The European Union has recognised the value that whistleblowers provide society, typically at great personal risk, and is adopting a comprehensive legal framework to protect employees who report government corruption and corporate crime.
Member states have two years to adopt the new public-interest disclosure scheme, which will protect whistleblowers and anyone who assists them such as colleagues or family members.
“The new rules will require the creation of safe channels for reporting both within an organisation — private or public — and to public authorities,” according to a statement from the Council of the EU, which adopted the new system on October 7.
“It will also provide a high level of protection to whistleblowers against retaliation, and require national authorities to adequately inform citizens and train public officials on how to deal with whistleblowing.”
The Council of the EU says the scheme will “guarantee a high level protection to whistleblowers across a wide range of sectors including public procurement, financial services, money laundering, product and transport safety, nuclear safety, public health, consumer and data protection”.
Whistleblowers will be encouraged to spill the beans internally to their employer in the first place, but they will not forfeit legal protection from reprisals such as disciplinary action from their employer if they choose to go straight to the public authorities.
“Whistle-blower protection is currently covered in a fragmented manner,” the council explains. “At the moment, only 10 EU countries have a comprehensive law protecting whistleblowers. At EU level, there is legislation in only a limited number of sectors (mostly in the areas of financial services) which include measures to protect whistleblowers.”
Not having an adequate whistleblowing framework is costly. Just in the area of public procurement, a lack of whistleblower protection could be costing the EU as much as €9.6 billion every year, or over AUD$15 billion, according to a 2017 study for European Commission.
People who bravely expose powerful criminals working within large organisations need robust protection as a key element of a well functioning democratic system based on the rule of law, said Anna-Maja Henriksson, the Justice Minister of Finland, which currently holds the EU Council presidency. “No one should risk their reputation or job for exposing illegal behaviours,” she said.
The new scheme will require companies with 50 employees or more and municipalities with more than 10,000 residents to create “effective and efficient reporting channels” and the protections will extend not only to public servants and paid employees of companies, but also to a wide range of other people who might notice shady behaviour including volunteers, trainees, shareholders or non-executive directors. Public authorities and companies will have to respond to disclosures and follow them up within three months, or apply for an extension to six months.