Due to a lack of comprehensive legislation and a minimum standard of protection at the EU level, potential whistleblowers are often afraid to come forward for fear that they will not be effectively protected. This finding led to a proposal by the European Commission for a directive on the protection of persons reporting violations of EU law.
Introduction
Increasing attention has been paid to whistleblowing in recent years (for example, Dieselgate and the Panama Papers). However, aside from a number of directives, regulations and guidelines applicable to specific sectors, such as financial services, there is currently no generally applicable legislation on whistleblowing at the EU level. For the most part, whistleblowing is governed by national law, which often provides only partial protection for whistleblowers, as is the case in Belgium. This lack of effective protection results in substantial uncertainty for potential whistleblowers who are consequently less likely to report illegal acts. If more people come forward with information about unlawful activities, this will improve the detection, investigation and prosecution of violations of EU law. This awareness led to a proposal by the European Commission for a directive on the protection of persons reporting breaches of EU law.
Scope of the proposed directive
The proposal aims to “set out a balanced set of common minimum standards providing robust protection against retaliation for whistleblowers reporting on breaches in specific policy areas”. The scope of the proposed directive is thus limited to policy areas (e.g. consumer protection, public health, etc.) in which there is a need to strengthen enforcement and where underreporting is a key factor affecting enforcement and illegal conduct by companies or organizations may result in serious harm to the public interest.
Furthermore, the directive only applies to persons who acquire information about unlawful conduct in a work-related context, be it in the private or public sector (even if the professional relationship has yet to begin).
Procedures
In addition to an obligation to establish external reporting channels, the proposal requires the Member States to ensure that private and public legal entities have internal channels and procedures, which meet certain criteria, to report unlawful activities and follow up on such reports. This obligation applies to private legal entities:
- with 50 or more employees or an annual turnover or annual balance sheet total of EUR 10 million or more; or
- that are active in the area of financial services; or
- that are vulnerable to money laundering or terrorist financing; or
- that are active in sectors or involved in activities identified by the Member States (further to an appropriate risk assessment).
Protection
Persons with reasonable grounds to believe that the reported information was true at the time of reporting will benefit from protection. As a general rule, information should first be reported internally. In some circumstances, however, information may be immediately reported or disclosed externally. The rights and obligations provided for by the proposal cannot be waived by contract.
The proposal requires the Member States to take all necessary measures in order to prohibit any form of retaliation against whistleblowers. If a whistleblower suffers harm which he or she has reasonable grounds to believe was in retaliation for a report or disclosure, the burden of proof shifts to the person or entity being reported on, which must then prove that the detriment to the whistleblower was unrelated to the whistleblowing.
Legal entities that form the object of whistleblowing have the right to a fair trial, are presumed innocent until proven guilty and are entitled to the benefit of due process. The competent authorities shall ensure that the identity of the legal entities or persons concerned is protected for the duration of the investigation (provided it is not already known to the public).
Penalties
The Member States must provide for “effective, proportionate and dissuasive” penalties in the event that natural or legal persons (attempt to) hinder reporting, take retaliatory measures against reporting persons, bring vexatious proceedings against reporting persons or breach their duty to maintain the confidentiality of the identity of reporting persons. Such penalties must also be imposed on persons making malicious or abusive reports or disclosures. In that case, the person or entity that forms the object of the report benefits from the protection and remedies provided for by general rules of law.
Final remarks
The proposal, which is still in the early stages of the legislative process, will have to be transposed into national law by 15 May 2021.
