TRENDING : #Q4Earnings

Why whistle blowing is so hard in India

Few legislative provisions for whistle blowing in India result in lesser people coming out with complaints

Samar Srivastava
Published: 17, May 2013

After studying law I vectored towards journalism by accident and its the only job I've done since. It's a job that has taken me on a private jet to Jaisalmer - where I wrote India's first feature on fractional ownership of business jets - to the badlands of west UP where India's sugar economy is inextricably new tied to politics. I'm a big fan of new business models and crafty entrepreneurs. Fortunately for me there are plenty of those in Asia at the moment. Bouquets and brickbats are welcome at samar.srivastava@network18online.com

Recent news on Ranbaxy has prominently featured the role of Dinesh Thakur, a whistleblower. Thakur, who worked at Ranbaxy for four months was responsible for blowing the lid on the company ‘s falsification of certification documents submitted to drug controllers around the world. The fraud took place over years and top management was complicit.

While Thakur, received $48.6 million (Rs262.4 crore) for his efforts the case leads to an important question: Why are there such few instances of whistle blowing in India? Is there something in our legal system that makes it harder for whistleblowers? Does the law not accord them the protection they deserve? Or is it just that they don’t have faith that their claims will be heard?

The answer lies in all three. First, the Companies Act does not contain a provision that makes it mandatory for companies to have whistle blowing policies in India. According to a lawyer who has worked in this area all his clients have been multinationals companies. Indian companies don’t show any desire to have a whistle blowing policy in place. “I suspect they don’t know how to handle such cases,” he says.

With multinationals he says there are clear rules on how the case has to be handled, how many levels the matter has to be escalate and what is to be done with the employee for the duration of the investigation. Plus he adds over the years they have worked to show that each case will be looked into fairly. Even then our research shows that it is most often former employees who resort to ratting on their employers. Few have the faith to complain while they are still working. Indian companies are far behind on this one.

In India there have been innumerable instances of whistle blowers being killed. So it’s hardly a surprise that such few people come forward with instances of wrong doing. According to a story on salon.com some 150 whistle blowers were have been harassed or jailed while 20 have been killed. What’s important to note is that whistle blowers exposing government corruption face a particularly uphill task in India. Their cases often wind slowly up the judicial chain and are only resolved decades later.

According to Rabindra Jhunjhunwala, a partner at Khaitan and Co. the lack of whistle blowing has to do with the evolution of corporate law in the country. He says that eight years ago there was a move by the Ministry of Corporate Affairs to insert a provision in the Companies Act to enable whistle blowing. It never saw the light of day and has not been heard of since.

So what can companies do? Lawyers and ombudsman point to three measures. First, legislate so that whistle blowing has a sound legal basis. Two, companies must ensure that those who come forward are not persecuted and the matters are investigated promptly. Similarly, the government must also set up mechanisms to ensure speedy disposal of claims. (If they could set up information officers under the Right to Information Act they can do the same in this case as well.) And, lastly companies must ensure that whistle blowers aren’t persecuted.

Some prominent whistle blowing cases:

Nisha Yadav – Jan 2013 – won Godfrey Phillips Bravery Award for lifting lid on child abuse racket at NGO orphanage “Suparaana Ka Aangan”

Kunal Saha – August 2009 – wins Supreme Court case against Advanced Medicare Research Institute in Kolkata for negligent treatment of his wife.

Paul Blakeslee – March 2013 – won $3.4 million for wrongful termination after he blew whistle on a colleague overcharging the government.

Vijay Pandhare – Oct 2012 – Uncovered Maharashtra Irrigation scam. Led to Ajit Pawar’s sacking.

Seema S Bhat – Nov 2005 – Wins Rs. 2.25 crore after exposing excessive levels of lead in water in Washington D.C.

Manoranjan Kumar – Mar 2009 – IES officer wins Rs. 25,000 case against Shipping Ministry for Kandla Port scam

  • I.Gower

    Totally agreed with the drift. Between the families that dominate and the following persecution, it is unlikely whistle blowing will ever be a top priority despite the seriousness of the offense. In fact the book "The Sindh Way of More" describes another method of whistle-blowing!

    on May 28, 2013
  • piyush

    Have a strong financial incentive in place like paying 10% of fine or taxes to whistle blower and then see how secrets come tumbling out.

    on May 18, 2013
  • Pharmaceutical manufacturer in India to pay Ohio $3.8 million – Norwalk Reflector | Quake Scientific Products Blog

    [...] Forbes India [...]

    on May 18, 2013
Prev
Your Put/Call Options Are Approved
Next
A dogma called High Performance culture: Part 6 - When Feedback is Oversimplified