing that the public interest overrides the interest of the organization he serves, blows the whistle that the organization is involved in corrupt, illegal, fraudulent or harmful activity.” Similarly, Duska et al. (2011) defines whistleblowing as “the practice in which employees who know that their company or colleague is engaged in activities that: cause unnecessary harm; violate human rights; are illegal; run counter to the defined purpose of the instructions or the professions; are otherwise immoral informs superiors, professional organizations, the public, or some government agency of these activities”. Other academics like author Peter Jubb have focused on whistleblowing as mostly an element of free speech and the right of individuals to express dissent. According to him, it is a necessary public action that involves deliberate and voluntary disclosure. He also added that it is an act by someone with current or former privileged access to an organization’s data or information, addressing significant illegal activities or other misconduct—whether real, suspected, or anticipated—that the organization controls. This disclosure is made to an external entity capable of addressing the issue. In that sense, whistleblowing involves negative or sensitive information regarding potential misconduct in an organization (Lazar, 2022; Skivenes & Trygstad, 2010) which is why individuals who have a potential role in uncovering organizational fraud (Dyck et al., 2010) are hesitant due to the high risk it comes within the responsibility (Lee & Fargher, 2018; Mesmer-Magnus & Viswesvaran, 2005).

Upon presenting themselves, whistleblowers are confronted with unfair treatment and termination from companies. Regulators intervene by enforcing laws to minimize these risks and protect whistleblowers. In the Philippine setting, the Whistleblower Protection Act of 2019 acknowledges whistleblowers play a vital role in reporting improper conduct within public offices, thereby aiding in the fight against corruption and ensuring high standards of integrity. The proposed measure aims to enhance the protection, security, and benefits for whistleblowers who are admitted into a designated whistleblower protection program managed by the Whistleblower Benefits and Protection Council. Even though the legal framework of the policy continuously evolves and strengthens to protect whistleblowers, there are gaps and the effectiveness of these protections can vary greatly. Such protection must be meaningful and incorporated into organizational structures and policies (Fotaki, 2016). Some scholars believe that whistleblower protection law cannot be truly effective. For example, Martin (2003) argued that whistleblower legislation is often ineffective and can even create an illusion of protection that is dangerous for whistleblowers. He proposed that whistleblowers should focus on acquiring practical skills such as grasping organizational dynamics, gathering data, writing clear reports, forming alliances, and engaging with the media, rather than depending solely on official procedures, legal frameworks, or ombudspersons. He contended that these skills are central to the effectiveness of official procedures. Encouraging the development of these skills could be a more effective approach to empowering and safeguarding whistleblowers (Martin, 2003). This statement further emphasizes the heavy responsibility of the whistleblowers- this requirement adds to the individual’s burden, making the process of whistleblowing more daunting and intimidating that leading to discouragement in coming forward. 

The landscape for whistleblowers has evolved significantly over recent decades, influenced by various societal changes. Today, various web-based platforms are developed as way to deal with the challenges of whistleblowing. This technology is intended to improve the accessibility of the channels, confidentiality and anonymity protection, as well as report management. The existence of social media also contributed to whistleblowing practices, which some scholars refer to as virtual whistleblowing (Lam & Harcourt, 2019; Latan et al., 2021; Lazar, 2022). With internet technology and social media, any stakeholders (including employees) can share negative or sensitive information about companies online—and even anonymously—through employee review websites. Still, it is a double-edged sword, while it offers anonymity and reach, it can also potentially compromise security and privacy.

In the past, whistleblowing was associated with the concept of gaining information on revolutionary movements or political activities. Consequently, in some countries, the concept of reporting misconduct has become associated with negative connotations such as in the Czech Republic, Ireland, Romania, and Slovakia, “whistleblower” is associated with being an informant. In Bulgaria and Italy, it’s associated with being a traitor or spy while in Hungary, Latvia, Estonia, and Lithuania, it’s associated with being a snitch.

Therefore, the mistrust of whistleblowers is a learned behaviour passed down from families and communities which leads to the stigma of speaking up is life-threatening, and it’s safer to stay quiet.  Ultimately, the historic feeling that making a report even if it’s to report wrongdoing is “wrong” could contribute to fewer people blowing the whistle in these countries. Without widespread support for the idea that blowing the whistle is the correct course of action, many potential whistleblowers feel pressured to stay quiet. Therefore, corruption goes unchecked for longer, often putting people at risk.  

