Ethics and Professions: Whistle Blowing

Ethics and the Professions: Blowing the Whistle on Crime1
by Lala CamererResearcher, Crime and Policing Policy Project, Institute for Defence PolicyPublished in African Security Review Vol 5 No 6, 1996

BACKGROUND

"Whistle-blowing is the disclosure by an employee of confidential information which relates to some danger, fraud, or other illegal or unethical conduct connected with the workplace, be it of the employer or of his fellow employees."2Business, Government and professional circles are increasingly disillusioned about the "ethical malaise" and the culture of corruption that currently haunt South African society. The variety of reasons provided for this state of affairs are mostly related to the corrupting nature of the apartheid state. In the business community, the breakdown of values is partly blamed on the sanctions-busting mentality that encouraged ingenious, but often immoral means to gain access to world markets. Attempts were praised rather than repudiated, and encouraged the development of a culture where unethical means in conducting business were valued.3 Among many other organisations, Government is also regularly dogged by claims of corruption. However, former deputy minister Holomisa's public attacks against his own political home may prove to be an example of how not to blow the whistle on alleged corruption and misconduct. With regard to the legal profession, it has been argued that the current lawlessness is partly due to the fact that many South Africans (especially the poor) have lost their respect for the law and the legal system that has been perceived as one of the main vehicles to enforce apartheid.4There have been several recent initiatives that attempt to address the growing concerns about corruption, a phenomenon that is in some sense more damaging to the nation's psyche than visible, violent street crimes. The Business Against Crime initiative, which aims to change the ethical climate in which business is conducted in South Africa, has established a working group on commercial crime that involves the relevant stakeholders. Upholding the code of ethics in the King report on corporate governance, this initiative urges organisations (both private and public) to adopt ethical codes which, if supported by effective communication channels and training, and is seen to be enforced, could contribute to the development of a moral business culture in South Africa.5 A publication called Beating Fraud: Commercial crime prevention, detection and response guide for the private and public sector has recently been published by the working group.Within Government, a code of conduct has recently been introduced for parliamentarians that call for the disclosure of their financial interests, in order to avoid possible conflicts of interest that may result in corruption. In introducing the code to the National Assembly, committee chairman Minister Kader Asmal described this as "the start of a process whereby an all-pervasive culture of disclosure, and therefore accountability can be achieved."6 Earlier this year, President Mandela appointed a national commission to investigate corruption, including allegations of irregularities in the administration and collection of taxes, customs and excise duties, and foreign exchange.7Reading through the latest issue of De Rebus, it appears that the legal profession is also concerned with such matters as the call for a national ethics conference to 'turn the tide' on unethical behaviour within the profession indicates.8 The conference is called to address professional behaviour and ethical rules, as well as discipline and complaints handling. This would include the localisation of initial disciplinary inquiries, the appointment of an independent inspectorate and the formulation of a more user-friendly complaints procedure.9 This article focuses on the latter area, namely a more user-friendly complaints procedure. A discussion of the concept 'whistle-blowing' is useful, as it is believed that making it easier for the ethical individual to blow the whistle on corruption is a key weapon in the fight against crime. The discussion will be preceded by a few notes on ethics and the professions.
ETHICS AND THE PROFESSIONS
Professions are distinct from occupations in that they exist to secure some fundamental end, for instance 'Law' and 'Academia' seek 'Justice' and 'Knowledge' respectively. Achieving this end requires specialised skills, knowledge and individual judgement. Ideally, members of professions internalise the fundamental ends that define their particular profession, and depend in part on their own capacity and sense of self-worth to realise these ends.10Professional ethics concerns itself with the rules that regulate professional conduct. In the legal profession, these rules aim to ensure the competent and professional ethical conduct of attorneys to protect the public against the consequences of misdemeanours. In other words, the public interest demands that a professional person must be an ethical one. The sole objective and guiding light of ethical conduct and the rule or rules prescribing ethical conduct must and can only be the public interest. Arguments have been put forward that, in a competitive market, a company's own enlightened self-interest dictates that it should behave in an ethical manner, as the adherence to high ethical standards in itself may be a key way of competing for a share of the market.11 The legal profession has also noted that "if we serve the public interest, we also serve our own interest."12Unfortunately, corruption can be found to a greater or lesser degree in most human activities, including those of members of the professions. It has been argued that this is perhaps more so in the legal profession, because of the morally ambiguous character of legal work. As it entails the use of the law and of deception, the tendency to become involved in corruption may be a basic occupational hazard.13 The corrupt official is thus one who not only abandons the fundamental end or goal of his/her profession, but also uses this professional position – or the skills and knowledge associated with it – for his/her own self-interest or for immoral ends. Mostly, corrupt individuals engage in interdependent corrupt activities, quite often at senior levels, with the corruption itself becoming a co-operative enterprise. It influences those who are not corrupt: it comprises and intimidates those who wish to avoid becoming corrupt themselves, and especially those who feel morally responsible to expose corruption.14In 'blowing the whistle' to expose corruption within organisations, those who choose this route face various dilemmas. The predicament of the potential whistle blower may in part be due to economic dependence and in part to legal obligations of confidence owed to employers.15 Besides the real fear of victimisation resulting from such disclosures, a primary dilemma involves the conflicting loyalties between the desire to follow one's moral beliefs and expose misconduct, and the organisational pressures to conform to a culture of loyalty and confidentiality, albeit misplaced. These notions will be looked at in some depth.

