Establish and train operators of confidential whistleblower hotline (EE0057)

What is the public problem that the commitment will address? Submitting tips or reporting misconduct is still a legally unregulated field in Estonia, and is more of a taboo rather than an accepted activity in society. By the end of 2021, Estonia should transpose an EU directive on the same subject, which sets fairly high standards for domestic legislation. For example, all public authorities with more than 50 employees must set up reporting mechanisms, including confidentiality ensuring reporting channels. However, the confidentiality of electronic channels is not always guaranteed, which is why very serious consideration needs to be given to how to create hotlines in public institutions so that they are effective and comply with legal requirements.

What is the commitment? Analysis of possible cost-effective channels or systems that meet confidentiality and security requirements and could be used by both the public and private sectors. Development of a technological solution.

How will the commitment contribute to solving the public problem? The establishment of confidential hotlines and the training of those responsible will facilitate the proper reception and processing of notifications in both the public and private sectors. Well-functioning reporting channels, in turn, help to improve the reputation of submitting reports and to detect misconduct earlier.

Why is this commitment relevant to OGP values? Transparency Public accountability

Additional information The activity supports the reaching of the strategic goal of ‘Estonia 2035’, in which ‘Estonia is an innovative, reliable and people-centred country’. The activity is also associated with the activities of the ‘Anti-Corruption Strategy 2013–2020’ and its follow-up document (under preparation). 21

Milestone Activity Result Start date End date Analysing possible e-solutions for the tip channel Technological solutions have been identified that will benefit both the public and private sectors in creating confidential and secure reporting channels. 08.2020 06.2021 Adding a module on tips to corruption training Training material are ready. 01.2021 06.2021 Creating technological solutions The process of creating solutions is underway. 06.2021 06.2022 Creating guidance material to assist authorities and responsible persons Auxiliary materials have been created for technological solutions. 06.2021 06.2022

Action Plan Review

Commitment 3.2: Support the implementation of whistleblower protection regulations

• Verifiable: Yes

• Does it have an open government lens? Yes

• Potential for results: Substantial

• This commitment has been un-clustered from Commitment 3 (Increase the transparency of policy-making)

Commitment #3.2: Supporting the implementation of whistleblower protection regulations (Ministry of Justice)

CSO collaborators: Transparency International Estonia

For a complete description of the commitment, see sub-commitment 3.2 in the action plan: https://www.opengovpartnership.org/documents/estonia-action-plan-2020-2022/

Context and objectives

With the exception of the first action plan, Estonia’s OGP action plans have not included many commitments related to fighting corruption. This has been due to a deliberate decision to address these issues in the framework of a separate anti-corruption strategy that guided the national anti-corruption policy from 2013 to 2020. This action plan contains two commitments related to public accountability and anti-corruption. One involves developing a digital tool that whistleblowers can use to report breaches of law, fraud, corruption, and other types of wrongdoing securely and confidentially.

Transparency International (TI) Estonia proposed this commitment to address its long-term concern about the lack of mechanisms for whistleblower protection in Estonia and to support the ongoing process of transposing the European Union’s (EU) new directive on whistleblower protection into the national legislation. [24] The EU directive foresees measures for protecting individuals who report on breaches of EU law in areas such as public procurement, anti-money laundering, tax fraud, product safety, environmental protection, public health, and so on, while encouraging EU member states to extend the same regulation to issues beyond EU law. [25] It also obliges public authorities and private companies with more than 50 employees to establish secure internal reporting channels that guarantee the confidentiality of whistleblowers. In addition, organizations are obliged to set up internal procedures for processing whistleblower reports, inform whistleblowers of receiving their report within seven days, provide feedback to them within three months, diligently follow up on the reports, and designate an impartial person or department to handle the reports. [26]

Estonia plans to transpose the directive by the end of 2021 as part of the new national anti-corruption action plan for 2021–2025. [27] The Ministry of Justice has proposed adopting a new horizontal law that would be broader in scope than the EU directive and regulate whistleblowing in any area, not limited to EU law. This commitment forms part of the government’s work on setting up a national system for whistleblower protection in line with the directive. Since the Ministry of Justice is drafting the new regulation outside the framework of the OGP action plan, the ministry designed this commitment to support the enforcement of the regulation by developing a digital tool for whistleblower reporting that any organization could adopt for free. As part of the commitment, the ministry will analyze the technological alternatives, deliver the tool, produce training material on whistleblowing for public officials, and prepare guidelines to assist the implementation of the reporting tool in organizations. Providing such a reporting tool centrally goes beyond the obligations the EU directive imposes. Through this commitment, the Ministry of Justice aims to reduce the costs that public sector organizations and private companies would incur when developing secure reporting channels of their own. [28] This addresses a major need for businesses, which have expressed concerns about their ability to carry the costs of complying with the new regulation. [29]

