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What is Whistleblowing

The May issue of magazine Bilance offers an article by senior associate Dace Driče and junior associate Linards Birznieks, both of PRIMUS DERLING, under the title What is Whistleblowing.

On 1 May 2019, the new Whistleblowing Law came into force. At the same time, changes will also be made to the Latvian Administrative Violations Code and the Civil Procedure Law. The purpose of the law is to promote the prevention of violations and possible losses in the public and private sectors by providing whistleblowing mechanisms, and protection of whistleblowers.

What is Whistleblowing

Whistleblowing is reporting by a person in the public interest about a potential violation that threatens or may endanger the public interests in whole or in part. The whistleblower has obtained information about a potential violation while fulfilling the work duties or establishing legal relations related to the fulfilment of work duties (for example, an employee can blow the whistle on corruption, tax evasion, food security threats, etc.).
The whistle may be blown in a variety of ways, by giving notice to the employer or by addressing the competent authorities or the contact point of the whistleblower, as well as by making a public statement in accordance with the law
From time to time we hear of loud whistleblowing cases in the world and in Latvia. Danske Bank’s money laundering scandal in Estonia can be mentioned as one of the most recent whistleblowing cases. An employee of Danske Bank of Estonia reported money laundering to Danske Bank’s management in Copenhagen, after which extensive investigation was launched.

However, notwithstanding highly scandalous whistleblowing cases that hit the headlines, it should be taken into account that any employee or potential employee can blow the whistle if the information about the violation is considered true. It is not necessary for an infringement found by a person to be huge or to cause enormous losses. If the person has detected any violation while fulfilling the work duties or establishing employment relations and such violation falls under the statutory whistleblowing, he or she may blow the whistle in the manner stipulated by law. For example, an employee working for a food processing plant reports that the company does not comply with hygiene requirements when handling food products and thus could endanger consumer health.

It is impossible to predict whether the new law will encourage individuals to report more actively irregularities and will encourage more active involvement of society, but it is certainly not desirable to perceive the law formally.

Effective intra-company operation of the whistleblowing system can enable the company to timely identify different problems and risks and cure irregularities, to prevent or minimize losses, to improve the quality of services provided by the company, the work environment and safety in the company, and to protect its reputation.

It should be noted that in the case of a non-existent or ineffective whistleblowing system, employees can use the external whistleblowing mechanism by reporting the violation to the relevant supervisory and control authority, which can result in the company being penalized. In turn, an effective internal system paves the way for the company to be the first to learn of failings and to address the issue internally.

The full version of the article is available in the May issue of Bilance.