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International experts - Published: 19 March 2019
Dejan Jasnic
Founder, ABC Transparency GmbH - Zug, Switzerland

Nearly one year ago the EU Commission published the proposal for a Directive of the European Parliament and of the Council on the protection of persons reporting breaches of Union law (hereinafter: the whistleblower protection directive).

On March 12, 2019 the EU Commission issued a press release announcing that the European Parliament and the Member States had reached a provisional agreement regarding the proposal.

The proposal will now have its first reading in Parliament on April 17.

The following part of the press release was a positive surprise:

“Safe reporting channels: whistleblowers are encouraged to report first internally, if the breach they want to reveal can be effectively addressed within their organisation and where they do not risk retaliation. They may also report directly to the competent authorities as they see fit, in light of the circumstances of the case.”

Reporting channels are one of the crucial points of the whistleblower protection directive. The initial proposal stipulates conditions for the protection of whistleblowers from retaliation. First, the whistleblower is required to report in good faith, i.e. have reasonable grounds to believe that the information reported was true at the time of reporting. This condition introduces some legal uncertainty for the whistleblowers with the “reasonable grounds” standard. However, this is nothing compared to the 2nd paragraph of the proposal’s Article 13:

“A person reporting externally shall qualify for protection under this Directive where one of the following conditions is fulfilled:

a) he or she first reported internally but no appropriate action was taken in response to the report within the reasonable timeframe referred in Article 5;
b) internal reporting channels were not available for the reporting person or the reporting person could not reasonably be expected to be aware of the availability of such channels;
c) the use of internal reporting channels was not mandatory for the reporting person, in accordance with Article 4(2);
d) he or she could not reasonably be expected to use internal reporting channels in light of the subject-matter of the report;
e) he or she had reasonable grounds to believe that the use of internal reporting channels could jeopardize the effectiveness of investigative actions by competent authorities;
f) he or she was entitled to report directly through the external reporting channels to a competent authority by virtue of Union law.”

This part of the initial proposal reads more like an arsenal for the organisation’s army of lawyers which the whistleblower will have to to face sooner or later all the while carrying the burden of proof that the conditions have been met.

Apparently, this problem was recognized during the legislative procedure by numerous bodies.

The Committee on Legal Affairs criticized the sequencing of reporting lines in its report:

“Not only can this seriously compromise the report itself, but above all it also risks forcing whistleblowers into situations of immediate difficulty with their employers. What is more, this approach places the burden of proof on the whistleblowers to show they have chosen the most appropriate channel in the event that the sequencing provided for in the text is not followed. In the context of a balance of power that is anything but equal, this could well put the reporting personal at risk.”

The rapporteur suggested rethinking the multiple tiers of channels by introducing more flexibility in order to leave it up to the reporting person to choose the most appropriate channel to use.

Link: http://www.europarl.europa.eu/doceo/document/A-8-2018-0398_EN.html?redirect

The Court of Auditors was more lenient in relation to the sequencing of reporting lines:

“We consider the general rule requiring prior recourse to internal channels to be sound in principle and conducive to a culture of acceptance of whistleblowing. However, we would note that the widely-drafted exceptions to this rule would require further interpretation (administrative and judicial) in order to avoid creating uncertainty for potential whistleblowers. Furthermore, care must be taken to ensure that the proposed cascade system, due to the accumulation of deadlines, does not create obstacles to the prevention of a breach, which would frustrate the purpose of the Directive.”

Link: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:52018AA0004

In this respect the opinion of the European Economic and Social Committee was particularly interesting:

“However, the EESC believes that a whistleblower must have a free choice between access to internal channels and to the competent authorities, and therefore recommends a two- rather than three-stage procedure, in the interests of fairness and legal certainty. On the one hand, international studies, even in countries that have no requirement to use internal reporting channels (United Kingdom, Ireland), show that employees resort first to internal procedures out of loyalty; there is therefore no danger of the internal channels being bypassed on a large scale. Furthermore, where use of internal channels is required, it is difficult to provide for all the necessary exceptions. On the other hand, national laws provide for direct involvement of the authorities (e.g. for criminal offenses). Finally, this obligation only applies to employees, other workers being exempt. This leads to a breach of the principle of equality and to legal uncertainty.”

Link: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=eesc:EESC-2018-02855

While the EU Council followed the approach of the Commission and wanted to keep as a general rule the obligation for the reporting person to report first using the internal channel, the European Parliament was of a different opinion. During the negotiations with the Council the European Parliament advocated that the choice of deciding whether to use the internal channel or address the report directly to the external channel be left to the whistleblower who is the best placed to make that assessment.

According to the Council’s report, this is the main political issue on which a balanced approach should be founded in order to be acceptable to both co-legislators.

Link: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CONSIL:ST_6631_2019_REV_1&from=EN

It appears however, from the press release of March 12, that the European Parliament’s position has prevailed for now. In my opinion, one should strive to remove the obstacles for bona fide whistleblowers and not scare them away. As established in numerous studies, the problem on the European continent is the lack of whistleblowing not its abundance. Moreover, if the choice of the most appropriate reporting channel remains with the whistleblower, this should motivate any serious organisation/employer to properly implement effective internal reporting lines which would convince the whistleblowers to report internally first. This is quite different from focusing on shutting down the possibility of using any external channels.

Dejan Jasnic is the founder of ABC Transparency GmbH and an ETHIC Intelligence certified auditor. He specializes in the implementation of whistleblower programmes as well as using AI and Big Data to prevent insurance fraud. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.

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