Guide to Whistleblowing

Contributing Editors

In this new age of accountability, organisations around the globe are having to navigate a patchwork of new laws designed to protect those who expose corporate misconduct. IEL’s Guide to Whistleblowing examines what constitutes a protective disclosure, the scope of regulations across 18 countries, and the steps businesses must take to ensure compliance with them.

Learn more about the response taken in specific countries or build your own report to compare approaches taken around the world.

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01. Which body of rules govern the status of whistleblowers?

01. Which body of rules govern the status of whistleblowers?

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Romania

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Romanian Law No. 571/2004 (Law 571)[1] was one of the first laws in Eastern Europe to deal with the protection of whistleblowers in the public sector. As regards the private sector, discussions related to the Draft Law on the Protection of Whistleblowers in the Public Interest, which was passed by the Senate on 19 April 2022, have been tense. This Draft Law (Pl-x 219/2022)[2], hereinafter referred to as the Draft Law) was adopted on 29 June 2022 with major changes (details below) by the Chamber of Deputies and subsequently challenged in the Romanian Constitutional Court. In a ruling on 13 July 2022, the Constitutional Court stated that the Draft Law is not unconstitutional and may be promulgated by President Iohannis. Several NGOs, whistleblowers and stakeholders of civil society have addressed an open letter to President Iohannis, asking him to use the alternative option and send the Draft Law back to Parliament for re-examination. The main reason they invoke is a failure of the Draft Law to comply with the requirements negotiated by the representatives of the Ministry of Justice with the European Commission and hence, a risk of an infringement procedure against Romania. The President has taken this step and sent the Draft Law back to Parliament.

This is the status at the time of writing. Currently it is unclear when the Draft Law shall be discussed in Parliament; this is expected to take place earliest in September 2022 after the parliamentary vacation.

The Draft Law is meant to implement the EU Whistleblowing Directive (Directive (EU) 2019/1937), but differs significantly from the European regulation. It has been criticised on the one hand because important provisions regarding the protection of whistleblowers in legal proceedings (eg, for defamation, breach of copyright, breach  of secrecy, breach of data protection rules, disclosure of trade secrets) have been omitted. On the other hand, the Draft Law has been attacked for reducing the protection standard granted by the previous Law 571/2004 for the public sector (eg, by restricting the possibility of whistleblowers to report directly to the press and by eliminating the resumption of good faith in favour of the whistleblowers). The signal from the Romanian parliament to employers has been interpreted as a sign of high tolerance as regards non-compliance with the Whistleblowing Directive. For example, employers applying repetitive retaliation measures against whistleblowers will pay a reduced civil fine of 2,000 EUR, as compared to roughly 6,000 EUR as per the first proposal. Another aspect is the lack of remedies and full compensation for damages suffered by whistleblowers, which can discourage them from reporting.

 

[1] Law no. 571/2004 regarding the protection of the staff of the public authorities, public institutions and other units that notifies breaches of law, published in the Official Gazette no. 1214/ 17.12.2004.

[2] Source: http://www.cdep.ro/pls/proiecte/upl_pck2015.proiect?nr=219&an=2022 (last checked on 20.07.2022).

Last updated on 16/08/2022

02. Which companies must implement a whistleblowing procedure?

02. Which companies must implement a whistleblowing procedure?

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Romania

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As a general rule, companies with 50 to 249 employees must establish internal reporting procedures from 17 December 2023. Article 8 paragraphs 3 and 4 of the Whistleblowing Directive provides that such a threshold of 50 employees does not apply for companies acting on the capital markets, in banking, credit, investment, insurance and re-insurance, occupational or personal pensions products or securities, meaning that they will have to organise reporting channels irrespective of their number of employees. The Romanian transposition seems to have misunderstood this stricter rule, hence (even if probably irrelevant in most cases in practice) companies from these sectors with less than 50 employees do not need to establish internal channels.

Last updated on 16/08/2022

03. Is it possible to set up a whistleblowing procedure at a Group level, covering all subsidiaries?

03. Is it possible to set up a whistleblowing procedure at a Group level, covering all subsidiaries?

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Romania

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As a general rule (article 9 paragraph 4), companies with 50 to 249 employees (regardless of the group) should have the option to share resources as regards the receipt of reports and any investigation to be carried out. Companies with fewer employees than that or administrative bodies with less than 10,000 inhabitants cannot pool their resources together.

