Corporate Lobbying: Do We Need a Law to Regulate Whistle Blowing?

"It takes courage to stand up and challenge the corrupt.

But courage isn’t always enough”

BACK IN 1971, Daniel Ellsberg — a former Marine and Vietnam War veteran, who was working as an

analyst at the Rand Corporation — `blew the whistle' on a top-secret Defence Department document on

the Vietnam War, which came to be known as the Pentagon Papers. Claiming to be driven by his

conscience, Ellsberg revealed to the New York Times and the Washington Post how successive U.S.

Presidents had dragged the country into an immoral and unwinnable war, and had lied to Americans

about its course and outcomes. His disclosure played a major part in turning the tide of public opinion

against the Vietnam War. The U.S. Government responded by prosecuting Ellsberg on 12 charges,

leading to a total sentence of 115 years if convicted. That was not all. The dirty tricks department at the

Nixon White House launched a smear campaign against Ellsberg; engaged the Watergate burglars to

break into his psychiatrist's office in the hope of finding something defamatory; tapped his telephones;

engaged thugs to physically attack him; and tried to influence the trial judge with the offer of the post of

FBI Director. When these plots were exposed, the judge had to abandon the trial and acquit Ellsberg.

Nixon's machinations against Ellsberg formed the basis of two of the three articles of impeachment

against him. The Guardian recently named Daniel Ellsberg "the most important whistleblower of the

past half century." Powerful individuals and organisations can retaliate against whistleblowers,

threatening their jobs, their families or even their lives. In trying to protect whistleblowers, we are

actually trying to protect ourselves. Many employees may be afraid to speak out even with the legal

protection, but its very existence will deter government and corporate wrongdoings to a considerable

extent.

Corporate Lobbying

Lobbying is the intention of influencing decisions made by legislators and officials in the government by

individuals, other legislators, constituents, or advocacy groups. A lobbyist is a person who tries to

influence legislation on behalf of a special interest or a member of a lobby. Governments often define

and regulate organized group lobbying that has become influential. Corporate lobbying is when the

corporations and the firms in the country try to take actions and influence the government in some way

in order to get interest.

Lobbying and Democracy

Gaining political influence in India was once a simple affair: You handed over a suitcase of cash, in non

sequential notes. But now in India, as elsewhere in the developing world, the old business of corruption

is meeting a new rival: the Washington-style business of persuasion, in which companies garner

influence through golf games, planted news stories and PowerPoint presentations. As global

corporations woo a billion customers, there are tax breaks and contracts to be wrested from Indian

officialdom. Some companies still get them by corrupt means, covering their tracks with middlemen, as

some foreign managers acknowledge in private and as high-profile Indian media investigations have

alleged. But many companies, according to experts on India's corporate landscape, are turning to

lobbyists who use subtler tools of influence, partly out of fear of anti-bribery laws like the U.S. Foreign

Corrupt Practices Act, which threatens jail time even for chief executives if they let workers pay bribes

overseas.

In Washington, lobbying is a huge, established industry and, of late, a source of controversy. But in India,

where there is a long tradition of outright corruption, lobbying is regarded by many as a lesser evil.

Supporters say lobbyists are helping to pry open closed industries. They are praised for introducing fact-

based analysis into the debate over liberalization, and for creating a cheaper alternative to bribery.

Unlike in the West, lobbying is virtually unregulated in India, as in many other developing countries.

Defenders of the lobbying say it signals a new partnership between the state and business in India. In

the decades after independence in 1947, India was a socialist republic notorious for its "License Raj" -

the lumbering bureaucracy that parceled out permissions needed to start, operate and close businesses.

The economic stimulus packages initiated in several countries have given fresh momentum to corporate

lobbying, in which powerful companies spend tens of millions of dollars ensuring that legislation and

policy are drafted to favour their area of business. Enormous sums are spent on this and on

contributions to campaign funds. Though lobbying has become a part of life, the scale of the effort has

drawn attention. For example, the Pharmaceutical Research and Manufacturers of America (PhRMA)

doubled its spending to nearly $7 million in the first quarter of 2009, followed by Pfizer, with more than

$6 million.

In India, corporate lobbying, in the form of intensive briefings and presentations to ministers and senior

civil servants, is expanding; the current political climate also makes ministers, officials, and legislators

more receptive to it. Published research shows a significant positive correlation between lobbying and

financial performance, and lobbying by firms or by lobbying agencies often produces policies tailored to

their own requirements. In 2005, U.S. Senator Dick Durbin’s attempt to tighten the law on mortgages

failed after intensive lobbying by lenders. Almost no major countries require oversight, transparency, or

accountability in lobbying. It has even been said that in India the paucity of high-quality research centers

makes officials vulnerable to slick lobbying and instant publicity countering allegations, for example,

environmental and other activists. There are, however, signs of concern about lobbying. Although some

major corporations are coming under shareholder pressure to provide detailed information on their

lobbying, an early change in the lobbying culture is unlikely. Critics say that what is called lobbying in the

west is called corruption in developing countries and though corruption stinks it is at least a stink that

everyone knows. There can be no doubt that lobbying will continue to pose a serious threat to

democratic processes around the world.

