The European Parliament has adopted an important, but not binding, resolution on legitimate measures to protect whistleblowers acting in the public interest when disclosing confidential information of companies and public bodies (resolution 2016/2224(INI) of 24 October 2017). Following numerous financial scandals, such as Luxleaks or the Panama Papers, the European Parliament has taken a proactive role in demanding effective protection for whistleblowers at EU level. The adopted resolution invites the European Commission to present a horizontal legislative proposal before the end of this year. The text is innovative, but the work of the Commission on this topic will be challenging.
A first important difficulty for the Commission is the choice of legal basis for the proposed legislation. Secondly, the European Parliament, in paragraphs 32-37 of the resolution, contradicts itself. On the one hand, it asks for organisations to establish internal structures to protect whistleblowing and, on the other hand, to protect the whistleblower that goes directly to the public if he acts in the public interest. The European Court of Human Rights, in its established case-law on the protection of whistleblowers, has stated that the whistleblower should, in the first place, raise concerns internally, and if this is not possible, he should address himself to the competent authorities. Only as a last resort should he address himself to the public. In the private sector, the internal reporting procedure is an essential one in order to safeguard the name and the image of the company. Alternatively, if the internal procedure is not effective, the whistleblower has the choice of reporting to the competent authorities. Consequently, reporting to the public should be envisaged as a last resort.
Furthermore, in paragraph 17 of the resolution, the Parliament provides a list of what constitutes the public interest. The list is not exhaustive. The resolution goes further by referring, in paragraph 14, to the European public interest. We understand, therefore, that the whistleblower should be protected if he reports in the (European) public interest. However, it should be highlighted that the concept of public interest is not easily defined and sometimes it can be abused. The clarification of what constitutes ‘public interest’ and ‘European public interest’ will be a major task for the Commission. In addition, the issue of private interests will need to be considered, and whether the whistleblower will be entitled to protection when he reports on a matter which is of private interest (for example, individual problems, or a problem concerning a small number of persons, such as harassment in the workplace).
Moreover, the resolution does not refer to the good faith element which is an essential criterion resulting from the case law of the Court of Strasbourg. In paragraph 47 of the resolution, the Parliament states that protection should be granted based on the information exposed and not on the intention of the whistleblower. What will happen in cases of bad faith whistleblowing? In addition, in the same paragraph, the Parliament states that the whistleblower must have reported information that he believed to be true. Once again, the case law of the Court of Strasbourg has highlighted that an essential criterion for granting protection to the whistleblower is the authenticity of the information. Especially in the business sector, if the whistleblower reports based on mistaken or untrue facts, the damage that will be caused to the company may be irreparable.
Moreover, the Parliament insists on the anonymity of the whistleblower. This idea is not necessarily wrong, but if a trial occurs (civil, administrative or criminal) it is essential for the other party to know the identity of the whistleblower. More specifically, in criminal trials, the defence has the right to examine the other party in order to ensure a fair trial. This right can only be restricted in specific situations according to national laws.
In addition, the Parliament proposes the idea of the creation of special national and European agencies that will be responsible for accepting and investigating these reports. This idea seems interesting, but the effectiveness of these agencies may be questioned. In the resolution, the Parliament refers to the European Ombudsman or the EPPO (European Public Prosecutor Office) being assigned this role. What kind of powers will they be given? Already the creation of the EPPO is meeting a lot of obstacles from the member states concerning the powers that it will have. Would that change in the case of whistleblowers?
In the business sector, the European Commission also faces many challenges. One important difficulty is trade secrets, whose protection was enhanced by Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 2016. In what way will the Commission legislate in order to cover this specific issue? In the financial sector, equally, the implementation of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 (MiFID II) will oblige member states to adopt whistleblower protection concerning reporting on financial illegalities. At the same time, the European Central Bank will reform its whistleblowing policy. It will be interesting to see the way that the Commission will reconcile all of these legislative acts.
Last, but not least, the Parliament does not make a deep analysis of the question of proportionality of the damage caused in relation to the report made. This proportionality test is another criterion of the case law of the Court of Strasbourg. The only mention is in paragraph 18 where it is stated that the general public interest should take precedence over the private or economic value of the information. The question arising is whether this should always be the case or whether it is wiser to adopt a proportionality test that will lead to a case-by-case analysis.
To sum up, the resolution is promising, and contains some very good elements, but also includes some obstacles that the Commission will have to consider and overcome. The problems raised here are not the only ones. For the moment, we can only wait for the Commission’s proposal, which will (probably) provide more clarification of the question of protection of whistleblowers.
Dimitrios Kafteranis is a PhD candidate at the University of Luxembourg.