The EU proposal on whistleblower protection - Comments

Key messages

• European companies are committed to preventing infringements of laws and codes of conduct. Being compliant with rules and maintaining a strong reputation are fundamental matters for every enterprise. Markets also benefit from a stronger compliance culture.
• Whistleblower protection is an important tool to help companies to better address unlawful or unethical conducts. Companies have themselves been introducing well-functioning procedures aimed at protecting whistleblowers and dealing with the persons concerned by the claims in a fair and effective way.
• Member States also have authorities and bodies designed to overlook, control and sanction unlawful behaviour, to whom individuals and companies can report wrongdoing. Furthermore, in many areas, there are already special reporting and whistleblower procedures resulting from EU law requirements.
• BusinessEurope has reservations about the need for a quasi-horizontal EU legislative initiative in the field of whistleblower protection.
• The proposal is a one size fits all regulation, which should be avoided in this area where national systems are carefully tailored to the national legal traditions and approaches, for example, on the way reports of infringements should be brought forward. Therefore, this proposal will potentially disrupt existing national solutions and create confusion at national level.
• EU action in this field should also not dilute the positive effects of existing national rules and of self-regulatory initiatives. Furthermore, there are international standards that also cover ethical and responsible conduct – for example OECD rules on corporate governance.
• There is not enough evidence that a lack of harmonisation of these systems has led to substantial barriers to doing business in the internal market. In any case, the proposal allows Member States to go beyond the standards proposed, which means that harmonisation will not be achieved in practise.
• The Commission proposal does not ensure a fair balance between protecting whistleblowers and the need for safeguards against misuse and disclosure of company sensitive information to competitors. Unlawful, unsubstantiated or irrelevant disclosures potentially lead to disastrous reputational and economic consequences for companies.
• BusinessEurope agrees that internal reporting must be the very first principal rule, but we regret that the proposal includes too many exemptions to this principle. Only if the company has failed to take action without valid reasons should external reports be considered, but not in every case.
• Trade secrets, professional secrecy and personal data are rights of companies and other involved persons which deserve effective protection. Therefore, any legislative initiative shall be balanced.