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Can organisations be kept honest during the pandemic?
Author: Professor Kate Kenny, Whitaker Institute, and Dr Lauren Kierans, Maynooth University
Opinion: supporting genuine whistleblowers will play a vital role in stopping organisations engaging in fraud and wrongdoing during Covid-19
The massive dislocation due to Covid-19 represents a "perfect storm" for fraud and wrongdoing in Ireland and elsewhere. The only way to deal with this is to ensure accountability. Supporting genuine whistleblowers plays a vital role.
Right now, though, they are often left exposed and Ireland is at a critical juncture here. We have a pretty good whistleblower protection law on paper, but the last few years have shown problems with it. Some organisations have not taken the law seriously and some workers have found themselves open to retaliation after raising serious concerns. A new EU directive, passed in 2019, offers the chance for Ireland to make significant improvements in how we protect people who speak out about wrongdoing.
Covid-19 brings many changes, including a variety of opportunities for misdemeanours in business and politics. According to The Economist, "cheating is inevitable" in the period ahead. Vast increases in government spending, troubled firms seeking rescue packages, new markets opening for medical equipment including PPE, and suspended parliaments leave us all vulnerable to what The Washington Post terms a potential "pandemic of corruption". Here in Ireland we have been warned of a crisis in transparency and accountability in politics as a side-effect of coronavirus restrictions.
Enabling genuine insiders to come forward with information is critical for staying on top of this. After all, 50% of all fraud, corruption and wrongdoing is first disclosed by employees, not by external examiners, or law enforcement. These concerned insiders save money for businesses in the long term, and ensure healthy governments. But typically one in every five whistleblowers describes retaliation. Protection for this group is vital.
In 2014, Ireland introduced one of the strongest whistleblower protection legislations in the world. Commended by experts internationally, the Protected Disclosure Act offers stronger protections for Irish whistleblowers than available in other countries. Even so, Ireland’s law leaves some people vulnerable when they use it to protect themselves against retaliation for speaking out, for the following reasons.
Burden of Proof
If you are retaliated against for speaking out, you have the right to a remedy under Ireland's disclosures law, but it is not straightforward. In cases of reprisal that don’t involve dismissal, the burden of proof is on you, the whistleblower, to demonstrate that the only reason this happened is because you spoke out. This is difficult to prove as an organisation can often find other reasons for behaviour that seems to be retaliatory, at least enough to cast doubt.
This "burden of proof" is a significant obstacle. Whistleblowers rarely have the financial resources to compete with corporate legal teams. It is the reason that many cases taken under the 2014 Act didn’t succeed. The EU Directive reverses this and places the onus on the organisation to prove that retaliation was for a different reason. Adopting this change would be a valuable step forward for Ireland.
The EU Directive is specific about the kinds of reporting systems organisations must have in place. These systems will make it easier to analyse what happened, when, and by whom during a whistleblowing process. Everything to do with disclosures, including reprisals, will now have to be carefully documented and recorded. Right now in Ireland, only public sector organisations are required to have speak-up policies in place. The EU directive extends this to most private sector firms. And it extends protections to volunteers, shareholders, and even non-executive members of an organization.
In Ireland, if you cannot disclose within your organisation, you have the option of going outside to a "prescribed person". These include county councils, oversight authorities, and regulators. Prescribed persons should be providing the public with information on how to make a whistleblowing disclosure, but four out of five currently do not.
Prescribed persons are supposed to report the number of protected disclosures they receive each year. But as of 2018, a full four years after the 2014 Act was passed, almost 80% were not reporting at all, or were providing incomplete information. It seems that many prescribed persons either do not understand their obligations, or they ignore them. The EU Directive insists on adherence here: authorities must make full information available online, and provide regular reports.
Under the EU directive, wrongdoing must be investigated. The current laws do not require Irish authorities to act on the information disclosed in whistleblowing cases. But the EU Directive demands that "diligent follow-up" of suspected wrongdoing is carried out.
Ireland’s private sector whistleblowers took a blow in 2018. A change in legislation meant that a person could be prosecuted if they disclosed information that the organisation could classify as a trade secret. Whistleblower protection can only be claimed if a "general public interest" test is met to demonstrate why they did it. Such tests are famously difficult to pass in court and many private sector whistleblowers will simply opt not to speak out because of these challenges. The EU Directive demands this restriction be scrapped; trade secrets provisions must not interfere with free speech rights.
A defeated whistleblowing case gives the impression that there was no wrongdoing, even if the case has only been lost because of procedural loopholes
Poor whistleblower laws are effectively cardboard shields, encouraging people to step forward and then failing to protect them when they do. The consequences are serious. A defeated whistleblowing case gives the impression that there was no wrongdoing in the first place, even if the case has only been lost because of procedural loopholes.
Ireland’s protected disclosures law was a pioneer legislation. It works well on paper. As one of the first of its kind, its introduction was accompanied by political wrangling and compromise. This is normal. But now is our opportunity to move forward towards first-class protections.
The EU Directive is not perfect, but it offers better protection for whistleblowers. We have until December 17th 2021 to transpose the Directive. It is vital that Ireland makes these changes sooner rather than later and that they don’t get lost in the noise. We need them to help ensure accountability: in our government, our businesses and our public sector in the turbulent times ahead.