The Whistle Blowers Protection Act

Ministry of Personnel, Grievances and Pensions

Context:

The Vice President of India, Shri M. Venkaiah Naidu today suggested all corporates to consciously encourage whistle-blowing mechanism and provide adequate safeguards for the protection of whistleblowers. It was important to ensure transparency and accountability in all matters of corporate governance to enhance the confidence of all the stakeholders, including the shareholders.

Background

• Whistleblowing is defined as an act of disclosing information by an employee or any concerned stakeholder about an illegal or unethical conduct within an organization.
  • A whistleblower is a person who informs about a person or organization engaged in such illicit activity.

• The Law Commission of India in 2001, had recommended that, in order to eliminate corruption, a law to protect whistleblowers was necessary. It had drafted a bill as well to address this issue.

• In 2004, in response to a petition filed after the infamous murder of NHAI Official, the Supreme Court of India directed the Central government that, ‘administrative machinery be put in place for acting on complaints from whistleblowers till a law is enacted.’
  • The government, in response, notified a resolution in 2004 named, ‘Public Interest Disclosure and Protection of Informers Resolution (PIDPIR)’.
  • This resolution gave the Central Vigilance Commission (CVC) the power to act on complaints from whistleblowers.

• In 2007, the report of the Second Administrative Reforms Commission also recommended that a specific law needs to be enacted to protect whistleblowers.
  • The UN Convention against Corruption to which India is a signatory (although not ratified) since 2005, encourages states to facilitate reporting of corruption by public officials and provide protection for witnesses and experts against retaliation.
  • The Convention also provides safeguards against victimization of the person making the complaint.

• To conform with such regulations, in 2011 Whistleblowers Protection Bill was proposed which finally became a law in 2014.

• The Companies Act, 2013, as well as the Securities and Exchange Board of India regulations have made it mandatory for companies to take notice of all such complaints.

Key Highlights of Whistle blower Protection Act, 2014

• The act establishes a mechanism to receive complaints related to disclosure of allegations of corruption or wilful misuse of power or discretion, against any public servant, and to inquire or cause an inquiry into such disclosure.
  • The act also provides adequate safeguards against victimization of the person making such complaints.

• It allows any person, including a public servant, to make a public interest disclosure before a Competent Authority. The law has elaborately defined various competent authorities. For instance, Competent authority to complaint against any union minister is the Prime Minister.

• The law does not allow anonymous complaints to be made and clearly states that no action will be taken by a competent authority if the complainant does not establish his/her identity.
  • The maximum time period for making a complaint is seven years.

• Exemptions: The act is not applicable to the Special Protection Group (SPG) personnel and officers, constituted under the Special Protection Group Act, 1988.

• Court of Appeal: Any person aggrieved by any order of the Competent Authority can make an appeal to the concerned High Court within a period of sixty days from the date of the order.

• Penalty: Any person who negligently or mala-fidely reveals the identity of a complainant will be punishable with imprisonment for a term extending up to 3 years and a fine which may extend up to Rs 50,000.
  • If the disclosure is done mala-fidely and knowingly that it was incorrect or false or misleading, the person will be punishable with imprisonment for a term extending up to 2 years and a fine extending up to Rs. 30,000.

• Annual Report: The Competent Authority prepares a consolidated annual report of the performance of its activities and submits it to the Central or State Government that will be further laid before each House of Parliament or State Legislature, as the case may be.

• The Whistleblowers Act overrides the Official Secrets Act, 1923 and allows the complainant to make public interest disclosure before competent authority even if they are violative of the later act but not harming the sovereignty of the nation.
  • In 2015, an amendment bill was moved that proposes, whistleblowers must not be allowed to reveal any documents classified under the Official Secrets Act of 1923 even if the purpose is to disclose acts of corruption, misuse of power or criminal activities. This dilutes the very existence of the 2014 Act.

The Whistle Blowers Protection (Amendment) Bill, 2015

Highlights of the Bill

• The Bill amends the Whistleblowers Protection Act, 2014. 
   
• The Act provides a mechanism for receiving and inquiring into public interest disclosures against acts of corruption, wilful misuse of power or discretion, or criminal offences by public servants.

• The Bill prohibits the reporting of a corruption related disclosure if it falls under any 10 categories of information.
   
• These categories include information related to: (i) economic, scientific interests and the security of India; (ii) Cabinet proceedings, (iii) intellectual property; (iv) that received in a fiduciary capacity, etc.
   
• The Act permits disclosures that are prohibited under the Official Secrets Act (OSA), 1923. The Bill reverses this to disallow disclosures that are covered by the OSA.
   
• Any public interest disclosure received by a Competent Authority will be referred to a government authorised authority if it falls under any of the above 10 prohibited categories. This authority will take a decision on the matter, which will be binding.

Comparison Whistle Blowers Protection Act, 2014 with the Amendment Bill, 2015