Final study

Sándor Léderer, Tivadar Hüttl

Introduction
A. Legal aspects of the whistleblowing in the CEE region
I. International requirements and national efforts, deficiencies
II. How whistleblower laws are constructed?
III. Whistleblowing and anti-corruption
IV. Public interest – a subsidiary concept to whistleblowing
V. Separate regulations
VI. Acts on classified information or secret acts
VII. Codes of Conduct and Sarbanes and Oxley Act
VIII. Data protection
IX. Other key issues
X. Whistleblowing and the media
B. Socio-cultural aspects of whistleblowing in the CEE region
Summary

Introduction

The first person to notice the threat of misconduct, mismanagement and corruption within a public or private organization is usually someone who works in or closely with the organization in question. While employees are best placed to raise any concerns, they are also the ones who have the most to lose by disclosing sensitive information. Therefore, it is vital for effective risk management that employees can confidently raise their concerns with their employers without suffering any negative consequences. Without this confidence, employees might be inclined to stay silent in professional situations. This denies organizations a fail-safe opportunity to deal with serious problems before they cause real damage. The cost of such a missed opportunity can be huge – fines, compensations, higher insurance premiums, damaged reputations, regulatory investigations, mistrust in public institutions, lost jobs, and even lost lives.
Whistleblowing is „an act of a man or woman who, believing that the public interest overrides the interest of the organization he serves, blows the whistle that the organization is involved in corrupt, illegal, fraudulent or harmful activity.[1] Whistleblowing is widely recognized as a means to fight corruption.  Countries around the world are developing legal regulations that encourage good faith reporting on malpractice, and protection for whistleblowers from retribution. International treaties – United Nations and Council of Europe conventions on corruption – include explicit requirements to insure such laws on national levels.

Employees are more likely to take action with respect to unacceptable behavior if there are channels that offer near absolute confidentiality, protection from maltreatment, and legal aid to those who disclose information on malpractice that threatens the public interest.[2] Many people do not even consider whistleblowing, not only due to fear of retaliation, but also due to fear of damaging personal and work relationships. Whistleblowers take serious risks when speaking out against their employers, colleagues, and business partners. In order to inspire people to reveal information on malpractice, more and more countries are adopting free-standing legislations on this topic.
This study, built on country reports from Bosnia and Herzegovina, Croatia, Hungary, Moldova, Poland, Serbia, and Slovenia, will present the practices of whistleblowers in the Central European region, along with the applicable legislations.[3] Some of the surveyed countries are deeply affected by corruption: Moldova is ranked 105th on the Transparency International’s Corruption Perception Index 2010. Bosnia and Herzegovina is ranked 91th, Serbia 78rd, Croatia 62th, Poland 41th, and Hungary placed 50th. The sole exception is Slovenia, which is ranked 27th on the list.[4] The authors of the present paper are deeply convinced that well constructed whistleblower legislation would be an effective tool against corruption.
Obviously, comprehensive whistleblowing legislation is a rarity in the region, thus we tried to identify legal procedures and concepts that can serve as replacements to whistleblower protections. The national experts from the countries in question prepared their reports by analyzing the results of a questionnaire. The questionnaire focused on the legal and socio-cultural aspect of whistleblowing. The country reports had to address the following: 1. how labor law protects an employee if she publicly raises her concerns with her employer’s activities; 2. does criminal law pursue retaliation or, on the contrary, do criminal sanctions threaten whistleblowers when they release sensitive information; 3. how does the concept of public interest, freedom of information regimes, international public and international private law influence the legal situation of whistleblowers in the region; 4. how do sectoral laws like anti corruption acts or civil servant acts help good faith reporting; 5. what are the socio-cultural dimension of whistleblowing.

The aim of the study is primarily to identify common deficiencies in the regional legislations; secondly to find the most important barriers that impede public interest disclosures; and thirdly, to contribute to more successful whistleblower protection by highlighting beneficial and effective practices in each country.

This study consists of two major parts. Part ‘A’ focuses on all the legal aspects of whistleblowing in the CEE region. Chapter I. of part A analyzes the international requirements, the national efforts, and deficiencies in fulfilling these requirements. Chapter II. gives an overview of how whistleblower laws are constructed. Chapter III. deals with the link between whistleblowing and anti-corruption policies. Since whistleblowing is always a public interest disclosure, the question of public interest as a subsidiary concept to whistleblowing has received great interest. Chapter V. summarizes separate regulations whistleblowers might rely on in absence of special whistleblowing regulation. Subsequently, Chapter VII. examines the acts relating to classified information and secret acts in the region. Chapter VIII. reflects on the importance of codes of conduct and the impact of American corporate law. Chapter IX. focuses on the importance of data protection in connection with whistleblowing, while Chapter X. is an overview of other key issues (time limits, rewards, compensation, burden of proof) relevant to whistleblowing. As a means of protection for whistleblowers without other options, we analyzed the opportunities of the media in disclosing information of public interest. Finally, Part ‘B’ of the paper gives an overall view of the socio-cultural aspects of whistleblowing in the CEE region.

A. Legal aspects of the whistleblowing in the CEE region

I. International requirements and national efforts, deficiencies

There are a number of international treaties which emphasize the importance of whistleblowing and encourage or require countries to protect disclosures made in the interest of the public good. Two conventions in the field of anti-corruption are especially important.
Article 33 of the UN Convention against Corruption states that “each party shall consider incorporating into its domestic legal system appropriate measures to provide protection against unjustified treatment for any persons, who report in good faith and on reasonable grounds to the competent authorities any facts concerning offences established in accordance with this Convention.”[5] According to Article 9 of Council of Europe’s Civil Law Convention on Corruption, each state party “shall provide in its internal law for appropriate protection against unjustified sanction for employees, who have reasonable grounds to suspect corruption, and who report in good faith their suspicion to responsible persons and authorities.”[6] It is not necessary to adopt a specific act on whistleblowing in order to meet the requirements of the international law. None of the conventions prescribe the specific methods for fulfilling these obligations, they simply state the required goal.  Ideally, there should be a single, comprehensive legal framework for whistleblower protection. For instance, the United Kingdom, New Zealand, South Africa, and the US have the most developed laws that are truly extensive.[7] In contrast to those examples, the survey found that whistleblowing legislation in the Eastern European region at this moment is far from ideal: the majority of whistleblowing legislations are disconnected and lack instruments for effective enforcement.
Clearly, international law is unable to satisfactorily force the signatories to implement the desirable level of protection. The UN Convention contains a recommendation.  In contrast, the Council of Europe (CoE) Convention requires the signatories to comply. Nevertheless, the CoE uses only means of “soft law” to influence national legislation. Under Article 14 of the CoE Convention, “the Group of States against Corruption (GRECO) shall monitor the implementation of this Convention.”[8] The monitoring is realized through compliance reports, which are used to help national governments identify the deficiencies in their systems. However, such reports can only be used to express political pressure and not as proper legal enforcement mechanisms. Consequently, when international obligations to adopt whistleblower laws do not coincide with the political will of national decision makers, the outcome is a weak law (Hungary), a failed attempt to adopt a new law (Moldova), political manipulation (Serbia), or negligence (Poland, Bosnia and Herzegovina, and Croatia).
For instance, the Hungarian system lacks effective implementation because of the failure to create the necessary infrastructure (an office to handle the complaints.  In Serbia and Moldova, the proposed laws were swept away in front of the Parliament, while the government of Croatia modified only some sectoral laws. Even though the Polish Ministry of Labor and Social Policy pledged to consider introducing a stronger protection after OECD Working Group on Bribery expressed its concerns over the deficiencies of the protection system, the government later reiterated its original standpoint that existing laws provide sufficient protections against reprisals.[9] Therefore, it is unlikely that Polish lawmakers will adopt proper, free standing whistleblower legislation in the near future. The striking impassivity of the Bosnian legislators served as an extreme proof that even the condemning report published in the GRECO report makes no difference.[10] As the sole exception, the Slovenian Parliament accepted on May 26, 2010 the Integrity and Prevention of Corruption Act, which set out rules on reporting corruption and unethical or illegal activity and the protection of whistleblowers.

