Sweeping whistleblower changes for the EU

The EU is taking bold steps to protect whistleblowers. So when will New Zealand follow suit? 

New rules

As expected, the EU has now announced sweeping whistleblower reforms, guaranteeing high-level protections for those in public procurement, financial services, money laundering, product and transport safety, nuclear safety, public health, consumer and data protection who choose to speak out about wrongdoing. 

“The new rules will require the creation of safe channels for reporting both within an organisation – private or public – and to public authorities,” says the Council of the EU in a statement. “It will also provide a high level of protection to whistleblowers against retaliation, and require national authorities to adequately inform citizens and train public officials on how to deal with whistleblowing.”

Member states have two years to transpose the new rules into national law.

“The EU is committed to having a well functioning democratic system based on the rule of law,” says Anna-Maja Henriksson, Finland’s Minister of Justice. “That includes providing a high level of protection across the Union to those whistleblowers who have the courage to speak up….No one should risk their reputation or job for exposing illegal behaviours.”

The new rules are nothing if not extensive, including the obligation to create “effective reporting channels” in companies of over 50 employees or municipalities of more than 10,000 inhabitants. 

The rules introduce safeguards to protect whistleblowers from retaliation, as well as those assisting whistle-blowers, such as colleagues and relatives. 

The new rules cover areas such as public procurement, financial services, prevention of money laundering, public health, etc. Persons protected in the new rules include employees, including civil servants at national/local level, volunteers and trainees, non executive members, shareholders, etc.

The EU is encouraging whistleblowers to use the internal whistleblowing systems within their organisation before turning to external channels – which public authorities are obliged to set up. (Whistle-blowers will not lose protection if they decide to use external channels in the first instance). 

New Zealand

The EU’s new rules show how far thinking around whistleblower protection has evolved in recent years, especially when viewed next to New Zealand’s aging regulatory framework, the New Zealand’s Protected Disclosures Act 2000.

Under the Act public sector agencies are required to have internal procedures or policies in place for whistleblowers, but private companies are not. In organisations where there is not a whistleblower system in place, employees are expected to make disclosure directly to the head of their organisation. In instances where the head of the organisation may be involved in the serious wrongdoing alleged – or if a disclosure is made and no action is taken or recommendation made after 20 working days – disclosures can be made directly to the Ombudsman, Commissioner of Police, Director of the Serious Fraud Office and Inspector-General of Intelligence and Security. 

Simply put, under the Act, employees are expected to use follow these “appropriate channels” for making a protected disclosure, otherwise they will not be protected. (Note, the media is not a protected authority). 

For a whistleblower to be protected under the Act, disclosures must also involve “serious wrongdoing”, a term tightly defined, but which can include gross negligence or mismanagement by public officials, criminal offences, the unlawful use of public funds, and conduct that poses a risk to public health, safety or the environment. 

Notably, bullying does not constitute “serious wrongdoing” under the Act. 

Last year the New Zealand Government announced it would be reviewing the Act, with proposed changes including ensuring organisations have good processes in place for making a protected disclosure, simplifying the process for managing protected disclosures, and creating a central point of contact for advice on when and how to use the Act.

That review however, now appears to have stalled. 

By further way of comparison, in July this year, federal authorities in Australian expanded protections for whistleblowers who report misconduct to include all public companies and large proprietary companies, requiring them to have a whistleblower policy in place and available to employees, with failure to comply carrying stiff penalties.