On December 16th, 2019 the European Union’s “Directive on the protection of persons who report breaches of Union law” entered into force as Directive 2019/1937.
Member States are required to transpose the Directive into national laws until December 17, 2021.
The Directive 2019/1937, referred to as the EU Whistleblower Protection Directive, sets forth legal obligations for legal persons in private and public sectors. It focuses mainly on organizations with more than 50 employees and on municipalities with more than 10.000 inhabitants. Thus, the scope of the directive is immense and far reaching. It regulates matter throughout the continent which is home to 450 million citizens and 22.5 million SMEs, many of which will be impacted by the Directive.
Protection of whistleblowers at the core of the Directive
A 2017 study carried out for the EU Commission estimated the loss within the EU due to a lack of whistle-blower protection in public procurement alone, to be in the range of €5.8 to €9.6 billion per year. We can all imagine the financial loss within the EU when we add up the loss estimations from other sectors.
As the Finish Minister of Justice, Ms. Anna-Maja Henriksson has put it: “The EU is committed to having a well functioning democratic system based on the rule of law. That includes providing a high level of protection across the Union to those whistle-blowers who have the courage to speak up. No one should risk their reputation or job for exposing illegal behaviours.”
The EU is determined to strengthen the rule of law and guarantee a high-level protection to whistle-blowers across diverse sectors. The Directive protects disclosures in several key areas including public procurement, financial services, money laundering, product and transport safety, public health, environment protection, consumer and data protection, between the others.
Considering the vast discrepancies in the present rule of law standards across different EU member states and regions, the Whistleblower Protection Directive is the Union’s attempt to consolidate and standardize the minimum legal standards for protecting eligible persons who decide to blow the whistle across the Union.
New Reporting Channels and Procedures
The corporations, SMEs, public authorities and municipalities will have to comply with the following major requirements:
- set up clear procedures and establish confidential and safe internal reporting channels,
- provide a high level of protection to whistle-blowers against retaliation,
- ensure confirmation of receipt of the report to the whistleblower within seven days,
- respond and provide a follow-up to the whistleblowers' report within 3 months,
- keep received reports in a secure place so that they can be used as evidence where appropriate.