Anna Fernqvist Svensson participates in the IR Global Virtual Series – Exposing the Truth: What the EU Whistleblower Directive means for global business

Foreword By Editor, Andrew Chilvers

Speaking Out: What impact will the EU whistleblowing law have on business transparency? In the past few years, demands have been growing around the world for more accountability by businesses and governments – particularly since the start of the Covid-19 crisis. Indeed, the global pandemic has heightened issues around whistleblowing like never before.

Nevertheless, whistleblowers often still face dire consequences – often fatal – if they report on problems their superiors would rather the world didn’t know about.

Dr Li Wenliang, in Wuhan China, was a case in point. Officially reprimanded for warning the world about Covid-19, he was then later ruthlessly silenced by the Wuhan public security bureau. In Poland, meanwhile, Renata Pizanowska, a nurse and midwife, was sacked for posting pictures on social media of her totally inadequate homemade surgical mask used by hospital staff for protection against the deadly virus.

Elsewhere, in the UK at the start of the pandemic, Linda Fairhall, an NHS nurse since 1979, was sacked after warning that the crippling workload NHS staff were under had led to a patient’s death. After she raised the alarm she was summarily dismissed for concerns about her leadership capabilities.

Theoretically, this was all set to change on December 17, with the implementation of the EU’s new whistleblowing directive that was due to be adopted into national laws by different EU states. The aim is a laudable one – to fight for more transparency from governments and organisations not just in the EU but beyond its borders. As with GDPR compliance, the hope is that there will be a positive knock-on effect with all businesses and public sector organisations that are located or have an office in an EU state.

The idea of the directive is to set up uniform minimum protection for people who want to report breaches of EU law – giving them legal security against any retaliation by companies or colleagues. Along with this minimum level of protection, each EU state is obliged to introduce a national legislation to give an added layer of security for whistleblowers. However, almost all professional services advisers agree that this added protection in the form of national laws will take time to enact given the patchwork of legislation that exists across the diverse EU member states.

What is the status of legal whistleblower protection within your jurisdiction and – if outside the EU – will there be an alignment with EU legislation because of the new law?

Sweden is a member of the EU and has adopted a new act on whistleblowing replacing the previous one. The new act has a wider scope and implements the rules of the new EU directive. The new Swedish whistleblowing law entered into force on December 17 2021.

Big companies have to implement a whistleblowing channel in 2022. For smaller businesses, between 50 and 250 employees, they have another year to implement a whistleblowing channel. So there is time to do it. As I say to my clients, if you already know that you have to set up this type of whistleblowing channel, why wait, just get started and commence to familiarise yourself with it.

It will take some time to implement whistleblowing channels and to educate everyone on this topic. Sweden is in the forefront of the new legislation while a lot of other EU countries have not yet adopted any new whistleblowing laws.

I work with my clients on data protection and whistleblowing is closely connected with issues around personal data. I’ve been asked by a number of clients how we’re going to assist them with a whistleblowing channel and if we can provide a solution for them. We have been in discussion with a Danish law firm that has offered a digital whistleblowing channel to their clients for some years. We think it would be a good idea to be able to offer this to clients.

Given that so many companies in the public and private sectors are not compliant at the moment (if that’s even possible), there’s a long way to go. Implementing a whistleblowing channel in organisations is a good opportunity to help with GDPR compliance – and answer a lot of basic questions employees often have about how their data is being used.

Will anonymous reporting be permitted? Will this help develop a culture of transparency?

In Sweden and probably in other countries as well, we believe this will be built on secure digital platforms where you can have a reporting system. You can then report back to someone, even if you don’t know who that person is. So the issue of confidentiality around whistleblowing (and anonymous reporting) would be solved.

I think it’s vitally important to choose the right secure platform, because what we’re also seeing in Sweden is that there are many companies implementing whistleblowing channels on a commercial basis ahead of the new law – but will they all be secure?

With so many businesses involved, it’s clear now that there’s an appetite in Sweden to bring transparency into business. How will this help to develop a culture of transparency? Of course, we hope that it will do that, but we don’t know yet.

What I think people maybe forget is that you must not use this kind of channel or reporting structure as a first channel for reporting. Normally, you go to your boss, if you see something that is wrong or if you have complaints. If the boss is the one who is doing wrong, you escalate it to another level and you go to the boss of your boss. That would be the normal way of reporting irregularities – and if you can’t do that then you can use this type of system. In many companies and organisations I don’t think there will be many reports being made.

The basic attitude within the Nordic countries is that we trust people. That also has an impact on companies and organisations and how we do business.

Under the Directive, criminal law will remain a prerogative of each member state. How will the new legislation impact criminal law in different jurisdictions?

Sweden is a very open country and I think we are unique in this respect.

How will it impact the criminal law in our jurisdiction? I don’t know if it will change just because of this directive and the new act on whistleblowing. I think we will just continue to work with strengthening the whistleblowers position even further.

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Contributing Advisors