Theoretical Frameworks

Whistleblowing involves exposing unethical or illegal activities within an organization. According to Duska et al. (2011), when it comes to Egoism, individuals always act in their self-interest. This suggests that the decision to blow the whistle depends on what they can gain-- such as career advancement, recognition, incentives, etc. Conversely, if the action does not offer personal gain, there is no motivation to blow the whistle. For this reason, Egoism is generally rejected often because it promotes selfishness and disregard for others' welfare. On the other hand, Duska et al. (2011), also argued that recent mindset research has shown that self-interest and concern for the self are not entirely bad but it is worse when certain individuals start pushing their goals at the grief of another. However, egoists contend that if one does not look out for the self, who will? Therefore, the very nature of egoism undermines the moral and professional values typically associated with whistleblowing when it should be done in honour of the profession in the first place and not for self-advancement. Duska et al. (2011) state that even though professionals may not concur, there are times when they will be obliged to expose unethical secrets.

 Utilitarianism is an ethical approach that advocates the greatest good for the greatest number (Mill, 1863). He advocated that an action that brings about more good consequences is viable while an action that brings about bad consequences is harmful. (Duska et al., 2011). Therefore, if exposing wrongdoing prevents harm, protects public interest, or promotes justice, then the act of whistleblowing can be seen as morally right. This makes whistleblowing fits into the utilitarian framework of ethics because it is grounded on the consideration of the larger society and the greater good over the potential harm or discomfort experienced by a few individuals or organization

Deontology is based on the belief that if one acts to fulfil his desires then they are not acting out of a moral motive. There are two formulas Immanuel Kant articulated based on the principle of this theory. The first formula is that one should “act so that you can will the maxim of your action to become a universal law”. Therefore, whistleblowing is valid under the ethics of deontology if one wants it to be universally accepted as a moral act. The second formula is to “act to never be to treat another rational being merely as a means”. In the context of whistleblowing, by bringing to light the practices that harm individuals or the public, the whistleblower respects the dignity and rights of those affected by the unethical behaviour—unlike in egoism wherein the main concern is themselves or utilitarianism which centres on outcomes.

Legal Protections for Whistleblowers

            Whistleblower protection legislation aims to shield people from retaliation when they reveal illegal, unethical, or improper activity within corporations. These laws encourage the reporting of misconduct by providing legal protection to whistleblowers. Such protections' scope, effectiveness, and enforcement vary significantly across countries and regions. Here is an overview of some of the National and International laws in place to protect whistleblowers.

National Whistleblower Protection Laws

            The most advanced procedures for protecting whistleblowers are found in the United States. This includes the "Whistleblower Protection Act of 1989," which shields federal workers who provide information that demonstrates legal infractions, flagrant financial mismanagement, hazards to public health and safety, or other miscellaneous misconduct. Retaliation in the form of termination, demotion, or other unfavourable job measures is prohibited. Another is the "Dodd-Frank Act" which protects people from retribution and offers incentives to expose financial wrongdoing, including violations of securities laws. Anonymous reporting of infractions is permitted, and whistleblowers may be compensated with up to 30% of the fines obtained through legal action.

            The "Whistleblower Protection Directive" of the European Union ensures that whistleblowers have access to efficient mechanisms for reporting violations of regulations confidentially, both internally and externally. And these reports are appropriately looked into and handled by the concerned authorities and organizations. Whistleblowers are also protected against all forms of retaliation.

            The United Kingdom’s "Public Interest Disclosure Act of 1998" protects workers from detrimental treatment or victimization from their employer if, in the public interest, they blow the whistle on wrongdoing such as breach of legal obligation, danger to the health and safety of any individual, and damage to the environment. The Act protects most workers in the public, private, and voluntary sectors. 

International Whistleblower Protection Laws

            In Article 33 Protection of Reporting Persons of the “United Nations Convention Against Corruption,” each State Party shall consider incorporating into its domestic legal system appropriate measures to provide protection against any unjustified treatment for any person who reports in good faith and on reasonable grounds to the competent authorities any facts concerning offences established following this Convention.