CONFLICTS OF LOYALTY AND CONFIDENTIALITY

Whistle-blowing in its most general form involves calling (public) attention to wrongful acts, typically in order to avert harm. It is often denounced as morally unjustifiable on the presumption that it violates the obligation to be loyal and the adherence to confidentiality owed to the business or profession. However, whistle-blowing that reveals genuine wrongs can be wholly consistent with personal, public and business/professional duties.16For various reasons, employees often experience confusion about their responsibilities towards managers or colleagues. In terms of loyalty in the work place, there is a culture of aversion towards the perception of being "sneaks, informers, rats and squealers." As such, there is considerable pressure on people to turn a blind eye on malpractice, to leave it to someone else to raise the matter, or to contact a regulator anonymously.17 Many organisations may also create a culture and procedures that deter employees from raising concerns through all-embracing confidentiality clauses to keep quiet in and outside the work place.18There are, however, many different kinds of loyalties.19 It is, for instance, inappropriate to demand friendly or familial loyalty from or to a business, since the limits of business or professional relationships are legal and contractual. While supplemental loyalties may develop as colleagues become friends, the loyalties owed to them as friends must be recognised as different in kind from the obligations that arise purely from a business or professional association. In effect, attempts to identify, avert and remedy organisational wrong doing will normally benefit a business, even if they temporarily reduce accounting profits. Stakeholders are therefore being loyal – not disloyal – when they criticise or attempt to prevent abuses. Not only is loyalty to corrupt professionals misplaced, it is an abrogation of duty, for loyalty is only warranted by those who embody the ideals of the profession and who are not corrupt.20Does the duty of confidentiality preclude whistle-blowing? Ordinarily not, for logically a business cannot bind its stakeholders to do, or to keep silent about, that which is illegal or contrary to its definitive purpose. The law has recognised this through the following judicial dictums: "fraud unravels all" and "there is no confidence as to the disclosure of iniquity."21 As long as the law of confidence has existed, there has existed alongside it a public interest exception. In 1743 it was found that, "[n]o private obligations can dispense with that universal one which lies on every member of the Society to discover every design which may be formed, contrary to the laws of the Society, to destroy the public welfare."22Under modern law, it is preferable not to speak about there being "no confidence in iniquity", but rather to recognise that there is always a balance to be struck between competing public interests. Thus, while there is the obligation of the law of fidelity owed by the employee to employer, and "a public interest that confidence should be preserved and protected by law", this kind of public interest may be outweighed by a countervailing public interest that favours disclosure. Therefore, the court has to undertake a balancing act to weigh the public interest in maintaining confidence, against a countervailing public interest that favours disclosure. This happened in the Spycatcher case where the court held that there was no obligation on an employee to keep information secret if it relates to such misconduct on the part of the employer or fellow employees that there is a public interest in its disclosure. For instance in the case of a crime, "the public interest in the maintenance of confidence may be overridden wherever there is a countervailing public interest in disclosure which is sufficient to override it."23With regard to the kind of disclosure that would be in the public interest, there is no hard and fast rule. However, the disclosure of gross mismanagement, illegal or unethical acts, fraud or conduct that puts the life or health of individuals or the safety of property or the environment at risk, is probably appropriate. The information must certainly be in the public interest, and not of mere interest to the public. The media have a private interest of their own in publishing what appeals to the public and "are peculiarly vulnerable to the error of confusing the public interest with their own interest."24 It is important that codes of professional conduct should explicitly recognise the public interest exception. Without doing any damage to the law of confidence, much greater use can and should be made of internal avenues of complaint and inquiry. In this regard, legal services can assist greatly in promoting communication of this kind.25High ethical standards include the creation of clearly understood procedures and channels of communication by business organisations so that employees who are aware of illegal or unethical conduct or practices in the work place are able to disclose it without fear of reprisal or victimisation. If that means altering a culture of misplaced loyalty to friends or to the organisation, of turning a blind eye, or of organisational concealment, high ethical standards require that this is done or at least attempted.26 Whistle-blowing properly understood, is not informing in a negative sense, but relaying essential information to those responsible to get things in order.27 As such, whistle blowers should be rewarded, rather than repudiated, for their efforts.

