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Blowing the whistle to protect whistleblowers in Europe

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In October 2019, after years of campaigning by civil society, the European Union (EU) passed a directive requiring member states to put in place strong legal protections for whistleblowers. No longer would people reporting tax fraud, environmental damage, or other breaches of European law have to hope that national legislation protected them if they faced retaliation from their employers.

After a slow start, all but one EU country has finally implemented the Whistleblowing Directive (EU Directive 1937/2019) into national laws. Poland, which was recently fined €7 million by the European Court of Justice for not doing so, should join the rest shortly: the country faces an additional penalty of €40,000 per day until it implements the Directive. Yet there is still considerable room for other European countries to continue strengthening whistleblower protection. Legislation in the 20 countries we assessed last year falls short in crucial areas.

In some countries, the national laws are problematic enough that Transparency International has turned “whistleblower” itself, alerting the European Commission to issues with how member states have implemented the Directive.

The first of these occurred in Hungary last year. In a move that seems destined to sow confusion, the Hungarian government has created two parallel systems: an old system that covers whistleblowers reporting breaches of Hungarian national law, and a new one that implements the Directive and only covers whistleblowers who report breaches of EU law.

Scope of what whistleblowers can report

Miklos Ligeti, the Legal Director of Transparency International Hungary, said: “It’s a mess. It takes a lawyer to define which case belongs in which system. It can be a Hungarian case with weaker protection, or an EU case covering narrower issues but with better protections. It is intimidating, dissuasive and deterrent to Hungarians. Whistleblowing should be easy.”

The newly adopted piece of legislation law also leaves whistleblowers who speak to the media unprotected. In an environment where public sector corruption is on the rise, government employees in particular might feel that they need to alert the press in order to raise the alarm. “When the constellation of corruption in Hungary is so sobering,” says Ligeti, “you need to be able to speak freely. That is not an option.”

In a letter to the European Commission, Transparency International’s chapter in Hungary and another local anti-corruption nonprofit K-Monitor have expressed their concerns that excluding whistleblowers who report to the media “clearly violates the Whistleblowing Directive,” and therefore “seriously endangers the European Union as an area of freedom, security and justice.”

Part of the problem, says Ligeti, is that the Whistleblowing Directive has been low on the government’s agenda. Whereas the Directive envisages national campaigns explaining and promoting the new rules, in Hungary this has not happened. As in many contexts, “being a whistleblower can be a very painful experience in Hungary, because there is no broad consensus that reporting on any form of wrongdoing serves the public good. Blowing the whistle is regarded as an individual and solitary action. The sentiment is: if you’re in trouble, you’re on your own,” Ligeti continues.

The Hungarian government has recently clashed with the European Commission over corruption and rule of law in the country, and, in this case too, Ligeti believes, further engagement from Brussels is likely to be helpful. In 2025, many municipalities and medium sized enterprises will have to implement their internal reporting systems as part of the Directive transposition. This creates the perfect opportunity to smooth out the issues and create a single clear and comprehensive framework to protect Hungarians. Pressure from the Commission might help create the necessary impetus, Ligeti explains.

In Italy, meanwhile, Transparency International has raised the alarm that the new whistleblower protection legislation is actually a step backwards in some important respects.

In 2017, Italy’s parliament passed a law that protects whistleblowers who first raise their concerns outside their organisations. But, transposing the Directive, the government has put limits on when whistleblowers can report externally and still be protected. While the Directive encourages employees to first raise the alarm within their organisations, it expressly allows them to go directly to the authorities.

Rather than legally requiring whistleblowers to report internally first, the government should use softer incentives, says Giorgio Fraschini, Whistleblowing Program Manager at Transparency International Italy. “When an external authority investigates, it is like an elephant in a crystal shop,” he says. “They don’t know the relationships and the practices of the workplace. Internal reporting is a more controlled system. A better system would promote internal reporting for these reasons, while leaving the choice of where to report to the whistleblower.”

Internal Whistleblowing Systems: Best practice principles

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The new Italian law also changed the scope of what can be reported, creating a confusing division between the public and private sectors, and excludes reports of irregularity and maladministration in the public sector. It ignores a key principle of the Directive – that its transposition should not create weaker protection for whistleblowers compared to previous national legislation. As in Hungary, whistleblowers will have a hard time understanding which cases can be reported. The weak consequences for retaliation against whistleblowers are another area of concern.

Many of the issues with the implementation of the Directive in Italy could have been avoided if the government had consulted with civil society, Fraschini says. Although the 2017 law was not perfect, it was drafted with considerable input from civil society experts. While transposing the Directive, the Italian government did not seek any public participation. As a result, it appears to have had problems aligning the Directive from Brussels with the existing national law.

Fraschini hopes that the European Commission will put pressure on the Italian government to quickly correct these shortcomings. He says: “The transposition should have been an opportunity to fix the flaws in the previous system. We’re confident that, with time, the problems will be solved. But the problem with fixing things with experience is that you’re sacrificing people in the meantime. People will suffer because of this missed opportunity.”