European Parliament estimates lack of protection for whistleblowers could be costing the EU as much as €9.6bn (£8.3bn) a year in potential benefits in the EU public procurement sector alone.
The anti-corruption organisation Transparency International said that the draft legislation, while needing some strengthening, will ensure “much-needed harmonisation” between member states. Up until now each jurisdiction has been responsible for its own policies and protections.
The new system will enable whistleblowers to use internal and external reporting channels to ensure they remain safe and the information remains confidential.
Depending on the case they will have the choice to report internally first or to go straight to an external competent national authority and EU institutions or agencies.
“We have had to fight to get a final text that meets expectations: whistleblowers must be protected, whilst choosing the best means to be heard and to defend the interests of the citizens,” said MEP Virginie Roziere.
It will also protect those who have taken information public in instances where no appropriate action was taken in response to any initial report or where the individual believes there is imminent risk of retaliation or to the public interest.
In July last year, the Royal Bank of Canada was found to have unfairly dismissed a whistleblower when the judge concluded that, rather than the “pretext” of his lateness to work, his public interest disclosure was “the main reason for his dismissal.”
The new agreement will also protects those facilitating whistleblowers such as colleagues, relatives or journalists.
Member states will also need to provide independent information on reporting channels and procedures, as well as free-of-charge financial and psychological support.
“Today is a historic day for those wish to expose corruption and wrongdoing,” said Nick Aiossa, senior policy officer at Transparency International EU.
"Whistleblowers in the EU, such as Howard Wilkinson, the Danske Bank whistleblower, have spent far too long facing unjust retaliation for speaking out,” he added.
Last month, Danske Bank was ordered to close its Estonian branch by the country’s financial supervisory authority, the Finantsinspektsioon, following a €200bn money-laundering scandal.
“It is quite an accomplishment that negotiations between the institutions have come to a positive end,” Aiossa said.
The provisional agreement awaits confirmation by the Legal Affairs committee and by ambassadors for the member states after which it will be put to a final vote by the full House and Council.
In May last year, former PwC employee Antoine Deltoir, who was one of the whistleblowers at the centre of the Luxleaks scandal, was acquitted in the Court of Appeal in Luxembourg.
He had previously been found guilty by Luxembourg’s Criminal Court for leaking classified documents that triggered the scandal.