            The “Council of Europe’s Recommendation CM/Rec(2014)7” has developed a legal instrument for protecting individuals who report or disclose information on acts and omissions in the workplace that represent a serious threat or harm to the public interest. The report analyses whistleblower protection frameworks in Council of Europe member states since the adoption of the Recommendation CM/Rec(2014)7 and identifies good practices and positive developments.

            The “G20 Anti-Corruption Working Group” established the High-Level Principles for the Effective Protection of Whistleblowers. These principles intend to establish, modify, or strengthen protection frameworks, legislation, and policies for whistleblowers and are intended to complement existing anti-corruption commitments and not weaken or replace them. The High-Level Principles offer flexibility to enable countries to apply them by their respective legal traditions effectively. The principles can also guide those responsible for setting up and operating protection frameworks for whistleblowers in the public and private sectors.

            These laws were designed to make whistleblowers feel safe and protect them from reprisals. However, its effectiveness may vary from different locations. The Whistleblower Protection Act and Dodd-Frank Act have been effective in the United States to expose wrongdoing, especially in the federal government. With the financial incentives offered by the Dodd-Frank Act, numerous whistleblowers have disclosed financial fraud. In Europe, the Whistleblower Protection Directive united the member states in protecting the whistleblowers. By creating a way for people to report issues internally, it has helped make things safer for whistleblowers. The Public Interest Disclosure Act in the UK has led to more whistleblowers stepping forward, particularly in both the public and private sectors.        

            Certainly, whistleblower protection laws have come a long way in promoting transparency and accountability but there is still much room for improvement. The extent of their effectiveness lies mostly on the strength with which these laws are enforced and their acceptance culturally as well as in how much legal protections different sectors get. Continued uniformity in the adoption of international practice and limitations around resources for protecting whistleblowers are ongoing challenges. Further legal reform, enhanced enforcement, and a shift away from the stigmatization of whistleblowing are necessary to make these laws more effective worldwide.

Challenges faced by the Whistleblowers

            As an employee of any organization or company, you are expected to become loyal to the company at all times, that is why whistleblowing has been a pressing issue inside and outside the organization when one commits this act specifically to your employer. And as a result of that action, whistleblowers often face different challenges.

            One common challenge is Retaliation, your employer might take revenge and fire you, harass you, or demote you from your current position in the company. However, since retaliation is illegal with all the whistleblower protection laws on hand, you can ask for legal advice from lawyers and fight for your rights. Another is that you may go through Emotional Distress. As a result of revealing your employer’s misdeeds, you may face criticism and discrimination from your employer and colleagues and this could result in panic attacks and depression on your part. Next, since the whistleblowing process is often too lengthy to be proven in court, this may become tough for you as you pay for expenses such as hiring a lawyer and attending court hearings and this might become harder on your part if your employer chooses to fire or terminate you. Whistleblowing also compromises trust since the company prefers if issues and concerns are addressed internally thus creating harmony and good relationships among employers, employees, and the staff. Another is the possibility of getting an unfavorable judgment on the wrongdoing you have filed against your employer. If you can keep up with the legal technicalities that the court may require you and if you could provide strong evidence to prove your claim. It might also become challenging for you to get employed in other organizations once they happen to know your background as a whistleblower in your previous company. Lastly, you may also experience gender-based discrimination especially if you’re a female whistleblower. This will cause you greater criticism for your actions. So, it would be best to contact first a whistleblower lawyer before coming out.

