Whistleblowers directive still needs to change

An EU directive nearing completion would protect the whistleblowers at the heart of recent scandals—but only if they reported within their organisation first.

Martin Jefflén

The European Union’s proposal for a directive to protect whistleblowers is reaching the final stages of its legislative journey. Major changes must however be made to the directive, even at this late stage, for the legislation to serve the citizen and encourage the reporting of wrongdoing within European companies and other organisations.

For many years, Eurocadres has lobbied hard for European-wide whistleblower protection which would enable safe reporting of criminal acts, corruption and other malfeasance. In 2016 it established the platform WhistleblowerProtection.EU, through which close to 90 trade unions and other civil-society organisations have co-operated in substantial and intensive lobbying to ensure Europe will be a safer place for those who report threats to the public interest. It would be disastrous if, after all this hard work, the EU ends up with a whistleblower-protection regime which risks discouraging citizens from reporting wrongdoing, by giving organisations new legal routes to avoid scrutiny, hide or destroy incriminating evidence or initiate legal processes to wear down the whistleblower.

LuxLeaks, Panama Papers, Dieselgate …

One only has to mention ‘LuxLeaks’, the Panama Papers or ‘Dieselgate’ (the German vehicle-emissions scandal) to confirm that whistleblowing is now deeply ingrained in the European body politic. In recent years, the EU’s legislative agenda has been fuelled by whistleblower revelations and the desire of regulators and legislators to respond to the scandals revealed.

Without the brave acts of whistleblowers—many of whom have lost their jobs and faced persecution and reprisals—these cases would not have seen the light of day. It is important that EU whistleblower legislation makes it easier for citizens to come forward and report, without fear of negative repercussions for their career, economic status or private life.

Trade unions and civil society have long worked together with the European Parliament, demanding that the European Commission should act. After persistent lobbying, the commission was finally convinced to propose a whistleblower-protection directive, the draft published in April 2018.

This initial proposal was more ambitious than expected but it contained several structural flaws. It was improved considerably by the European Parliament in a report adopted in November last year. Parliamentarians added the right to be protected when reporting abuses of workers’ rights, supported anonymous reporting and introduced lower thresholds on reporting to the media or the public. The EP report strengthened the protection of freedom of speech, while diminishing the options for retaliation against workers in both public and private sectors.

The Council of the EU has however sought to dismantle important parts of the good work by the parliament. The council’s position, if adopted, would increase the possibilities for retaliation against those exposing crimes and give accused organisations more time to destroy or hide incriminating evidence. It could also allow companies to stay embroiled in legal cases for years, to break the resolve and the financial stability of the whistleblower.

Mandatory internal reporting

The central problem with the commission proposal, which remains in the council position, is the requirement to report first internally through a dedicated channel. The directive does not offer protection were reporting to be via normal supervisory channels—which means most reports would be unprotected. It would have the absurd effect of making it safer not to report to one’s superior and instead to use the separate whistleblower report channel within the company.

While dedicated channels are necessary for safe reporting, especially when a superior is part of the wrongdoing, in many cases reporting to the manager would be normal procedure. Not offering protection for reports via regular supervisory channels means that the flow of information necessary for due diligence risks being slowed down considerably. Eurocadres is a European trade-union organisation representing managers, who need this information to do their job. If less information is passed on, it is bad for managers and bad for business.

As currently envisaged, external reporting to law-enforcement agencies or regulatory authorities becomes a safe option only after reporting through the dedicated internal channel. This risks putting those who have been accused of breaking the law in a stronger position to cover up their crimes.

Last comes public reporting, which includes reporting via the media. The European Parliament improved protection here too.

Making it less safe to report

The directive, in the commission’s draft and the council’s position, offers exceptions from this rule of internal first. The burden of proof, however, falls on the whistleblower to demonstrate that the criteria for the exceptions are fulfilled. This would have a considerable chilling effect. Making it less safe to report carries the danger of making a potential whistleblower feel less confident about reporting. Every additional hurdle which must be leapt reduces the chance of the whistleblower coming forward.

Whistleblowers must have options regarding how and to whom they report. It is common sense that if an employee becomes aware of a criminal act taking place within an organisation, as a citizen s/he has the right to report this to law-enforcement agencies. The introduction of mandatory internal reporting would undermine this fundamental right. Most whistleblowers do report internally first and this is often the best option, as it is closer to the problem which can more easily be resolved. Internal reporting first is thus a good principle—but a good principle can make a disastrous law.

Currently, the parliament is the only EU institution, in trilogue, supporting the right of whistleblowers to report directly to competent authorities. The commission and the council are still insisting on mandatory internal reporting as the first step of a three-step whistleblowing process. But Belgium and Bulgaria are openly opposed to this bad idea, which goes against international good practice and the Council of Europe recommendation on protection of whistleblowers.

It is essential that those who blow the whistle have a right to seek advice from trade unions at any point in the process. This right is even more important if the threat of mandatory internal reporting is hovering over their head. Yet the proposal does not clearly affirm that whistleblowers must be safe to seek support from their union.

In several member states a somewhat decent level of protection is already offered. The directive aims to establish a minimum level but it must be ensured—by introducing a non-regression clause—that it cannot be used to worsen protection in a member state. A directive with mandatory internal reporting, for example, could end up destroying a good national protection by introducing procedures which set strict requirements for which channels can be used.

Trilogue negotiations

The commission, the parliament and the council are now deeply involved in the final stages of trilogue negotiations on the text of the directive, before the end of this parliamentary mandate. It is essential that this process is used to re-establish many of the parliament’s positions, which gave significantly more protection to those reporting wrongdoing.

Eurocadres and WeMove.EU have joined forces to launch a petition, calling for significant changes to the draft text. Launched in early February, it attracted nearly 100,000 signatories in a fortnight. At the same time, in an open letter, 79 trade unions and civil-society organisations have raised the problem of reporting channels.

A positive environment which encourages whistleblowers to come forward and offers them full protection throughout the reporting and investigation is vital.  A directive which actively supports whistleblowing against corrupt practices within European undertakings and challenges criminal acts in society at large will contribute to a more social Europe. The EU institutions must respond to the demands of their constituents, protecting whistleblowers and making reporting easier and safer.