Protecting whistleblowers is a crucial part of ensuring transparency and integrity within organizations. On Feb. 18, 2023, the Whistleblowers Protection Act entered into force, a law resulting from the need to implement EU Directive 2019/1937. This law not only introduced new protections for whistleblowers, but also significantly expanded the powers of the House of Whistleblowers. In order to test the legal tenability and feasibility of these new powers, Pro Facto conducted a legal preliminary study on behalf of the Ministry of the Interior and Kingdom Relations. The report, published April 2024, provides an in-depth analysis of the challenges associated with the oversight and sanctioning powers of the House of Whistleblowers.
Background and Objectives of the Study
The Whistleblower Protection Act marks an important development in the Dutch legal landscape, particularly through the enhanced protection it provides to individuals who report wrongdoing within their organizations. The law amends and replaces the previous House of Whistleblowers Act and introduces a wide range of new obligations for employers, as well as expanded powers for the House of Whistleblowers.
One of the most significant changes is the granting of new oversight and sanctions powers to the House. These powers include the ability to impose sanctions on organizations that fail to meet obligations under the law, such as protecting whistleblowers from harm. Pro Facto’s preliminary legal research focuses specifically on the legal challenges and potential bottlenecks associated with these new House duties.
Key findings of the Preliminary Study
Pro Facto’s report offers a comprehensive review of supervisory and sanctioning powers, identifying several legal and practical challenges:
- Compatibility of Duties and Functions within the House of Whistleblowers: A central finding of the study is the potential tension between the House’s new enforcement duties and its existing support role. The House provides legal and psychosocial support to whistleblowers, which may contrast with its new role as supervisor and enforcer. This dual function can lead to conflict and raises questions about the independence and effectiveness of the House in both roles.
- Unclear Standards and Enforcement: The researchers point out that some of the standards that the House must enforce, such as requirements for internal reporting procedures at organizations, are not sufficiently clear in legal terms. This can lead to problems of interpretation for both the organizations required to meet these standards and for the House in its role as enforcer. The lack of precision in these standards is an obstacle to effective and consistent enforcement.
- Supervision and Sanctioning Powers: The report criticizes the organizational choice to place oversight duties with the House Research Department. This department is also responsible for investigating whistleblower reports, which can lead to a mixing of investigative and supervisory roles. The researchers suggest that this could affect the independence and objectivity of supervision. They call for a rethinking of the House’s organization so that oversight and sanctions functions can be better separated from investigative and support functions.
- Legal Tenability of Sanctions: The House’s power to impose sanctions, such as administrative fines and periodic penalty payments, raises legal questions. The report highlights the need to further refine and clarify these sanctioning powers so that they are in line with the requirements of the General Administrative Law Act (Awb). Specifically, it is recommended that the legal basis for imposing sanctions be better substantiated and the procedures surrounding sanctions application be carefully designed to ensure legality and consistency.
Feasibility and Practical Challenges
In addition to the legal analysis, the preliminary study also focuses on the practicality of the new powers of the House of Whistleblowers. The report highlights the need for sufficient resources and expertise within the House to effectively carry out the new oversight and enforcement tasks. It emphasizes that without adequate financial and human resources, there is a risk that the House will not be able to fulfill its duties effectively, which may ultimately be at the expense of protecting whistleblowers.
Recommendations for improvements
In its report, Pro Facto makes several recommendations to improve the effectiveness of the House sanctions regime and oversight structure:
- Clearer Standards: The report recommends that the standards the House must enforce be more specific and concrete. This will not only facilitate enforcement but also improve compliance by organizations.
- Review of Organizational Structure: It is recommended that the organizational separation between the oversight and support functions within the House be strengthened. This can be done, for example, by establishing a separate oversight department that operates independently of the department that supports whistleblowers.
- Strengthening the Legal Basis for Sanctions: To avoid legal problems, the report calls for further elaboration of the rules regarding sanctions. This includes clarifying the legal basis for imposing fines and periodic penalty payments, as well as developing detailed procedures for their application.
- Resources and Expertise: The report highlights the need for additional resources and specific expertise within the House to effectively carry out the new tasks. One way to do this is to hire specialized lawyers and supervisors.
Conclusion
Pro Facto’s preliminary legal research exposes some significant challenges in the implementation of the Whistleblower Protection Act. While the law makes important strides in protecting whistleblowers and strengthening oversight of organizations, the report points to the need for further legal and organizational refinement. Pro Facto’s recommendations provide valuable guidance for policymakers to further improve the legislation and its implementation, so that whistleblowers can actually get the protection they deserve and enforcement of the law can take place effectively and lawfully, ensuring that employers also know the legal framework within which they must operate.
It is now up to legislators and policymakers to take the findings of this study to heart and take the necessary steps to optimize the law and the operation of the House of Whistleblowers.
We believe it is time for the Netherlands to establish effective and deterrent sanctions for non-compliance with the Whistleblower Protection Act, as required by the EU Directive. And we are not alone. On Oct. 10, 2024, Two MP Van Nispen (SP) introduced a motion urging the government to move forward on this. We will keep you informed.
