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Whistleblowers show responsibility, compliance protects

Edward Snowden, probably the best-known present-day whistleblower, has managed to get people all around the world talking about how important it is to inform the general public about maladministration in companies or organisations. In the fight against corruption, many companies are changing their approach to whistleblowing as part of their compliance procedures.

The German language includes the word ‘verpfeifen’ which has a similar meaning to the English expression ‘to blow a whistle on someone’ – in other words to denounce a person. Ever since Edward Snowden went public with his revelations about the surveillance and spying practices of the secret services, everyone has been familiar with this expression.

A whistleblower is an employee of a company or a public authority who exposes malpractice, such as corruption or even dangers that are subject to a cover-up. A well-known German example is the chemist, Reiner Moormann, who worked in a nuclear research facility and, a few years ago, highlighted the risks connected to a certain kind of reactor. Whistleblowers need to show a great deal of civil courage, and they may risk losing their jobs. They often suffer for many years as a result of their brave act of coming forward.

Video: Whistleblower – Alone against the system

Whistleblowing and compliance in companies

Now, as part of their compliance obligations, more and more companies and organisations offer support for people draw attention to themselves by pointing out breaches of rules, cases of corruption, or violations of environmental or cartel laws. In Germany, for more than 10 years, many companies have maintained so-called complaints offices, which are mostly reached using whistleblowing hotlines. This is because, since 2002, the American Sarbanes-Oxley Act (SOX) has obliged international companies to set up a confidential system for such warnings.

Many of the German DAX-30 companies – including, for example, Deutsche Telekom and Siemens – but also an increasing number of medium-size companies have set up such whistleblowing hotlines and provide information on their respective intranets. The website through which employees of Deutsche Telekom can raise their concerns about breaches of internal guidelines, laws or moral behaviour – anonymously and confidentially – is called ‘Tell me!’ In addition, there is also an advisory site on the intranet called ‘Ask me!’ This provides all kinds of information on the topic of compliance, for instance for questions about receiving gifts or how to deal with internal information.

Respected as a whistleblower, or despised as an informer

If we look at some of the examples in Germany, whistleblowers in the past have often been seen as denunciators. There is the vet Margrit Herbst, for instance, who lost her job in 1990 when she warned of symptoms in beef cattle that suggested an occurrence of the disease BSE. Her warnings were ignored and the beef found its way into the food chain. In 1994, Herbst was summarily dismissed because – so it was claimed – she had breached her official secrecy obligation. Today, she lives on a modest pension – though she was at least awarded the International Whistleblower Prize.

Mirko Haase is the Compliance Officer with General Motors, for the Europe, Middle East and Africa region. He is also President of the German professional Association of Compliance Managers (BCM). He is quoted in the magazine FINANCE as saying, ‘In Germany, whistleblowers are perceived as informants rather than as awareness raisers.’ Here, it seems Germany is still experiencing the repercussions of its earlier exposure to spying – which in the former East Germany was an everyday occurrence. However, larger, internationally active companies are already further advanced than small companies when dealing with employees who complain about malpractice.

International guidelines on whistleblowing

The International Chamber of Commerce (ICC) has published guidelines on whistleblowing. Its aim is to achieve a global standard that should help companies implement programmes on whistleblowing.

Whistleblowing and compliance internationally

Compared to other countries, Germany offers relatively little protection for whistleblowers. The rulings of Germany’s highest industrial tribunals and of the European Court of Human Rights are binding, but as yet, there is no specific law to protect whistleblowers. Civil servants and employees in public service are particularly disadvantaged. In the USA, people sometimes even have protection from dismissal and may be paid damages if they report cases of tax evasion.

Even in a number of developing countries, which are affected by a lot of corruption, something is happening. In its fact sheet ‘Supporting Anonymous Whistle Blowing Systems’, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, explains how it is supporting its partner countries in their efforts to establish Internet-based systems. In a similar way to the Deutsche Telekom system, these will enable people to report cases of corruption and other legal breaches. Taking the example of Indonesia, since 2003 this country has had a ‘Corruption Eradication Commission’ – the KPK – which has set up an anonymous whistleblowing system with the assistance of GIZ. This includes a feature enabling the simultaneous interaction between the KPK and the whistleblower. This means that first-hand information arrives directly at the right place, while at the same time the anonymity of the whistleblower is guaranteed. The first successes have already been achieved, with several high-ranking officials being convicted, including 65 parliamentarians and seven ministers.

Whistleblowing – Compliance and Risk Management: Interview with Simon Airey, Head of Investigations at DLA Piper

November 2014

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