DISCLOSURE: INTERNAL, EXTERNAL AND ANONYMOUS

Whistle-blowing, and "relaying information to those responsible for getting it right", will ideally occur internally, if the right channels exist. However, as a last resort, whistle-blowers may use external methods of disclosure, such as a regulator or the media. Since the purpose of whistle-blowing is to stop, hinder or prevent perceived wrong doing, a disclosure method that has negligible prospects of achieving this result is self-destructive folly, not whistle-blowing. Therefore, to impose the damage of whistle-blowing on an organisation that cannot control the wrong doing is unfair and jeopardises the social value of the act, for to be implicated an organisation must be accountable and blameworthy for the disclosed wrong. Rather than confidentiality, fairness has been raised as the chief moral constraint of whistle-blowing. Those most closely responsible must be given the opportunity to rebut the charges or to acknowledge and remedy their mistakes.28Who would be the appropriate recipients of the disclosure? The general rule for whistle-blowing is that the disclosure causing the least damage is the appropriate route. Whenever possible, employees are advised to use internal mechanisms within their organisation to raise their concerns. This means generally that the charge is laid internally within the organisation and at the most appropriate level where the charge of misconduct can be addressed. It is therefore advisable for organisations to have internal reporting mechanisms, or what some have termed "critical information systems."29 The absence of such channels raises the likelihood of employees using other, more damaging channels that company may have less or no control over, for instance an external regulator or the media. Repercussions and expenses tend to mushroom when the timing and nature of corrections are determined by the media or the law, rather than by the business or profession itself.The whistle should thus normally be blown at the lowest hierarchical level that is likely to be efficacious. Where possible, established organisational procedures should be used to minimise damage and disruptions, in order to correct the situation locally and rapidly. Initial whistle-blowing will thus normally be internal. It should be noted, however, that 'open door' policies run by a corrupt management have typically worked against whistle blowers, and mainly served to identify the 'trouble-makers' to be ejected. External whistle-blowing, as a last resort, is justifiable if internal channels have been exhausted or are unavailable and unusable.30The question of anonymous disclosure also needs to be dealt with briefly. While anonymous helplines clearly aid in deterring crime and malpractices, they do little to encourage or reassert individual morality or any community ethic. They start from the premise that reporting misconduct is a shameful and embarrassing thing to do. An additional and real risk with this form of disclosure is that anonymity is the preferred cloak of the malicious and vindictive.31 While anonymous whistle-blowing may be more suspect and thus less likely to be efficacious than the acknowledged open kind, it can be perfectly justifiable, as long as the wrong doing is genuine.32

RESPONSES TO WHISTLE BLOWERS

Once the whistle has been blown, preferably through the available internal channels, or as a last resort to a regulatory body or the press, the whistle blower may experience negative, or more rarely positive responses to his or her action, depending on the culture within the organisation.Mostly, degradation ceremonies that punish and alienate resisters and protesters occur where the whistle blower suffers at the hands of colleagues who feel betrayed. Superiors who have the power to harass them, may punish whistle blowers by questioning their competence and judgement, terminating their employment, or even blacklisting them from other positions and effectively bring their career development to a halt. More rarely – but an approach that needs to be embraced by ethical institutions – ceremonies of status elevation may occur that reinforce the whistle blower's conviction that (s)he is acting in the right way.33Since rectifying a problem requires the acknowledgement that it is real and possibly taking direct or indirect responsibility for its occurrence, managers typically deny that problems exist even in the face of the most blatant evidence. They would rather spend time and money to cover it up, than to face what is wrong. Even though the organisation and other stakeholders will be better served by an ethical response of accounting for wrongful actions, instead of resorting to cover-ups or making a scapegoat of the whistle blower, to punish the messenger is a common (though hardly ethical) response to bad news. In practice, whistle blowers often suffer grievously for their efforts and as such, fear of retaliation is a major deterrent to potential whistle blowers.