Large multinational corporations play as much for power as for market share. Lobbying by MNCs is seen

not only at a national level but also to bring pressure on nations when they make their decisions on an

international or regional plane. The USA's insistence on the new patent regime was down, to a large

extent, to the intense lobbying by PRMA in the lead-up to the Doha round of the WTO, and similarly,

there is a lot of industry lobbying happening currently in relation to the proposed AIFM directive in the

EU. MNCs have the financial backing necessary to make a powerful statement to politicians, something

other lobby groups, like NGOs, cannot fight.

No business runs with a rule-book since the rules are applicable only to the 'ideal' contexts. No matter

how many times we criticize, democracy there is no pure and simple rules of human interaction. Yes, the

loudest voice is the one that gets heard. There's nothing right or wrong in it and whether we like it or

not, that's how it is. And it is everywhere. The production line of a business has its own rules, to

maintain supremacy of products/ services, and those rules needs to be bent or by-passed as needed. It's

an open truth that every product has at least one defect. Similarly, the sales and marketing depends not

only on the power of the product but also on the skills of presentation and advertisement. A human

mind can never be unbiased. As long as people are moved by relations, contacts, pressure, greed, fear,

etc the lobbying and grouping are going to play a significant role in determining favoritism. Whether

money should be involved or not is a different aspect, but money 'will' be involved as long as there are

no better alternatives to it. Whether it's corruption or madness, every game has its own rules.

Lobbying Is Integral To Policy- Making

There is another question that arises, which is – That can a further reduction in discretionary powers of

government help reduce the role of lobbyists? The answer to this question is that the cornerstone of

Indian economic reforms is the gradual removal of the discretionary powers of government through

clearly laid down policies that favour none and do away with the need for corporates to beg for special

treatment. Unfortunately, even after more than a decade-and-a-half of reforms, the government retains

substantial discretionary powers. Discretion with respect to quick or slow clearance of files, speed of

licence awards, higher or lower tax imposition, smoother or slower loan sanction, and including

rewriting of policy for entire industries.

The Indian economy, by and large, functions around the government’s discretionary powers. Whenever

government changes, the wielders of these discretionary powers also change, making matters worse for

corporate lobbyists. In most cases, businessmen hate political instability and would prefer continuity.

However, reform has the ability to effectively dilute the discretionary powers of government through

the establishment of independent regulators and a clear policy, as witnessed in the telecom sector.

Irrespective of the level of reform, it is an accepted fact that corporate lobbying is a necessary evil. It

remains an integral part of the policymaking process of government at all times; only its manifestations

vary. In the last few days, India has witnessed a raging debate on lobbying as it was raked up in the

aftermath of a corporate feud that reached the corridors of power at the Delhi Durbar. Lobbyists on

either side have been trying hard to tilt the government’s petroleum policy to their advantage.

Lobbying goes on all the time, mainly because the state retains so much discretionary power. But even a

much-reformed state will offer scope for lobbying. Therefore, it is pertinent to ask, “Why not encourage

an ethos that discourages behind-the-doors lobbying?” The American experience in this regard should

be an eye-opener, as lobbyists in America are registered legal firms. Now, it is for Indian society to

decide whether we should allow covert backdoor lobbying or open transparent lobbying as practised in

the developed world.

Lobbying in India is at a nascent stage. Until recently, it was rated equivalent to influencing government

policy with money. With increased transparency in governance, corporate entities realised that a more

legitimate method is needed to influence policymakers. Certainly, religion and caste play an important

role in Indian politics and are used to influence policy as more and more politicians resort to vote-bank

politics. Being politically savvy is considered an obvious prerequisite to lobbying government effectively.

Winning a contract is one thing, but becoming a savvy local corporation in India is quite another. A

successful lobbyist needs to know how to make representations to government, what tools and

techniques can be effectively used to communicate with MPs, MLAs, ministers, etc. These are both the

obvious and arcane bits of knowledge that empower lobbyist to understand better the working of the

government. Since the reforms cannot ensure substantial reduction in the discretionary powers of

government, it is time that Indian corporates start hiring professional lobbyists. Necessary safeguards

need to be taken to ensure that lobbyists should not double up as MPs and get free access to ministers

who formulate important policies. Moreover, a realisation should emerge within the social and political

spectrum that the Indian democracy has reasonably matured and lobbying needs to be recognised as an

integral part of the policymaking process. It needs to be regulated and professionally managed for the

betterment of everyone.

Political Lobbying

Lobbying is the intention of influencing decisions made by legislators and officials in the government by

individuals, other legislators, constituents, or advocacy groups. In the United States, the Internal

Revenue Service makes a clear distinction for nonprofit organizations between lobbying and advocacy

limiting the former to "asking policymakers to take a specific position on a specific piece of legislation, or

that ask others to ask the same"; in common language, the definition of lobbying is normally broader.