II. How whistleblower laws are constructed?

Comprehensive whistleblowing laws generally use broad definitions of wrongdoings, typically covering maladministration, criminal acts, danger to health or safety, and abuses of power. The law adopted in Slovenia, and other similar attempts at legislation illustrate how lawmakers understand the scope of whistleblowing in the region. The Slovenian Integrity and Prevention of Corruption Act[11] covers disclosure on corruption both in the public and private sector. Moreover, officials may report to the Commission if they have reasonable suspicion of illegal or unethical conduct at public institutions.
The failed Moldavian proposal included assumed violation of law, corruption infringements, economic and fiscal crimes, violation of deontological norms, other violations committed in either the private or public sector which constitutes a threat to health and security. The Serbian Act on Freedom of Information allows for the disclosure of data under the free access regime. Protection for disclosure is privilege of public servants, ordinary citizens are excluded. The Hungarian act offers protection for public or private sector employees who report breaches of fair procedure in spending public funds, administrative actions, public procurement, and measures concerning the utilization and alienation of state property. Reports might be submitted to the employer, the supervisory body or oversight institution of the employer, a specialized anti-corruption office assigned in a different act (an institution which in the end has not been established), or “the organization assigned by the employer in the organizational regulations concerning the whistleblowing procedure.”[12]

A further issue is when whistleblowers gain protected status.
In Moldova, whistleblower status would have been recognized if the person submitting a good faith report received a confirmation certificate of whistleblower status issued by the protection body. According to Slovenian law, acting in good faith is the most important factor in determining whether the protection of the whistleblower shall be granted or not by the Corruption Prevention Commission and the Commission of Witness Protection. The Commission primarily takes into account the nature and the gravity of the reported activity, the threatened or caused damage, any breach by the reporting person of the duty to protect certain data, or the status of the person to which the case has been disclosed. This provides flexibility in the assessment, and the relevant practice will show how effective this solution is. Observably, safeguards are guaranteed following the administrative decision, a constitutive act of the public authority is the condition of the protection. In contrast, in a declarative act, the authority simply determines whether the person enjoys safeguards against retaliation, but the protection is granted and rights deriving from the protection are enforceable even if the authority fails to issue an administrative decision. Clearly, the latter solution is favorable, and that is how the Hungarian act is constructed: the whistleblower is protected by the very existence of the legal protection adopted by the Parliament.
Channels for reporting wrongdoing can be internal and external. In some states with comprehensive legislation, disclosures must be made within the organization. In others, legislation prefers external channels such as special authorities, anticorruption offices, etc. Research shows that whistleblowers should have the opportunity to choose between different reporting channels. The availability of multiple channels enables employees to select the insitution or person with whom they are most comfortable sharing sensitive information and the channel they find easiest to use.[13]

According to the Moldavian attempt, the disclosure should have been submitted to the Centre for Combating Economic Crimes and Corruption, which fulfills the role of a protective and investigative body. This is a stricto sensu external disclosure procedure. In Hungary, the report can be submitted to the employer, the supervisory body or oversight institutions of the employer, an office assigned in a different act (in theory: the non existent Public Interest Protection Office), or the organization assigned by the employer in the organizational regulations concerning the whistleblowing procedure. Slovenian regulation distinguishes between the reporting of corruption and the reporting of unethical or illegal activity. The former report can be submitted to the dedicated Commission or other external competent bodies, while the latter shall be made to the superior or a duly appointed person within the organization, and in this case the Commission only plays a complementary role.

III. Whistleblowing and anti-corruption

Since whistleblowing is also one of the instruments in the fight against corruption, it is of utmost importance to examine the existing forms of anticorruption regulations as well as the effects of the legal environment on the struggle against corruption.
Having a specific anti-corruption law is not a necessity in fighting corruption; however, it might be an indicator of a coherent and long-term anti-corruption policy. Although several countries have specific anti-corruption regulations, they are often either completely ineffective in the fight against corruption, or state regulations and funding are not implemented successfully.

Slovenia has adopted the Prevention of Corruption Act in 2003, which is one of the best anti-corruption acts according to the country study written by Integriteta – Association for Ethics in Public Service[14]. However, NGOs also claim that the Commission established through that act has become the main target of the Parliament ever since, as the Parliament has tried to abolish it several times in order to stop the Law from being successfully exercised. Nevertheless, as previously mentioned, the Commission for the Prevention of Corruption and the Ministry of Public Administration of the Republic of Slovenia prepared the Integrity and Prevention of Corruption Act, which introduced new regulations regarding whistleblowing protection.
Although Bosnia and Herzegovina does not have a specific anti-corruption law, the country has a reasonable legal framework for fighting corruption. The regulations can be found e.g. in the Criminal Code, the Law on Criminal Procedure, the Law on Conflict of Interest, the Public Procurement Law, and the Freedom of Information Law. However, despite the firm legal basis, Bosnia and Herzegovina faces major implementation challenges which may reflect a lack of political will to effectively tackle corruption.
Concerning the current state of whistleblowing legislation, Croatia, Serbia, Moldova, Hungary and Poland have no specific, free standing anti-corruption acts. The Government of the Republic of Croatia adopted the National Anti-corruption Program 2006-2008 as well as an Anti-corruption Strategy. Moldovan anti-corruption lawmaking ended with the National Strategy for Preventing Corruption.

Chapter II of the United Nations Convention against Corruption includes model preventive policies such as the establishment of anti-corruption bodies. These anti-corruption bodies should be responsible for the implementation of anti-corruption policies and the dissemination of knowledge; furthermore, they must be independent, well-resourced and equipped with a properly trained staff. With the exception of Bosnia and Herzegovina and Hungary, all countries have specific anti-corruption institutions. In Croatia, the Office for Suppression of Corruption and Organized Crime (USKOK) is the main anti-corruption body. There is also the National Council which monitors the implementation of the National program for the suppression of corruption.

In Slovenia, there exists the Commission for the Prevention of Corruption, but this institution has no real investigative power.[15] In Serbia, the Anti-Corruption Agency is a relatively new organization, and its investigative powers are rather limited. The Moldavian Center for Combating Economic Crimes and Corruption is subordinated to the President of the country with all the possible drawbacks of such subordination. Poland has two institutions designed specifically to tackle the problem of corruption, the Central Anticorruption Bureau and the Governmental Plenipotentiary for the Development of the Program for Preventing of Irregularities in Public Institutions. The Central Anticorruption Bureau’s independence is questionable as it is subordinated to the Prime Minister, who has the authority to appoint and dismiss the Chief of the CAB.

The fate of some of the anticorruption bodies or organizations that are often set up in these different countries with great fanfare can be foretold already at the time of their founding: carrying out – without real judicial competence – only quasi activities, they become either a temporary communications channel of the government or become simply one of the instruments in the struggle between political forces, which those in power use to discredit their political enemies. The country reports clearly show that the anticorruption bodies set up in this last period are unable to make a real breakthrough in the fight against corruption.