The Commission states that the protection of whistleblowers and a higher number of disclosures will only be achieved if each company having more than 49 employees will establish its own whistleblowing system. According to the current interpretation instructions of the EU Commission regarding the Whistleblowing Directive (dated 2 June 2021 and 29 June 2021), it is not prohibited to establish a centralised system, but such a system must be run in parallel with the mandatory local system.

Last updated on 16/08/2022

04. Is there a specific sanction if whistleblowing procedures are absent within the Company?

04. Is there a specific sanction if whistleblowing procedures are absent within the Company?

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Romania

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There are several administrative fines for companies failing to comply with the new whistleblowers’ legislation – between 500 EUR and 5,000 EUR for not establishing internal reporting procedures.

Last updated on 16/08/2022

05. Are the employee representative bodies involved in the implementation of this system? 

05. Are the employee representative bodies involved in the implementation of this system? 

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Romania

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The previous proposal of the law implementing the EU Whistleblowing Directive provided for employee representative bodies (ie, generally speaking trade unions, if they exist, or employee representatives) to be consulted when establishing the reporting procedures. The approved version as of 29 June 2022 does not provide for such consultancy procedure anymore; however, it remains recommendable.

Last updated on 16/08/2022

06. What are the publicity measures of the whistleblowing procedure within the company?

06. What are the publicity measures of the whistleblowing procedure within the company?

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Romania

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According to article 10 paragraph 2 of the Draft Law, employees are informed about the reporting procedures, including the person or department designated to receive such reports, both through the website of the company and through announcements at its headquarters, provided that there is a visible location accessible to all employees.

Last updated on 16/08/2022

07. Should employers manage the reporting channel itself or can it be outsourced?

07. Should employers manage the reporting channel itself or can it be outsourced?

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Romania

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Both options are available for companies. At first glance, internal channels controlled by its own employees (auditors or compliance officers, in-house legal counsel or even an internal hotline) may be more effective for companies, since this ensures that potential wrongdoings are checked internally and do not compromise the image of the company. However, whistleblowers may not trust internal channels that allow easy identification of the individual whistleblower and are usually established to act in the best interest of the company (and not necessarily the whistleblower). Groups of companies must give more thought to the organisation; in many cases, outsourcing to third parties (eg, a recognized law firm) may be a better and more cost-effective solution.

Last updated on 16/08/2022

09. What precautions should be taken when setting up a whistleblowing procedure?

09. What precautions should be taken when setting up a whistleblowing procedure?

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Romania

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The big challenge is to create a system that would strike a balance between better protection and an increased incentive for the whistleblower to notify breaches. As mentioned in question 7, employers need to make a thorough analysis and decide whether to handle the whistleblowing channel from within the company or outsource it to a specialised provider that is known in the Romanian market and trusted by employees.

Last updated on 16/08/2022

10. What types of breaches/violations are subject to whistleblowing?

10. What types of breaches/violations are subject to whistleblowing?

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Romania

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The proposed Romanian implementation follows encouragement by the EU to extend the list of sectors (public procurement, financial services, money laundering, product and traffic safety, public health, consumer and data protection) subject to whistleblowing procedures and stipulate a general protection for reports on any breaches of law, including specific rules on ethics and codes of conduct for certain professions. Such an extension of the scope of application, combined with vague exclusions (see question 11) and the refusal to analyse anonymous reports, may, however, have the opposite effect and discourage whistleblowers from reporting any wrongdoing.

Last updated on 16/08/2022

11. Are there special whistleblowing procedures applicable to specific economic sectors or professional areas?

11. Are there special whistleblowing procedures applicable to specific economic sectors or professional areas?

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Romania

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Appendix 1 to the Draft Law contains references to the special procedures applicable both EU-wide and at a national level (ie, stock-listed companies, the insurance sector, managers of alternative investment funds and offshore oil businesses). Specialists have particularly drawn attention to the fact that the vague wording of article 1 paragraph 4 of the Draft Law may exclude a large spectrum of companies involved in national defence and security from the mandatory protection of whistleblowers.

