New EU Directive on Whistleblower Protection

Vigjilenca Abazi, Assistant Professor of EU Law, Maastricht University & Fellow, Yale Law School

*The author is the co-author of the model Directive presented at the European Parliament in May 2016.

With an overwhelming majority, the European Parliament on 16 April voted in favour of the new law to protect whistleblowers in the European Union. The Directive sets leading standards and has become a prime example of how a concerted effort by civil society – NGOs, trade unions, journalists, scholars, and whistleblowers – together with the European Parliament can lead to progressive legislation and enhance tools that safeguard the rule of law in Europe.  

‘Promoting Gold Standard Protections’ 

Prior to this Directive, whistleblowers faced a paradoxical situation in Europe: they would be prosecuted at the national level, whilst celebrated for ‘promoting European values’ at the EU level, as in the case of LuxLeaks whistleblower Antoine Deltour. The European Parliament called upon the Commission to propose legislation since 2013, yet the Commission had rejected the calls noting lack of EU competences to legislate. The Council was also sceptical, as many member states do not have national laws in place. A key turning point was the presentation of the model Directive promoted by the Greens & European Free Alliance at the European Parliament in 2016. Protecting whistleblowers became inevitable after the EU witnessed the murder of two journalists, Daphne Galizia in Malta and Jàn Kuciak in Slovakia, who exposed corruption in their respective countries.

     

The Directive provides significant improvement in protecting whistleblowers and moves Member States closer toward an advanced legal framework. Indeed, as noted by the world’s leading NGO for whistleblowing, the Whistleblowing International Network, the EU ‘has raised the bar for all EU governments to lead the world in promoting gold standard protections for whistleblowers’ or as Commissioner Jourová remarked these ‘rules will be a game changer’.

The Whistleblower

The Directive covers workers in the public and private sector. More specifically, it includes civil servants, the self-employed, shareholders, management, administrative or supervisory bodies, volunteers, paid or unpaid trainees, contractors, subcontractors and suppliers, individuals disclosing breaches during a recruitment process and former workers. The Directive does not encompass EU officials. For a worker to be able to invoke the protection granted by this Directive, the worker must have reasonable grounds to believe that the information reported was true at the time of reporting and that the information fell within the scope of the Directive.

Wide Ranging Policies

The Directive has a wide scope of protection not only in terms of who can be a whistleblower, but also in terms of policies that it covers. The Commission drew from many different Treaty provisions to ensure that reporting gaps are not created, although the disclosure should be related to a breach or abuse of EU law in any of the following issues: public procurement, financial services, prevention of money laundering and terrorist financing, product safety, transport safety, protection of the environment, radiation protection and nuclear safety, food and feed safety, animal health and welfare, public health, consumer protection, protection of privacy and personal data and security of network and information systems, protection of the financial interests of the Union, breaches of internal market rules, including competition and State aid rules or tax avoidance issues. Strictly national policies are not covered and neither are violations of worker’s rights and working conditions. The latter exclusion will be reviewed in future.

Disclosure Channels

One of the most contested points since the Commission proposed the Directive last year is whether protection will be made conditional on the whistleblowers first reporting internally. The Commission proposal set out a three tier reporting process, and it envisaged a mandatory disclosure first and foremost internally in the organisation. Not only was such a proposal counter to the case law of the European Court of Human Rights on the issue, but also it would have caused more harm than good, especially in Member States that have legislation in place and do not demand such strict channels.

Indeed, the role of civil society cannot be stressed enough in this regard, as it played an invaluable role in making sure that the European Parliament amended the mandatory internal reporting. EP rapporteur Rozière understood these concerns and ensured that this piece of EU legislation meets the adequate standards rather than create uncertainty in legal protection. Making this her “biggest” priority, she succeeded in defending whistleblowers to choose the best means available for disclosure. The adopted Directive foresees that whistleblowers would be protected for reporting internally or for reporting directly to regulators and competent authorities. Reporting to the public still has strings of conditions, but if there were a risk of retaliation or low prospect of the reported breach to be addressed, whistleblowers would be protected if they reported to the public. 

Applicable to Businesses and Public Administration

The Directive applies both in the private and public sector, including to local authorities. Channels for reporting must be set up by companies with more than 50 employees. Local authorities that have less than 50 employees or municipalities with less than 10,000 inhabitants are exempt from the obligation to set up channels of reporting. More guidance on how local and regional authorities should ensure protection for whistleblowers could nevertheless be found in a Resolution of the Council of Europe, which was also voted with sweeping majority earlier in April 2019 by the Congress of Local and Regional Authorities, laying out in detail recommendations and the most recent data on the matter. 

Implementation and Practice

A good law in the books is of little use if its implementation in practice falls short. It will be of outmost importance that the Member States transpose this Directive in its full spirit and even push higher standards where possible. Member States will have two years to transpose the Directive to national law and civil society will continue to monitor closely and possibly facilitate national debates in how whistleblowers should be protected. After the scandals of LuxLeaks, PanamaPapers and Cambridge Analytica, citizens are becoming increasingly aware that whistleblowers play a crucial role in exposing wrongdoing and should not pay a personal price for defending public interest. National governments should take note of this public opinion and implement the EU Directive to its fullest.

Photo credit: The Guardian Nigeria

The Extraterritorial Reach of EU Animal Welfare Rules

By Jessica Lawrence, PhD student, VU University Amsterdam

In an interesting judgment in Zuchtvieh-Transport, the CJEU has ruled that Regulation 1/2005 on the protection of animals during transport applies outside of EU borders to transport taking place in third states, if that transport began on EU territory. This is a novel ruling that is expected to have important positive impacts on animal welfare. However, it can also be seen as an example of the CJEU’s tendency in recent years to read the EU’s jurisdiction expansively, stretching traditional international law notions of ‘territorial jurisdiction’ to permit the regulation of conduct taking place in third states.