IV. Public interest – a subsidiary concept to whistleblowing

In the absence of comprehensive laws, whistleblowers have to use other legal means in disclosing wrongdoings. The whistleblower is usually not directly, personally affected by the danger or illegality. Consequently, the whistleblower rarely has a personal interest in the outcome of any investigation into their concerns: the whistleblower acts in the interest of the public. Every whistleblowing is a public interest disclosure, but not all public interest disclosures are regarded as whistleblowing; there are other ways to make information related to socially harmful phenomena public. These specific rules might replace or complement the whistleblowing procedure. Topic-specific public interest announcements and public interest litigation assume the existence of a public interest concept. According to Bell, the public interest is “used to describe where the net interest of particular individuals may not be advanced, but where something necessary to the cohesion or development of the community is secured.”[16] The contemporary constructions of public interest should at all times serve as a counterbalance to the power of the dominant interest groups of society, yet also consider the prevailing view of the state and the social and economic apparatus and traditions. Well constructed public interest schemes can be a strong means of the opposition in developing and voicing public interest claims contrary to dominant interest groups and values – for instance polluters vs. environmentalists, multinational companies vs. consumer protection NGOs.
The peculiarity of such schemes – in contrast to whistleblowing procedures – is that they provide means to fight against wrongdoings for people outside the organization. The right to report wrongdoings to competent authorities is generally prevalent, but this does not mean that the person who discloses the information has strong means to influence the legal process if it is launched. These public interest disclosures or announcements are typically made to a public agency of the government, and are investigated in an administrative process or in the form of action popularis. The latter is an action to obtain remedy by a person or a group in the name of collective interest, and is considered an effective judicial tool. For instance, in Serbia, in the field of consumer protection, specialized associations of consumers can act in the name of the protection of consumer rights. The public interest concept may appear in the judicial practice.
In Poland, for instance, the “public interest” seems to be frequently referred to in defamation claims. Reasoning based on the public interest can be a valid defense against charges in civil and in criminal procedure alike. From the point of view of whistleblowing, the question arises whether an employee defamed her employer, and consequently, was their dismissal legitimate. Revealing negative information about someone’s inappropriate behavior undertaken in his professional life may destroy his good reputation. Defamation liability is based on the presumption that conduct undermining a person’s reputation is illegal. It is the employee’s duty to prove her conduct legitimate. If the employee shows before the employment court that she acted for the sake of the public interest and within the framework of the legal order when revealing information undermining a good reputation, she will win the case. It is irrelevant whether the trespasser was acting in good faith or not.[17] Moreover, the Polish Supreme Court has ruled recently that in the case of critical press publications, it is sufficient for a journalist to prove that she was acting in the sake of the public interest and with due diligence while gathering materials and verifying facts for publication.[18] In other words, press publications do not need to pass the test of truth.
This concept also frequently appears in the freedom of information laws; the right to know must be balanced against the need to facilitate effective governance. Whistleblowing is widely regarded as an element of the freedom of information. However, the two should not be confused. On one hand, the scope of whistleblowing covers more than the notion of freedom of information, because it may concern exceptional information.  For instance, it may require the disclosure of classified information relating to maladministration. On the other hand, it can be less: generally, public interest disclosures must be done by using official channels. Whereas freedom of information means the unrestricted spreading of information, whistleblowers (according to the rule of thumb) must address the disclosures to the competent authorities. Even free standing whistleblowing regulations, like those of the United Kingdom or Canada, recognize disclosures to the media as a last resort if a series of conditions have been satisfied. The assessment of the public interest is a judgment in which legal interpretation and policy are involved. Furthermore, the test and the concept on which it is based is not fixed; the balance is likely to shift towards transparency as information becomes less current.

The Bosnian act says that the public authority shall disclose information which would otherwise be exempt from transparency, if public interest – e.g. miscarriage of justice, abuse of authority, neglect in performance, etc. – prevails over secrecy. Similarly in Croatia, the public interest test is used in the Secrecy Act: the classifier has to balance the right for access to information and the values that can serve as a reason to classify public information as secret, by using the public interest test. The possibility of overriding confidentiality, and the sanctions that are attached to the breach of secrecy obligations, might serve as an incentive to disclose information even if it is classified.

All in all, well established public interest schemes – let them be special reporting channels or actio popularis – have foundations established within the core values of liberal democracy. The use of this concept is an attempt to further democratic values, and to avoid the otherwise inevitable dominance of the economically powerful, which may readily override presently vulnerable democratic promises and expectations of equality of citizenship. Some scholars argue that this theory generally carries no clear and shared meaning and can lead to confusion, and if there is an alternative, clearer, and less contentious concept available, then the public interest should not be utilized.[19] As a concluding remark, we would like to point out that public interest procedures are unable to replace missing, comprehensive whistleblower laws. The two major elements of whistleblowing laws are procedures facilitating disclosure through various channels, and protection against retaliation and remedies. Public interest procedures generally set up some sort of procedure to facilitate disclosure, but they fail to establish safeguards against reprisals.

V. Separate regulations

An effective protection from retaliation is the main incentive to disclose information on wrongdoing. Each country’s legal system under the scope of this survey has some form of protection which may serve as an incentive, even though freestanding whistleblowing legislation is missing. However, just like the channels of disclosure of information of public interest, the possible ways of protecting those who speak out remain on the level of chapters in various laws. In most countries, labor laws, civil servant acts, and witness-protection acts most typically stipulate the cases in which employees or witnesses of crimes might receive protection from the law.

V.1 Basic rights and duties of employers and employees are secured in labor laws. Labor codes fix the general requirements for cooperation in good faith and fairness, respect for rightful interest, the right to refuse compliance with harmful instructions, and most importantly, forbidding unlawful dismissals. In one Hungarian case, the employees were instructed by their superior to dump waste material and waste water into a river as the waste management containers were full.  The employees refused the order and later gave an interview to a commercial television channel on the pollution. The defendant claimed that the employees tarnished the good reputation of the company and their superior, and violated business secrets, consequently their dismissals were lawful. However he did not claim that the allegations were unfounded. The court emphasized that even if the opinions of the employees were incorrect, they cannot be regarded as false public interest reporting, consequently the ruling invalidated the dismissals.

However, due to the general characteristics of these principles, we cannot interpret them as free standing whistleblowing regulations. Firstly, the remedies offered are always ex post protection – indemnification or reinstatement, – consequently, they do not serve as an effective incentive in protecting the employee’s status or offer anonymity. Secondly, these laws lack the established procedure that promotes internal disclosure. Nevertheless, some legal means might be considered as useful. In Croatia, for instance, a dismissal is not justifiable when the employee addresses a report in good faith to the competent authority with justified suspicion of corruption. Meanwhile, the Polish report emphasizes that whistleblowers who work based on contracts governed by Civil Code are actually deprived of any protection. Labor Code governed employment agreements offer better, but far from satisfactory protection. Additionally, in Bosnia and Herzegovina, the Law on Companies of Republika Srpska stipulates that “a company shall fully protect persons who, acting conscientiously, in good faith, indicate the existence of corruption to competent authorities.” [20]

V.2 Witnesses and other participants in the penal process are to be protected from serious threats. Witness protection focuses mainly on the most serious crimes, whereas the basic scope of whistleblowing is generally less severe. Protecting witnesses or whistleblowers might overlap, as both offer confidentiality and the protection of identity. In this sense, the two are similar, but the basic idea behind whistleblowing is not to protect the people who disclose information on the most serious crimes, but on less severe harmful acts. Additionally, while witness protection is offered against threats against life or physical integrity, whistleblower laws protect the professional status of a person. Finally, these laws are not necessarily applicable, because whistleblowers often suspect wrongdoing without having formal evidence, and thus would not be able – or willing – to testify.

V.3 The special legal status of public officers distinguishes them from ordinary citizens. Frequently, the right and the duty to report are accompanied by protective measures. Policemen in Hungary have to file their complaints to their superior or even externally, to the minister who oversees the police. There are explicit rules protecting policemen against retaliation. In Croatia, civil servants have a duty to report any wrongdoing discovered in connection with their line of duty, and they are protected by law in cases of whistleblowing. They cannot be let go and are protected against any kind of abuse.

