European Commission proposes new whistleblower protection rules

The European Commission is proposing a new law to strengthen whistleblower protection across the EU.

It said that recent scandals like Luxleaks, the Panama Papers and the ongoing Cambridge Analytica revelations showed that whistleblowers can play an important role in uncovering unlawful activities that damage the public interest and the welfare of citizens and society.

The proposals, it said, would guarantee a high level of protection for whistleblowers who report breaches of EU law by setting new, EU-wide standards. The new law will establish safe channels for reporting both within an organisation and to public authorities. It will also protect whistleblowers against dismissal, demotion and other forms of retaliation and require national authorities to inform citizens and provide training for public authorities on how to deal with whistleblowers.

Whistleblowers, the commission said, can help detect, investigate and sanction abuses of EU law, while also enabling journalists and the free press to play their fundamental role in European democracies.

It was noted that intimidation of whistleblowers and retaliation against them was a reality, with 36% of workers who reported misconduct stating in the 2016 Global Business Ethics Survey that they had experienced retaliation.

"Many recent scandals may never have come to light if insiders hadn't had the courage to speak out. But those who did took enormous risks. So if we better protect whistleblowers, we can better detect and prevent harm to the public interest such as fraud, corruption, corporate tax avoidance or damage to people's health and the environment, first vice-president Frans Timmermans said at a press conference announcing the proposals.

“There should be no punishment for doing the right thing. In addition, today's proposals also protect those who act as sources for investigative journalists, helping to ensure that freedom of expression and freedom of the media are defended in Europe."

Justice commissioner Věra Jourová, said the new rules would be a “game changer”.

“In a globalized world where the temptation to maximize profit sometimes at the expense of the law is real, we need to support people who are ready to take the risk to uncover serious violations of EU law,” she said. “We owe it to the honest people of Europe.”

Protection for a wide range of EU law breaches

The proposal ensures EU-wide protection for blowing the whistle on breaches of EU legislation in the fields of public procurement; financial services, money laundering and terrorist financing; product safety; transport safety; environmental protection; nuclear safety; food and feed safety, animal health and welfare; public health; consumer protection; privacy, data protection and security of network and information systems.

It also applies to breaches of EU competition rules, violations and abuse of corporate tax rules and damage to the EU's financial interests.

The Commission has encouraged member states to go beyond this minimum standard and establish comprehensive frameworks for whistleblower protection based on the same principles.

Clear Mechanisms and Obligations for Employers

Among the proposed rules is to have all companies with more than 50 employees or with an annual turnover of over €10 million, set up an internal procedure to handle whistleblowers' reports.

All state and regional administrations, and municipalities with over 10,000 inhabitants will also be covered by the new law.

The protection mechanisms will have to set up must include:

• Clear reporting channels, within and outside of the organisation, ensuring confidentiality;
• A three tier reporting system of:
• Internal reporting channels;
• Reporting to competent authorities – if internal channels do not work or could not reasonably be expected to work (for example where the use of internal channels could jeopardise the effectiveness of investigative actions by the authorities responsible);
• Public/media reporting – if no appropriate action is taken after reporting through other channels, or in case of imminent or clear danger to the public interest or irreversible damage;
• Feedback obligations for authorities and companies, who will have to respond and follow-up to the whistleblowers' reports within 3 months for internal reporting channels;
• Prevention of retaliation and effective protection: all forms of retaliation are forbidden and should be sanctioned. If a whistleblower suffers retaliation, he or she should have access to free advice and adequate remedies (for example measures to stop workplace harassment or prevent dismissal). The burden of proof will be reversed in such cases, so that the person or organisation must prove that they are not acting in retaliation against the whistleblower. Whistleblowers will also be protected in judicial proceedings, in particular through an exemption from liability for disclosing the information.