Whistleblowers exposing fraud, tax evasion, data breaches and other misdeeds will be given more protection from retaliation under new rules proposed by the European Commission on Monday.
The move by the E.U. executive comes in the wake of criticism from transparency campaigners about the lack of protection granted to individuals who report such breaches in E.U. laws.
They cite the example of two former accounting firm employees who were prosecuted in 2016 for leaking data about Luxembourg’s tax deals with large corporations. The conviction of one was overturned by Luxembourg’s highest court this year.
Critics also point to British regulators’ relatively lenient treatment of Barclays’ chief Executive Jes Staley last week who was allowed to keep his job after trying to uncover an informant at the bank.
The European Commission said its proposal was a game changer since it will require companies setting up internal channels for whistleblowers and also shield them from reprisals such as sackings, demotion and even litigation.
There are also safeguards against malicious or abusive reports.
“There should be no punishment for doing the right thing,” Commission Vice President Francs Timmermans said.
“In addition, today’s proposals also protect those who act as sources for investigative journalists, helping to ensure that freedom of expression and freedom of the media are defended in Europe.”
The E.U. executive said the proposed rules would protect those who unmask illegal activities in public procurement, financial services, money laundering, nuclear safety, food safety, privacy and data protection among others.
The proposal requires approval from E.U. countries and the European Parliament before it can become law. Currently only 10 E.U. countries offer full protection to whistleblowers.
Transparency International said the proposal was a bold step in recognizing the importance and rights of informants.
The Association of Chartered Certified Accountants (ACCA) said increasing whistleblower protection will help businesses.
“Companies have to see speak-up as something that would help them manage risks and avoid more serious issues such as violation of law, inappropriate conduct, crime or any type of harms,” ACCA head of corporate governance Jo Iwasaki said.
