CONCEPT OF WHISTLE BLOWING IN CORPORATES :CASE OF MR. SATYENDRA DUBEY

Group 7Anubhav Tuli(48)Amitabh kumar(52)Manoj Sardana(160)Arvind Rathi(166)Anil Deokar(168)Rahul Thakur(170)

FLOW OF PRESENTATION

Introduction Whistle Blowers Satyendra Dubey’s case Company Whistle Blower policy Indian Law: The Whistle blower Protection

Law Case study : Challenger

WHISTLE BLOWER

A whistle blower is a person who tells the public or someone in authority about alleged dishonest or illegal activities (misconduct) occurring in a government department, a public or private organization, or a company.

THERE ARE TWO TYPES OF WHISTLE BLOWERS:

Internal whistle -blowers report misconduct to another employee or a superior within their organization

External whistle-blowers report misconduct to outside persons or entities

HUMAN DILEMMA

In practical term, if an employee is concerned about wrongdoing or risk that threatened others, he/she have four option :- To stay silent; To blow whistle internally; To blow whistle outside; or To leak information outside.

WHEN TO BLOW THE WHISTLE

A violation of a law, rule or regulation Gross mismanagement A gross waste of funds An abuse of authority A substantial and specific danger to

public health or safety

HOW TO BLOW THE WHISTLE

Do it anonymously let the evidence speak for itself and protect yourself if

possible Do it in a group

charges have more weight and won’t seem like a personal vendetta.

Present just the evidence leave interpretation of facts to others.

Work through internal channels start with your immediate supervisor or follow the

standard reporting procedure Work through external channels

go public (biggest risk)

STATISTICS

Polling Group:233 individuals polled, 40% responded

Average age: 47Employed for 6.5 years at jobAlmost all lost job

STATISTICS

Negative Effects: 51% of gov’t employees lost their job 82% harassed by superiors 69% watched closely after blowing the whistle 63% lost job responsibilities 60% fired 10% attempted suicide

Positive Effects: 20% felt their actions resulted in positive

changes More than 50% (of responders) would do it again

REASONS FOR INVOLVING WHISTLE BLOWER ACT BY CORPORATE

To whistleblowing reminds everyone at the organisation that they owe a loyalty to the organisation and not just to their manager.

a safe alternative to silence is one of the most

effective ways to deter and discourage people from abusing their position and authority.

EFFECTS OF WHISTLE-BLOWING

Forced to leave organization/demotion

Credibility ruined Family, health,

and/or life in jeopardy

Outrage and divisiveness of people directly or indirectly involved

Physical or psychological isolation

Organization experiences loss of money, restitution, productivity, and positive reputations.

Incarceration

SHERRON WATKINS

Former Vice President of Enron Corporation

Alerted then-CEO Ken Lay in August 2001 to accounting irregularities within the company

Warned that Enron 'might implode in a wave of accounting scandals.'

Testified before Congressional Committees from the House and Senate investigating Enron's demise.

Lauded in the press for her courageous actions, but left her job at Enron after a few months when she wasn't given much to do

BUNNATINE (BUNNY) H. GREENHOUSE Former chief contracting

officer Senior Executive Service, United States Army Corps of Engineers.

alleging specific instances of waste, fraud, and other abuses and irregularities by Halliburton with regard to its operations in Iraq since the 2003 invasion.

Greenhouse suddenly soured

INDIAN WHISTLE BLOWER AND RESULT

MANJUNATH SHANMUGHAM

Manjunath Shanmugham, a sales manager of the IOC.

ordered two petrol pumps at Lakhimpur Kheri to be sealed for selling adulterated fuel for three months.

When the pump started operating again a month later, Manjunath decided to conduct a surprise raid

RESULT OF WHISTLE BLOWING

Manjunath had been shot dead in Gola Gokarannath town of Lakhimpur Kheri.

His body, riddled with at least six bullets

2 employees were arrested and the main accused, pump owner Pawan Kumar ('Monu') Mittal, was held on November 23 along with seven others.

AFTERMATH

Indian Oil Corporation paid Rs. 26 lakhs compensation to the family.

The matter of adulteration in diesel was taken up by the Energy Coordination Committee

SHASHEENDRAN

exposed corruption in state-run Malabar Cements.

He and his two children were found hanging inside their home

Post-mortem report said that he was physically assaulted before his death

SATYENDRA DUBEY (INTRODUCTION)

A Civil Engineer from IIT Project Director - National Highway Authority

of India(NHAI) Deputy General Director – Golden

Quadrilateral Project 27th Nov 2003 – Shot dead by unidentified

gunmen in the town of Gaya

GOLDEN QUADRILATERAL PROJECT

Compromised by various criminal acts: Fudging of project report details Forging of documents on procurement Extension of tacit support by NHAI to bigh

contractors Dubey reported this to PMO as the project

was important to the nation

DUBEY’S MURDER – SEQUEL OF WHISTLE BLOWING

Reported to PMO attaching his credentials on a separate attachment, he requested PMO to remove the attachment before forwarding

File along with the attachment was forwarded to NHAI for investigation

Dubey received threat calls Dubey complained to PMO for leaking his

identity

Secret information and documents leaked by NHAI officials

Contractors were paid advance immediately Almost 100% of the work was sub-contracted

to small contractors

Government should ensure the security of individuals

Dubey’s Anonmity was ignored and the report was sent to MoRTH

Central government disapprove to leak his identity, blames Bihar government for lawlessness in the state

Bihar government pointed out irregularities in the quadrilateral project

WHISTLE BLOWER POLICY

HMEL - WHISTLEBLOWER POLICY Objective of the policy : HMEL endeavours to conduct its business with

the highest standards of integrity, ethics and legal compliance.

