The European parliament and council are currently considering a Directive, proposed in April 2018 by the European Commission, which would give protection to those reporting breaches of EU law. The Commission estimates that the current risk in the EU ascribable to fraud and corruption is estimated at somewhere between €179bn (£158bn) and €256bn.

As detailed in ECA Opinion No 4/2018, the Commission undertook a 12-week public consultation which resulted in 5707 replies, three stakeholder-targeted online consultations, two workshops with national experts and one workshop with ‘academic and advocacy experts’. The proposed system is intended to give 40% of the EU workforce the right to whistleblower protection and ‘has the potential to generate savings for the EU budget through the recovery of sums unduly paid’ and by reducing losses.

While the paper notes that member states ‘currently have a wide range of approaches to whistleblowing’ it argues that this approach is ‘piecemeal’ and that a ‘comprehensive, well designed and user-friendly Directive could be an effective tool to ensure that people are deterred from breaching Union law and that breaches, where they do occur, do not go unpunished.’

The proposal covers ‘reporting persons in the public or private sector who acquire information on breaches in a work-related context, including volunteers, unpaid trainees and persons in the process of being recruited’. It aims to protect those who report breaches that fall into four main categories: breaches falling within the scope of Union acts, breaches of competition rules, breaches affecting the financial interests of the Union, and breaches relating to the internal market.

Furthermore, it would require member states to ensure that legal entities in both the public and the public sector establish procedures and internal channels for whistleblowing, excluding legal entities with fewer than 50 employees or with a turnover of less than €10m.

In order to protect whistleblowers, the proposal obliges member states to prevent retaliation by such means are providing assistance from competent authorities, blocking the enforceability of contractual and non-contractual restrictions on disclosure (such as contract clauses) and legal and financial assistance.

The Opinion largely praises the proposed Directive but notes that it does not cover ‘whistleblowing by EU staff concerning the activities of EU institutions, offices and bodies’ and that ‘there is room to improve the transparency and extent of the proposed reporting requirements’. The ECA also states that it ‘shares the view of the UK National Audit Office that publishing comprehensive statistics on whistleblowing investigations, including their outcomes, is a means of increasing employees’ confidence in whistleblowing arrangements, as it enables them to see that reporting is taken seriously’.

Pietro Russo, the member of the European Court of Auditors responsible for the Opinion, said: ‘Member states currently have a wide range of approaches to whistleblowing and EU law takes a piecemeal approach.

‘A comprehensive, well-designed and user-friendly Directive could be an effective tool and could contribute to the protection of the EU budget, sound financial management and accountability.’

Opinion No 4/2018 is here

Report by James Bunney