PUBLIC CONCERN AT WORK

In response to these and other problems concerning whistle-blowing, a charity known as Public Concern at Work has been established in Britain. Here employees are able to seek professional and independent (confidential) advice on the most effective way to raise their concerns and can discuss all aspects of the matter without committing any actionable breach of confidence that they owe to their employer. The charity is classified as a legal advice centre, has a free helpline and is staffed by four lawyers who provide free legal advice to clients on whistle-blowing. The charity is usually contacted when clients have raised concerns and feel they are being victimised because they have raised it directly themselves. As such, Public Concern at Work mainly assists whistle blowers who may find themselves victimised at work after the event.Where disputes occur over whether conduct is unethical or not, the charity holds that where no clear consensus can be obtained, companies are ethically entitled to adopt a variety of practices that are within the law. The charity also distinguishes between protest and watchdog whistle-blowing. Protest whistle-blowing is where an employee takes exception to a lawful or transparent activity of his employer, for instance objecting to company policy on animal experimentation. Watchdog whistle-blowing rests on the premise that where an employee is the first or only person to know that something is going seriously wrong, and will endanger lives or damage a wider public interest, (s)he will often need particular help, as (s)he alone may have the most to lose by sounding the alarm.34The context for the establishment of Public Concern at Work may be of interest to South Africans. Following public inquiries into various scandals and disasters, it was found in Britain that employees often knew that something was seriously wrong, but turned a blind eye, or raised concerns that were ignored or channelled to the wrong people. Preventable disasters that come to mind include:
the Clapham rail disaster (where a supervisor had noticed loose wiring but did not want to "rock the boat");
the sinking of the Herald of Free Enterprise ferry (where on five separate occasions concerns were raised about sailing with bow doors open, yet the message got lost in middle management); and
the Challenger shuttle explosion (where engineers were aware of fault design).
After these events, those in charge have mostly said, "if only we had known."Public Concern at Work was set up to examine practical steps that organisations may take to ensure that serious concerns were both raised by employees and addressed by those in charge. They support the recommendation that each organisation should have some kind of mechanism that would enable employees to voice concerns about dangers, malpractices and other issues. Without safe and accepted ways to raise concerns at work when employees are confronted by seemingly serious illegalities or malpractices, they will face stark choices and dilemmas.

SELF-REGULATION AND THE LAW

Without these measures in place, it is unclear how far an organisation or sector can be left to regulate itself properly. Club-like and self-regulatory constraints have often proved to be inadequate protections of public interest, unless buttressed by law. In practice, higher ethical standards encouraged by whistle-blowing need further legal underpinning. Unfortunately, the law at present (in the UK) offers employees who are acting in the public interest no protection against victimisation through dismissals or otherwise. However, during the next parliamentary session, the Public Interest Disclosure Draft Bill, supported by leading businesses, unions and others, is to be introduced as a legal protection for whistle blowers.In order to secure protection (injunction, declaration or compensation) from this Bill, whistle blowers will have to show that they are being punished because they have sounded the alarm on some serious malpractice. Moreover, they will have to pass several additional tests. It will have to be established, among others that theydid not act in bad faith;had reasonable grounds to believe the information to be accurate; did not make the disclosure for money or personal gain; and could prove that it would have been ineffective to have raised the matter internally.35

It is hoped that the Bill, should it come into law, will become a real deterrent to misconduct. In theory, it will serve to deter malpractice and encourage organisations across the public, private and voluntary sectors to adopt more open and accountable cultures with codes of ethics that encourage the effective internal reporting of malpractice. Currently under consideration by the South African Government is the Open Democracy Bill that makes provision, among others, for transparency of Government actions; access to Government records; and the protection of whistle blowers. It is hoped that the Bill, should it become law, will be a real deterrent to misconduct. It will serve to deter malpractice and encourage organisations across the public, private and voluntary sectors to adopt more open and accountable cultures with codes of ethics that encourage the effective internal reporting of malpractice.

