WASHINGTON, D.C. | APRIL 17, 2019 — Thanks to a directive enacted Tuesday by the European Parliament, whistleblowers in the European Union (“EU”) will soon have safe channels to report violations of the law. This is the first time that the EU has taken meaningful action to protect whistleblowers. Until now, witnesses to crime inside the workplace have had little protection against retaliation by their employers and thus have been deterred from notifying law enforcement. The directive will go into effect once approved by EU ministers; member countries will then be charged with implementing it.
John Kostyack, Executive Director of the National Whistleblower Center, praised the decision:
“The EU Directive on whistleblowing is a major step in the right direction. The European Union, for the first time, has formally acknowledged the importance of protecting whistleblowers in their work against corruption. It is now up to the various members of the EU to implement the Directive and ensure that whistleblowers are incentivized and protected. Europe still has a long way to go, but important progress was made.”
European Commission Vice President Frans Timmermans said, “This will help tackle fraud, corruption, corporate tax avoidance and damage to people’s health and the environment.”
A key feature of the directive is its protection of whistleblowers from retaliation by employers, such as termination or demotion. Whistleblowers are encouraged to make confidential reports to law enforcement authorities, and if the initial report does not receive “appropriate” action, or if they believe there is imminent danger to the public, or if there’s a risk of retaliation, they may make a public disclosure and still enjoy protections against retaliation..
The directive was proposed last year following the public outcry over “Panama Papers” and other tax avoidance schemes. But initial drafts would have led to completely ineffective protections, requiring whistleblowers to report internally and thus forcing the sharing of incriminating information with those perpetrating crimes. The National Whistleblower Center (“NWC”) advocated against this provision, highlighting how this would be a poison pill and could ruin the lives and livelihoods of whistleblowers in Europe.
In two letters addressed to the Presidents of the European Parliament and the European Commission, the NWC explained the grave risks that come with internal reporting requirements. The NWC argued that type of language “undermines the rule of law, violates international anti-corruption conventions, [and] violates U.S. securities laws applicable to numerous European companies.”
A critical step in the NWC’s advocacy took place last November when Stephen M. Kohn, then Executive Director and now Chairman of the Board, testified before the European Parliament. Among other things, Kohn’s testimony exposed efforts to create a loophole for those committing tax law violations. NWC also joined a coalition of 80 international organizations calling for the European Council and the Member States to remove the mandatory internal reporting regime.
Fortunately, the final directive contains no tax loophole and ensures that whistleblowers are permitted to report wrongdoing to outside authorities. Earlier this month, the European Parliament spokesperson responded to the National Whistleblower Center directly, assuring that whistleblowers would indeed be protected.
- Press conference in English – Landmark Legislation Passed 2019: The EU approves whistleblower protection rules https://youtu.be/UqR_V2Ba-eo
- Stephen Kohn advocates on behalf of a whistleblower in Europe: Reported by EU Reporter https://www.youtube.com/watch?v=hV3K3kxDPDQ
- Stephen Kohn’s testimony before European Parliament about whistleblower protection and rewards: https://youtu.be/ndTx8giekDw
- For more information about international whistleblowers, click here.