6.12. Reporting Mechanism and Whistleblower Protection

 

There is no single legal definition of whistleblowers however, these persons are always related to reports on violations observed at work. In other words, whistleblowers are the persons who osberve  various violations (including corruption-related) due to their type of work, yet, at the same time, namely due to the fact that they work  in such working places that  they report on, encounter other type of potential negative consequences than other whistleblowers.

 Whistleblowers may be persecuted at work or even fired, although their reports may often prevent crime and even accidents. Meanwhile, namely these persons usually posses valuable internal information, in particular, when we talk about areas, which require very specific knowledge, also when preparing contracts, participating in various procurement or service provision tenders or on corruption in such expert knowledge requiring areas as construction of the complex infrastructure projects or high technologies. At the same time, namely for these reasons, the information provided by them  may be very valuable and help prevent serious crime or accidents.

The International Labour Organisation defines whistleblowing as “the reporting by employees or former employees of illegal, irregular, dangerous or unethical practices by employers.”

Various international organisations distiguish whistleblowers as persons who need special legal protection. More and more individual states adopt special laws for their protectionor amend the already existing laws  in such a manner that whistleblowers feel more safe, at least from legal perspective.

Effective mechanisms for reporting unethical behaviour, fraud and corruption are important for preventing fraud and corruption as well as management and prevention of related risks in the company. An opportunity to report possible cases of corruption in a safe and simple manner is a very important part of combating corruption. However, so far, only a few rare business organisations in Lithuania clearly publicly encourage their employees to report unethical or possibly corrupt behaviour. Meanwhile, namely those employees who work at the organisation have the best knowledge of the risks related to the peculiarities of their work, see  their colleagues' behaviour at close hand and may timely report possible fraud, corruption or other illegal behaviour.

An internal reporting channel with clear safety standards as well as a clear position of the management, which  encourages reporting violations observed, may become an effective measure to ensure the better internal risk management. In their methodical publications international organisations provide the recommended elements for developing a sustainable violation reporting system[96].

 

Reporting methods and channels

 

Reporting channels must be clearly defined and create an optimal opportunity to receive reports, since otherwise whistleblowers may  lack  trust in the reporting channel as a convenient and effective means for disclosing information.

Whistleblower protection systems usually contain one or more reporting channels, which ensure a safe way of providing and disclosing information. Such channels are usually designed for internal reporting, external reporting to a competent entity and external reporting to the public or the media.

  

Employees who became aware of illegal actions should have an opportunity  to report this, first of all, inside the organisation, with no fear of possible retaliation or any other negative consequences.

It is noteworthy that an open and safe opportunity to report illegal or inappropriate actions may pave the way to open organisational culture between the whistleblower and the  management of the organisation.

The effort in developing such organisational culture should, first of all, be shown by the top management, spreading top-down and maintained in the entire organisation. Organisations should act on a presumption that its employees will demonstrate good will and provide information on improper action, while the top management will support the bravery of such persons in disclosing the information at their disposal and take appropriate actions to protect them from  negative consequences as well as will responsibility  investigate any suspicions of improper or illegal action in the organisation.

Thus the top management promoting internal reporting might control the actions that may harm the organisation's reputation or cause damage if an employee disclosed the appropriate information through external channel.

However, although employers should support whistleblowers and  responsibly  react to the information provided by them, this is not always the case in reality. In such cases whistleblowers are often afraid of their employers' indifference and think that there is no other way than reporting the information externally, in anticipation of a timely  reaction, which would result in the elimination of illegal action.

This that  whistleblowers choose external channels for disclosure of information  may be a clear signal that the organisation promotes insular culture and that the management does not  take appropriate actions and does not  feel responsible for protecting its employees.

The availability of internal and external information channels create an opportunity for the whistleblower to  choose how and whom report the available information to. The case-on-case circumstances should determine the choice of the most appropriate channel.. There should be more than one such reporting channel, for the whistleblower, having taken into consideration all the circumstances,  to be able to  choose the most trustworthy channel.