Organizational and Societal Impacts

Despite the encouragement and transparent communication regarding whistleblowing in organizations, once the deed of disclosing information on wrongdoings is executed, whistleblowers are isolated as being the “troublemakers” as their colleagues and superiors become progressively less friendly (Rothschild, 2008). In such a way, whistleblowing is perceived as a form of betrayal that leads to retaliation by the organization (Uys, 2008). Organizations maltreat whistleblowers through work-related retaliations such as blacklisting, constructive dismissal, transfers to another section, personal harassment, character assassination, and the implementation of disciplinary proceedings discrediting the employee (Glazer & Glazer 1989; Gummer 1985; Hunt 1995; MesmerMagnus & Viswesvaran 2005; Rothschild & Miethe 1994). These companies are the same organizations that advertise themselves with good values and ethics but dispute their principles. What makes it worse is that retaliation frequently takes place faster than protection, which places the employer at a strategic advantage (De Maria (2006). Miceli et al (2008) developed a model to understand the reason why organizations would retaliate against a whistleblower and provided insights on the constructive ways of facilitating whistleblowing by creating an organizational culture that discourages retaliation. He emphasized that it has something to do with compliance that strongly discourages wrongdoings which reduces the need for whistleblowing. This creates a perception of a receptive attitude toward dealing with complaints, thereby minimizing the likelihood of reprisals. If important values are not being shared by employees, it implies the organizational culture is weak and ethics are easily compromised (Dorasamy & Pillay, 2011). On the other hand, it could also be argued that “emphasis on compliance creates so much bureaucracy or overcontrols employees that it undermines the development of ethical values, good decision making and trust in management” (Miceli et al, 2008) but this approach can streamline in setting dominate organizational culture leading to consistent practice of values. This is further supported by Tsahuridu and Vanderckhove (2008) who argued that by institutionalizing employees into the ethical culture of the organization, the ethical autonomy of employees in the organizational context is enhanced. Hence, the environment for potential whistleblowing is more conducive. When values are enacted in an organization, it can be suggested that employees are less likely to fear retaliation.

            Whistleblowing plays an important role in promoting public trust and transparency. Brown et al. (2014) stated that the relationship between whistleblowing, transparency, and public trust is complex and nuanced. Whistleblowing exposes any misdeeds in an organization and is regarded as a critical instrument for transparency. A result of the study by the authors from Australia, the UK, and International surveys show that the public supports whistleblowing as part of transparency reforms. However, the public’s support of whistleblowing doesn’t necessarily mean that they don’t trust organizations, rather they see it as a corrective action to any wrongdoings. This highlights how whistleblowing as a transparency mechanism contributes to trust rather than as a substitute for it.

            Moreover, public whistleblowing such as to media is often seen as a last resort when internal mechanisms fail. This serves as a warning against any wrongdoing by organizations and helps build trust by ensuring that organizations are held liable.

Promoting ethical behaviour in the organization

            Whistleblowing might seem ethical since you as an employee have the moral duty to report any wrongdoing of your company. However, many employees hesitate to come out once they discover illegal activities in their organization, partly because they might find themselves struggling with ethical dilemmas and challenges they may face as a whistleblowers. That is why in creating a culture of ethics and transparency in an organization, ethics should be the top priority of a company from the very first day, so employees know and feel at ease to come forward if they discover something.

            To prioritize ethics, an organization can set up a compliance hotline where employees can report misconduct anonymously. Signage where employees can see when, where, and how to report. Another is the onboarding process of new employees, making ethics part of their training. These could help the organization create a culture of ethical behaviour and foster an environment where employees feel safe coming out. If you make ethics an integral part of your corporate culture, then there would be nothing wrong for whistleblowers to report.

Conclusion

            Whistleblowing even though when done with good intentions, is still frowned upon due to the consequences it leads to both employee and employer but most damage is directed to the whistleblowers extending outside the workplace. Over the years of significant progress and advancements in legal protection, conflicts continue to arise despite the ethical theories such as egoism, utilitarianism, and deontology providing insight and justifications making it difficult to apply due to complex actual circumstances.

            Legal frameworks have made notable strides in safeguarding whistleblowers. However, not every whistleblowing case is handled effectively since it varies widely; gaps in enforcement are also a hindrance and cultural acceptance persists. The challenge of retaliation and the stigma associated with whistleblowing implies the need for stronger and universally applied protection measures.

            To truly foster an environment where whistleblowing can thrive as a tool for ethical oversight, organizations must go beyond mere compliance. Organizations must live up to their core values of embedding a culture of ethics in their workplace, providing clear and confidential reporting mechanisms, and supporting whistleblowers through effective legal and organizational frameworks. In addition, corporate practices should incorporate education and training on ethical behaviour, ensuring that employees are both empowered and protected when reporting wrongdoing, without the fear of retaliation.

                Ultimately, to achieve an organizational culture that promotes transparency and accountability, effort must come from all the stakeholders including policymakers, corporate leaders, and the public. By addressing the underlying issues that undermine whistleblower protections and embracing a proactive approach to ethics, organizations can protect the integrity of their operations and contribute to the broader fight against corruption.

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