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Netherlands showing other EU countries what not to do when transposing EU whistleblower directive

Like all EU Member States, the Netherlands must adopt new legislation by the end of 2021 to transpose the EU Directive on Whistleblower Protection. A draft bill published for consultation in 2020 is an object lesson in how to put whistleblowers at risk and discourage them from speaking up.

Transparency Int'l

By Marie Terracol and Lotte Rooijendijk

The Netherlands has had a legal framework for the protection of whistleblowers since the Whistleblowers Authority Act became law in 2016. It is rather advanced legislation, but its difficult implementation has revealed important shortcomings. The transposition of the Whistleblower Protection Directive should be the perfect opportunity to address those shortcomings.

Instead of a much-needed reform of the current legal framework, arguing lack of time, the Dutch government issued a draft law that creates a special whistleblowing regime – running parallel to the existing one – for the areas covered by the Directive. Many experts, including Transparency International Netherlands and the Dutch Whistleblower Authority, heavily criticised the proposal.

In response, Lotte Rooijendijk, Project Lead at Transparency International Netherlands, said: “The Dutch should not build an extra floor on a house with unstable foundations. Not only are the foundations weak, the legislative proposal for the implementation of the Directive adds a complex and weak structure on top of them. We urge the government to revise the current legislation to both address its shortcomings and meet the standards of the EU Whistleblower Directive.”

The damaging effects of a minimalistic approach to the transposition

While not perfect, the Whistleblower Protection Directive provides a strong foundation for EU member states to achieve robust whistleblower protection. One of its main flaws is its limited and fragmented scope: it only protects whistleblowers who report breaches of EU law. Whistleblowers reporting breaches “only” of national law do not benefit from the protection and procedures offered by the Directive, unless national governments extend those protection and procedures to them.

The EU Commission, which drafted the Directive, is aware of this flaw and has repeatedly asked EU member states to widen the scope of the Directive beyond the areas covered by the Directive. The whistleblowers’ advocates who celebrated the adoption of the Directive warned policy makers that transposing the Directive without fixing this flaw, would severely weaken the protection it is supposed to bring.

In countries that currently do not have whistleblower protection laws (or have very weak ones), which is still the majority of EU countries, it limits the national protection regime to whistleblowers reporting breaches of EU law, leaving the others at risk. In countries with existing whistleblower protection legislation, like the Netherlands, it means creating two parallel regimes, with different levels of protection but also different procedures and obligations. In both cases, it means that one needs to understand whether what is reported is a breach of EU law or a breach of “other” law. The sheer complexity, potential inequalities and legal uncertainty is clear for all parties involved: workers, companies, public employers but also the authorities that deal with the whistleblowers’ reports.

How can someone know whether a suspected wrongdoing constitutes a breach of EU or national law? The likely answer is, they cannot. Indeed, many whistleblowers do not know all the facts when they report a suspicion of wrongdoing (which is why there are subsequent investigations). In addition, most people will not have the expertise necessary to identify which article of which law has been breached in a particular case. Even if they did, EU and national law can be so entangled that EU law experts themselves are sometimes hard pressed to know where EU law finishes and where national law starts.

A whistleblower protection regime that only applies to breaches of EU law would place an incredible burden on whistleblowers, who will need to figure out if their case fits in that box to know whether they are protected and which procedure to follow to benefit from protection. This will add stress to an already stressful situation, and given the uncertainty, many might decide not to speak up. As a consequence, a company might not learn that one of its employees is committing fraud before it is too late and it suffers irreversible financial and reputation damage. Similarly, the authorities and citizens might remain ignorant of a serious public health issue until it is too late.

A minimalistic transposition will also create additional burdens for companies. The Directive has created a number of obligations, and companies may already have others under their existing legal framework. For each whistleblowing report received, they will have to determine whether or not it is about a breach of EU law in order to know their obligations in terms of follow-up or protection. This will require additional financial and human resources. In the end, they might have to apply the most demanding standards of both regimes in all whistleblowing cases to mitigate legal risks. The same will apply to public entities and authorities receiving whistleblowers’ reports, and they are often notoriously lacking in resources.

Unjustifiable inequalities

A minimalistic transposition is placing EU interests above national interests. The aim of the Directive is to enhance the enforcement of EU law, as whistleblowing is one of the most effective ways to prevent and detect breaches of law. Not extending the Directive’s robust protection regime to all whistleblowers, amounts to saying that enforcing EU law and protecting EU funds is more important than enforcing national law and protecting national funds.

A minimalistic transposition would create inequalities between workers reporting wrongdoing. In a country with currently almost no legal whistleblower protection, such as Germany, an employee reporting a minor violation of EU law would be protected from retaliation, while another employee of the same organisation reporting a serious crime under German law could be lawfully dismissed. In the Netherlands, if the current approach were to be maintained, an employee reporting a serious crime under Dutch law will need to first report it internally within their organisation, with all the risks of retaliation and destruction of proof that it entails. Employees reporting minor breaches of EU law can go directly to the authorities. Such unequal treatment seems difficult to justify, and some argue that this could be unconstitutional in some countries.

Quality should come before speed

In a reaction to the criticisms received during the public consultation on the Dutch Bill, the Ministry of Internal Affairs, responsible for the transposition of the Directive, stated that they had no choice and that amending the Bill is “unfortunately impossible” as the Directive should be transposed into national legislation within a year.

It is distressing that the quality of the law is apparently sacrificed to procedures and deadlines. Why has the Bill been issued for consultation if the Ministry had no intention to take the inputs received into account? This seems like a foolish exercise and anything but a transparent and participatory democratic process. The Netherlands is further in the process than most other EU countries and notorious for being late in the transposition of Directives. So why the rush?

The EU adopted a game-changing Directive to protect whistleblowers across Europe. Now the true commitment of governments in Europe to protect those who speak up in the public interest will be put to the test. Rather than fail, hopefully the Netherlands will change their minimalistic approach to the transposition and follow best practice, taking the inputs of the consultation and the feedback from experts into account.