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10/12/2016

France to strengthen whistleblower protection in economic reform bill

Trade & Society

France to strengthen whistleblower protection in economic reform bill

EU member states have not yet agreed on a legal definition of a whistleblower.

[thierry ehrmann/Flickr]

After the EU’s fierce debate over whistleblower protection, France has proposed a much tighter set of safeguards in its draft bill for transparency and the modernisation of the economy. EurActiv France reports.

French MPs on Monday (6 June) began their examination of the draft bill for transparency and the modernisation of the economy, known as the Sapin 2 bill. Central to this bill is the question of how whistleblowers can be protected from prosecution.

Proposed by the French Minister of Finance Michel Sapin, this economic reform bill aims to lay the foundations for a whistleblower protection regime, with a certain number of safeguards against possible reprisals.

Uproar over protection of trade secrets

Outcry from journalists has forced French Economy Minister Emmanuel Macron to remove a “trade secrets” clause from his economic bill. Concerns are being raised over EU plans for a similar law. EurActiv France reports

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The initiative is timed to capitalise on the political momentum built up during the European discussions on the same topic. MEPs came in for heavy criticism when they adopted the European Trade Secrets Directive in April, over what many see as the inadequate protection the text offers whistleblowers.

The Trade Secrets Directive: What it does – and does not – mean

In the three years it was debated in the European Parliament, the recently-adopted Trade Secrets Directive generated no small amount of controversy and myths. EurActiv France attempts to separate fact from fiction.

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With the dust not yet settled from the Panama Papers revelations, and coming as the trial of the Luxleaks whistleblower Antoine Deltour getting under way, the timing of the directive provoked widespread indignation from the public.

French definition

France’s Sapin 2 bill attempts to provide a legal definition of a whistleblower, which currently does not exist.

Based on the definition offered by the French Council of State in its April report on the right to raise the alarm on malpractice, a whistleblower could be defined as someone who “signals in good faith, freely and in the public interest, from inside or outside an organisation, serious breaches of the law or serious threats to public or private interests, for which he is not responsible”.

Trade secrets: Whistleblower protection not a priority

The Trade Secrets Directive is out of the starting blocks, but the creation of a protected ‘whistleblower’ status may take some time. EurActiv France reports.

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The idea of structuring the alert process was also raised by MPs at the committee stage of the discussions.

Under the solutions suggested, a whistleblower could raise the alarm directly to the administration or business concerned, but could also choose to pass through external authorities like the French Defender of Rights or professional associations. Only if no follow-up action is taken by any of these authorities could the whistleblower make their information public.

Compensation

The French Rights Defender, whose independence is guaranteed under the country’s constitution, would become the authority of reference for the protection of whistleblowers, thanks to a separate bill proposed by the Socialist Party.

Finally, a system of financial support for whistleblowers should allow them to face any possible reprisals from companies or organisations exposed by their revelations.  Damages may also be envisaged to compensate any material and moral harm suffered.

European level

At the European level, the issue of whistleblower protection is struggling to make headway. The Council of the European Union on Friday (3 June) adopted the Trade Secrets Directive, which foresees an exception for those who reveal “misconduct, wrongdoing or illegal activity, […] in the public interest”.

But the absence of a legal definition for a whistleblower weakens the protection offered by this clause.

With no consensus on the legal definition at a European level, France is acting alone on the subject.

Background

In November 2013, the European Commission proposed a directive giving a common definition of what constitutes a trade secret. This directive also provides the framework for victims of trade secret theft to claim reparations.

The theft of trade secrets is an increasingly widespread problem in the EU. In 2013, one in four European companies was the victim of at least one case of information theft (compared to 18% in 2012).

Differences in national legislation and the absence of a European definition of trade secrets means levels of protection vary considerably from one EU member state to another.

The strengthening of trade secrets legislation has made it more important to provide adequate protection for whistleblowers. Legislation on this subject is almost non-existent in most European countries.

Timeline

Further Reading