‘Disturbing contradiction.’ Luxleaks verdict shows the need for an EU Whistleblowing Directive

28th March 2017

(Photo from Transparency International)

Luxembourg’s Court of Appeal has maintained the convictions of the Luxleaks whistleblowers Antoine Deltour and Raphael Halet. Their conviction clearly shows the need for a European Whistleblowing Directive to avoid the perverse situation where whistleblowers can be criminally convicted yet applauded by the public.

PricewaterhouseCoopers (PwC) were shown to have helped set up tax rulings in Luxembourg that helped hundreds of large multinational companies such as Apple and IKEA avoid paying billions in tax to EU Member States, harming public services across the continent. PwC employees Antoine Deltour and Raphael Halet helped bring the rulings to light.

The group, Support Antoine, criticised the “disturbing contradiction” in the court’s decision: “It recognised the whistleblower’s role and the public interest of the revelations but anyhow concludes on a condemnation.”

The sentencing – although reduced – does little to dispel the notion that big corporate interests are protected over the public.

Following the Greek financial crisis, Brexit and rising tide of populism in 2016, European institutions would be wise to tackle this perception. Last year’s passing of the Trade Secrets Directive, despite concerted campaigns from political parties, trade unions and groups championing whistleblowing and press freedom, again leaves the European Parliament vulnerable to criticism that its loyalties are weighted towards the interests of corporations rather than those of European citizens.

There is no European law to protect those who speak up against corporate malpractice. The Luxleaks verdict shows it is vital that this is quickly addressed. Earlier this month the EU Commission launched a public consultation on whistleblower protection and Public Concern at Work (PCaW) very much hopes this ends with legislative action in the form of an EU wide whistleblowing directive.

Though far from perfect, the UK already has whistleblowing protection through the Public Interest Disclosure Act. Given this, and the fact that Britain is about to trigger Article 50 and begin the process of leaving the EU, one could wonder why we should be concerned with whether the EU makes moves to protect whistleblowers in other jurisdictions.

One irreversible aspect of globalisation is the capacity for corporate wrongdoing to cause harm across state borders. The issues exposed by Deltour reduced tax receipts across Europe and there are plenty of other examples where the wellbeing and safety of citizens in one country is damaged by actions in another. After the Volkswagen emissions scandal, researchers from the Massachusetts Institute of Technology have estimated that 1200 Europeans will die prematurely due to the sale of 2.6m cars in Germany alone. It is sobering to imagine what the global effect will be as 11m cars were sold worldwide.

Quite simply it is in all of our interests that those who come across wrongdoing are able to report it without fear for their freedom or livelihood. The conviction of those who broke the Luxleaks scandal is a sorry indictment against society’s claimed respect for whistleblowers. Let’s hope that the proposed European Whistleblowing Directive is passed to ensure it is one of the last.

Tom Casey - Adviser