Explanatory Memorandum to COM(2018)218 - Protection of persons reporting on breaches of Union law

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This page contains a limited version of this dossier in the EU Monitor.

dossier COM(2018)218 - Protection of persons reporting on breaches of Union law.
source COM(2018)218 EN
date 23-04-2018


1. CONTEXTOFTHEPROPOSAL

• Reasons for and objectives of the proposal

Unlawful activities and abuse of law may occur in any organisation, whether private or public, big or small. They can take many forms, such as corruption or fraud, malpractice or negligence. And if they are not addressed, they can sometimes result in serious harm to the public interest. People who work for an organisation or are in contact with it in their work-related activities are often the first to know about such occurrences and are, therefore, in a privileged position to inform those who can address the problem.

Whistleblowers, i.e. persons who report (within the organisation concerned or to an outside authority) or disclose (to the public) information on a wrongdoing obtained in a work-related context, help prevent damage and detect threat or harm to the public interest that may otherwise remain hidden. However, they are often discouraged from reporting their concerns for fear of retaliation. For these reasons, the importance of providing effective whistleblower protection for safeguarding the public interest is increasingly acknowledged both at European1 and international level2.

Lack of effective whistleblower protection raises further concerns on its negative impacts on the freedom of expression and the freedom of the media, enshrined in Article 11 of the EU Charter of Fundamental Rights (‘the Charter’). Discussions at the second Annual Colloquium on Fundamental Rights on ‘Media pluralism and Democracy’, organised by the Commission in November 2016, highlighted that protecting whistleblowers as sources of information for journalists is essential for investigative journalism to fulfil its ‘watchdog’ role. 3

Lack of effective whistleblower protection can also impair the enforcement of EU law. Alongside other means to collect evidence4, whistleblowing is a means of feeding national and EU enforcement systems with information leading to effective detection, investigation and prosecution in breaches of Union rules.

The whistleblower protection currently available across the EU is fragmented5. Lack of whistleblower protection in a Member State can have a negative impact on the functioning of EU policies in that Member State, but also spill-over impacts in other Member States. At EU level, whistleblower protection is provided for only in specific sectors and to varying degrees6. This fragmentation and these gaps mean that, in many situations, whistleblowers are not properly protected against retaliation. Where potential whistleblowers do not feel safe to come forward with the information they possess, this translates into underreporting and therefore ‘missed opportunities’ for preventing and detecting breaches of Union law which can cause serious harm to the public interest.

See Council of Europe Recommendation CM/Rec(2014)7 of 30 April 2014 on the protection of whistleblowers; Resolution 2171 (2017) of the Parliamentary Assembly of the Council of Europe of 27 June 2017.

Whistleblower protection standards are set out in international instruments and guidelines such as the 2004 UN Convention against Corruption, to which all Member States as well as the EU are parties; the G20 Anti-Corruption Action Plan; the OECD report of March 2016: ‘Committing to Effective Whistleblower Protection’.

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Such as complaint mechanisms and statutory audits. For more information see under ‘Subsidiarity’. For more information see under ‘Consistency with existing policy provisions’.

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Indications about the magnitude of underreporting by whistleblowers can be drawn from surveys such as the 2017 Special Eurobarometer on corruption7: 81 % of Europeans indicated that they did not report corruption that they experienced or witnessed. 85 % of respondents to the 2017 public consultation carried out by the Commission believe that workers very rarely or rarely report concerns about threat or harm to the public because of fear of legal and financial consequences8. Illustrating negative impacts on the proper functioning of the single market, a 2017 study carried out for the Commission9 estimated the loss of potential benefits due to a lack of whistleblower protection, in public procurement alone, to be in the range of EUR 5.8 to EUR 9.6 billion each year for the EU as a whole.

To address this fragmentation of protection across the EU, EU institutions and many stakeholders have been calling for action at EU level. The European Parliament, in its resolution of 24 October 2017 on ‘Legitimate measures to protect whistleblowers acting in the public interest and its resolution of 20 January 2017 on the role of whistle-blowers in the protection of the EU’s financial interests10, called on the Commission to present a horizontal legislative proposal to guarantee a high level of protection for whistleblowers in the EU, in both the public and private sectors, as well as in national and EU institutions. The Council encouraged the Commission to explore the possibility for future action at EU level in its Conclusions on tax transparency of 11 October 201611. Civil society organisations and trade unions12 have consistently called for EU-wide legislation on the protection of whistleblowers acting in the public interest.

In its 2016 Communication ‘EU Law: Better Results through Better Application’13, the Commission noted that enforcing EU law remains a challenge and set out its commitment to put ‘a stronger focus on enforcement in order to serve the general interest’. In particular, it highlighted that ‘[O]ften, when issues come to the fore — car emission testing, water pollution, illegal landfills, transport safety and security — it is not the lack of EU legislation that is the problem but rather the fact that the EU law is not applied effectively […]’.

In line with this commitment, this proposal aims at fully exploiting the potential of whistleblower protection with a view to strengthening enforcement. It sets out a balanced set of common minimum standards providing robust protection against retaliation for whistleblowers reporting on breaches in specific policy areas14 where:

i) there is a need to strengthen enforcement;

ii) underreporting by whistleblowers is a key factor affecting enforcement; and

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Milieu (2017), on ‘Estimating the economic benefits of whistleblower protection in public procurement’ https://publications.europa.eu/en/publication-detail/-/publication/8d5955bd-9378-11e7-b92d-01aa75ed71a1/language-en