Widespread corruption in health care and public contracting during the COVID-19 pandemic has shown the vital role of whistleblowers in safeguarding health and public finances. We’ve seen reports of government officials giving protective equipment contracts to alleged fraudsters, hijacking emergency funds and purchasing vastly overpriced, poor quality mobile hospitals, among other integrity violations.
The usual checks and balances that hold governments accountable have frequently been side-lined during the pandemic, making whistleblowers an even more crucial line of defence against corruption. The individuals who call out wrongdoing don’t just expose the corrupt. They also save billions in public finances and countless lives; it was a whistleblower in China, Doctor Li Wenliang, who spoke up first about the threat posed by the corona virus spreading through Wuhan in December 2019.
Many other workers – in the public and private sector – have come forward in the past six months, often at risk to their livelihoods and lives. Whistleblowers face everything from retaliation from their employers and legal challenges to physical harm. For these brave individuals’ well-being, and that of anyone who wants a corruption-free future, they must be protected.
EU Whistleblower Protection Directive: a vital win
The EU Whistleblower Protection Directive aims to do just that. When the Directive was adopted in 2019, only a few EU states had adequate whistleblower protection. The uneven legislation across various EU countries provides patchy protection to whistleblowers at best, which is a deterrent for those wanting to come forward and expose wrongdoing. The new Directive provides a strong foundation for EU member states to achieve uniform and robust whistleblower protection.
Core features of the Directive include protection for whistleblowers against all forms of retaliation from their employers, and obligations for organisations with more than 50 workers to create internal reporting channels. It also expands the definition of whistleblower to include not just employees of companies, but all individuals who report wrongdoing encountered in a work-related context, including consultants, shareholders, former employees and job applicants.
The Directive, while a significant step in the right direction, is not perfect. It covers whistleblowers who report breaches of EU laws in some areas, but not breaches in other areas or of national laws. It does not require follow-up of anonymous reports of breaches of law, nor does it protect CSOs who support whistleblowers against retaliation. It is key that member states fill these gaps during transposition – the process of adopting their own national laws to comply with the Directive. The Directive should be taken as a starting point for effective whistleblower protection legislation, not the finishing line.
Despite its imperfections, the Directive was seen as a massive win for whistleblower protection when it was approved in March 2019. EU member states have two years from its entry into force (until 17 December 2021) to transpose the Directive into their own national law.
Nine months into the transposition period, things are no longer looking so promising.
Failure to grasp an opportunity?
Delays are happening in many countries. Nearly half of the 27 member states have not even started the transposition process. Amongst the other half of member states, progress has been very slow or is proceeding in a manner that is unlikely to result in effective legislation. In Spain, for example, the working group created to transpose the Directive does not include civil society organisations; without proper consultations with all relevant stakeholders, national legislation is unlikely to offer adequate protection to whistleblowers in practice.
This lack of urgency from the EU member states is concerning. The corruption exposed by the COVID-19 pandemic and the huge amounts of relief funds at stake should spur countries into action. Sadly, it seems to have done the opposite. Governments are now using the crisis as an excuse to delay the transposition process and limit protection.
In Germany, for example, the Ministry of Economy is obstructing broadening the scope of whistleblower protection beyond the provisions of the Directive. This is partly because it fears increased costs and administrative work for small and medium enterprises during the COVID-19 crisis. The ministry is seemingly unaware of the benefits robust protection would bring businesses.
With only 15 months left until the original deadline for member states to finish transposition, countries risk missing the chance to strengthen and standardise whistleblower protection. It would be a wasted opportunity if countries come up with below-par legislation at the last moment, just to avoid fines and other repercussions.
Our tool for assessing whistleblower laws
Transparency International has developed a methodology to help lawmakers, CSOs and other stakeholders assess how national legislation stacks up against the requirements of the EU Directive and also against international best practices.
A two-step methodology, it can help member states fully transpose the Directive and then go further to meet international standards. Although it was designed with the EU in mind, it can be applied in any country. For both EU and non-EU stakeholders, this tool allows assessment of current national legislation, as well as draft laws and amendments throughout the legislative process. In fact, it can be used by lawmakers to check that their draft laws are up to standards.
The tool builds on Transparency International’s global experience with ensuring that whistleblowers are protected. We recognise their value to society and will be advocating and providing expert advice to ensure that the EU Directive is an opportunity that countries don’t miss.
Our recommendations for an optimal transposition
Based on careful assessment and our experience, we actively advocate for countries to address the following gaps in the EU Whistleblower Protection Directive:
- The limited scope of the Directive must be widened so that all whistleblowers speaking up about wrongdoing are protected. Legislation must protect those who speak out against any breaches of national law as well as EU law.
- There must be better protection against retaliatory legal proceedings.
- Legislation must ensure full reparation of damages suffered by whistleblowers, including reinstatement and full financial compensation (no caps).
- Companies must accept and follow-up on anonymous reports.
- Legislation must include penalties for failure to fulfil obligations under the Directive, including for failure to establish reporting mechanisms, failure to follow-up on reports and failure to support and protect whistleblowers.
To ensure these gaps are addressed, and the legislation adopted is effective, we recommend the involvement of all key stakeholders when drafting the law, including trade unions, business and employer associations, civil society organisations and academia. It will help ensure that the legislation takes into account the needs and concerns of all parties that will be affected, thus building buy-in, trust and support of those who will have a role in implementing the legislation.
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