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Governmental actions in the state of emergency

The newly proposed Anti-Corruption Whistleblower Protection Act should soon enter the interdepartmental round of comments. In response to a recommendation of the Rekonstrukce státu (Reconstruction of the State) initiative, the Justice Minister Marie Benešová promised to speed up the implementation of the European regulation. The new law should protect and support public administration staff who encounter a wrongdoing in the workplace and are willing to blow the whistle. This anti-corruption measure could significantly improve protection of the public interest and prevent uneconomic behaviour.

Speeding up the adoption of the law that would protect whistleblowers reporting corruption was recommended to the government by Rekonstrukce státu in its Nezhasínat! (Don’t Switch Off the Lights!) project in early May. In order to address the impacts of the coronavirus pandemic, the state is spending hundreds of billions of public money and quickly buys protective equipment. That is why it’s now particularly important to strengthen transparency and prevent corruption in public administration.

We made an appeal to the government to improve whistleblower protection as soon as possible and provide a tool that would make it possible to report corruption behaviour securely. “There is no Czech law that would comprehensively address whistleblower protection. Potential whistleblowers currently have no way to report a wrongdoing that would provide a guarantee of anonymity and prevent the risk of them being identified and retaliated against. That’s one of the reasons why employees as well civil servants blow the whistle only very rarely,” explains Marek Zelenka from the NGO Oživení who is Rekonstrukce státu’s expert on this issue.

Minister Benešová promised to speed up discussion

In response to our recommendation, the Justice Minister Marie Benešová promised that she would try to submit the whistleblower protection bill as soon as possible. “I agree that a regulation on the protection of whistleblowers who report corruption and other wrongdoings can save public money, prevent damage to the environment and protect other public interests. This regulation must therefore become part of the Czech legal environment as soon as possible,” she said in a letter addressed to Rekonstrukce státu.

Following a European regulation, the government is obliged to implement whistleblower protection in Czech law by December 2021. So far, the process has been far from smooth. Even though the legislative plan expects the bill to be submitted by September this year. “Given the expected length of the legislative process in the Parliament and the necessity of this legal regulation, I can promise that I will attempt to submit the bill earlier,” says the minister. She also added that in the coming weeks, the draft bill should be sent to the other ministries for comments.

“We appreciate that Minister Benešová considers the whistleblower protection act a priority. Anti-corruption organisations will be ensuring that the state establishes a trustworthy body that whistleblowers will be able to turn to and that will effectively protect them against retaliation,” says Věnek Bonuš, an analyst at Rekonstrukce státu, in response to the letter.

You can read the full letter by Justice Minister Marie Benešová here:

Dear Rekonstrukce státu,

With authorization from the Prime Minister of the Czech Republic Andrej Babiš, let me respond to the “Recommendation of Rekonstrukce státu on the strengthening of protection for anti-corruption whistleblowers and the deployment of an electronic tool for safely reporting corruption” document that you sent to the Prime Minister and myself in two separate e-mails on 6 May 2020.

I agree that a regulation on the protection of whistleblowers who report corruption and other wrongdoings can save public money, prevent damage to the environment and protect other public interests. This regulation must therefore become part of the Czech legal environment as soon as possible.

The Ministry of Justice is currently finishing a proposed draft of a Whistleblower Protection Act which together with the accompanying amendment act transposes the directive of the European Parliament and Council (EU) on the protection of persons who report breaches of Union law. Let me note that the government’s 2020 Legislative Plan expects both proposals to be submitted to the government by September 2020. Given the expected length of the legislative process in the Parliament and the necessity of this legal regulation, I can promise that I will attempt to submit the bill earlier. You can therefore expect both proposals to enter the interdepartmental round of comments in the upcoming weeks.

Let me also assure you that both proposals will fully meet all the requirements of the corresponding directive. This includes in particular e.g. the mandatory implementation of internal whistleblowing systems for selected employers. The currently existing internal whistleblower systems in the public (as well as private) sector will then have to be adapted to comply with the requirements of the law (and therefore the directive). In this context, I wish to thank you for the offer of utilising the free GlobaLeaks tool; I will discuss this with experts from IT and other fields, particularly with regard to any potential security risks.

Regards, Marie Benešová

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In the NEZHASÍNAT! project, we offer to politicians recommendations on how to tackle the crisis in compliance with the law and how to kickstart our economy effectively and transparently. The impacts of the coronavirus pandemic and a restart of the economy shouldn’t be done with the lights out. You can find all the recommendations submitted to the government by Rekonstrukce státu here.

Under the new European directive, the Czech Republic is supposed to protect whistleblowers, but fails to prepare laws. However, public institutions and companies will still have to follow the new directive. Will GlobaLeaks help them?

People who draw attention to violations of the law or the public interest will be protected in the European Union. In October 2019, the European Parliament approved it. The Czech Republic has less than two years to transpose the European directive. The legislative process is running without concrete results. Public administration and businesses must be prepared to protect the whistleblower with or without Czech legislation. “The protection of whistleblowers will be guaranteed by a directive throughout the European Union next year. Without adequate transposition into Czech legislation, however, there is a risk that whistleblowing protection will not work or there will be a confusion,” says Lenka Svobodová from Oživení, whistleblowing expert.

The legal protection of whistleblowers has so far been valid only in some countries of the Union, such as Slovakia or Ireland. From next year, whistleblowers will be protected throughout the European Union. Some countries have already managed to draft a new European standard that significantly changes the status and protection of whistleblowers, such as Spain. The Czech Republic has been lagging far behind in this process, and the topic has been neglected in the long term.