Other activities that seek to influence policies, possibly including public demonstrations and the filing of

"friend of the court briefs", are termed as "advocacy".

The House of Commons Public Administration Select Committee argued that while there are

shortcomings in the regulation of the lobbying industry in the United Kingdom, "The practice of lobbying

in order to influence political decisions is a legitimate and necessary part of the democratic process.

Individuals and organizations reasonably want to influence decisions that may affect them, those around

them, and their environment. Government in turn needs access to the knowledge and views that

lobbying can bring. Governments often define and regulate organized group lobbying. Economist

Thomas Sowell defends corporate lobbying as simply an example of a group having better knowledge of

its interests than the people at large do of theirs. Lobby groups may concentrate their efforts on the

legislatures, where laws are created, but may also use the judicial branch to advance their causes.

Lobbying in United Kingdom:

Recently, many recent MPs and in particular Ministers are recruited by lobby firms and lobbyists have

been recruited by ministers as 'special advisors' using what is termed the Revolving door of influence. In

2009 the House of Commons Public Administration Select Committee recommended that a statutory

register of lobbying activity and lobbyists would improve transparency to the dealings between

Whitehall decision makers and outside interests. Parliament controversially responded to this

recommendation by saying that self-regulation was more practical. The Conservative leader, David

Cameron, predicted that it was "the next big scandal waiting to happen" and was one that had "tainted

our politics for too long, an issue that exposes the far-too-cozy relationship between politics,

government, business and money.

Lobbying in United States:

The ability of individuals, groups, and corporations to lobby the government is protected by the right to

petition in the First Amendment to the United States Constitution. Lobbyists use time spent with

legislators to explain the goals of the organizations they represent and the obstacles elected officials

face when dealing with issues, to clients. Lobbying activities are also performed at the state level, and

lobbyists try to influence legislation in the state legislatures in each of the 50 states. At the local

municipal level, some lobbying activities occur with city council members and county commissioners,

especially in the larger cities and more populous counties. The Lobbying Disclosure Act of 1995 and

Honest Leadership and Open Government Act of 2007 increased regulation and transparency. In 2009

U.S. President Barack Obama signed two related executive orders and three presidential memoranda on

his first day in office.

WHISTLE BLOWER PROTECTION AND PROPOSALS

Background on Whistle Blowing law in India and update on current proposal

It has often been said that no culture is immune from corruption. Sadly, there are individuals in all

societies who improperly leverage their positions of authority, demanding money or personal favours in

order to do work which they are supposed to do by virtue of their authority. Irrespective of the degree

of coercion involved, the fact remains that bribery fosters a culture of impunity and rampant corruption

undermines the functioning of public institutions. The ripple effect of such culture is then felt across the

board, in both public and private life.

Whistle-blowing or the act of exposing wrongdoing, fraud or corrupt practices in an organization or

situation, has been seen as one of the few strong measures to combat corruption. The social censure

that such whistle-blowing entails seemingly operates as a check or deterrent for future improper

conduct. A whistleblower can be a person who works for the government and reports misconduct within

the government or it can be an employee of a private company reporting corrupt practices within the

company. Despite a strong lobby in this field, India does not yet have legislation for whistleblowers who

normally face a lot of problems while reporting acts of corruption. By exposing corruption among their

superiors, they face the possibility of direct or indirect punishment. This could be in the form of lack of

advancement and promotions ultimately leading to weak career graph.

Proposals and Past Efforts

Taking note of the harassment and victimization suffered by whistleblowers in India, especially by

superiors in their very own organizations, on account of disclosing improper conduct / malpractices in

the system, the paramount importance of protecting whistleblowers was felt. Consequently, upon the

request of the then Central Vigilance Commissioner, Mr. N. Vittal, in August 1999, the Law Commission

of India prepared a report on “Public Interest Disclosure Bill” [179th Report of the Law Commission of

India]. A draft Public Interest Disclosure (Protection of Informers) Bill, 2002 was then circulated in

January 2003. There was no further progress on the matter till November 2003, when one Mr. Satyendra

Dubey, was murdered after he exposed corrupt practices prevalent in the National Highways Authority

of India (NHAI). The incident led to widespread media outrage and impetus for the enactment of a

whistleblowers bill.

In May 2004, the Government of India, vide a Resolution on Public Interest Disclosure & Protection of

Informers, authorized the Central Vigilance Commission (CVC) as the ‘Designated Authority’ to receive

written complaints for disclosure of any allegation of corruption or misuse of office and to recommend

appropriate action. The CVC then issued a Public Notice (through an Office Order) in relation to the said

Resolution. This Public Notice provided that the jurisdiction of the CVC in this behalf would be restricted

to any employee of the Central Government or of any corporation established by or under a Central Act,

government companies, societies or local authorities owned or controlled by the Central Government.

This would mean that personnel employed by the State Governments and activities of the State

Governments or its Corporations etc. will not come under the purview of the CVC. It also stated that the

CVC will have the responsibility of keeping the identity of the complainant secret. The general public was

also informed that any complaint, which is to be made, under the Resolution, should comply with those

aspects that were mentioned in the Notice.

