Representatives of the private sector were invited to a dialogue with the chairman and the commissioners of the Philippine Competition Commission (PCC) to discuss areas where cooperation makes sense in achieving the “level playing field” we are all interested in. All participants agreed that a level playing field involves, besides “fair competition” anti-corruption, a fair taxation regime, data- privacy protection and cybersecurity. It became obvious that compliance officers/security managers will play an increasingly important role in business and government as we move forward.
Another issue was also raised and discussed is the need to encourage whistle-blowers to move forward and expose fraud, tax evasion, data breaches and other misdeeds. However, without whistleblower protection it is understandable that these potential heroes will not step forward. While we have encouraged Congress for many years to pass “whistle-blower protection legislation”—without success—the group agreed that it is absolutely necessary that whistle-blowers will be given protection from retaliation.
In this context, the news that the European Commission (EC) proposed a new policy on whistle-blower protection a few days ago comes handy and will hopefully encourage Philippine lawmakers to follow suit.
The proposal targets, in particular, whistle-blowers reporting misconduct in public procurement, financial services, nuclear safety, food safety, privacy and data protection, among others. The new regulations will require companies to set up internal hotlines and shield whistle-blowers from any form of retaliation. The proposal also includes safeguards against malicious or abusive reports, as well as sources of investigative journalists. The proposal requires approval from European Union countries and the European Parliament before it can become law. Currently, only 10 EU countries offer full protection to whistle-blowers.
The move by the EU comes in the wake of criticisms from transparency campaigners about the lack of protection granted to individuals who report such breaches in EU laws. Critics cite the example of two former accounting firm employees who were prosecuted in 2016 for leaking data about Luxembourg’s tax deals with large corporations. The conviction of one was overturned by Luxembourg’s highest court this year.
Critics also point to British regulators’ relatively lenient treatment of Barclays’s Chief Executive Jes Staley last week, who was allowed to keep his job after trying to uncover an informant at the bank.
The EC said its proposal was a game changer since it will require companies setting up internal channels for whistleblowers and also shield them from reprisals, such as sackings, demotion and even litigation.
There are also safeguards against malicious or abusive reports.
“There should be no punishment for doing the right thing,” Commission Vice President Francs Timmermans said.
“In addition, today’s proposals also protect those who act as sources for investigative journalists, helping to ensure that freedom of expression and freedom of the media are defended in Europe.”
The EU executive said the proposed rules would protect those who unmask illegal activities in public procurement, financial services, money laundering, nuclear safety, food safety, privacy and data protection, among others.
Transparency International said the proposal was a bold step in recognizing the importance and rights of informants.
The Association of Chartered Certified Accountants (ACCA) said increasing whistle-blower protection will help businesses.
“Companies have to see speak-up as something that would help them manage risks and avoid more serious issues, such as violation of law, inappropriate conduct, crime or any type of harms,” ACCA Head of Corporate Governance Jo Iwasaki said.
Given this encouragement coming from the EU, it may be highly opportune to restart the dialogue with the Senate and the House regarding whistle-blower protection legislation. The bills await congressional action.
Comments are welcome—contact me at Schumacher@eitsc.com.