Whistleblower Legislation in Brazil Já! / by Mark Langevin

aaaaWhistleblowerFCPAReview  

A Review of

A Urgência de uma Legislação Whistleblower no Brasil

Juliana Magalhães Fernandes de Oliveira

Núcleo de Estudos e Pesquisas da Consultoria Legislativa

Brazilian Senate

May 2015

Does Brazil’s lack of effective whistleblower laws encourage corruption, or is the absence just another demonstration of the country’s historical tolerance of the pay to play style of politics?

Juliana Magalhães Fernandes de Oliveira, of the Núcleo de Estudos e Pesquisas da Consultoria Legislativa of the Brazilian Federal Senate, recently published a critical report on the absence of effective whistleblower laws in Brazil to remind legislators and citizens that

“Whistleblowing has become a very effective social norm and mechanism to combat corruption in diverse nations around the world and is not subject to the same sort of criticisms now being made against the plea bargaining related to the Lavo Jato (Petrolão) corruption scandal (2015:5).”[1]

Whistleblowing is expressed as an ethical action, one that sheds light on crimes related to public authority wherein employees and citizens act as informants for prosecutors. Whistleblowing protections include legal protections from retribution, the single most important protection needed for encouraging employees to make credible allegations of corruption and misconduct.

Oliveira provides a concise conceptual and historical understanding of whistleblowing and relies on the United States experiences and laws to illustrate her advocacy. She describes the content and use of the U.S. False Claims Act (FCA) first promulgated in 1863, as well as the more recent enactment of the Federal Whistleblower Protection Act (1989) and the Whistleblower Protection Enhancement Act of 2012, largely aimed at protecting federal employees who make credible allegations of corruption and misconduct. She also notes that the Sarbanes-Oxley Act, regulating Financial Services, protects private sector employees who make allegations of criminal acts and unethical behavior.

Oliveira makes the case that Brazil should draft and enact whistleblower protections, in part because the nation has ratified a number of international laws that mandate such protections. She reports of the Interamerican Convention Against Corruption, ratified by Brazil in 2002, that binds signatories to developing systems to protect citizens and government employees who make good faith allegations of corruption and criminal acts, including the protection of their identity. Oliveira also reports that Brazil ratified United Nations Declaration against Corruption and Bribery in International Commercial Transactions in 2000.

Oliveira makes too much of the financial reward system found in some whistleblower protection laws around the world, and even points to some precedents in Brazil that would allow for such compensation to accusers. She argues that financial rewards are necessary to make whistleblowing really work. However, she offers little empirical proof of this claim, despite its use by other countries.

At this point in Brazil’s political evolution it would make much more sense to enact whistleblower protections based on the ethical performance of accusers, rather than material incentives to file allegations. If indeed the empirical evidence suggests that financial rewards work, then Brazil can incorporate such an incentive later. The most important issue is simply moving the Brazilian Congress to take up the issue at a time of corruption scandals and the frustratingly slow pace of political reform.

It is sad that social movements that parade themselves as purveyors of common sense and democratic righteousness, such as Vem Pra Rua, distribute manifestos that are as infused with partisan politics as they lack common sense reforms to protect the public interest from corruption. For example, Vem Pra Rua’s manifesto does not include any provision or advocacy for whistleblowing despite demanding full transparency from BNDES, the government development bank. Ironically, Vem Pra Rua calls for the end of the Foro de São Paulo, a regional grouping of socialist and anti-imperialist parties and organizations that imperfectly calls for citizen empowerment among other positions. Both organizations could benefit from a dose of democratic pragmatism to develop effective whistleblower protection laws and advocate for their adoption in Brazil and throughout the world where corruption undercuts the provision of public services so vital to the welfare of a majority of citizens in every country.

It is certainly a great time for Brazil and its government to take a modest, but critical step toward curbing corruption by enacting whistleblower laws at every level of government, and Oliveira has helped guide the way.

[1] Translated from the Portuguese to English by author.