The deadline for companies to establish and activate a “Whistleblowing/Reporting Channel” expired on December 1st, 2023, in accordance with Law 2/2023, of February 20th, 2023, which protects individuals who report regulatory breaches in their fight against corruption.
What is a Whistleblowing Channel?
A Whistleblowing Channel is a tool that falls within the Compliance scope, and companies are now required to implement it as a strict legal obligation, aligning with their commitment to fostering and promoting a genuine corporate ethical culture, rather than merely out of fear of being sanctioned.
The premise is for the actions of organization members to align with the principles and values advocated by the company, encouraging others to do the same and to “report” any behaviour contrary to the organization’s principles, values, or legal requirements.
Hence, Law 2/2023, transposing (EU) Directive 2019/1937, of October 23rd, 2019, on the protection of persons who report breaches of Union law, aims to promote effective, confidential, and secure Whistleblowing Channels in companies to ensure the effective protection of whistleblowers against reprisals.
This "Whistleblowing directive", further emphasises the need to establish these reporting channels to detect possible violations or irregularities early on and take suitable measures to mitigate such risks, alongside implementing policies that consolidate a corporate ethical tone of non-recurrence. Its impact in Spain has also influenced the “criminal liability of the legal person”, and the detection of criminal offences, making people more aware and contributing to investigation processes.
What is the purpose of a Whistleblowing Channel?
In this context, a Whistleblowing Channel is a communication tool implemented within an organisation, through which individuals within it, as well as external third parties linked to it, can report suspicions of a breach or the risk thereof to the company, or provide information regarding suspicions of irregularities or actual irregularities that contravene the company's standards.
What are the specificities of a Whistleblowing Channel?
Confidentiality, anonymity, and openness to third parties are the specificities of these channels.
The organisation is responsible for providing both employees and other members of the organisation, as well as third parties associated with the company, with all the relevant information regarding the channel and its functioning. Moreover, the personnel in charge of the Reporting Channel must receive appropriate training in this regard, enabling efficient and effective collaboration in the early detection of non-compliances and potential risks to the organisation.
What types of Whistleblowing Channels exist?
The Law establishes two types of channels:
- External Channels: implemented by the competent authorities.
- Internal Channels: implemented within private or public organizations. Effective management of these channels and the received reports is crucial. The ISO 37002 standard provides guidelines and recommendations regarding Whistleblowing Channels.
What phases are involved in the management of a Whistleblowing Channel?
Whistleblowing Channel management involves four phases:
- reception,
- evaluation (triage),
- treatment, and
- conclusion.
These four phases must be carried out with due diligence to ensure, throughout the management and investigation processes, the protection of the accused and the whistleblower, as well as their confidentiality. It is worth noting the judgment of the Supreme Court STS 328/2021, dated April 22nd, 2021, which convicted a businessman who, to investigate the dishonest behaviour of a worker causing harm to his company, accessed the latter's email. This underscores the importance of these channels and their subsequent management, so that suspicions are brought to light, and investigations are conducted with due caution, preserving all the rights of those under investigation.
What are the consequences of failing to implement a Whistleblowing Channel?
Failing to implement a Whistleblowing Channel in accordance with prevailing regulations could incur fines of up to one million euros, contingent upon the severity of the breach, whether it is deemed minor, serious, or very serious, and whether it is attributed to an individual or a corporate entity (legal person).
What can be reported through a Whistleblowing Channel?
In general terms, any relevant conduct that may be deemed contrary to the law and/or internal rules and procedures can be reported. This will vary depending on how each organization establishes its Whistleblowing Channel. For example, some may prefer to have a specific list of crimes and infractions (numerus clausus), while others may encourage the reporting of any suspicion or concern to the company.
What are the benefits of a Whistleblowing Channel?
It is crucial to recognise the benefits of having a Whistleblowing Channel beyond viewing it as a mere obligation, part of a "paper compliance" approach. This reflects the commitment of the highest levels of the organisation to compliance, risk management, and channel management.
Thus, some of its benefits are:
- creating a corporate ethical compliance and learning environment;
- transparency;
- ethical commitment of the company;
- avoiding fear of reprisals and facilitating the communication of violations and irregularities, building more trust; and
- prevention, as well as early detection and response to non-compliances and risks.
- Continuous improvement of risk management and compliance system.
- Attract and retain committed talent.
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