Current Proposal

The Office Order and the Public Notice are still in force. In 2006, however, the erstwhile draft Public

Interest Disclosure Bill was updated and the same was renamed as “The Whistleblowers Bill, 2006. The

said Bill was introduced in the Rajya Sabha (Upper House of the Parliament of India) on March 3, 2006.

Over the last few years, the Bill has undergone several changes based on comments and suggestions

received. The latest version of the Bill, styled as “The Public Interest Disclosure and Protection to

Persons Making the Disclosures Bill, 2010” (“the Bill”), was introduced in the Lok Sabha (House of the

People), Parliament of India on August 26, 2010. The revised Bill has several new provisions which were

added with a view to make a robust legislation on the subject. The Bill is yet to be notified as a statute.

A Brief Summary Of The Bill And Its Proposal

The Purpose of the Bill is (a) to establish a mechanism to receive complaints relating to disclosure on any

allegations of corruption or wilful misuse of power or wilful misuse of discretion against any public

servant; (b) to inquire / cause an inquiry into such disclosure; (c) to provide adequate safeguards against

victimization of the person making such complaint and for matters connected therewith or incidental

thereto.

What Is Public Interest Disclosure?

A Public Interest Disclosure is a complaint made by any person relating to – (a) an attempt to commit or

commission of an offence under the Prevention of Corruption Act, 1988; (b) wilful misuse of power or

wilful misuse of discretion by virtue of which demonstrable loss is caused to the Government or

demonstrable gain accrues to a public servant; (c) an attempt to commit or commission of a criminal

offences by a public servant.

Who Is A Public Servant?

A Public Servant is any employee of the Central or State Governments, or any corporations established

by or under any Central / State Act, any government companies, societies or local authorities owned or

controlled by the Central / State Governments and such other categories of employees as may be

notified by the Central / State Governments from time to time.

Who Can Make A Public Interest Disclosure & To Whom?

Any public servant or any other person including any non-governmental organization may make a public

interest disclosure before the Competent Authority. The Competent Authority, in relation to any public

servant employed with the Central Government or any Central Government Authority, is the Central

Vigilance Commission or any such authority that the Central Government specifies by way of a

Notification. In the case of State Government employees, the Competent Authority is the State Vigilance

Commissioner or any other authority as specified by the State Government by way of a Notification.

Requirements of Disclosure

It is necessary that any disclosure made under the Act is made in good faith and the person making the

disclosure is required to make a personal declaration stating that he / she has reasonable belief that the

information disclosed by him / her and the allegation contained therein is substantially true.

Furthermore, in order that action is taken on a public interest disclosure, it is necessary that the identity

of the complainant / public servant is accurately mentioned in the complaint.

Inquiry In Relation To Public Interest Disclosure

After ascertaining from the complainant / public servant whether he / she was the person / public

servant who made the complaint, the Competent Authority shall conceal the identity of the complainant

unless the complainant has himself / herself revealed his / her identity to any other office or authority

while making the disclosure in the complaint or otherwise. Thereafter, an inquiry into the disclosure

shall be made by the Competent Authority.

Powers of the Competent Authority

# For the purposes of an inquiry under the Act, the Competent Authority has been granted the powers

of a civil court (while trying a suit) in respect of the following matters:

# Summoning and enforcing the attendance of any person and examining him / her on oath;

# Requiring the discovery and production of any document;

# Receiving evidence on affidavits;

# Requisitioning any public record or copy of it from any court / office;

# Issuing commissions for the examination of witnesses or documents;

# Such other matters as may be prescribed.

# Proceedings before the Competent Authority shall be deemed to be judicial proceedings. While

exercising powers of a Civil Court, the Competent Authority has to take such steps as to ensure that the

identity of the complainant is not revealed or compromised.

# Protection To The Persons Making The Disclosure

# The Central Government shall ensure that no person / public servant who makes a disclosure under

the Act is victimized by initiation of any proceeding or otherwise merely on the ground that such

person / public servant has made a disclosure or rendered assistance in an inquiry under the Act. If any

person is being victimized or is likely to be victimized, he / she may file an application to the Competent

Authority seeking redress in the matter. The Competent Authority may then issue suitable directions for

protection of such person. Such directions can be issued to the concerned public servant, or public

authority, any other government authority including the police.

Offences and Penalties

If the officials who are required to aid / assist an inquiry into the public interest disclosure upon the

request of the Competent Authority, obstruct the inquiry by delaying the furnishing of a report on the

matter which is requested for by the Competent Authority, such official(s) shall be liable to pay a penalty

which may extend to Rupees Two Hundred and Fifty for each day of delay. However, the total amount of

the penalty shall not exceed Rupees Fifty Thousand.

The act of negligently revealing the identity of a complainant is punishable with imprisonment for a term

which may extend up to three years and also to fine which may extend to Rupees Fifty Thousand.

Making a mala fide, incorrect, false or misleading disclosure is punishable with imprisonment for a term

which may extend up to Fifty Thousand Rupees.

