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27/09/2016

Whistleblowers: Between a rock and a hard place

Euro & Finance

Whistleblowers: Between a rock and a hard place

Support for the current whistleblower of the month, Antoine Deltour of LuxLeaks fame, has been far-reaching.

[Support Antoine/Twitter]

Catching one’s boss breaking the law currently seems like a lose-lose situation for all involved. There is support in the European Parliament for more protection to be given to whistleblowers, but it faces an uphill struggle. EurActiv Germany reports.

For the whistleblower, it is their decision as to whether they make their employer’s transgressions public or not. Only a few choose to do so and those that do are often ostracised as a result. Prime example: Antoine Deltour, who is currently on trial in Luxembourg for his part in revealing the LuxLeaks scandal.

In most EU states, whistleblowers run an enormous legal risk. To be protected against legal action, a court must rule that the information being revealed is in the public interest. What ruling the court will come to is, of course, not known beforehand.

LuxLeaks whistleblowers go on trial

Three people go on trial in Luxembourg today (26 April) over the so-called LuxLeaks scandal that exposed the country’s huge tax breaks for major international companies, with the issue riding high after the recent Panama Papers revelations.

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Now the European Greens have called upon the European Commission to provide EU-wide protection for whistleblowers. “If you reveal questionable business practices and tax evasion then your actions shouldn’t be criminalised, they should be encouraged,” the Greens insisted. As well as legal protection for whistleblowers, they called for affected parties to be protected against bullying and dismissals, and for a fund to be created to support them.

Whether the EU-executive will respond to the request remains to be seen. Recently, the Commission pushed through a law that appears to strengthen the employer’s position: the directive on protecting commercial secrets stipulates that it is primarily a company itself that will determine what is and what is not confidential information. Critics have pointed out that there is now a lot of room for inconvenient truths to be swept under the carpet.

Activist: Panama Papers style tax-dodging costs lives in Africa

Tax evasion by multinational companies, such as that exposed by the Panama Papers, costs African countries up to 60% of the revenue they lose, which has massive implications for development aid, government budgets, and ultimately costs lives, says activist Stella Agara.

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A Commission spokesperson, declining to comment specifically on the Greens’ demands, told EurActiv.de that, “Within the scope of our competencies, we are weighing up the potential need for better protection for whistleblowers.” When it comes to matter on its own doorstep, the spokesperson added that, “We are committed to ensuring that whistleblowers involved in suspected cases of EU corruption brought to the European Public Prosecutor are given the necessary protection under national law.

As national laws rarely provide whistleblowers with any meaningful protection, the only way in which they could receive the necessary support would arguably only be if extra protection was made a legal requirement, by EU law or otherwise.

The Greens’ Sven Giegold is still optimistic: “Our experience points to the fact that the Commission eventually responds when under bipartisan pressure from the European Parliament.” Pressure that is set to be exerted this week as the main parties discuss what steps to take next.

European Parliament vies to lead Panama Papers inquiry

The European Parliament will vote on whether to create a committee of inquiry into the Panama Papers this Thursday (14 April) – and may decide to merge the new body with the special committee on Tax Rulings. EurActiv France reports.

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Most employers will, naturally, argue that the existing mechanisms in place are sufficient. “New regulations are unnecessary at EU-level and could even be harmful,” said a spokesperson for the Federal Association of German Employers, who also added that entire companies and the jobs they provide could be jeopardised by an EU-wide law.

However, those interested in the market-economy argued the opposite: “It’s also about the integrity of the market: tax avoidance, for example, leads to unfair competiton,” Giegold added. For companies interested in fair business, nothing is to be feared from stricter rules. “All the scandals have shown, that a lot of companies are not sticking to the rules,” the Greens MEP highlighted. Arguably the reason why powerful economic and political concerns have little interest in seeing an EU-wide law rolled out.

The German government has also scuppered a few efforts to provide more protection, blocking a proposal levied by the opposition last year. “The demands made by German courts in terms of what is in the public interest are often so high that no whistleblowers can meet them,” said Matthias Spielkamp, who sits on the advisory board of the Whistleblower Network.

In addition to a clear legal definition, Spielkamp called for an independent institution to be set up, which would be tasked with advising whistleblowers. Moreover, employers would be sanctioned if they were found to be harassing whistleblowers.