The right of refusal of specific commands that result in breaking the law is a chance to evade corruption or taking part in corrupt actions as an employee or civil servant. This right has a common root with whistleblowing: one must have the opportunity to maintain her personal integrity even in cases of official commands or informal pressures to take part in wrongdoings. Almost every country taking part in this research has regulations in place relating to these problems. Relevant provisions might be found in the civil servant codes, but may also appear as part of the labor law. The Slovenian Law stipulates that civil servants shall not be held liable for damages or be punishable if they commit a disciplinary violation, or cause damages by carrying out written directions or instructions from their superiors.
In Bosnia and Herzegovina, a civil servant may commit a disciplinary violation in the case that she refuses to execute legal orders from her direct superior, but she is not obligated to execute the given order if the execution of that order would constitute a criminal offence.
The right to refuse illegal orders does not always mean that an employee is truly protected when refusing a command by her superior. As the Serbian country report points out, the protection guaranteed is not always sufficient: “Civil servants cannot be legally punished because of rejecting or reporting of wrongdoing of superiors. However, there is no protection if such a civil servant suffers damage somehow, on the basis of other legal ground.”[21]
The Polish report demonstrates the lack of protection through a case study: “Janusz R. – a former employee of a state university. He worked in the economic department and was responsible for supplies made to all faculties within the university. He refused to follow an instruction made by his boss that all purchases should be made with one particular supplier. The refusal was based on the fact that the offer was one of the least competitive at that time. He raised his concerns internally, and as a result the internal audit was carried out. Though, no financial losses were established and the case was closed, Janusz R. was transferred to a lower position within the archive department. He perceived the transfer as a reprisal which in his opinion was also meant to cut him off from the documents and information. Believing that behind the irregularities there was also an offense of corruption, he reported the case to the prosecutor’s office. Soon after, he was dismissed based on the grounds of provocative and conflicting behaviors. Although the investigation confirmed the university might have incurred financial loss, the investigation was eventually closed as the total amount of the damage did not suffice to constitute an offence. Janusz R. was not entitled to appeal from the prosecutor’s decision due to the fact that he was denied a formal status of a victim.”[22]
In conclusion, we can emphasize that these sectoral laws adopted whistleblower protections in a piecemeal fashion.  They are found in a number of different statutes, and typically cover only certain types of people and information. The main disadvantage is that they are fragmented, do not cover many types of wrongdoings, and their utilization is hampered, because they are not well-known outside their own sectors. Protection and disclosure channels offered by sectoral laws are only employed after long struggles with authorities, which makes the reporting and disclosure of information even more risky.

VI. Acts on classified information or secret acts

Acts on classified information are significant barriers to anti-corruption efforts, because they give very powerful rights to data processors, and potential perpetrators of wrongdoings in the public sector, to hide information. Generally, penal sanctions are received when someone discloses classified information without proper authorization. The criminality of such acts deter people from speaking out, even when aware of serious wrongdoings. Information may be classified if its disclosure to unauthorized persons would hurt or endanger the security or the independence of a country, or cause serious economic and political losses. Proportionality between the right to have access to information and protection of values guarded by the classification is a difficult question, and potential whistleblowers are not in a situation to influence the balancing process. Public interest tests exist in several countries (see Chapter IV.), which should be useful for whistleblowers in estimating the potential harm caused when deciding whether to disclose information or to stay silent, and also to avoid sanctions. Regretfully, these mechanisms do not work effectively. In Bosnia and Herzegovina, it is obligatory to assess whether the interest of the public to know certain information is more important than the interest of not disclosing the information with the aim of protecting specific values. If the authority determines certain information may be considered an exemption from the freedom of information, but the public interest is more important, information should be made accessible to the public rather than protecting certain values in society, and the public authority shall make the requested information public. When the data processor denies the request, an administrative decision should be issued explaining in detail why the specific information shall not be made public. This administrative decision can be appealed, but the administrative procedure is complicated and ordinary citizens are not able to apply the available legal remedies.

Serbian law provides the possibility of abolishing the classification of public interest overriding the interest of secrecy, but this right to balance between two equally important goals is reserved for top state officials.  Consequently, low-ranking whistleblowers are not capable of releasing this kind of information.
Under the Slovenian freedom of information act, information shall be disclosed if public interest prevails over public interest or interest of persons not to disclose the requested information, except in case of classified data of the two highest level of secrecy. Consequently, the most sensitive pieces of information are excluded.
Protection of classified information in Hungary is regulated by the act CLV of 2009.  Formal classification procedures are set up by the act, in which possible damages to protected public interests caused by unauthorized access or disclosure are assessed. According to the potential level of the damage caused by transparency, information is classified at different levels which may be regularly reviewed by the source of the information. The original bill –presented to the Parliament in 2009 – foresaw a list of illegal classifications of information where classification was used to conceal violations of the law, administrative error, lack of efficiency, or avoiding competition or embarrassment of a person or institution. Information classified contrary to this provision should not have been classified; therefore, their disclosure would not have constituted a criminal offence. The same provision also provides for a public interest test in which public interest in withholding and disclosing classified information would have been balanced. Unfortunately, neither the list of illegal classifications, nor the public interest test was adopted in the final text of the law.

National security is an extremely delicate area in relation to transparency, and it is generally weakly addressed in freedom of information acts around the world. An important decision in European jurisprudence on the conflict between the right of reporting and the duty to preserve secrecy was delivered by the   European Court of Human Rights. In the case of Guja vs. Moldova, the Court ruled in favor of whistleblowing. Mr. Guja was a public employee who had released an unclassified document that revealed political manipulation of the justice system, and was subsequently dismissed. The Court found a violation of the freedom of expression (Article 10 of the Convention). It “considered that the public interest in the provision of information about undue pressure and wrongdoing … was so important in a democratic society that it outweighed the interest in maintaining public confidence in the Prosecutor General’s Office.”[23]

VII. Codes of Conduct and Sarbanes and Oxley Act

So called “soft law” is a possible way to implement some kind of whistleblowing protection. The term refers to quasi-legal instruments which do not have any legally binding force. Soft law instruments are usually considered as non-binding declarations that lack effective enforcement mechanisms, but which nevertheless hold much potential for becoming “hard laws” in the future. This “hardening” of soft laws may happen in cases when declarations and recommendations are the first step in the legislative process, and principles already stated in the soft laws will be referenced.

VII.1 Codes of conducts are typical soft law instruments. These collections of rules and policy statements intend to assist employees and directors in making decisions about their conduct in relation to the institution’s affairs. Each employee must manage her professional and personal affairs so as to avoid situations that might lead to conflicts or even suspicions of conflict between self-interest and duty to the institution.

Codes of conduct are quite prevalent in the public sector. Characteristically, general codes of conduct modulate the daily activity of public servants. The Hungarian Parliament adopted a decree on the fundamental ethical requirements of the public sector. It has no obligatory power, but it sets the direction for public organizations. It prescribes setting up appropriate channels so that reports are definitely forwarded to the investigating authorities concerned. Whistleblowing is covered in the Code of Ethics of Public Servants which ensures that public servants who report violations of the code or criminal offences shall not suffer any kind of damages. However, this provision has no sanctions, thus its usefulness is questionable.
The Serbian Code of Business Ethics provides anonymity to a person who reports a violation of the code to the Chamber of Commerce.

Unfortunately, most codes of conduct in the public sector are poorly promoted, monitored, and implemented.