Last updated on 16/08/2022

13. Who can be a whistleblower?

13. Who can be a whistleblower?

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Romania

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The term includes:

  • workers;
  • self-employed persons within the meaning of article 49 TFEU;
  • shareholders and persons belonging to the administrative, management or supervisory body of an undertaking, including non-executive members, as well as volunteers and paid or unpaid trainees; and
  • any persons working under the supervision and direction of contractors, subcontractors and suppliers.

Moreover, former employees or persons who have acquired information during the recruitment process or other pre-contractual negotiations may be whistleblowers.

Last updated on 16/08/2022

14. Are there requirements to fulfil to be considered as a whistleblower?

14. Are there requirements to fulfil to be considered as a whistleblower?

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Romania

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To qualify as a whistleblower and benefit from the protection envisaged for these persons, the individual must:

  • belong to the category described in question 13;
  • have reasonable grounds to believe that the information reported was true at the time of reporting and the reporting is necessary; and
  • have filed an internal or external reporting or public disclosure.

Romanian NGOs have criticised the wording of the second condition regarding the whistleblower verifying whether the reporting is necessary without any indication what is “necessary”.

Last updated on 16/08/2022

15. Are anonymous alerts admissible?

15. Are anonymous alerts admissible?

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Romania

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One of the major criticisms brought to the Draft Law in the form sent for promulgation is the fact that it has restricted anonymous reporting. In the previous wording (adopted by the Senate on 19 April 2022) anonymous reports were accepted and analysed as long as they contained sufficient information for verifying the alleged wrongdoing. According to the current version of the Draft Law, anonymous reports need not be analysed (article 11 paragraph 1b), since a report needs to formally bear the name and signature of the whistleblower.

It seems like the Romanian political class is still very reluctant to implement verification obligations in anonymous cases. Some critics invoke a connection with the communist past and a society in which “everybody sneaked on everybody”[3]

 

[3] On the historical sensitivity of such topic, Radu Ogarca in: “Whistle Blowing in Romania”, 2009, accessed on 20.07.2022.

Last updated on 16/08/2022

16. Does the whistleblower have to be a direct witness of the violation that they are whistleblowing on?

16. Does the whistleblower have to be a direct witness of the violation that they are whistleblowing on?

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Romania

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No, but the whistleblower must have reasonable grounds to believe that the reported information was true at the time of the report. Also, he or she must bring evidence for the reported breaches; if he or she is aware that the reported information is untrue, an administrative fine will be applied (between 400 and 5,000 EUR).

There have been many voices from specialised NGOs stating that such a strict rule will prevent whistleblowers from reporting, since they have to prove good faith before the reported breach is taken seriously. In the previous wording of the Draft Law adopted by the Senate on 19 April 2022, the presumption of good faith was stated (which is in line with the provisions of the Law 571/2004 for the public sector).

Last updated on 16/08/2022

17. What are the terms and conditions of the whistleblowing procedure?

17. What are the terms and conditions of the whistleblowing procedure?

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Romania

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The internal whistleblowing procedure needs to provide for the following:

  1. channels for receiving the reports that are designed, established and operated in a secure manner and ensures that the identity of the reporting person and any third party mentioned in the report is protected, and prevents access thereto by unauthorised staff members;
  2. acknowledgment of receipt of the report to the reporting person within seven days of that report;
  3. the designation of an impartial person or department competent for receiving and following up on the reports, who will maintain communication with the reporting person and, where necessary, ask for further information from and provide feedback to that reporting person;
  4. diligent follow-up by the designated person or department referred to in point c;
  5. feedback about the status of the report within a reasonable timeframe, not exceeding three months from the acknowledgment of receipt or, if no acknowledgement was sent to the reporting person, three months from the end of the seven days after the report was made, except for situations when such feedback may jeopardise the process; and
  6. clear and easily accessible information regarding the procedures for reporting externally to competent authorities and, where relevant, to institutions, bodies, offices or agencies of the Union.

 

Last updated on 16/08/2022

18. Is there a hierarchy between the different reporting channels?

18. Is there a hierarchy between the different reporting channels?

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Romania

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Whistleblowers are encouraged to use primary reporting systems at the company level – a path that may have an additional chilling effect. External channels should be chosen when the whistleblower identifies retaliation risks in internal channels or does not believe that internal reporting may efficiently lead to a remedy of the breach. Finally, public disclosure should be the last resort according to the Romanian parliament, although studies have shown that this is usually the most powerful tool.

