Recent scandals such as "Panama Papers" or "Luxleaks" have shown that companies have a strong interest in ensuring that a whistleblowing framework and culture are implemented within them, as their consequences can be significant. It is therefore essential for a company to maintain control of a potential whistleblowing process by investigating potential wrongdoing internally at an early stage.

From the perspective of citizens and society, whistle-blowers can play an important role in uncovering illegal activities that are detrimental to their interests, as well as to the public interest and the well-being of society.

  1. Despite the extensive case law of the European Court of Justice, there is currently no comprehensive legal framework. The procedures relating to whistle-blowers are therefore fragmented by country and, consequently, relatively uneven. This can be explained by the complexity of the issue and the importance of the interests at stake. At present, only 10 EU countries (France, Hungary, Ireland, Italy, Lithuania, Malta, the Netherlands, Slovakia, Sweden and the United Kingdom) offer full legal protection. In other countries, protection is partial or applies to specific sectors or categories of employees. This is the case in Belgium where, until recently, whistleblowing systems were only required in the public sector (by the federal and Flemish authorities). The Act of 31 July 2017 introduced a whistleblowing system in the private sector, in application of the 2014 European regulation on market abuse. However, this Act only applies to financial institutions and to any person who reports an alleged or actual breach of the Act of 2 August 2002 by a financial institution to the FSMA.
  2. Given this legal vacuum in Belgium and the increasing number of alert launches in recent years, more and more private companies consider it is in their interest to ensure that whistle-blowers can report inappropriate behaviour within the company, thus avoiding that they are forced to turn to the general public or the media. On 23 April 2018, the European Commission presented a new proposal for a Directive to strengthen the protection of whistle-blowers in the EU (Proposal for a Directive on the protection of persons reporting on breaches of Union law - COM/2018/218 final - 2018/0106 (COD)). The Directive aims to protect workers (as well as informants whose employment relationship has not yet begun), self-employed individuals, shareholders, directors, managers, volunteers, trainees or any person working under the supervision and direction of contractors, subcontractors or suppliers, who decide to report illegal activities of which they are aware. Under the proposal, companies (as well as government entities) will be required to establish internal channels and procedures for processing whistle-blower reports. The new legislation will provide for the establishment of secure channels of communication both within an organisation and for public authorities. It will also protect whistle-blowers from dismissal, demotion and other forms of reprisals and will oblige national authorities to inform citizens and train public authorities on how to treat whistle-blowers.
  3. Despite their importance, these alert systems raise many legal issues, including social law and the protection of the whistle-blower’s or involved person's personal data. Therefore, when implementing this channel and procedure, companies will have to be cautious and take these aspects into account, at the risk of not being able to use the information thus obtained, or of committing violations of the GDPR, which could result in financial penalties.

The European Parliament agreed to the European Commission's proposal for a directive of 23 April 2018 - after it had been amended - on 10 April 2019. The proposal is expected to be adopted by the European Council in autumn 2019. The EU countries will then have two years, to transpose the directive into their national law.

Manon Denis

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