The function and implementation of whistleblower protection mechanism in business ethics Asso Prii TI Estonia Tallinn,

What is whistleblowing? the disclosure by organization members (former or current) of illegal, immoral, or illegitimate practices under the control of their employers, to persons or organisations that may be able to effect action

Subject to whistleblowing Reporting of: serious threath to the health or safety failure to comply with a legal obligation Unauthorized or inappropriate use of funds environmental risks corruption, dishonesty or serious maladministration etc.

Present situation Approximately 30% of Estonian entrepreneurs claim to have witnessed the corrupt activities of their employees. Only 1% of entrepreneurs that have had contact with corruption reported it to the law enforcement authorities (Source: "Corruption in Estonia: a survey of three target groups", Ministy of Justice, 2007) Anti Corruption Act draft  limited scope No existing surveys yet analyzing the need for whistleblower protection in private sector TI Estonia in cooperation with Transparency International is coordinating whistleblower protection project

Whistleblowing policy Whistleblowing policy refers to an environment created inside the organisation to encourage employees to speak out and foster justified disclosures  most expected subjects to disclosures have been identified  appropriate way to disclose has been made available  is usually included in company’s or business sector’s code of ethics

Use for companies Whistleblowing policy works as a warning system indicating that something is going wrong inside the organisation and prevents external disclosures Employees are advised how to raise concern properly and assured that no reprisals will follow in case of justified disclosure Indication for public (customers, partners etc.) that additional measures have been taken inside the organisation to guarantee better quality and comply with legal requirements

Whistleblowing mechanisms in codes of ethics Sectoral codes of ethics:  provide more general guidelines for implementing whistleblower protection mechanisms  useful if sector has a number of small scale businesses and they choose to follow one code instead of creating own

Corporate codes of ethics:  risks that are expected to be pointed out by employees must be detected  most appropriate procedure of disclosing must be created within the organisation  employees must be educated about the need to disclose these risks and the way how to do it properly  employees must be assured that justified disclosure (free of personal interests) is not sanctioned

TI Estonia aims To cooperate with undertakings and umbrella organisations to have whistleblower protection mechanisms included in corporate and sectoral codes of ethics Evolve into permanent advisory centre on whistleblowing related issues to provide constant training and consultancy Highlight the need for comprehensive whistleblowing laws in Estonia

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