Several recent whistleblowing cases reported in the media have revealed the need to ensure that safe channels exist for reporting unlawful and corrupt behavior and that whistleblowers’ reports are effectively dealt with. In some cases, whistleblowers have experienced harassment and retaliation by their employers. For example, the name of Howard Wilkinson, whistleblower on money laundering at the Danske Bank, was leaked to the media without his consent. [30] Illar Lemetti, a former secretary-general of the Ministry of Rural Affairs, was fired from his job after reporting concerns of the minister’s possible conflict of interest to the prosecutor’s office. [31] Keegan McBride, who raised suspicion of misuse of EU research funding at the Tallinn University of Technology, reported harassment by the university’s management. [32]

Estonia has so far lacked specific legislation governing whistleblower protection, which has been a barrier to early detection of problems such as administrative misconduct. Many cases of wrongdoing both in the public and private sector have likely gone unreported due to lack of awareness, regulations, or reporting mechanisms. For example, a 2016 survey found that 51 percent of citizens and 28 percent of entrepreneurs who had experienced corruption did not report this, whereas only 1 percent turned to law enforcement. [33] The Police and Border Guard Board hosts a hotline for reporting corruption cases and reports a slow increase in the number of allegations received over the years, despite considerable annual fluctuations. [34] Although this may show citizens’ gradually increasing willingness to report wrongdoing, the scope of the hotline is only limited to cases of corruption. This commitment will provide means for individuals to report corruption as well as other types of wrongdoing. It also provides guidance to public and private organizations on implementing a secure and confidential reporting system. Because the implementation of the reporting tool will be supported by a new regulation that establishes requirements for proper follow-up on information received from whistleblowers, this commitment contributes to advancing the OGP value of public accountability, albeit in combination with steps taken outside the scope of the OGP action plan.

Potential for results: Substantial

If implemented as planned, this commitment could encourage more whistleblowers to report wrongdoing in government as well as the private sector thanks to having better access to channels for securely submitting their allegations. Yet the commitment’s outcomes in this respect are difficult to measure because data about the number of whistleblowing cases in Estonia have not been collected so far. There is also no information on the number of public or private organizations that have already set up whistleblower reporting and protection systems. [35] Some prominent public enterprises (e.g., Riigi Kinnisvara, [36] Eesti Energia, [37] Tallinna Vesi [38]) and private companies (e.g., Circle K [39]) have established internal reporting processes. At the same time, the results of a small non-representative survey EY conducted in 2018 indicate that whistleblower protection systems and hotlines are not common practice among public and private organizations. [40]

As the new EU directive becomes national law, all medium and large organizations have a legal obligation to adopt secure hotlines for whistleblowing. However, the executive director of TI Estonia believes that unless a secure technological solution is made available, many organizations with fewer resources could end up creating reporting channels that do not fully protect the anonymity of whistleblowers. [41] According to the plans, the Ministry of Justice would fund the development of a secure digital tool for reporting misconduct and offer it to any organization for free. [42] Both TI Estonia [43] and the Chamber of Commerce and Industry [44] expect this commitment to reduce the administrative burden and costs of public and private organizations in complying with the requirements of the directive. Hence, as a result of the commitment, public resources would be saved by adopting a common tool instead of developing numerous separate solutions. In addition, both public and private organizations are likely to implement their whistleblowing systems faster and with less friction.

Indirectly and in the long term, this commitment could also contribute to citizens’ increased trust in government institutions by enabling early exposure and prevention of corruption. However, the effects would not be immediate, as the relationship between actual or perceived corruption and trust in public institutions is not linear. For instance, over the past five years, public trust in the national government has fluctuated from 37 percent in 2016 to 57 in 2017 and from 54 percent in 2018 to 43 in 2019. [45] Trust in local authorities has been more stable, ranging from a low of 53 percent in 2016 to a high of 63 percent in 2018. In 2020, both indicators were above the EU average, with 46 percent trusting the national government and 58 percent trusting local government. [46] At the same time, the actual number of registered corruption crimes has dropped from 550 in 2016 to 72 in 2019, [47] and Estonia’s score in Transparency International’s Corruption Perceptions index has steadily improved from 70 in 2016 to 75 in 2020. [48]

