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08.02.2017 | Brussels faces mounting calls for whistle-blower protection

European parliamentarians and civil society groups want legal safeguards for those prepared to disclose wrongdoing.

Pressure is growing on Brussels to introduce legislation to protect whistle-blowers, with the European Union parliament next week likely to back a draft report urging the adoption of a package of measures aimed at encouraging disclosure of graft.

The vote on February 14 comes amid continuing concerns over the effectiveness of efforts to combat corruption – which could cost the EU up to 990 billion euros a year, according to a report commissioned by the European parliament last year.

The draft parliamentary report urges the European Commission, the EU’s executive arm, to submit a legislative proposal establishing an “effective and comprehensive European whistle-blower protection program” which would safeguard those reporting illegal activities in companies and public bodies. It also calls for the setting up of an independent EU body with offices in member states to help whistle-blowers “disclose information about possible irregularities affecting the financial interests of the Union”.

The EU parliament is expected to approve the package with some amendments. While the EC is under no obligation to legislate, it is likely to come under pressure to do so, amid a growing public campaign for greater safeguards.

Over sixty civil society organisations across Europe are calling for a law on whistle-blowing protection, as signs that the absence of such legislation discourages members of the public from reporting wrongdoing. In November, a Transparency International survey, covering 22 of the 28 EU member states, revealed that a quarter of Europeans believe that reporting corruption is the most effective course of action a person can take to combat the problem, but over a third said they feared the consequences of doing so.

The EU parliamentary report, produced by the Committee on Budgetary Control, points out that irregularities are not reported precisely because people are afraid of what might happen to them, with the EU’s financial interests undermined as a result. The MEPs involved in the drafting of the document say only a few member states have sufficiently robust whistle-blowing protection systems. They add that while a European Ombudsman is able to investigate complaints of EU citizens about maladministration in Brussels’ institutions, it has no authority to protect whistle-blowers in member states.

Backing for legislation and mechanisms that encourage disclosure of wrongdoing have been mounting following the Panama Papers revelations last year and the so-called LuxLeaks affair in 2014, when more than 30,000 documents came to light exposing huge tax breaks Luxembourg offered international companies.  In June 2016 the leakers, former PwC employees Antoine Deltour and Raphael Halet, received suspended sentences after being convicted of breaking the country’s professional secrecy laws.  They launched an appeal, with the result expected in March.

Although their actions prompted the EU to take steps to prevent global firms evading tax, legislation introduced in May 2016 might have unintentionally set back the whistle-blowing cause. The Trade Secrets Protection Act was designed to help multinationals guard against industrial espionage, but critics say the law does not sufficiently define the kind of information it seeks to protect. The Corporate Europe Observatory, a research and campaign group, noted “that legislation which should have regulated fair competition between companies” had been transformed into “something resembling a blanket right to corporate secrecy”.   

In their draft report, MEPs acknowledge that legal safeguards for whistle-blowers have become even more urgent because the trade secrets legislation limits their rights and may have an “unintended discouraging effect” on those who want to report irregularities.  But the parliamentary vote comes as the EC’s own efforts to combat graft face scrutiny.

While the EC has been critical of the Romanian government’s recent attempts to decriminalise some forms of corruption, it has itself sparked controversy by shelving plans to publish a follow-up to its 2014 anti-corruption report, which assessed measures to counter financial abuses in member states and recommended improvements. The report found that measures were uneven across the Union and more needed to be done to punish perpetrators. 

The EC had promised to follow up the 2014 report with similar assessments every two years; the latest – near completion – was due to be published in the spring. But instead its preference is now to address corruption issues through the European Semester, the EU's annual policy monitoring process, and a series of other activities, including working closer with international organisations engaged in combating graft.

The move has disappointed  activists who regard the EC’s  reporting initiative as a key means of guiding its anti-corruption work.  Sandor Lederer, who contributed the Hungarian chapter of the 2014 assessment, said it was “extremely worrying” at a time when citizens’ trust in Brussels’ institutions is at an all-time low.  Carl Dolan, the director of Transparency International’s EU office, said that the “message coming from the European Commission is clear: fighting corruption is no longer a political priority”.

But MEPs and activists will hope that European parliamentary backing for whistle-blowing protection will prompt the EC to demonstrate its commitment to curbing the scourge of corruption, which some believe is helping to fuel the populism that threatens to undermine the EU project.