To provide the stakeholders a way to raise issues or concerns if they have reason to believe that these standards or the Code of Conduct are being compromised.

Provides a mechanism for the stakeholders to approach the Audit Committee.

The Audit Committee if it deems fit can approach the Ethics Committee to be headed by COO to investigate into the matter and report.

CONT….

Coverage and Scope Covers HMEL and all its subsidiaries. Procedure All complaints / disclosures will be received, recorded

and initially enquired by the Ombudsperson who would thereafter send a report of his investigations to the Audit Committee.

It must contain as much relevant information as possible and should help in initial assessment and investigation.

The Whistleblower must disclose his / her identity in the complaint and the Audit/Ethics Committee will not accept anonymous complaints.

CONT… Investigation The Audit committee will go through the report and

may ask the Ethics committee or a senior person for the investigation

The investigating authority would upfront contact the employee against whom the allegation has been made.

The Investigating authority will prepare a report and recommend future course of action within 45 days on the basis of the investigations and submit it to the Audit Committee.

Composition of Ethics Committee COO, VP-Finance and VP-HR with COO as its

Chairman.

CONT….

Protection Try to keep the identity of the Whistleblower confidential Will ensure that there is no unfair treatment meted out

to the Whistleblowers. Any other stakeholder assisting in the investigation will

be protected to the same extent as the Whistleblower If a Whistleblower makes an allegation knowing it to be

false or with mala fide intentions, no protection will be provided under this policy and he / she may be subject to disciplinary action.

Decision The Audit Committee will recommend to the

Management about the corrective or disciplinary action to be taken

HMEL will initiate the necessary action.

INDIAN LAW: THE WHISTLE BLOWER PROTECTION LAW

NEED WHISTLEBLOWER POLICIES?

Values ethical and lawful conductPolicies designed to:

Encourage timely, safe, and honest reporting of alleged wrongs

Ensure consistent and timely institutional response

WHISTLE BLOWER PROTECTION LAW

Key features :- It will protect the whistle blowers from any

discrimination or victimization in their workplace.

It provides for concealing the identity of a citizen who discloses information about the misuse of power and money. Those who reveal the identity of the whistle blower will be held liable and penalized, by the Central Vigilance Commission (CVC).

CONT..

The offenders will be liable for imprisonment up to 3 years and a fine up to Rs.50, 000.

There will be penalization in case of delays in response, under the Right to Information Act. A fine of Rs.250 will be imposed for every day of delay beyond the set deadline.

There will be penalization for officials who try to mislead the CVC.

CONT..

The bill provides for addressing complaints against public sector employees and employees of the Central and the State Government.

The bill also ensures the honest government officials are not harassed in anyway but those individuals who file false complaints and charges will be liable for imprisonment up to 2 years and fine up to Rs.30, 000.

CASE STUDY: CHALLENGER

January 28, 1986

Space Shuttle Challengerexploded 72 seconds intoits flight, killing all 7 crewmembers. The flight received much

media attention because a teacher, Christa McAuliffe, was on board.

CHALLENGER: WHAT WENT WRONG Explosion caused by O-

ring failure between segments of the booster rockets.

Several employees of the manufacturer, Thiokol, had been aware of the O-ring deficiencies.

No one listened to the engineers who knew about the problem

MAJOR PLAYERS Roger Boisjoly, seal specialist at

ThiokolDirected task force for a year to study the

evidence that hot gases eroded O-rings Allan McDonald, manager of solid-

rocket motor program Larry Mulloy, NASA official, manager of

booster programs George Hardy, NASA official

TIMELINE July 31, 1985

Boisioly wrote a memo saying, “it is my honest and very real fear that if we do not take immediate action to solve the problem [the company could] stand in jeopardy of losing a flight.”

No conclusive evidence to back up memo

TIMELINE January 27, 1986, the day before lift-off

McDonald was worried about temperatures dropping to 22 degrees overnight.

14 engineers “fought like hell” to get permission to present to NASA

All 14 Thiokol engineers recommended postponing the launch

Mulloy and Hardy challenged the recommendation Mulloy: “When do you want me to launch, next April?” Hardy: recommendation “appalled” him Thiokol: Management reversed the recommendation for

postponement

What kind of dilemma was Thiokol forced into?

THE EXPLOSION O-rings partially

failed on ignition (picture)

Melted metal sealed the gap

Hit a wind shear, causing the booster to flex and the seal to dislodge

Loss of cabin pressure

Flames led to explosion

TIMELINE After the explosion

McDonald Went public Demoted by management Public outcry and Congressional investigation led to a

reversal of that decision and a promotion instead Became spokesman for Thiokol and new rocket

boosters Boisjoly

“I hope and pray that I have not risked my job and family security by being honest in my conviction”

Never worked on a shuttle again because it was too painful

Wondered if there was more he could have done, even though the record shows he minced no words

Reassigned by management with altered responsibilities

Took leave of absence, a year later went on disability

TIMELINE Later Repercussions

Boisjoly sued Thiokol for $1 billion in personal suit Dismissed because Thiokol’s actions were ruled not

to have been designed to cause him distressBiosjoly sued Thiokol for $2 billion under False

Claims Act Filed on premise that Thiokol falsely certified safety

and knew that the rockets they supplied to NASA were defective

Dismissed in 1988: Judge ruled that decision to launch was not a false claim, but an engineering judgment with which other engineers disagreed, and that NASA also knew the facts behind the allegations, and was not deceived