On its own, this commitment’s potential for results would be moderate. However, in conjunction with the anti-corruption strategy and the government’s activities in adopting the national regulation on whistleblower protection that do not fall within the scope of the OGP action plan, this commitment could contribute to a highly institutionalized change in public accountability and corruption prevention. The law will provide the legal obligation to diligently process and respond to whistleblowers’ reports, and the government has taken a holistic approach to creating measures to enforce the law. Therefore, the reporting mechanism that emerges from this commitment could significantly change the practice of reporting wrongdoing in public administration and holding public officials to account. As the law also applies to the private sector, this commitment could help prevent fraud and corruption in society more broadly. The commitment is even more relevant in light of the COVID-19 pandemic, which has increased societies’ vulnerabilities to violations of law and rights in areas of public procurement, work safety, or delivery of health services. [49]

Opportunities, challenges, and recommendations during implementation

This commitment’s basis in a strong legal mandate, along with a strict deadline imposed by the EU, increases the commitment’s chances of being completed by the end of the action plan term. However, as the EU directive does not explicitly require governments to provide a common reporting solution for organizations subject to the law, certain risks that could limit completion remain, for example, a lack of resources. At the same time, even if the government succeeds in delivering the technological solution, its adoption by public (and private) organizations may be a challenge on its own. In addition to putting a secure reporting channel in place, the new regulation requires public and private sector organizations with more than 50 employees to devise effective procedures for investigating the information received through the channel and to provide full confidentiality and employment protection for whistleblowers. Such procedures are critical to ensuring this commitment’s actual impact on public accountability. However, setting up new work processes and ensuring organizational will to address the issues raised by whistleblowers is a much larger challenge than is setting up an electronic reporting channel.

When implementing the commitment, the IRM recommends that the Ministry of Justice give the following aspects priority to achieve better results:

• Devote resources to raising organizations’ awareness of the benefits of whistleblowing and mechanisms of whistleblower protection. The commitment foresees producing training materials and guidelines to assist the implementation of whistleblower protection systems. In addition to that, the IRM recommends allocating resources to raising public awareness of the role and rights of whistleblowers and encouraging individuals to report cases of unlawful or unethical behavior.

• Foster the enforcement of the whistleblower regulation and promote the use of the reporting solution among local municipalities. Corruption and conflict of interest are significant problems in Estonian municipalities, [50] which is related to local administrators’ low awareness of the issue. [51] Because the majority of Estonian local governments have fewer than 50 employees and fewer than 10,000 inhabitants, the EU directive gives the government the right to exempt such local municipalities from the obligation to establish procedures for internal reporting and follow-up. [52] The IRM recommends that the government not grant this exemption. In case the exemption is nevertheless granted, the government could actively promote the local municipalities to voluntary adopt such channels and procedures.

• Regularly monitor and assess the results. The anti-corruption strategy 2021–2025 envisages conducting an assessment of the actual implementation of the whistleblower regulation once it is adopted. The planned regulatory changes provide an opportunity to launch a mechanism for regular monitoring of whistleblowing in the public and private sector. The IRM supports the TI Estonia experts’ recommendations that the government should start collecting data about whistleblowing cases at least in the public sector and use the assessment results as a basis for adopting additional measures to support the enforcement of the regulation in different sectors and levels of government. ^[53]

• Publish data on whistleblower cases. In the coming years, the Ministry of Justice plans to centrally collect data on whistleblowing cases in accordance with the EU directive (which sets a reporting obligation to member states) and to assess the implementation of the new law currently being developed. [54] The IRM recommends making these data publicly available, to the extent that privacy requirements permit.

Results Report

Commitment 3.2. Support the implementation of whistleblower protection regulations

● Verifiable: Yes

● Does it have an open government lens? Yes

● This commitment has been un-clustered from Commitment 3 (Increase the transparency of policy-making)

● Potential for results: Substantial

● Completion: Limited

● Did it open government? No early results to report yet

This commitment aimed to develop a free and secure digital tool for whistleblower reporting as part of the transposition of the EU Whistleblower Directive. The Parliament was expected to adopt the whistleblower protection law during the action plan term. However, parliamentary proceedings came to a standstill after the first reading of the bill in January 2022 due to irresolvable political disagreements both on the desired scope of the regulation and whether it is needed at all. [84] Since this commitment’s activities depended on the adoption of the regulation, the Ministry of Justice could not implement them in the planned timeframe. The ministry undertook a few preparatory steps, such as publishing guidelines on whistleblower protection mechanisms on its website [85] and preparing an initial vision of the reporting tool. The European Commission has begun infringement proceedings for Estonia’s failure to transpose the EU directive on time. [86]