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A practical guide for navigating the EU's whistleblower protection directive

Julia Arbery (jarbery@stoneturn.com), based in Frankfurt, Germany, and Lisa Van Houten (lvanhouten@stoneturn.com), based in Chicago, Illinois, USA, are managing directors with global advisory firm StoneTurn.

The Panama Papers, the FIFA scandal, Cambridge Analytica, WikiLeaks—these are all well-known examples of whistleblower cases in the United States, where whistleblowing is an accepted and even encouraged practice due to the stringent laws that provide a safe harbor for reporting wrongdoing, both within an organization and to public authorities, regardless of anonymity. While Americans have had some sort of avenue to safely and anonymously voice concerns about corporate misgivings since the civil war,[1] whistleblowers have been much less common in the European Union (EU). In the absence of EU incentives for speaking out against corporate wrongdoing, corporate scandals and fraudulent activities were far less likely to be brought to light in the court of public opinion. In fact, according to the 2017 European Commission[2] poll on corruption, “81 percent of respondents said they did not report the corruption they had experienced or witnessed because they did not believe they had adequate protection. Similarly, 85 percent of respondents believed workers ‘very rarely’ or ‘rarely’ report concerns about threat or harm to the public interest due to fear of reprisals.” That is, until recently.

In April of 2019,[3] the European Parliament voted to overhaul whistleblower regulations and standardize protections across its 27 member countries against retaliation for speaking out. On October 7, 2019, EU ministers formally approved the new law requiring all member countries to implement the new directive within the next two years. The passage of this legislation presents a significant change for companies operating in the EU, as they will now need to thoroughly evaluate and enhance compliance policies and procedures to ensure these heightened standards are being met. To help companies get started, we provide an overview of the minimum standards set by the new whistleblower directive in the EU and best practices for companies and compliance professionals to consider as they navigate and implement these new standards in accordance with the local laws based on the new directive.

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