Facts and Judgment

The case at hand concerns the refusal of Stadt Kempten, a municipality in Bavaria (Germany), to issue an export permit to animal transport company Zuchtvieh-Export. In 2012, Zuchtvieh-Export planned to transport 62 cattle from Kempten to Andijan (Uzbekistan), a journey of some 7000 km. The trip would take approximately 9 days, during which time only two 24-hour long rest stops were planned. During these rest stops, the cattle would be fed and watered, but not unloaded. Stadt Kempten refused customs clearance for the cattle because this schedule was not in accordance with the provisions of Regulation 1/2005, which sets EU standards for animal welfare during transport.

Zuchtvieh-Export objected to this decision, and filed a claim at the Bayerischer Verwaltungsgerichtshof (Higher Administrative Court, Bavaria). During its proceedings, that court asked the CJEU for a preliminary ruling on the question whether, with respect to animal transport involving a long journey that begins in the EU but ends far outside of its borders, Regulation 1/2005 applies only to the portion of the transport taking place within the EU, or also to those parts of the transport taking place outside of EU territory.

The CJEU came down firmly on the side of extraterritorial application, stating unambiguously that Regulation 1/2005 “does not subject the transport of animals with a point of departure within the territory of the European Union and a destination in a third country to any particular approval scheme, different from that applicable to transport taking place within the European Union” (para. 47). The only nod the Court makes to the limits of EU authority is the following:

“Should it nevertheless be the case that the law or administrative practice of a third country through which the transport will transit verifiably and definitely precludes full compliance with the technical rules of [Regulation 1/2005], the margin of discretion conferred on the competent authority of the place of departure empowers it to accept realistic planning for transport which, in the light inter alia of the means of transport used and the journey arrangements made, indicates that the planned transport will safeguard the welfare of the animals at a level equivalent to those technical rules.” (para. 54)

In finding that Regulation 1/2005 also applies to those parts of animal transport taking place outside of the EU, the Court went against the opinion of Advocate General Bot. The AG was indeed of the opinion that the scope of the Regulation was limited to the EU, and that applying it to transport outside of EU borders would essentially deputize the authorities of other countries, requiring them to “check to ensure compliance with the rules laid down by the regulation” (AG’s opinion, para. 54). As Advocate General Bot pointed out, this would be inconsistent with the rules regarding the transport of animals into the EU, according to which transit companies must meet EU animal welfare standards only once they enter EU territory (AG’s opinion, para. 82).

Comment

It is particularly interesting to see Zuchtvieh in light of the Court’s other recent case law on the extraterritorial application of EU rules. Traditionally speaking, international law frowns upon extraterritorial regulation, instead deferring to state sovereignty and its corollary, the principle of non-interference in the affairs of other states. Extraterritorial rules are thus only permissible where there is a solid jurisdictional reason for enacting them (for example, because the actors involved are nationals, or the behaviour abroad has domestic territorial effects). In recent years, however, the CJEU has seemed quite willing to use the ambiguity inherent in these jurisdictional terms to permit the application of EU rules that have legislative effects in third states. It has justified the application of such rules outside its borders using what Joanne Scott has helpfully termed “territorial extension”: the practice of using a (potentially quite limited) territorial connection with the EU to justify the regulation of conduct taking place in third states.

In the Air Transport Association case, for example, an association of American air transport companies challenged the EU’s decision to apply its carbon emissions trading scheme to emissions by non-EU planes that took place outside European territory, if those flights landed in the EU. The CJEU found that this was permissible, and should not be seen as violating the prohibition of extraterritorial regulation under customary international law. (ATA para. 157). In the Court’s view, the emissions trading scheme was not ‘extraterritorial’, because it was applied only at airports within EU jurisdiction—regardless of any effects on extraterritorial behaviour. For other examples of broad readings of regulatory jurisdiction by the CJEU, one might look to earlier cases such as Minin, Poulsen, and Ebony Maritime.

Similarly, in Zuchtvieh, the CJEU found that there was no extraterritorial regulation because the permit for transporting the animals in question was issued within the EU. While Advocate General Bot expressed his concern regarding the effects such an interpretation would have on the conduct of transporters and customs officials in third states, the CJEU clearly did not find these issues relevant to its determination.

The Zuchtvieh ruling is expected to have positive effects on animal welfare, improving conditions for the millions of animals transported from the EU to third states every year. In addition to these concrete effects, however, the judgment also demonstrates the increasing tendency of the CJEU to expand the permissible reach of EU legislation to conduct taking place on third state territory.

It remains to be seen whether this trend will continue, and at what point the CJEU will consider that the extraterritorial reach of EU law has reached its limit. One may indeed question the impact of this case on the so-called ‘external dimension’ of EU law, which is one of the key concerns nowadays for EU policy-makers. Is the EU entitled to export its rules/values/fundamental rights standards to other countries? At what point does ‘territorial extension’ become an illegal or illegitimate exercise of EU authority? EU ‘territorial extension’ definitely encounters quite some resistance from the international community. Despite the CJEU’s approval of the emissions trading scheme in Air Transport Association, for example, international backlash against the rule was so strong that the EU agreed to suspend its operation so long as international negotiations on a more global rule were underway. Although Zuchtvieh has thus far not generated a similar protest, it does change the standard international legal conversation about jurisdiction, pushing an expanded understanding of who can and should regulate the behaviour of cross-border economic activities.

Originally published on EU LAW BLOG

Barnard & Peers: chapter 24

Photo credit: www.ciwf.org.uk