Codes of conduct are spreading across the private sector, too. OECD in the Guidelines for Multinational Enterprises encourages companies to issue voluntary codes of conduct, which are expressions of commitment to ethical values in such areas as environment, labor standards, or consumer protection. Specialized management systems are recommended to develop methods to evoke respect for these commitments – these involve information systems as well.[24]

VII.2 International business law is also strongly influenced by some national laws. It is common sense that the American business law serves as an example for multinational companies. As a response to the Enron scandal, the Congress of the United States adopted the Sarbanes and Oxley Act of 2002 (hereinafter: SOX). As the whole scandal was triggered by internal whistleblowing, unsurprisingly, SOX contains one detailed section on whistleblowing. The Act attempts to encourage and protect whistleblowers in a variety of ways by providing channels for anonymous whistleblowing, establishing criminal penalties for retaliation against whistleblowers, and protection for whistleblowers in order to preserve their work status. In the terms and conditions of the employment, it prohibits any kind of retaliation, such as discharging, demotion, suspension, harassment, or any other kind of discrimination against an employee for whistleblowing and reporting secure information to someone within the organization who has the authority to investigate, discover, or terminate misconduct. It also requires a channel for anonymous whistleblowing. The SOX applies to every publicly registered company issuing securities in an American secondary exchange market.

Does SOX influence Central European whistleblowing? The former chairman of the Security Exchange Commission once stated at a conference, that “our mandate is to implement the Sarbanes-Oxley Act fully for all companies, foreign or domestic.”[25] The provisions of the SOX are mirrored in the Nasdaq and the New York Stock Exchange (hereinafter: NYSE) rules. If listed on NYSE, companies must certify their accounts to those markets yearly, and this certification process implies that companies are in a position to assert that they comply with whistleblowing rules.[26] The law is vague enough that it may cover U.S. citizens working for a foreign subsidiary, or for a private foreign subsidiary of a covered U.S. company, or a foreign employee working for a foreign subsidiary, because Section 806 virtually makes no distinction between domestic and foreign companies that have securities registered or listed in the USA. However, extra-territorial effects of the SOX are not recognized – neither by the US Courts, nor by foreign jurisprudence. In one appellate decision on the extraterritorial application of SOX, the First Circuit found that the law does not protect a foreign worker who reports irregularities at a foreign subsidiary of a U.S. corporation.[27] The court described the policy behind the presumption as preventing unintended conflicts between U.S. laws and foreign legal regimes. However, this interpretation fails to take into consideration the reality of globalization: the mere fact that over a thousand foreign companies list their securities in the United States.[28]

Multinational companies in Central Europe tend to have some kind of internal channel to disclose wrongdoings. For instance, the biggest Croatian telecom company implemented a code of conduct of the Deutsche Telekom Group, which formulates common rules for every subsidiary company. All employees, business partners, customers, and stockholders can report violations as well as irregularities such as fraud or unlawful practices. Absolute confidentiality is guaranteed as it is possible to report anonymously. Furthermore, the code of conduct expressis verbis stipulates that good faith reporting does not constitute grounds for dismissal. US Steel Serbia –according to the country report – also established reporting channels for violations of their Code of Conduct.

VIII. Data protection

The implementation of whistleblowing schemes rely on processing personal data: collection, registration, storage, and disclosure of data relating to an identified person. On one hand, personal information of the whistleblower is handled, except of course the anonymous reporting scheme; on the other hand, the personal information of the presumed wrongdoer is processed. As a result, in most European countries the data protection rules shall be taken into consideration in connection with public interest disclosures.

The most important common ground of data protection rules is the Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995. Member states must have data protection rules in harmony with the Directive, and those who apply for EU membership, have to adjust their data protection regulation to the European law. Consequently, whistleblower or other public interest disclosure regulations must be implemented in compliance with EU data protection rules. To be legitimate, the data processing in a whistleblowing regulation has to satisfy one of the grounds set out in Article 7 of the Directive. Under Article 7 c.), the establishment of the whistleblowing system is legitimate if it is necessary for compliance with legal obligations to which the data controller is subject. This means that the establishment of a reporting channel should have the purpose of meeting a legal obligation imposed by the EU or member state law, and more specifically, a legal obligation to establish internal control procedures in well defined areas.[29] According to Article 7 f.), the establishment of a reporting system may be found necessary for purposes of a legitimate interest pursued by the controller or by the third party to whom the data is disclosed. According to the Article 29 Working Party, the group of European data protection authorities, “the goal of ensuring financial security in international financial markets and in particular the prevention of fraud and misconduct in respect of accounting, internal accounting controls, auditing matters, and reporting as well as the fight against bribery, appears to be a legitimate interest of the employer that justifies the processing of personal data by means of whistleblowing system in these areas.”[30]

In Poland, anonymous whistleblowing procedures recommended by economic organizations[31] or by law (e.g. SOX), might face data protection rules as a legal barrier with regards to securing confidential channels to raise concerns. The Act on The Protection of Personal Data imposes an obligation on the entity processing personal data to notify the individual whose data is being processed about the source of the data. This means the identity of a whistleblower should be revealed to a person whose conduct raised ethical questions. Such notification should be made immediately after the data is entered into the database and through the initiative of the processing entity. The Hungarian Data Protection Commissioner issued several statements in which he condemned the whistleblowing system, because the consent of the employees who may become subjects of the disclosure is not required.
The lack of explicit rules for processing personal data related to public interest disclosures is a potential barrier to lawful whistleblowing. On one hand, the identity of the whistleblower is not protected; on the other hand, informational self determination of the subject of the disclosure might be affected without proper legal authorization.[32]

IX. Other key issues

Procedural time limits, compensation, and the burden of proof are key issues in whistleblower protection.

IX.1 A quick procedure is essential: lengthy investigations and unpredictable procedures discourage potential whistleblowers, as one might not take risks in the absence of a foreseeable process. As there are no special regulations for whistleblowers in most countries, the usual time limits for legal procedures are supposed to enhance judging in whistleblower cases. Although most of the countries have regulations for the maximal length of court procedures (e.g. labour disputes); in reality, they often last much longer, and turn such procedures into a nightmare for employees in conflict with their employers.
Even though the Hungarian government failed to install the competent institution, and consequently the procedural rules exist only on paper, the act contains time limits. The future office has to launch the process if the disclosure is well founded within 8 days of receiving the information. Nevertheless, there is a subjective and an objective time limit: the whistleblower can file the disclosure up to 12 month after becoming aware of the wrongdoing, and the disclosure is not investigated if 5 years have passed after its commitment. The Slovenian Act refers to the general administrative procedure, which contains strict time limits. According to the Moldavian draft law, the Protection Body has to make a decision within 5 business days after the submission of a report, whether to launch a procedure itself, or initiate an investigation at the competent body. The investigation body is obliged to examine the report and notify the protection body about the results of the investigation within 45 days. If requested, the protection body has to notify the whistleblower about the results of the investigation within 3 business days.

IX.2 Most whistleblowing laws provide compensation to the whistleblower in cases where they have suffered harms that cannot be remedied by any injunction. It usually means a compensation of the lost salary, but can also include money for damages.[33] In countries with working whistleblower protections, compensation starts soon after an employee loses their salary, if they can prove that it happened because of whistleblowing. In standard labor procedures, compensation is given only after the end of the labor dispute, when it is decided that that the employee has been dismissed illegally. However, this kind of compensation usually comes much too late. Hungary has a regulation for compensating whistleblowers. An employee whose income situation deteriorated due to her whistleblower activity is supposed to receive financial help when requested. The amount of the subsidy is at most the difference between the reduced and the original salary, but at least 50% of it. Employees made redundant or left without a salary receive 75% of their original wage. Aid can only be given if a legal dispute has been initiated, and has to be ceased after a final judgment in the dispute. According to the Slovenian legislation, if the whistleblower has been exposed to retaliatory measures and adverse consequences have occurred, she shall have the right to demand reimbursements for illegally caused damages from the employer. The Commission may offer assistance if a causal relationship is established between the adverse consequences and the retaliatory measures.

