Born as a Beacon for Transparency and Integrity in the Workplace.
New Obligations for Companies
Updated as of May 20, 2023
Introduction
Whistleblowing is a system for reporting internal misconduct that is increasingly spreading in Italy and around the world. In this article, we will explore what whistleblowing is, when it is mandatory for companies, and how it contributes to transparency and integrity in the workplace.
Definition and Types
The term “whistleblowing” derives from the phrase “to blow the whistle” and refers to the practice of reporting abuses and illegal practices within the organization where one works. There are two main types of whistleblowing: internal and external. In internal whistleblowing, employees report misconduct using internal channels within the company, while in external whistleblowing, reports are made to competent authorities or disclosed publicly through social media or the press.
Legislation and Protection
In Italy, whistleblowing regulations were introduced with the Anti-Corruption Law 190/2012, which initially applied only to public employees. Subsequently, Law 179/2017 extended the regulations to the private sector. The implementation of the EU Directive 2019/1937 on the protection of whistleblowers further strengthened the protection of whistleblowers. The directive requires Member States to introduce adequate rules to protect both public and private whistleblowers and harmonize the treatment of whistleblowers across Europe.
On December 9, 2022, the Council of Ministers, through Decree 24/2023, transposed the European Directive on the protection of whistleblowers by approving the “Legislative Decree implementing Directive (EU) 2019/1937.” The EU mandated Member States to introduce adequate rules for the protection of public and private whistleblowers. The Directive expands the concept of a “reporting person” (whistleblower) and now includes not only public or private employees but also collaborators, consultants, freelancers, workers on probation, interns, and others. Private whistleblowers, in addition to internal reporting channels, must have access to external reporting channels (to be established at ANAC) or make a public disclosure or report to the judicial authorities.
Lastly, to make the system more effective, administrative fines (ranging from €5,000 to €50,000, directly applicable by ANAC) are provided in case retaliation is proven, if the user’s report has been obstructed, or if reporting channels have not been established.
The introduction of the whistleblowing obligation in the private sector has required a modification
of the disciplinary system regarding the administrative liability of entities, Legislative Decree 231/2001. The MOGs (Models of Organization, Management, and Control) must include the obligation to establish one or more channels for reporting potentially illicit conduct under the mentioned decree.
In Italy, a series of obligations have been imposed to make the protection of whistleblowers concrete and effective. Starting from July 2023, it is mandatory for all companies with more than 250 employees, regardless of whether they adopt an Organizational Model pursuant to Legislative Decree No. 231/2001, to establish a specific and confidential online channel for submitting reports. From December 17, 2023, companies with 50 to 249 employees must also have a dedicated reporting channel.
Impact of Whistleblowing
Whistleblowing plays a fundamental role in promoting transparency, integrity, and accountability within organizations. Reports of abuses help expose misconduct, protect public interests, and can lead to regulatory and policy changes. Furthermore, whistleblowing promotes the responsibility and accountability of organizations and improves organizational culture by fostering integrity and preventing future abuses. Properly managing whistleblower reports allows companies to preserve their reputation and restore stakeholder trust.
Famous Examples of Whistleblowing in Italy and Worldwide
In Italy, several significant cases of whistleblowing have raised important issues regarding transparency and integrity in the workplace. One of the most well-known cases is that of Banca Monte dei Paschi di Siena, where a whistleblower reported illicit financial operations. Another significant case concerns the healthcare sector, with whistleblowing regarding fraud in the national healthcare system. Internationally, the most famous example is that of Edward Snowden, who revealed the global surveillance practices of the NSA. Another historic case is that of Mark Felt, known as “Deep Throat,” who provided key information during the Watergate scandal in the United States.
Conclusions
Whistleblowing is becoming increasingly relevant in Italy and worldwide as it contributes to the promotion of transparency and integrity within organizations. Italian legislation and European regulations are enhancing whistleblower protection and creating a favorable environment for reporting misconduct. However, it is important for companies to develop effective procedures for managing whistleblower reports and protecting whistleblowers from retaliation. Only through a robust system and a culture of openness and accountability can the positive impact of whistleblowing be maximized, fostering a more ethical and transparent work environment.
Contribution by Dr. Alessandro Gazzano from the Catania Bar Association
