In 2019, the European Union adopted a landmark Directive on Whistleblowing requiring Member States to undertake sweeping reforms to encourage and protect individuals who report wrongdoing. EU governments had until 17 December 2021 to ‘transpose’ the Directive into their national legal systems.
The mission to harmonize whistleblower protection across Europe via common minimum standards however is far from realised. As of today (15 December 2021), two days before the official deadline, only a handful of countries have passed new laws – Denmark, Sweden, and Portugal. There have been reports online of a new law in Austria, but there is no official information available. While government delays in implementing Union rules are commonplace, and the transposition period coincided with the challenges of the pandemic, encouraging those with information about potential harm to speak up should have been a priority for EU governments. Putting transposition on the backburner was dangerous given the increased risks both of public safety and corruption during Covid19.
Whistleblowing International Network (WIN) and Transparency International (TI) were aware of these delays and analysed progress and the approach governments were taking just over halfway into the two-year transposition period. Over two thirds (18 of 27) had either not started at all or had made minimal progress. While some countries demonstrated good open practice by engaging in wide stakeholder and public consultation on intentions and draft proposals, this was in stark contrast to the secrecy in others. Malta is a case in point.
Malta’s Bill – a sudden development
On the 15 November 2021 – a month prior to the deadline – Malta published a new Bill entitled ‘Att dwar il-Protezzjoni ta’ Informatur’ or ‘Protection of the Whistleblower Act’. The draft law purports to transpose the Directive by amending the current legislation that has been in place since 2013.
Despite some media reports of progress announced by the Minister for Justice, Edward Zammit Lewis, no official information was publicly available. In fact, until the sudden publication of a draft law last month, Malta was still listed as one of four countries ‘not started’ on the EU Whistleblowing Monitor along with other outliers – Luxembourg, Cyprus and Hungary.
Public institutions in Malta had already highlighted the severe lack of stakeholder consultation when it came to implementing a new legal framework. In 2020, Maltese ombud’s institution, the ‘Uffiċċjutal-Ombudsman Parlamentari,’ stated in its annual report that a new obligation to handle private sector whistleblower reports would conflict with the limited powers it had under the Ombudsman Act to investigate reports within public administration. Commenting again on the lack of consultation for the transposition Bill the 2021 report stated:
“The Ombudsman would be failing if he did not record his disappointment at this complete failure of consultation. This is to prevent such incidents from happening again.”
Despite this, and the repeated public calls from Repubblika – a civil society organisation in Malta focused on the rule of law – for the government to meaningfully engage with stakeholders and civil society, the government did not take heed. As feared, the bill has now been forced through, and early analysis of its provisions does not bode well for protecting whistleblowers in Malta.
Early analysis of the new law is not optimistic
Upon first assessment of the Maltese law, a fundamental flaw may undermine the entire project. The proposed scope of the law would only protect individuals who report to specified formal whistleblowing units. In comparison, the UK which adopted the first dedicated whistleblowing legislation in Europe in 1998, a public interest disclosure internal to the employer is protected if made to ‘any responsible officer’ or anyone ‘reasonably believed to be responsible for the wrongdoing’ allowing for ordinary raising of concerns to line management the same protection as reports made via the whistleblowing procedure. A similar broad approach is found in Ireland and France.
Worse still, the new units to handle disclosure do not have any of the guarantees for independent channels free from conflicts of interest with access to organisational leadership necessary for credibility, and safety for whistleblowers.
Further, Malta’s experience since the introduction of the first Whistleblower Protection legislation in 2013 has shown that the effective control the government has on the competent authority that was set up to decide whether whistleblower ‘status’ is to be awarded to individuals reporting wrongdoing has made the law entirely unworkable. Potential witnesses have faced material consequences as a result of information they provided to support their application for whistleblower status and applications have been rejected, possibly because acceptance would have impacted the interests of those enjoying considerable influence over the decisions of the competent authority. The new law does not correct this serious problem.