The apex anti-corruption body, Central Vigilance Committee (CVC), has been given power to protect the

identity of whistleblowers. The government decided to bring a law through Public Interest Disclosure

and Protection for Persons Making Disclosure Bill 2010 after the murder of Right to Information activist

Amit Jethwa in Gujarat.

SEBI Guidelines Regarding Whistle Blowing

Bowing to intense pressure from India, the market regulator has diluted its stand on the whistle-blower

policy and the tenure of independent directors on company boards.

In a major departure from its earlier plan, the Securities and Exchange Board of India has said that the

reporting requirement for listed firm for independent directors and the whistle-blower policy is no

longer mandatory. The revised Clause 49 has also specified various other reporting requirements for

companies.

SEBI had earlier said that independent directors might have a tenure not exceeding, in the aggregate, a

period of nine years on the board of a company. SEBI has now made this reporting requirement a non-

mandatory requirement of the listing agreement.

Another mandatory requirement for the corporates was to have the whistle blower policy. SEBI circular

mentioned that the whistle-blower policy through which company might establish a mechanism for

employees to report to the management concerns about unethical behaviour, actual or suspected fraud

or violation of the company’s code of conduct or ethics policy. This mechanism could also provide for

direct access to the chairman of the audit committee in exceptional cases. Once established, the

existence of the mechanism may be appropriately communicated within the organisation. The provision

of having whistle-blower policy too has been made a non-mandatory requirement. SEBI-watchers say

this will benefit some promoters, who have been lobbying against the whistle-blower policy as it doesn’t

suit their working style.

Whistle Blowing- Basic Concept

The term `whistle blowing' is a relatively recent entry into the vocabulary of public and corporate affairs,

although the phenomenon itself is not new. It refers to the process by which insiders `go public' with

their claims of malpractices by, or within, organisations — usually after failing to remedy the matters

from the inside, and often at great personal risk to themselves. It is this willingness to stand up for a

principle and court risk openly that distinguishes whistle blowing from such related practices as in-house

criticism, anonymous leaks, and the like. The whistle blower is considered a hero or a traitor, a do-

gooder or a crank, a role model or a non-conformist troublemaker — depending on one's point of view.

Whistle blowing is a universal phenomenon. India has also had its share of prominent whistleblowers

from V. P. Singh to Manoj Prabhakar to P. Dinakar.

It is true that under normal circumstances, an organisation is entitled to total loyalty and confidentiality

from its employees. But when there is serious malpractice or when people's lives are at stake as in

corruption and fraud in defence procurement; deaths in `encounter' of innocent persons; toxic leaks

from a chemical factory; non-adherence to flight safety standards by an airline; creative accounting and

false declarations by a company; cheating and plagiarism in scientific research, for example — the

overriding public interest may lie in protecting the public's right to be told, and the whistle blower's right

not to be punished for doing so. Without whistleblowers, we may not get to learn about problems until

it is time to mourn the consequences.

No doubt, audit, ombudsman, vigilance commissions, regulating agencies, the media, civil society, and

courts all play a role in deterring government and corporate transgressions to some extent. However,

formidable their investigative skills, that initial inside information provided by a whistle blower is crucial.

Even a powerful Freedom of Information Act, which discloses information without the need for leaking,

offers only a partial solution.

Protecting Whistle Blowers in India

During the past decade, scams, swindles, and rip-offs have become a regular feature of the Indian

political and corporate landscape, costing taxpayers, investors and banks thousands of crores of rupees.

Enactment of a Whistleblowers Protection Act is even more necessary for India than it was for the U.K.

and the U.S. Together with the Freedom of Information Act, it can be a potent tool for promoting good

governance in the country. What we lack at the moment are public interest groups.

It was the Veerappa Moily Commission on Administrative Reforms II that had recommended the system

of whistleblowers. It advocates that an honest and conscientious public servant, privy to information

relating to gross corruption, abuse of authority or grave injustice, should be encouraged to disclose it in

public interest without fear of retribution. In conjunction with the Freedom of Information Act, a

Whistleblowers Protection Act can indeed be a potent tool for promoting good and transparent

governance in the country.

Endorsing the right to information as a fundamental right, Ex- Chief Justice Y K Sabharwal has

emphasised that ‘public accountability’ is a facet of administrative efficiency, information serving as an

instrument for the oversight of citizens.

Suggestions on Whistle Blowing Legislation

Based on the experiences of other countries, here are a few suggestions and a set of general principles,

which could usefully underpin any effective Indian legislation on the subject:

· With the consent of the required number of State governments, Parliament should try to enact a single

Act for all employees working in any tier of government, and also for employees working in any form of

organisation in the private and voluntary sectors. Employees of contractors, sub-contractors and agents

of an organisation; applicants for employment, former employees and overseas employees; attorneys

and auditors should also be covered.

· The Official Secrets Act should be overridden to provide for a public interest defence and the `gagging

clauses' in employment or severance contracts should be declared void in respect of public interest

disclosures.

