Recently, following the changes in its government, Ukraine has gone through significant reforms in its laws relating to prevention of corruption, establishing anticorruption agencies and an anti-corruption court. As part of this process, Ukraine also enacted a new amendment related to whistleblowers to enter into force on January 1, 2020. The amendment provides monetary rewards, as well as a number of guarantees and legal protections for whistleblowers. The amendments require all government agencies, state-owned enterprises, and private companies that participate in public procurements (above a certain contract amount) to (i) implement secure communication channels, such as anonymous hotlines, electronic mailboxes and online communication channels, for reporting corruption-related violations, (ii) assist and consult employees on whistleblowing, and (iii) implement internal procedures for reviewing complaints. Perhaps one of the most important developments is that the law amends Ukraine's Criminal Code, revoking the criminal liability that could arise out of publicizing and circulating information on a criminal or other offense through various media, made in compliance with the requirements of the law.
Reflecting on these recent changes in Ukraine for Turkey and Turkish corporate environment taking into account the long-known positive effect of whistleblowing, it is clear that its benefits outweigh its disadvantages, although it may have its setbacks as well.
The primary benefit of whistleblowing is that it provides companies access to direct, intact and unfiltered information, and a source to root out previously unexposed non-compliant or illegal practices, where employees are not bound by the limits of formal language or possible pressure from their managers or colleagues. The practice also educates employees and promotes honesty, compliance and clear communication within the workplace. As the practice reinforces the company's compliance policies, which is generally in line with the local regulations, when an employee is required to use a hotline dedicated to whistleblowing, he/she is also forced to maintain a better knowledge of such practices, both in terms of company policies and the local legislation. It clearly helps establishing a healthy compliance culture, since the system is usually also compliant with all applicable laws, such as data protection and privacy regulations. On top of that, the presence of a whistleblowing mechanism can have a preventive impact in discouraging employees before they engage in potential corrupt acts.
As such, whistleblowing is vital in preventing or minimizing damages that a company could incur as a result of corrupt practices. Companies can also learn from past occurrences and take constructive steps in fixing the areas of risk and vulnerability, preventing substantial losses of reputation, as well as protecting its customers.
To add to its overall positive effect for companies, whistleblowing plays a highly important role in helping governments in their fight against corruption. It saves both companies and governments huge amounts of money and resources.
In Turkey, acts of corruption are regulated under the Turkish Criminal Code ("Code"). The Code and the Turkish criminal law system does not regulate corporate criminal liability, and follow the principle of personality, which regulates that a person can only be penalized for his/her own actions. In parallel with this, it is only possible for a company's actions or business conduct to become subject to a criminal investigation, where the company's organs or representatives who committed the related crimes are prosecuted, and for which certain security measures can be imposed.
By extension, one might also expect Turkey to accelerate its efforts in implementing laws and regulations similar to those recently enacted in Ukraine, as a corporate compliance culture, supported by whistleblowing procedures disseminated within companies, would greatly contribute to the countrywide adoption of such a culture. Moreover, regulations that encourage companies to implement and maintain whistleblowing policies and mechanisms would provide a significant amount of help in ensuring Turkey's national laws to be in compliance with the relevant international standards.
It is also of significance that within this context, companies in Turkey assume the responsibility of forming and implementing their own procedures and tools for preventing corruption, especially in terms of self-policing. In certain cases, internal rules and practices of companies may even come off stricter than those set forth by the local legislation. Particularly, Turkish subsidiaries of multinational companies implement and maintain these controls in order to comply with the detailed anti-corruption regulations of the country in which their parent company operates. In terms of whistleblowing, one could argue that control mechanisms such as whistleblowing and ethics hotlines are still either not known or not used effectively within the Turkish corporate culture. For this reason, multinational companies in Turkey are advised to focus on two important factors: (i) adapting general global compliance programs to the cultural and legislative characteristics of Turkey (as it is critical to understand that the culture in addressing and preventing corrupt practices) and (ii) proper employee training, again, by taking into account the characteristics of the local climate. Otherwise, together with the lack of clear statutory obligations, efforts in enforcing these self-policing and control mechanisms might provide fruitless.
This article was first published in Legal Insights Quarterly by ELIG Gürkaynak Attorneys-at-Law in March 2020. A link to the full Legal Insight Quarterly may be found here
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