Another worrisome loophole which threatens now to undermine whistleblower rights in Malta is found in problematic provision for evidential proof requirements to be successful in enforcing rights. Whilst the Directive is clear that burdens of proof should be reversed so that the onus is on the employer to show any detrimental treatment was not in any linked to the reporting of wrongdoing, the specific qualified exclusion of retaliation where it is “justifiable for administrative or organisational reasons” that is specifically included in the Maltese law is an easy claim for most employers to prove, thus failing to offer the protection foreseen by the EU Directive.
Whilst the new law may seem an improvement to the current system on paper, loopholes as significant as those set out above will undermine trust and confidence in the protection, with people more likely choosing to stay silent or suffering for speaking up and creating a chilling effect on potential whistleblowers in the future.
Malta’s legislative whistleblower protection framework has so far proven entirely ineffective. The law was only applied once in a case which failed to lead to any convictions of the wrongdoers and was severely criticised by the courts as forensically baseless, and from outside the courts as a politically motivated attempt to discredit an opposition MP. Potential whistleblowers in major corruption scandals involving senior government officials including Malta’s prime minister, have either been denied whistleblower protection or have said they have been advised not to rely on the level of protection provided by law.
In September, the Network of European Integrity and Whistleblowing Authorities NEIWA – of which no Maltese authority is a member – adopted a declaration calling on EU legislatures to ensure correct transposition of the Directive, specifically recommending that external reporting channels set up by the competent authorities have the sufficient organisation and financial resources and autonomy needed to perform their functions robustly and where protection status is foreseen under national law, ensure reporting persons are granted it. The case of Jonathan Ferrishighlights the dilemma faced by potential witnesses to wrongdoing in Malta who risk punishment ranging from dismissal from their employment to imprisonment if they reveal information that could lead to the prosecution of corruption before they are granted whistleblower protection.
The EU Rule of Law reports on Malta for 2020 and 2021 both observed that there has been a “rather limited” use of the framework which suggests it is inadequate in meeting its core objective of protecting potential whistleblowers from the risk of retribution. The new Bill does not address these fundamental concerns.
Tom Devine, Legal Director of the Government Accountability Project based in Washington DC and a founding member of WIN states:
“Whilst the new Maltese transposition legislation is sophisticated, it is like a train with all the bells and whistles but a defective, dangerous engine. As a whistleblower adviser for 43 years, I would warn anyone that relying on these rights is like spending time and money to hammer the last nail in their own professional coffin. Behind all the gaudy cosmetics, this law is a Trojan horse.”
Whistleblower protection is a matter of fundamental human rights
It is worth noting that the legal protections enshrined in EU Directive exist in parallel to the whistleblowing rights which have evolved under the European Convention of Human Rights (ECHR) and jurisprudence of the Court (ECtHR). Whistleblowers are afforded special protection under Article 10 ECHR rights to freedom of expression and the public’s right to know. The Directive explicitly draws upon the case law of ECtHR as well the principles developed by the Council of Europe in the Committee of Ministers Recommendation (CM/Rec/2014/7) on the protection of whistleblowers. All 27 EU member states are also members of the Council of Europe, including Malta.
The Council of Europe Recommendation is clear that there should be few barriers to reporting concerns about wrongdoing or risks internally, that protection against retaliation should be as close to automatic as possible (see Principle 15 and paragraph 63 of the Explanatory Memorandum) and that the choice of channels for reporting or disclosing information must be flexible to the individual as each set of circumstances will be different (Principle 14). It also makes it clear that reports or disclosures should be investigated promptly, and the results acted on by the employer, appropriate regulatory body, law enforcement or supervisory body in an efficient and effective manner (see Principle 19). The Recommendation has been in place since 2014 and it is time for Malta to take the protection of whistleblowers seriously as a matter of freedom of expression and democratic accountability.