· It should be subject to the condition that the disclosures shall not jeopardise operations or endanger

the lives of personnel. The judiciary may have to remain outside its purview unless the Contempt of

Courts Act is first amended to provide for a public interest defence.

· What constitute `public interest disclosures' need to be clearly defined, the protection should apply to

specific disclosures only involving an illegality, criminality, breach of regulatory law, miscarriage of

justice, danger to public health or safety and damage to environment, including attempts to cover up

such malpractices.

· The whistleblower must reasonably believe that his information about a malpractice is substantially

true, and must act in good faith. Those caught making anonymous or pseudonymous leaks should not be

protected. The period of limitation for filing a complaint must be sufficiently long.

· The Act must encourage employees to raise the matter internally in the first instance and mandate

organisations to establish suitable mechanisms for this purpose. Where it is not reasonable to raise the

matter internally, or where attempts to remedy the matter from the inside have been unsuccessful,

employees who make an external disclosure in a specified way should also be protected.

Whistleblower protection measures are gathering a momentum of their own around the world, aided

partly by spectacular government and corporate scandals. It is just a question of time before we shift

from our present culture of zero tolerance of whistle blowing to a culture of zero tolerance of

whistleblower retaliation. For Example- Americas Watchdog Corporate Whistle Blower Center is an

Initiative focused on assisting whistle blowers to step up to the plate to report corporate fraud, waste

and abuse. The corporate fraud could relate to consumers, to the shareholder, and or to US taxpayer.

Substantial proof, of corporate, or shareholder fraud, that is original, substantial, and easy to see could

result in the hero-whistle blower getting a significant reward for their information. The Corporate

Whistle Blower Initiative is devoted to helping insiders step forward with valuable information about

corporate wrong doing, fraud, or dishonesty.

The Whistle Blowers Hall of Fame

Whistle Blowing refers to the process by which insiders go public with their claims of malpractices by, or

within, organisations usually after failing to remedy the matters from the inside, and often at great

personal risk to them. Sometimes the cost of such valiant efforts is just too high to pay.

Satyendra Dubey was one of those rare young men who was completely and uncomplicatedly honest.

He didn't know he was a hero. An engineer from Indian Institute of Technology, Kanpur and working for

National Highway Authority of India probably never knew the word but died for simply doing the right

thing. He was gunned down by the mafia in Gaya on early morning of November 27th, nearly a year

after he had complained of corruption on the Golden Quadrilateral project to the Prime Minister's

office. Knowing the dangers that surround honest people bucking the whole corrupt system, in his letter,

Dubey had requested that his name be kept secret, a request that wasn't honoured, the letter was sent

from the PMO to the Ministry of Road, Transport and Highways and then to the National Highway

Authority of India, with which Dubey was working as Deputy General Manager. His death speaks

volumes about the growing nexus between politicians and mafia and also highlights the illegal

procedures/ways involved in awarding contracts and also the allegedly fraudulent pre-qualification bids

in connection to big development projects.

Corruption exists all over the world and thrives at all layers of government. Officers who refuse to enter

the bandwagon are victimized. In India, the Tehelka expose involving defence deals had not only

victimized the reporters involved in the undercover operation but also harassed virtually anybody

associated with the portal.

A management graduate from Indian Institute of Management, Lucknow, Manjunath Shanmugham,

who was working as a sales officer with the Indian Oil Corporation, was shot dead on November 19,

2005, when he tried to expose an adulteration racket at an IOC petrol pump in Lakhimpur Kheri. While a

trial court awarded death sentence to the main accused and life sentence to seven others, last year the

Allahabad High Court Bench in Lucknow commuted the death penalty to life sentence and acquitted two

of the other seven convicts.

If Manjunath's assassination raised questions about the effectiveness of the whistle-blower protection

regime in India, the series of murders of RTI activists across the country only underlines the urgency of a

suitable law.

The government has not made any attempt to place the Bill in the public domain before it reaches

Parliament an instance of its obsession with secrecy. This is a violation of the Right to Information Act,

2005, which requires that every public authority shall publish all relevant facts while formulating

important policies or announcing decisions that affect the public.

Meanwhile, there is considerable concern whether the new Bill will at all be an improvement over the

PIDPI resolution. This was clear when Justice R.C. Lahoti, a former Chief Justice of India and a member of

the Executive Committee of the India Rejuvenation Initiative, pointed out that according to reports in a

newspaper, referred to two shocking instances of the CVC not protecting whistle-blowers. In the first

case, the former Deputy Chairman of the Kandla Port Trust, Manoranjan Kumar, reported gross

wrongdoings to the CVC in 2007 and ended up losing his job, while the guilty went unpunished. In the

second case, Raj Kumar, a stenographer in the Sports Authority of India, faced a departmental inquiry

after he filed a petition in the Punjab and Haryana High Court alleging corruption in his department.

The PIDPI resolution brought under its purview only complaints against employees of the Central

Government or public sector companies. Personnel employed by State governments could not be

complained against under it. The resolution suffers from other limitations as well.