THE SOUTH AFRICAN LEGAL PROFESSION

In South Africa, specifically with regard to the legal profession, the Krugel Commission's report to the Transvaal Law Society found "that the present system of submitting complaints must be changed so that complainants can feel confident about lodging a complaint against an attorney with the law society."36 This finding is supported by conclusions from question 1637 in the Radloff questionnaire where "half of the respondents were reluctant to report unethical conduct to their provincial law societies because they believed that the law society would fail to take appropriate steps to curb such conduct, in fact 60% believed that even if the law society attempted to curb unethical conduct it would be unable to do so."The fact that "law societies find it increasingly difficult to act, simply because nobody is prepared to lodge a complaint or take a colleague to task" is obviously a serious matter in need of urgent attention. It raises the question: "How can we expect the public to have faith in our profession's ability to regulate itself properly if so many of us have doubts in this regard?" The fact is that the manner in which any law society is seen to exercise discipline against defaulting members, determines whether the public perceives it as being a self-protection outfit – a perception which would justify the imposition of discipline from outside – or a body that governs the profession in a manner sufficiently responsible to justify its being left to its own devices.38Various proposals have been made to address these issues, from a disciplinary body of retired judges to an independent legal services ombudsman. However, it is not the intention of this article to address these suggestions. Suffice it to note, before concluding, that the Law Society in Britain has recently announced the introduction of a confidential hotline to its Investigation Unit. in cases where a solicitor or employee suspects that fraud may be being perpetrated by someone in his/her firm or by another member of the profession.39 Could this be a solution for the South African legal profession?

CONCLUSION

To address these issues, there should ideally be a shift in culture away from a world where "it is not my problem" to one where individuals accept more responsibility, and where those privileged to be in charge and to enjoy the benefits this brings, are more accountable for their organisations. It should be more rewarding to identify and resolve problems, rather than to ignore them. As such, whistle-blowing UK-style is a positive and necessary development to be nurtured. Not only does it help to raise the standards of business and professional ethics, but also the standards of behaviour of the community in general. A key corporate governance responsibility should be to facilitate internal whistle-blowing mechanisms and ensure that justified whistle blowers are not penalised, but praised for their efforts on behalf of the organisation.Basic steps in reducing corruption in the private and public sector involve common sense and practical measures. For instance, when it comes to the recruitment of employees, effective screening mechanisms are required. Since crime occurs when opportunity and motive coincide, it is important to reduce the opportunities to commit crime, for instance by target hardening or environmental design. In addition to the constant reinforcement of the motivation to do what is right and to avoid doing wrong, effective detection and deterrence of crime through active enforcement of ethical codes are required. The good need to co-operate with each other if they are to drive out the bad, as institutional corruption can only be resisted successfully through collective action from those members who strongly identify with the ends of the institution and, equally strongly, reject corrupt practices.40
ENDNOTES
Address to the Association of Law Societies of the RSA, 21 August 1996.
G Borrie, Business ethics and accountability, Four Windows on Whistleblowing, Public Concern at Work, UK, 1996.
G Rossouw, Business ethics in South Africa: The State of the Nation, unpublished paper, 1996.
G Radloff, Professional Ethics – The Response of Legal Practitioners to a Questionnaire, De Rebus, August 1996.
Rossouw, op. cit.
The Star, 19 August 1996.
Business Day, 1 March 1996.
De Rebus, op. cit.
Ibid.
S Miller, Creating Good Policing, unpublished paper, 1995.
Borrie, op. cit.
Radloff, op. cit.
Miller, op. cit.
Ibid.
Borrie, op. cit.
E Sternberg, A Vindication of Whistleblowing in Business, Four Windows on Whistleblowing, Public Concern at Work, UK, 1996.
Borrie, op. cit.
Ibid.
Sternberg, op. cit.
Miller, op. cit.
Gartside versus Outram, (1869) 26 L.J. CL 113.
Annesley versus The Earl of Anglesea, 17 State Tr. 1139.
M Brindle and G Dehn, Confidence, Public Interest and the Lawyer, Four Windows on Whistleblowing, Public Concern at Work, UK, 1996.
Borrie, op. cit.
Brindle and Dehn, op. cit.
Borrie, op. cit.
Sternberg, op. cit.
Ibid.
Ibid.
Ibid.
Borrie, op. cit.
Sternberg, op. cit.
M Glazer, Whistleblowers.
Borrie, op. cit.
Ibid.
De Rebus, July 1996.
16: I am reluctant to report conduct which I consider to be unethical to my law society, becausea) I may lose support from either the financial institution or estate agent with whom my colleague is involved as I will be perceived by them to be obstructive.b) Even if I were to make the effort and take the time to do so, the law society will probably fail to take appropriate steps to curb such conductc) The law society will probably be unable to curb such conduct notwithstanding every effort on its part.
De Rebus, July and August 1996.
Sternberg, op. cit.
Miller, op. cit.