Giving rewards to whistleblowers is a highly debated topic. Many whistleblower experts are weary of such provisions, seeing them as detracting from the public interest principles of legislation. A number of Asian jurisdictions give huge rewards to people who have revealed corruption.[34] In Eastern-Europe, the above detailed practice is relatively unknown. Only Hungarian legislation deals with this question, and offers rewards to whistleblowers of corruption and cartels. The Moldavian draft law also rewards whistleblowers with a maximum 10% of the amount of the material damage redeemed to the state.

IX.2 Adversary systems of justice typically give the parties the task of adducing evidence on contested issue in litigation. Such a policy raises the problem of dividing that task between the parties. Burden of proof rules are the device courts employ to address this problem. By giving a specified party the burden of proof on a given issue, the court tells that party that she must either come up with evidence supporting her position, or otherwise suffer an adverse judgment.[35] The most significant contribution of the burden of proof to moral practice is through the burden allocation principles. Cases in which one party has the burden of proof are exceptions. Generally, the burden of proof should be assigned to the plaintiff who seeks to change the present state of affairs and who naturally should be expected to bear the risk of failure of persuasion. Another general rule in continental legal systems is that a party is not required to prove in the negative.

Some common law systems – which adopted comprehensive whistleblowing acts – place the burden of proof on the employer. Under the American federal whistleblower regulations, the agency has to show by clear and convincing evidence that the dismissal would have taken place similarly in the absence of the public interest disclosure. In other words, the agency has to prove that the dismissal is not related to the disclosure; it has to prove the negative. Countries discussed in the present study have similar rules. In Hungary, the burden of proof is shared; the employee has to prove that she made a disclosure, and the employer has to show either that the dismissal or other measure is not related to the disclosure, or that the employee filed a false claim or did not act in good faith. According to the Slovenian act, if the person reporting the case states facts in a dispute that give support to the allegation that the report caused that person to be subjected to retaliatory measures from the employer, the burden of proof shall be on the employer.

The question arises: how to justify unconventional rules of burden of proof? The possession of evidence vindicates it to some extent: clearly, the party in possession of the documents should have the burden of going forward. As the employee and the employer are often in asymmetrical positions regarding information, the law must presume that the party in the stronger position of knowledge and information– the employer – can prove with less difficulty that the employee’s claim was false, or that the disadvantageous measure would have occurred anyway.

Another theoretical reason lies in the possibility of errors in the course of judicial procedure. When one party has much at stake – e.g. a whistleblower defendant and her professional status, just like an accused and his liberty of movement, – her situation is less dire if the burden is on the other party. In the author’s point of view, the purpose of the judicial – or administrative – procedure is the most important factor for the legislator when designing the rules of the burden of proof. When the goal is solely the protection of the whistleblower, then the one-sided requirement to prove the negative seems legitimate. However, if the legal process also aims to clarify the truth of the content of the disclosure, then the society is interested in obtaining accurate information, and consequently, it has a reason to devise systems that increase the probability that such information will be made public.

X. Whistleblowing and the media

The mere existence of a free media has a latent, deterrent effect on misconduct. However, even free-standing whistleblowing regulations recognize disclosure for the media as a last resort. In Canada, South Africa, and United Kingdom, the law allows such disclosures if a series of conditions have been satisfied.[36] The reason of the higher threshold is to encourage internal disclosures; disclosure to the media is the most extreme form of external disclosure.
In the countries affected by this study, the most important conjunction between public interest disclosure and media is the protection of sources. The widely prevalent right and duty of the journalist to keep the identity of the source secret recognizes the media’s role in whistleblowing. Simply put, it means that the authorities, including the courts, cannot compel a journalist to reveal the identity of an anonymous source for a story. The right is based on the recognition that without a strong guarantee of anonymity, many people would be deterred from coming forward and sharing information of public interest with journalists. Thus, if the media have the possibility to hide the identity of their sources, then disclosure of sensitive information on wrongdoing is possible. Consequently, if the source has to be disclosed, whistleblowing is not promoted. As noted by the European Court of Human Rights: “Without such protection, sources may be deterred from assisting the press in informing the public in matters of public interest. As a result the vital public – watchdog role of the press may be undermined and the ability of the press to provide accurate and reliable information may be adversely affected.”[37]

The protection of sources is not absolute. In Serbia, journalists have to name the identity of the source when the criminal offence concerned is punishable with 5 years of imprisonment or more. In Poland, though the journalist’s obligation to secrecy can be revoked under some circumstances by the criminal court, the identity of the source of information will always remain secret. Even in case the whistleblower discloses classified information to a journalist and thus commits an offense, neither the prosecutor nor the court can demand her identity. In Slovenia, the journalist must – whenever possible – indicate the source of information, because the public has the right to know that in order to evaluate its relevance and credibility. The journalist can refuse to testify if he believes his source may be at risk. Editorial personnel and journalists are obliged to reveal the source in cases stipulated by criminal legislation. Interestingly, in Bosnia, the right to hide the identity of the source includes the right not to disclose any documents or facts that might reveal the identity, particularly written, audio, visual or electronic material.

The heavily criticized Hungarian media act eliminated the protection of sources of journalists from January 1, 2011 onwards. Despite the wide range of alternatives that other nations’ laws offer, Hungarian decision makers opted to follow neither the path of American shield laws nor the example of the European Court of Human Rights (Sanoma Uitgevers B.V. v. The Netherlands, 2010). According to the provisions of the Act, journalists are allowed to protect their sources only when the information to be published is ‘in the public interest.’ This kind of protection, where an authority decides on whether the publication is ‘in the public interest,’ rests on no legal right. It is an occasional, condition-ridden protection, where the conditions are set by an authority, and not by journalists. Furthermore, journalists are required to reveal their sources to authorities or courts for vague purposes such as crime prevention or public order. This means that any source has to be communicated to police or prosecutors under very vaguely defined circumstances, and not even a court order is required.
Another danger to the protection of sources is the Data Retention Directive of the European Union. This Directive – adopted in 2006 – compels phone and Internet companies to indiscriminately collect and store data about their customers’ communications. Such generalized data retention puts confidential activity and contacts at risk of disclosure by way of data leaks and abuses. The main problem is that telecommunication data is handled by entities different from the source or the journalist.

All in all, sources can often be whistleblowers, thus confidentiality is essential for the media’s ability to gather valuable information on wrongdoings inside government institutions or private corporations. Lack of source protection discourages sources to talk to journalists and wrongdoings will not be exposed.

B. Socio-cultural aspects of whistleblowing in the CEE region

Whistleblowing is a highly unknown term and practice in Eastern-Europe, even in countries where whistleblower protection is already taken into consideration. There is practically no country in our survey that has any statistics on the incidence of whistleblowing-like activities. As a rare exception, PricewaterhouseCoopers conducted a study in Hungary, which mentions that 17% of economic crimes were discovered through whistleblowing.[38]
Only Slovenia (Žvižgač) and Croatia (Zviždač) have their own expressions for the word “whistleblower.” In Serbia, the English term is relatively well-known, but all Serbian synonyms have negative connotations. In Bosnia and Herzegovina, Moldova and Poland, there aren’t any neutral translations for whistleblowing and people tend to use the words “snitch” or “denouncer” to describe whistleblower activity. The situation is almost the same in Hungary, although the long existing term of “announcer in public interest” is increasingly used for whistleblowers.

In almost every country, the press reported several stories that can be considered whistleblowing. In most cases, an employee disclosed information of public interest and as a consequence, she had to face retaliation which was most frequently dismissal from the company or institution. The first whistleblower in Croatia to gain great media attention was a bank employee, who disclosed that the wife of ex-president Tudjman had made a huge bank deposit which Tudjman had not mentioned in his property card. She got fired from the company. An example of the most brutal retaliation is the story of Milan Vukelic, a civil servant who publicly accused officials in Bosnia-Herzegovina’s Republika Srpska of corruption. He was killed on November 7, 2007 when his car exploded. Milan Vukelic, a town planner for Banja Luka’s municipal authority, accused both his boss of corruption and the police for threatening him.