The Central Vigilance Commission announced that it had the responsibility of keeping the identity of the

complainant secret, even though it could not stop the complainant himself from disclosing his identity or

making the complaint public. According to the resolution, only if the commission is of the opinion that

either the complainant or the witnesses need protection, it shall issue appropriate directions to the

authorities concerned. In other words, the commission has to be “convinced” about the whistle-

blower's need for protection, which falls short of civil society's expectations. One major lacuna in the

resolution is that it does not make the recommendation of the commission binding on the government.

The CVC, either as a result of his discreet inquiry or on the basis of the complaint itself, may find

substance in the allegations of corruption. It could use the CBI or the police authorities to investigate the

complaint. In that event, the CVC could only “recommend appropriate action” to the government

department or the organisation concerned against the guilty official. The punitive action could include

redress of the loss caused to the government, initiation of criminal proceedings, and corrective

measures to prevent the recurrence of such cases. The former CVC, P. Shankar, had deplored this aspect

of the resolution, as, in his view, the CVC needed sanction before he could order prosecution.

The CVC's annual reports claim that the commission has established a well-defined internal procedure

for processing complaints received under the PIDPI resolution in order to ensure that the complainant's

identity is not disclosed. The Joint Secretary (Home), Ministry of Home Affairs, has been made the nodal

authority to arrange for protection to the complainants wherever required and as directed by the

commission. The commission has formed a screening committee headed by the Secretary to the CVC to

examine these complaints and decide the further course of action.

The commission received 276 complaints from whistle-blowers in 2008. Of these, 83 complaints were

sent to Chief Vigilance Officers or the CBI for investigation/discreet verification of facts/comments, 144

were sent for necessary action and 46 were found to be without a vigilance angle, having been filed by

anonymous complainants. This left a pendency of three complaints. The commission has noted that

despite its best efforts, complainants under the PIDPI resolution forward copies of the same complaint

or lodge separate complaints containing similar allegations with other authorities concerned, thus

revealing their identity. The commission has issued guidelines asking the organisations not to subject

any complainant to any kind of harassment because of his/her having lodged a complaint, even if, at any

time, the identity of the complainant gets revealed through any source.

A study of data carried in the commission's annual reports shows that the number of complaints under

the PIDPI resolution has declined steadily since 2004. There is considerable suspense, therefore,

whether the new Bill to replace the resolution can inspire potential whistle-blowers.

2G SCAM in India

The world is gripped by the ‘drip-drip-drip’ of cable internal communication shared by Wikileaks through

their website. Apart from gauging the impact to international relations and politics these candid

revelations also put the focus firmly on the power of transparency in internal communication.

Interestingly, the India diplomatic corps have looked at the positive side of the issue – requesting their

Foreign Services Institute (FSI) to adapt and outdo brevity and the style of writing if possible.

Similarly, leakage of private conversations between corporate heads and a lobbyist (Radia tapes) as well

as corporate espionage in a supposed telecom scam in India has also put immense pressure on the

government and companies to re-look at processes, policies and measures. For leaders and

organizations social media has only compounded the issue with rising credibility challenges and

dwindling trust ratings.

The gap between what leaders and governments say and do has always been a topic of debate. These

leaks and tapes have cast a shadow over their intentions and it will make it even more difficult to

improve their standing. The 2G spectrum scam involved officials and ministers in the Government of

India illegally undercharging mobile telephony companies for frequency allocation licenses, which they

would use to create 2G subscriptions for cell phones.

According to a report submitted by the Comptroller and Auditor General based on money collected from

3G licenses, the loss to the exchequer was 176,379 crore (US$39.16 billion). The issuing of the 2G

licenses occurred in 2008, but the scam came to public notice when the Indian Income Tax Department

investigated political lobbyist Niira Radia and the Supreme Court of India took Subramaniam Swamy's

complaints on record. Former Telecom Minister of the NDA government Arun Shourie was the

whistleblower who helped uncover the scam and also exposed many loopholes in the UPA government's

policy towards issuing telecom licences.

In 2008, the Income Tax department, after orders from the ministry of Home and the PMO, began

tapping the phones of Nira Radia. This was done to help in an ongoing investigation into a case where it

was alleged that Niira Radia had acted as a spy. Some of the many conversations recorded over 300 days

were leaked to the media. The intense controversy around the leaked tapes became known in the media

as the Radia tapes controversy. The tapes featured some conversations between politicians, journalists

and corporations. Politicians like Karunanidhi, journalists like Barkha Dutt and Vir Sanghvi and industrial

groups like the Tata Group were either participants or mentioned in these tapes.

Parties Involved

The selling of the licenses brought attention to four groups of entities - politicians who had the authority

to sell licenses, bureaucrats who implemented and influenced policy decisions, corporations who were

buying the licenses, and media professionals who mediated between the politicians and the

corporations on behalf of one or the other interest group.

