Brussels, 18/04/2018. The European Commission is expected to propose a new EU-wide whistleblower-protection law within the week. The proposed regulation is an attempt to protect citizens from the often devastating personal consequences they face for simply reporting fraud or corruption, while at the same time erecting safeguards against “malicious or abusive reports”. It will apply to both the public and private sectors.
The regulation obliges organisations in the private sector to establish reporting channels for employees who wish to blow the whistle on corruption. It will be compulsory for companies with 50 or more employees, those with a turnover of over €10 million, and all legal entities involved in financial services or vulnerable to money laundering or terrorist financing.
For the public sector, government administrations, regional and departmental authorities and municipalities with more than 10,000 residents will be affected, as well as other legal entities governed by public law.
Mandatory ‘internal-first’ reporting
Employees and members of the public will be expected to make every attempt to report internally first, if they are to enjoy any subsequent EU whistleblower protection. This includes reports to competent authorities, which are considered “external” disclosures and only valid for protection if internal reporting was not followed up, the internal-reporting channel was unknown or did not exist.
However, the regulation will provide for exceptional circumstances such as grounds to suspect a cover-up would follow from internal reporting, or cases such as an imminent danger to the public interest, where the timing is urgent.
Which areas are covered?
Whistleblower protection will cover EU regulations in the following areas:
- EU financial interests.
- public procurement.
- financial services, prevention of money laundering and terrorist financing.
- product safety.
- transport safety.
- environment protection.
- nuclear safety.
- food and feed safety, animal health and welfare.
- public health.
- consumer protection.
- protection of privacy and personal data, and security of network information systems.
- tax breaches or unfair tax advantages.
- state aid and undertakings.
Some distance to go yet
The regulation also makes some mention of protection against malicious reporting, in the form of compensation for those who suffer financial damage from such disclosures. However it is still in draft form, and likely to undergo a fair amount of modification as it crosses the EU policy-making straits. The final shape is therefore likely to change before it reaches safe harbour.
© Philip Hunt, 2018.