Common channels for reporting corruption are public hotlines and email addresses, most of which can be contacted anonymously.The aim of operating such a hotline is mainly to enable potential reporters to share their information with relevant channels without the fear of revenge. In this case, one tries to substitute the necessary protection of the reporter by obscuring the reporter’s person, which often makes it impossible to carry out further investigations since the flow of information is in one-sided and the authorities cannot make contact with the witness/reporter. In case of non-anonymous hotlines, the hotline is simply a technical instrument and as such it is not much different from a traditional declaration. Bosnia and Herzegovina, Croatia, and Serbia have general hotlines for reporting criminal offences. Also, Transparency International BiH operates a service providing legal assistance to citizens, where you can also report corruption via phone or email. In Croatia, citizens mostly report corruption and malpractice anonymously and directly to NGOs such as Transparency International and the Association Whistleblower.
In Hungary, the National Development Agency, responsible for managing EU funds, set up an online service for reporting any kind of irregularities connected to EU funded projects. Reports made on this site can be traced by anybody. From April 2010, in specific cases and upon certain conditions, those submitting indispensable information about so-called hardcore cartels might be entitled to an award. Information about cartels shall be submitted to the Cartel Section of the Hungarian Competition Authority.
In Moldova, almost all central and many local public institutions opened anti-corruption hotlines. To evaluate the quality of these services, TI-Moldova conducted a study in 2008, with the following results: The hotlines are not operated professionally and the operators show little interest in following the cases. Also, there is no clear mechanism of receiving, registering complains, and passing them to the competent body/subdivision. And finally, operators do not have to take responsibility if they do not forward a report to the investigative body.

If the authorities fail to guarantee sufficient channels and protections for whistleblowers, and the press lacks the capacity needed to investigate and publish their stories, NGOs might help with advice and advocacy. However, the role of NGOs does not stop at guiding potential whistleblowers: non-governmental organizations may also operate as watchdogs monitoring governmental politics and malfunctions of the judiciary system. NGOs can enforce the adoption of new laws as well as bring in new aspects in the lawmaking procedure.
In Bosnia and Herzegovina and Slovenia, there are no NGOs concerned with whistleblowing. In Slovenia, the recently established Society for Integrity in Public Sector has an eye on national procedures regarding whistleblower regulations, but does not deal with specific cases.
According to the Croatian country study, non-governmental organizations play an important role in Croatia. The Association Whistleblower (Zviždači, founded in 2008) provides a hotline for reporting corruption and malpractices. As a consequence, more than 1500 people have reported corruption or malpractice in about one year. Transparency International provides advisory assistance to people who report corruption or malpractice and serves as an independent disclosure channel.

In Serbia, the Coalition for Free Access to Information (a dozen NGOs) promoted the idea of whistleblower protection through the Free Access to Information Act. Transparency Serbia – also member of the Coalition – has been running an anti-corruption legal advisory centre for several years. In Moldova, two NGOs have anti-corruption hotlines.In Poland, two NGOs are active in supporting whistleblowing, namely the Stefan Batory Foundation and the Helsinki Foundation for Human Rights.

Transparency International Hungary and HCLU regard whistleblowing as a key issue in tackling corruption. TI Hungary drafted a concept paper in 2008 to promote a comprehensive policy concerning whistleblowing and participated in the legislative process by giving opinions on the draft of the governmental legislation. K-Monitor, another anti-corruption NGO provides an online opportunity for whistleblowers to share their information and experiences.

The attitude of the society and the press towards whistleblowing varies not only among countries but also within the society: On the one hand, people still regard reporting to the authorities as some kind of negative, snitch-like activity, whilst on the other hand, they support those who have the courage to stand up against misconduct. The fact is that whistleblowing is still highly unknown in this region, and there have not been any public discussions on its usefulness or raison d’etre. The press itself often negatively reports on whistleblowing legislation and cooperation with the authorities, although they themselves depend on stories received from informants.

In Bosnia and Herzegovina, social perception of those who report possible irregularities in their environments is generally negative – according to the Bosnian country study. “Another problem can be the fact that the majority of population is ready to publicly speak about bad functioning of the state, or companies, corruption and visible crime, but these statements only represent general attitudes. Citizens are not ready to officially report these findings to competent entities in their environment, and it is common that citizens do not report even those criminal offences they encountered by chance. Citizens do not trust the institutions: police, prosecutor’s office, state authorities and they generally fear, often rightly, that they will only cause problems to themselves by reporting perpetrators of criminal offences which will lead to inconveniences for persons reporting, while there is a clear perception that the reported persons will suffer no consequences whatsoever.”[39]
The Croatian and Serbian country studies claim that the most common type of attitude towards whistleblowing in the press is positive and supportive, and in Croatia, the only discussion on whistleblowing and reporting to the police takes place in the media. The media’s role in whistleblowing activity is also recognized by the need for special privileges for the protection of their sources.
Official statistics of the Slovenian Commission for the Prevention of Corruption attached to the Slovenian country study show that citizens are more and more inclined to report on corruption cases: the number of the reported cases (in 2007-2008) is around 600 a year.[40] In Poland, however, the general attitude towards whistleblowers is rather hostile.
In some countries, statistics are available on the willingness of people to report corruption or other malpractices to the authorities. In Hungary, a study carried out in 2007 by the Gallup Institute shows that 69% of the people taking part in the survey did not know who to report corruption to. 57% of the respondents said they would report corruption, but only 6% had already done so.[41]
A survey conducted in 2010 by TI Moldova among 418 representatives of 15 central public institutions asked whether they would report corruption to their superiors if they were aware of specific cases. 34% of the answers were in the negative. The main reason for not reporting was the fact that “it would cause problems” – 53.4% of the respondents agreed with this response, while almost a quarter of the people responded “it would not change anything.”[42]
In a study carried out by TI Serbia in 2006, asking “whom would you turn to if you would face corruption,” only 11.1% of those questioned named the police.[43] The Serbian country study points out that the main reason for not reporting is often the fear of retaliations or any other problem. Even if not expecting to suffer any damages, potential reporters do not have any incentives to make such reports. Furthermore, they may often expect to be bothered later (to provide statements during the investigation and court sessions). Therefore, such reports are more likely to be made by persons directly affected by wrongdoing.
The research carried out in the different countries show clearly that in general, the public is not aware of the channels available for reporting cases of corruption crimes, and of their related rights and obligations. This is due, on one hand, to inadequate information, and on the other hand, to the lack of confidence in the authorities. Therefore, it is not surprising that in the region, whistleblowing as such is an almost unknown phenomenon without any tradition.

Summary

A whistleblowing policy is a testament to the commitment to good governance, and a guide for employees on how to raise concerns responsibly. It can help create an environment in which the employee can understand her responsibilities, and the management can demonstrate its accountability. Without a safe alternative to silence, a concerned employee may feel their only option is to say nothing or to disclose or anonymously leak information outside the organization. An effective whistleblowing policy will create the opportunity to take the necessary corrective action.

Having analyzed the country reports contained in the survey, the authors observed the following:

Without comprehensive legal regulations, the state of whistleblowers is insecure: it is impossible for them to identify the legal consequences of their steps (e.g. persecution of misappropriating a secret), and the dangers resulting from their special situation. In the majority of the countries under review, labor law is the last resort, which also has an institutional framework that is far from adequate. There are some reassuring findings, mainly referring to Hungarian and Polish judicial cases.  Yet, as the legal systems of these countries are not based on the rule of precedents, it will be easy to depart from these positive steps in future cases. Besides, the region is not famous for predictable, calculable legal decision making.

