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The rules of the game regarding the reception and handling of reports of irregularities within organizations have so far been fragmented and diverse across the wider European area. With the new EU Directive on the protection of whistleblowers, they will be radically changed in the coming years and, above all, unified. A proposal for such a directive was issued by the European Commission in April this year. It has been fueled by some recent scandals, such as Diselgate, Luxleaks, Panama Papers, with Commission Vice-President Timmermans stressing the main purpose of the proposal for a directive - to protect whistleblowers - as many of these inconsistencies would not be detected without individuals' courage to speak out. Commission, 2018b).
But what will the directive specifically dictate? The new rules will also cover all state and regional administrations and municipalities with more than 10,000 inhabitants. Safeguards will need to include clear reporting channels /… /, a three-tier notification system /… /, mandatory feedback, prevention of retaliation and effective protection. The proposal contains safeguards to deter malicious reports and abuses and to prevent damage to reputation. In the case of a whistleblower, the presumption of innocence will apply, and they will also have the right to an effective remedy, an impartial trial and a defense ”(European Commission, 2018b). Another specificity of the directive is that the burden of proof will be reversed with regard to retaliation. Namely, it will be considered that the action against the whistleblower is a reimbursement due to his report and therefore inadmissible, but the other party will have to prove otherwise. The summary of the expected impact assessment of the directive shows that the rules for setting up internal systems for reporting irregularities and protecting whistleblowers will focus on the following areas: public procurement, prevention of money laundering and terrorist financing, protection of competition, tax evasion, product safety, food safety '), transport safety, environmental and animal protection, public health, consumer protection, privacy and personal data, and information security (European Commission, 2018c). Among the positive effects, they cite a favorable impact on the economy, society and the environment. The directive is expected to contribute to the detection of fraud and corruption, thus having a beneficial effect on the EU budget, from which between € 179 billion and € 256 billion is now flowing, at the expense of such risks. In the field of public procurement, between 5.8 and 9.6 billion euros are expected to be saved annually at the EU level. Overall, the European Commission expects whistleblower protection to contribute to fairer competition in the single market and to a significant improvement in the economic, labor and social environment by working to encourage integrity and transparency in the public and private sectors (ibid.).
The Slovenian government supports the proposed directive, but defends the clarity of the provisions, "because only in this way will different treatment of the same facts in different Member States be prevented" (National Council of the Republic of Slovenia, 2018). Also extremely important is the position of Austria, which took over the six-month EU presidency on 1 July and called for the launch of the EU Integrity Project - its operation will be based on the activities of four working groups, one of which will deal exclusively with whistleblower protection ).
What about the timeliness of the directive? As noted, the directive is currently still a proposal. It is expected to be completed by the end of 2019, and the European Commission in Article 20 of the proposal imposes a duty on Member States to implement the directive, which should be implemented by 15 May 2021 (European Commission, 2018a). All follow-up reporting, statistics and impact assessment procedures (by various EU bodies) are expected to be completed by 15 May 2027.
The European Institute of Compliance and Ethics (EICE) supports such initiatives and also places integrity at its conferences and other events. This and other topics will also be discussed by excellent experts at this year's conference on compliance and business ethics.
SOURCES:
1. National Council of the RS. 2018. Opinion on the Proposal for a Position of the Republic of Slovenia on the Proposal for a Directive of the European Parliament and of the Council on the protection of persons who report infringements of Union law.
2. European Commission. 2018a. EU Whistleblower protection.
3. European Commission. 2018b. New rules for whistleblower protection.
4. European Commission. 2018c. Summary of the impact assessment.
Tilen Obradović
Education, research and development in the field of compliance and ethics and care for the development of the business compliance officer profession.