In our view, Malta is in particular need of an effective whistleblower protection framework that encourages those who witness wrongdoing to speak up and to expose suspicions of illicit or unethical practices. Whistleblower protection is a key tool in any meaningful effort to combat corruption. Whistleblowing has been found to be the single most effective method to uncover fraud – in its impact assessment for the Directive, the Commission calculated that the lack of whistleblower protection in the area of public procurement alone amounted to in the range of 5.8 and 9.6 Billion euro annually. It is estimated that total cost of corruption across the EU is between 179 and 990 billion in GDP each year.
Over the last few years Malta has earned a reputation as being unwilling or unable to combat institutionalised corruption particularly in the public sector. It has been said that Malta has a ‘shadow economy’ and has experienced a ‘corruption nosedive’ scoring just 53% on TI Corruption index. Malta is considered a gateway to EU, yet it is estimated that it loses at least 11 % of its GDP to corruption every year and the country has been grey-listedby the Financial Action Task Force.
If Malta remains unable to clean up its act, a vulnerability exists for the global financial system and particularly for the EU. In order to stop Malta being exploited as a backdoor to Europe for financial criminals and international organised crime, whistleblowers who expose weaknesses in controls or complicity in wrongdoing must be fully protected.
In its 2019 evaluation report on Malta, the Council of Europe’s GRECO urged Malta to review its whistleblower protection rules. The recommendations by GRECO are not reflected in the new Bill.
The assassination of the Maltese journalist Daphne Caruana Galizia on 16 October 2017 was a wake-up call in Europe and an horrific reminder of Malta’s vulnerability to organised crime, a damaging culture of collusion and cover-up linked to the highest political levels. This means there are serious risks to people who work to expose uncomfortable truths, including whistleblowers. At the time it presented its proposal for a new directive to protect whistleblowers, Frans Timmermans, the Vice-President of the European Commission stated in April 2018 that the proposals would help to ensure that freedom of expression and freedom of the media are defended in Europe and protect those who act as sources for investigative journalists. In relation to this we recall the experience of Maria Efimova, one of Daphne Caruana Galizia’s sources who had to flee Malta because of the risk to her safety after she blew the whistle on the wrongdoing of her employer Pilatus Bank. Maria Efimova has been awarded special recognition for her whistleblowing yet she remains ineligible for whistleblower protection in Malta and is still being pursued by the Maltese authorities.
Urgent intervention is needed today
Repubblika and the Whistleblowing International Network are deeply dismayed by the actions of the Maltese Government to push through flawed amendents that do not meet the standards nor fulfil the spirit of the EU Directive to protect whistleblowers. We jointly call on the Maltese authorities to conducts an urgent, transparency and effective consultation on what is actually needed to protect whistleblowers in Malta and ensure a correct transposition of the EU Directive.
In our expert opinion, the newly amended law will fail to serve its purpose to encourage witnesses to wrongdoing to speak up by providing them with the protection they need. The rushed transposition of the EU Directive is a false economy. It may meet the deadline but it fails whistleblowers. Malta’s law is a‘Trojan Horse’.
In the coming days, we will publish more detailed feedback on specific provisions adopted by Parliament this week and trust that the Maltese authorities will finally open the door to effective consultation having kept it sealed shut up to now.
The text of the EU Directive can be read here.
Addendum: Other countries criticised for their approach to transposition.
In the Netherlands, civil society have urged for quality over speed and serious concern for the Dutch approach to implementation, which had ignored all comments and consultation recommendations to fix significant damaging effects of the minimalistic approach and resulting hybrid reporting framework. Legal experts in other countries have warned of legal absurdities such a ‘verbatim’ transposition would create and experts are now publicly urging for the Dutch draft to be sent back for significant revision. The Commission have already stated that provisions to allow for exceptions in the obligations on corporate groups to establish confidential channels, as seen in the Danish Bill, equate an ‘incorrect transposition.’