The insecure situation of whistleblowers is well documented in Hungary, where it is forbidden for the employer to persecute a discloser of information of public interest (i.e. a whistleblower), yet the respective law does not guarantee the possibility to control and to enforce this prohibition. In Slovenia, where lately a new whistleblowing act corresponding to international standards has been adopted, whistleblowing is still in its infancy and there are no analyzable practical experiences regarding the functioning of the law as yet.

To include a well structured law into the fabric of the existing legal practice comes with enormous challenges: For instance, the Slovenian act does not make it clear how the rules regulating the protection of data and secrets will be harmonized with the new regulations aimed at encouraging disclosures and protecting the disclosers. Whistleblowing regulation has to be organically adapted into the broader legal environment. Recalling laws on classified data, how can anyone be expected to report misconduct if criminal prosecution by the state cannot be depended upon for secrecy? It must be clearly stated that a public disclosure shall be made in good faith and with great prudence, since the potential whistleblower is treading on very thin ice. To ensure this, laws alone are not enough.
A culture to protect the public interest is missing; whistleblowers are looked at with suspicion in most of the countries under review. Therefore, it would be important to strengthen the organizational culture at least in public institutions. In the countries analyzed, no efforts have been made pointing in this direction. A further cultural problem hindering the evolution of whistleblowing in the region is the reservation with which Eastern-European societies generally look on all procedures that involve supplying information to the authorities on a third party. The background of this phenomenon is mostly of a socio-cultural character and may change only in the long run. Hence, in the beginning it might be illusionary to expect that laws and regulations will meet high levels of popular support.

The practices described in the country reports show that anticorruption institutions have not yet been able to deliver properly. They have been set up in the first place to serve the interests of a given political side and have been used by those in power at the time. Based on the findings of the reports, one might also conclude that the investigating authorities are not functioning fully independently from politics either. This means that there is a further missing link in the system of conditions for the effective functioning of a solid whistleblower-act, namely a reliable and effective institutional background.

Existing legislations – except Slovenian – fall short of adequate protection and effective disclosure channels. Even though attempts have been made to remedy the lack of comprehensive laws, political and socio-cultural shortcomings prevented their implementation. The weak democracies of the region may in fact be strengthened exactly by those institutions that are stimulating social activity and stressing the enforcement of law. The lack of protection and the feeling of helplessness against illegal actions, reduces the trust in democratic institutions in these societies, and leads to the further erosion of public morale.

——–

1 Ralph Nader, Peter Petkas, Kate Blackwell: Whistle-blowing, 1972, Bantham Press, page 28.

2 Mary Rowe, “Options and Choice for Conflict Resolution in the Workplace” in Negotiation: Strategies for Mutual Gain, by Lavinia Hall, ed., Sage Publications, Inc., 1993, pp. 105–119.

3 The country reports are available at: http://www.whistleblowing-cee.org/

4 http://www.transparency.org/policy_research/surveys_indices/cpi/2010/results

5 http://www.unodc.org/documents/treaties/UNCAC/Publications/Convention/08-50026_E.pdf

6 http://conventions.coe.int/treaty/en/treaties/html/174.htm

7 David Benisar: Whistleblowing: International Standards and Developments (May 2006) A study for the First International Conference on Corruption and Transparency, Mexico, City, 23-25 of March 2006, p. 17. Available at:
http://www.corrupcion.unam.mx/documentos/investigaciones/banisar_paper.pdf

8 http://conventions.coe.int/treaty/en/treaties/html/174.htm

9 See: The protection of whistleblowers in the light of GRECO’s work by Christophe Speckbacher, Secretariat of GRECO at
http://www.batory.org.pl/doc/Whistleblowing%20mechanisms%20REV2%20for%20Batory%20Foundation%20Conf%20of%2030March09.pdf

10 Second Evaluation Round; Compliance Report on Bosnia and Herzegovina, Strasbourg, 19 February 2009, Public Greco RC-II (2008) 7E
http://www.coe.int/t/dghl/monitoring/greco/evaluations/round2/GrecoRC2(2008)7_Bosnia-Herzegovina_EN.pdf

11 Full text available in English at: http://k-monitor.hu/files/page/ipca.pdf

12 Article 20 para 1 of Act CLXIII of 2009 on the Protection of Fair Procedures.

13 Alternative to Silence – Whistleblower Protection in 10 European Countries (Transparency International, 2009), page 12.

14 Country study Slovenia, page 8.

15 See Article 16 of the Act, available at: http://k-monitor.hu/files/page/ipca.pdf

16 Bell, J.: Public Interest: Policy or Principle?” in Law and the Public Interest, edited by Franz Steiner, 1993.

17 Judgment of the Supreme Court of 23.09.2004, case reference number I PK 487/03.

18 Judgement of the Supreme Court of 18.02.2005, IIICZP 53/04.

19 Braybrooke: The Public Interest? The Present and Future of the Concept, Atherton Press, 1962. p. 34.

20 Official Gazette of Republika Srpska number 112/08,58/09

21 Country study Serbia, page 8.

22 Country study Poland, page 4.

23 European Court of Human Rights, Case of Guja v Moldova (Application no. 14277/04) Judgement. Strasbourg, 12 Feb 2008.

24 http://www.oecd.org/dataoecd/56/36/1922428.pdf, page 44.

25 Speech by SEC Chairman Harvey L. Pitt: Remarks at the Financial Times’ Conference on Regulation & Integration of the International Capital Markets (October 8, 2002), available at http://www.sec.gov/news/speech/spch588.htm

26 NYSE, Section 303§ 06.

27 Carnero v. Boston Scientific Corp., 433 F.3d 1, 9 (1st Circ. 2006).

28 Tery Morehead Dworkin: SOX and Whistleblowing, Michigan Law Review, 2006, Vol. 105, p. 1774.

29 Article 29 Data Protection Working Party, Opinion 1/2006 on the application of EU data protection rules to internal whistleblowing schemes in the field of accounting, internal accounting controls, auditing matters, fight against bribery, banking and financial crime, 00195/06, 1 February 2006, page 7.

30 Ibid, page 9.

31 See recommendations of International Chamber of Commerce at: http://www.iccwbo.org/uploadedFiles/ICC%20Guidelines%20Whistleblowing%20%20as%20adopted%204_08(2).pdf

32 Annual Report of DP&FOI Commissioner 2007, pp. 61-62, see in English at:
http://abiweb.obh.hu/dpc/annual_reports/ar_dpc_2007.pdf

33 Benisar, p. 68.

34 Ibid. p. 69.

35 Bruce L. Hay, Kathryn E. Spier: Burdens of Proof in Civil Litigation: An Economic Perspective; The Journal of Legal Studies, Vol. 26, June 1997; p. 413.
Lawrence Crocker: Ethics and the Law’s of Burden of Proof, in Philosophical Issues, October, 2008, p. 277.

36 Bensiar, p. 24.

37 Goodwin v. The United Kingdom – 17488/90 [1996] ECHR 16 (27 March 1996) http://www.osce.org/documents/html/pdftohtml/24250_en.pdf.html

38 http://www.pwc.com/en_HU/hu/publications/assets/crime_survey_eng_final.pdf

39 Country study Bosnia and Herzegowina, page 8.

40 Country study Slovenia, page 19.

41 http://irm.gov.hu/i/irm.gov.hu/files//downloads/Fooldal/Szakmai_munka/Korrupcio_Elleni_Strategia/korrupcio_elleni_strategia_v6_korr.nelkul.doc

42 Country study Moldova, page 5.

43 Country study Serbia, page 11.

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See country studies

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