Shortfall of Money

A. Raja arranged the sale of the 2G spectrum licenses below their market value. Swan Telecom, a new

company with few assets, bought a license for 1,537 crore. Shortly thereafter, the board sold 45% of the

company to Etisalat for 4,200 crore. Similarly, a company formerly invested in real estate and not

telecom, the Unitech Group, purchased a license for 1,661 crore and the company board soon after sold

a 60% stake in their wireless division for 6,200 crore to Telenor.

The nature of the selling of the licenses was that licenses were to be sold at market value, and the fact

that the licenses were quickly resold at a huge profit indicates that the selling agents issued the licenses

below market value. Nine companies purchased licenses and collectively they paid the Ministry of

Communications and Information Technology's telecommunications division 10,772 crore. The amount

of money expected for this licensing by the Comptroller and Auditor General of India was 176,700 crore.

Relationship between Media and Government:

Media sources such as OPEN and Outlook reported that Barkha Dutt and Vir Sanghvi knew that

corporate lobbyist Nira Radia was influencing the decisions of A. Raja. The critics alleged that Dutt and

Sanghvi knew about corruption between the government and the media industry, supported this

corrupt activity, and suppressed news reporting the discovery of the corruption.

Response to the Scam

In early November 2010 Jayalalithaa accused the Tamil Nadu state chief minister M Karunanidhi of

protecting A. Raja from corruption charges and called for A. Raja's resignation. In mid November the

comptroller Vinod Rai issued show-cause notices to Unitech, S Tel, Loop Mobile, Datacom (Videocon),

and Etisalat to respond to his assertion that all of the 85 licenses granted to these companies did not

have the up-front capital required at the time of the application and were in other ways illegal.

In response to the various allegations, the Govt of India has replaced the then incumbent Telecom

minister, A Raja with Kapil Sibal who has taken up this charge in addition to being the Union minister for

Human Resources Development. Mr Sibal contends that the "notional" losses quoted are a result of

erroneous calculations and insists that the actual losses are nil. The CBI conducted raids on Raja and four

other telecom officials - former telecom secretary Siddharth Behura, Raja's personal secretary R K

Chandolia, member telecom K Sridhar and DoT deputy director general A K Srivastava on 8 December

2010. Raja, Behura and Chandolia were arrested on Feb 2nd 2011.

Conclusion

While the Bill regarding Whistle Blowing is a big leap forward in relation to protection of whistle blowers

in India, there still are some ambiguities that require mending. For instance, while the Bill proposes to

protect the identities of those who make a public interest disclosure, protection to such complainants is

proposed to be provided only after a complaint or a query is filed under the Right to Information Act,

2005 in which the complainant / applicant must disclose his / her identity. Such protection may not only

be too belated but also no protection at all since the risk of information leak may be high. It would be

interesting to see how the Competent Authority handles this issue. It is also felt that there aren’t many

robust provisions to deal with the issue of accountability of the Competent Authority in the process of

conducting an inquiry.

Whistle blowing is considered to be a self regulating mechanism within organizations. Unfortunately,

such individuals aren’t seen in a positive light considering the exposures that leaders and organizations

face. However within organizations ethics committees and internal audit teams are tasked with

investigating and recommending action if there are misdemeanours. Unless ethical violations and

information security breaches are linked to performance and ongoing feedback there are limitations for

whistle blowing to get institutionalized. The need and urgency of a whistle blowing act cannot be

overemphasized even as Satyendra Dubey's death sparked off widespread public protest. Both in

unlettered societies with meagre resources as also in the developed world, there is an urgent need both

for access to information by the public along with an act that would provide protection to all those who

blew the whistle.

It is time that the authorities took cognizance of the fact that money associated with development

works that usually comes from the tax payers pocket lands up in corrupt hands. In the process

development takes the back seat. India cannot afford to lose its money nor its resources. The real

heroes of today's world are honest people. They are few and far between. They are the ones society is

longing to follow. But everywhere it sees them fail. Yet the world and developing countries especially

cannot afford to lose its honest officers who stand up against all odds and risk their lives. It is time the

government thinks about cleaning its system by providing protection to all those ordinary people who

dares to bare open facts and has a stake at country's future. Mere assurance from the Prime Minister

that the guilty wouldn't be spared is not enough either to the citizens or to Dubey's family. If the

government really means business it has to go about demonstrating that there are systems in place for

good people to rely on.

We need a fast and efficient judiciary to handover judgments in fair and impartial manner with or

without political and social pressure, and a clean and unbiased police that will come to the aid of those

working on the right side of the law; we also need public knowledge about the constitution and rule of

law; and laws that will encourage people in both urban and rural areas to come forward without any

fear to usher in an era of transparency, accountability and participation in the governance of the

country. We need a system, a society where a person can do its duty without fear and the head held

high. If the government really intends to deliver such a nation, then it is time the government pulled up

its sleeves and makes concrete efforts to pass a whistleblowers act. To conclude it may be said with

absolute certainty that no measure to curb government and corporate transgressions in India or

elsewhere will bear fruit unless legal immunity and protection against retaliation is given to responsible

and conscientious whistle blowers.