Explainer | How well are whistleblowers protected by the law?

Whistleblowing has been making the news after allegations of accounting malfeasance and 'unethical practices' against the CEO and CFO of Indian IT major Infosys came to light.

Who is a 'whistleblower'?

A whistleblower is someone who exposes or brings to public knowledge instances of fraud, corruption or malpractice in any organisation. The said person does so by filing a complaint with the concerned authority.

Is there a law for whistleblowers?

The Whistleblower Protection Act, 2014 lays down a set of rules to protect whistleblowers who attempt to expose any wrongdoing in the bureaucracy. It was tabled and passed by the Lok Sabha in 2011, and finally became an act of Parliament after a delay of over three years, in 2014.

Under this, such disclosures against anyone in the system can be made before a 'competent authority', the same is specified for each category of public servant. For instance, the competent authority to receive a complaint against a government servant would be the Central or State Vigilance Commission. Penalties for false complaints are also laid down under the Act.

However, the Act does not cover corporate whistleblowers but are rules put in place on corporate whistleblowing. The Companies Act and Whistleblower Policy, laid down by the Securities and Exchange Board of India (SEBI), are the rules under which corporate whistleblowers are protected.

Under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the market regulator requires every listed company to establish a mechanism called 'Whistleblower Policy'. This is to enable stakeholders to be able to report cases of unethical behaviour, fraud or violation of the company's code of conduct or ethics policy.

Why is it important?

Ensuring that company employees or people inside an organisational structure are able to expose any irregularities is a crucial step towards improving corporate governance. More so because employees within any organisation are likely to be aware of the ins-and-outs of their workings.

In the past, there have been several cases where whistleblowers have been harassed, threatened and even murdered. A case in point is the murder of an engineer, Satyendra Dubey, in November 2003. He had blown the whistle in a corruption case in the NHAI's Golden Quadrilateral Project.

He is only one among the many who were subjected to threats and harassment during their attempts to blow the lid off such cases of malpractices.