Little protection and no disclosures 

Whisteblowing potentially affects a large number of people. According to a survey conducted by the Czech Government Office in 2016, corruption in the state administration is a relatively frequent phenomenon, but rarely reported. Only 16% out of the 2000 respondents said there is or was an infringement at their workplace. In total, 144 persons directly witnessed corruption. But most of them did not report it¹. Even in private companies, the situation does not appear to be much better.² “ With very limited protection of whistleblowers, such a result cannot be a surprise,” says lawyer Lenka Ježková from Oživení.

Since 2010, three unsuccessful attempts have been made in the Czech Republic to increase whistleblower protection through comprehensive legislation. Finally, in a hurry in the hasty approval of the Civil Service Act in 2014, a government decree was adopted, which, however, did not bring about a positive change. “Although the institute of the investigator was established, who should review disclosures and offer solutions, it quickly turned out that the investigator does not have enough powers to do so,” says Lenka Ježková from Oživení. She believes, the protection of whistleblowers has been lacking the flag bearer among politicians, especially in the parliament. Someone who would unequivocally stand up for the subject and advocate the interests of whistleblowers not only in the parliament.

The Directive newly extends the areas covered by whistleblowing. In addition to corruption and fraud, it also targets public procurement, product safety, personal data protection, the environment, public health or consumer protection. In addition, the Directive should protect not only employees, but also other people who can witness the infringement in connection with their work. In addition, the new measures affect not only the public sector but also private companies. The biggest difference compared to the present is, however, a sharp increase in the level of protection of whistleblowers. “It will not be so easy to throw the whistleblowers out of work, to harass them, or to shift to worse positions,” explains Lenka Svobodová.

Last chance

The Czech Republic has less than two years for this last chance. Within this period, the European directive on the protection of persons who report violations of EU law must be incorporated into the Czech legislation. The Ministry of Justice has been working on a paragraph version, but the progress is not very ideal. Originally, the draft was announced to be available in December 2019, but the deadline has been postponed to the end of February 2020. Regarding the length of the Czech legislative process, doubts are rising whether the legislative process will be finished in time. If not, in May 2021 the European directive applies. “In practice, this can bring about a great degree of uncertainty for all involved,” explains Lenka Svobodová. 

One of the solutions that can ease the situation for institutions and companies is the Europe-wide project Expanding Anonymous Tipping (EAT), which Oživení, the non-profit organization, runs in the Czech Republic. The project offers GlobaLeaks instances. This interface works as an internal notification mechanism, also required by the Directive. The interface protects the whistleblowers’ identity and the content of their disclosures. “Oživení supports whistleblowers, but also offers legal assistance to the employers with GlobaLeaks,” says lawyer Lenka Ježková. The municipality Brno-Center is one of the first candidates in the Czech Republic. GlobaLeaks, which operates in eleven European countries, targets not only the public sector and local governments, but also private companies that will also have to comply with the Directive. Currently, the Globaleaks is used by institutions such as the Anticorruption Agency in Valencia, the National Anticorruption Office of Italy and the International Criminal Court. But GlobaLeaks is also used by non-profit organizations and journalists (eg. Italian IRPILeaks, Hungarian Atlatszo) or corporate companies such as Dr. Oetker, Edison or Falck.

Not just reporting corruption

Whistleblowing is often wrongly associated exclusively with reporting corruption or fraud. This is an unjustified restriction on areas, that employees can often draw attention to and the authors of the European directive reflect this. The whistleblowers will be protected when it comes to public procurement, product safety, personal data protection, the environment, public health or consumer protection. This may also include unfair advertising, restrictions of competition, or circumvention and misconduct. Member States are allowed to extend this list further. In terms of severity, this may be a mere suspicion of an offense or a crime. This is an important preventive measure.

Expanding the scope of protected persons

The Directive requires that not only employees but also other persons should be protected, that is those who are able to learn about an infringement in the context of their professional activities. These include job seekers, self-employed persons, company shareholders, but also its suppliers. Here, the authors considered that whistleblowers’ access to information is crucial, so that they can identify potential risks at an early stage, not their formal relationship with the organization.

Increased protection

People in the Czech Republic can now resist dismissal under the Labor Code and claim damages. But this is only a subsequent defense. At a moment, when the harshest action is taken against an employee, that is to say he/she loses the job, he/she is reliant on legal proceedings. This can be exhaustive, both physically and financially (he/she contests the invalidity of dismissal and must not be employed elsewhere). The Directive therefore emphasizes prevention and explicitly provides for a ban on retaliation, such as intimidation or harassment. It lays down a clear requirement for whistleblowers to be protected before any retaliation takes place.

One of the options discussed is that the law would prohibit dismissal, deprivation of office or transfer of a worker to another place until the matter is investigated. If the company nevertheless relocated such an employee to a lower position, such conduct would be considered null and void.

New agency as oversight body

The Directive calls for the independency of the body responsible for receiving and evaluating notifications. It is up to the states whether it will be existing or brand new. According to the discussions so far, this seems to be the obstacle. While NGOs demand the body to be independent, both financially and organizationally, and therefore stand outside the central government, legislators still leave this option open.

Including the private sector

The protection of whistleblowers will also have a significant impact on the private sector. The new rules introduce the obligation to establish secure channels for reporting activities in breach of EU legislation, both within businesses and public authorities. Companies will have to determine who and how will receive disclosures and how the disclosures will be handled. This will affect all companies with more than 50 employees. The regulation also applies to state-owned or controlled legal entities and municipalities with more than 10,000 inhabitants.

Published on Jan 22^nd 2020 https://www.oziveni.cz/2020/01/evropa-zacne-chranit-whistleblowery-pripravit-se-musi-instituce-i-firmy/