Nonetheless, both (internal and external) levels (channels) should operate simultaneously that potential whistleblowers had an opportunity of choice whom they would like to disclose the available information to. Also, the whistleblower should have an opportunity to disclose information through external channel if, upon its disclosure, he/she has received no adequate reaction  for a certain period of time or if no appropriate action was taken to investigate the facts reported. Moreover, potential whistleblowers should have an opportunity to apply to external supervisory authorities passing and not using the internal information disclosure mechanism if they are  afraid or have the presumption that they will fail to safely use the internal reporting channels of the organisation, and that their anonymity or confidentiality of personal data may be not ensured, or that the violations reported will be covered up.

Direct access to external channels may also be necessary in case of a need to report an inevitable threat or danger, which may be difficult using internal channels. In any case, despite the choice of the channel for disclosing information, the opportunity for the whistleblower to decide himself/herself whom to disclose the information to creates better objective opportunities to do so in an easier way.

 
If the organisation  has a separate reporting channel, it is recommended to:

  1. Clearly indicate who is responsible for maintenance of the channel, who receives and manages information received by it for the whistleblower  to know that his report will not be discussed by persons that are subject to be reported, and be sure that the channel is trustworthy. The objectivity should be preserved, the facts and evidence reported by whistleblowers must be consistently and objectively analysed.
  2. Clearly indicate and explain the type of this channel, by clarifying whether the person may report anonymously, what he/she might  expect in each individual case and the difference between different ways of reporting, when the institution receives reports by different reporting channels.
  3. Provide clear information on the storage of information related to the copyright  of the report. In order the whistleblowers trust  the reporting channels, they should clearly understand that their personal data will be protected and that the fact that they reported  will not become known to the wrong persons.
  4. Indicate if the  whistleblowers receive feedback and how it will be provided. Reports on possible cases of corruption and ethical violations received must be investigated  in due time as well as according to the procedures established  by the organisation, while whistleblowers in all cases must clearly perceive whether  they are to be informed on the  results  or the course of the investigation.

 

Increasing employees' awareness

 

It should be noted that increasing employees' awareness is a very important element of whistleblower protection, which enables the change in attitudes towards whistleblowers and elimination  of negative attitudes and opinions on reporting illegal or dishonest behaviour. Therefore, it is agreed that open organisational culture and legal regulation of whistleblower protection must be strengthened by means of increasing awareness, communication, training and appropriate evaluations of processes that take place in the organisation. The use of clear and effective methods of communication with employees may result in emergence of mutual trust between the employer and an employee, it also allows the employee to clearly know how the whistleblower protection mechanism would be applied to him/her  as well as the protection measures applied in the organisation, thus encouraging him/her to feel not indifferent to the  illegal and dishonest actions taking  place in the organisation.

In order to ensure the proper functioning of the protection mechanism and that it meets its purpose, the organisations should regularly review its whistleblower protection systems in place by evaluating their efficiency. If necessary, it should also improve the internal regulation by optimising the aforementioned  system  to eliminate any gaps and shortcomings detected.

 

Dealing with cases of corruption abroad

 

If a Lithuanian company or its employee encounters corruption abroad, where, for example, the company incurs significant losses because the competitors pay bribes, or a foreign state official  demands a bribe, this should be reported to the STT or the Lithuanian Embassy (see Annex No. 7). The whistleblower may choose where  to report improper behaviour or undesirable situations, a whistleblower may choose where to report the improper behaviour or undesirable situations – to the authorities in Lithuania or abroad.

Some countries have their own procedure for reporting corruption cases, which might be used by the employees of Lithuanian companies operating abroad. For example, the U.S. Securities and Exchange Commission has a disclosure  system  under which a whistleblower may receive a premium if  the reported information contributed to the clear-up of an economic crime.



[96] https://www.unodc.org/documents/corruption/Publications/2013/13-84498_Ebook.pdf