Whistle Blower protection
All companies (including banks and other financial institutions) with at least 50 employees, irrespective of their size, will be required to set up whistleblower channel if this passes law.
A 2017 study carried out for the Commission estimated the loss of potential benefits due to a lack of whistle-blower protection, in public procurement alone, to be in the range of €5.8 to €9.6 billion each year for the EU as a whole.
An EU article stated the Council wanted ' ...more clarity on some provisions of the text so as to increase legal certainty and better address the links between the new rules and existing legislation in some sectors.
The Ambassador Lumini?a Odobescu, Permanent representative of Romania to the EU stated:
Recent scandals such Cambridge analytica or Lux Leaks have demonstrated the importance of whistleblowers. That is why we need to provide them with a high level of protection across the Union. We should not expect anyone to risk their reputation or job for exposing illegal behaviour.
Some of the elements of the position adopted by the Council compared to the initial proposal include:
- Reporting system: whistleblowers will first have to use internal channels within their organisation before calling on external ones (set up by public authorities) and, eventually, going for public disclosure. However, the principle of a three step system includes exceptions allowing a person to go directly for external or even public disclosures in some specific cases (e.g. in case of manifest or imminent danger for the public interest) ;
- Persons protected by the new rules: these elements of the Commission's proposal were kept, and include a large number of profiles who could acquire information on breaches in a work-related context. e.g. workers, including civil servants at national/local level, volunteers and trainees, non executive members, shareholders, etc.
- Feedback obligations for authorities and companies: they will have to respond and follow-up to the whistleblowers' reports within 3 months (with the possibility of extending to 6 months for external channels in duly justified cases);
- Public disclosures: the Council introduced an article setting out the conditions to be fulfilled for a person to be protected by the new rules in case he/she publicly discloses information;
- Scope of application: the Council's position retains the wide scope as proposed by the Commission and covers areas such as public procurement, financial services, prevention of money laundering, public health, etc.'
Reuters article on the topic last week stated:
'The move follows criticism from transparency campaigners about the lack of EU protection for individuals who report such breaches, citing the prosecution of two whistleblowers who leaked information in 2012 about Luxembourg’s illegal tax deals with large corporations.
Whistleblower protection is currently handled by national authorities in the 28 EU states, resulting in largely different treatment, with no laws at all in some countries.
Though a number of Luxembourg tax deals were ruled illegal by the EU, the two whistleblowers received nine-month and one-year prison sentences from the Grand Duchy, with one ultimately fined 1,000 euros (869 pounds)and the other acquitted last year.
The new regulations proposed by the European Commission last year would bring in EU-wide rules requiring companies to set up internal channels for whistleblowers and shield them from reprisals such as sackings, demotion and even litigation.'