Companies

Why India’s whistleblower protection programme is not as effective as that in the US

K Giriprakash Bengaluru | Updated on October 25, 2019 Published on October 25, 2019

A whistleblower in India is protected under Indian law, but it is not as effective as it is in the US, where a separate entity takes care of such incidences.

The Companies Act, 2013 makes it mandatory for entities listed on the stock exchanges to set up an audit committee to investigate whistleblower complaints. It also provides safeguards against their victimisation, but it does not provide a mechanism to protect them. The safeguards are entirely dependent on the policies drafted by the companies themselves.

According to Vijay Belavadi of BRK Law Firm, the whistleblower does not have enough protection in India. “It is incumbent upon the Directors (usually the top management) of a company to investigate complaints of wrongdoing by the erring top management, which usually defeats the purpose, primarily because of lack of appropriate legislation.”

The Whistle-Blowers Protection Act, 2014, notified on May 12, 2014, has not been implemented so far. In a recent clarification, the Ministry of Personnel, Public Grievances and Pensions said the law may require further amendments before being introduced. The Act pertains to government and public sector enterprises, to provide a mechanism to investigate alleged corruption and misuse of power by public servants, and also protect anyone who exposes alleged wrongdoing in government bodies, projects and offices.

Read also: Infosys: Complainants don’t want their identities revealed

The whistleblower group at Infosys thought it fit to send its documents and voice recordings to the US Department of Labor’s Whistleblower Protection Program, rather than to the company itself, claiming that its identity would be revealed if it did. “We have not sent to the company (recordings and documentary evidence) as our identity will be revealed,” the email to the labour department officials said.

Whistleblower protection in the US

According to its website, the office of the Whistleblower Protection Program enforces protections for employees who suffer retaliation for engaging in protected activities under more than 20 federal laws. "The investigation of complaints of retaliation against employees is conducted by investigators in OSHA’s (Occupational Safety and Health Administration). The investigators are neutral fact-finders; they do not work for either the complainant or respondent (employer)," the website says.

“The whistleblowers have very little protection in India and hence they are wary of sending documentary evidence either to the regulator or to their employers,” Belavadi, who runs the Bengaluru-based BRK Law Firm, said.

Infosys itself has a whistleblower policy and prides itself on the fact that it is among the top three companies in the BSE 100 Index in disclosure ranking, according to a 2016 survey. The website does not give an update for the current year. According to its website, mandatory disclosures, among others, have to do with financial information, board evaluation information, risk management and whistleblower policy and transcripts of analyst engagement and earnings calls.

Read also: Whistleblower complaint: Law firm eyes class-action lawsuit against Infosys

Some of the other companies which have a whistleblower policy are Wipro, which has adopted an ombudsman process policy, where employees are “encouraged to report questionable accounting matters, and reporting of fraudulent financial or other information to the stakeholders, any conduct that results in violation of the company’s code of business conduct and ethics, to management (on an anonymous basis), if employees so desire.

Tata Motors has one and is time-bound. The investigation has to be completed in 45 days, while TCS, SAIL and Reliance Industries are the other top corporate houses which have a whistleblower policy.

Published on October 25, 2019
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