Romanian civil society has criticised the current version of the Draft Law since it prevents whistleblowers from addressing the press. According to article 19 paragraph 2 of the Draft Law, whistleblowers are only allowed to publicly disclose information on breaches if at least three months have passed since the internal or external reporting. This period (which is not provided within the Whistleblowing Directive) may discourage whistleblowers from using broad disclosure to the press, since it may give the employer the chance to intervene and retaliate.

Last updated on 16/08/2022

19. Should the employer inform external authorities about the whistleblowing? If so, in what circumstances?

19. Should the employer inform external authorities about the whistleblowing? If so, in what circumstances?

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Romania

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As a general rule, the person or department designated to check reports is bound to keep information confidential regarding the whistleblower and the reports. However, exceptions apply when the law provides an obligation to inform public authorities (ie, in the context of investigations by national authorities or judicial proceedings).

Last updated on 16/08/2022

20. Can the whistleblower be sanctioned if the facts, once verified, are not confirmed or are not constitutive of an infringement?

20. Can the whistleblower be sanctioned if the facts, once verified, are not confirmed or are not constitutive of an infringement?

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Romania

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Yes, the whistleblower would pay a fine of up to 5,000 EUR if he or she knowingly reports false information. Additionally, criminal sanctions may apply if the details of the case prove that the abusive report constitutes a criminal offence according to the Romanian Criminal Code. Whether or not it is an infringement worth reporting is, however, not an analysis the whistleblower needs to perform, hence no sanction will be applied if the reported breach turns out to be irrelevant.

Last updated on 16/08/2022

21. What are the sanctions if there is obstruction of the whistleblower?

21. What are the sanctions if there is obstruction of the whistleblower?

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Romania

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There is no clear sanction for preventing a potential whistleblower from reporting, but there are sanctions for not establishing internal channels in line with legal provisions. The wording of the Romanian Draft Law provides for a sanction for preventing the designated person or department from reporting further information received from the whistleblowers.

Last updated on 16/08/2022

22. What procedure must the whistleblower follow to receive protection?

22. What procedure must the whistleblower follow to receive protection?

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Romania

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For a whistleblower to qualify for protection under the Draft Law, he or she must verify whether the personal condition and the work-related context are fulfilled, and file for a non-anonymous report using either the internal or the external channel. Public disclosures to the press are permitted only in exceptional cases (see question18).

Last updated on 16/08/2022

23. What is the scope of the protection? 

23. What is the scope of the protection? 

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Romania

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The scope of the protection provided by the Draft Law is to prevent retaliation in a work-related context and in a broader context to enhance the enforcement of national and EU law.

Last updated on 16/08/2022

24. What are the support measures attached to the status of whistleblower?

24. What are the support measures attached to the status of whistleblower?

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Romania

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The law provides for extensive support measures from information and advice received from the Romanian National Integrity Agency to legal aid provided by the local Attorneys Bar, both free of charge. Civil society criticised such shallow support for lacking accompanying norms for the benefit of whistleblowers. Although there were many voices from practice asking for financial incentives for whistleblowers, no such measures have been approved. Also, no rule regarding psychological support, mentioned in article 20 paragraph 2 of the Directive, has been transposed.

Last updated on 16/08/2022

25. What are the risks for the whistleblower if there is abusive reporting or non-compliance with the procedure?

25. What are the risks for the whistleblower if there is abusive reporting or non-compliance with the procedure?

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Romania

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If a person reports false information, he or she may be obliged to pay a fine of up to 5,000 EUR if he or she knowingly or abusively reported such facts (see question 20). Another risk for whistleblowers is when he or she does not fulfil all the “subjective“ conditions to qualify as a whistleblower and is refused any protection. Given the Romanian transposition of the Whistleblowing Directive, certain parts may considerably narrow the category of protected whistleblowers. Finally, a whistleblower, even if qualified as such, risks retaliation during the unusual period of three months from the internal or external report when he or she has to wait until the breach is reported to the press.

 

Last updated on 16/08/2022