Jesse Van Genugten: Whistleblowing in the Netherlands may drive you crazy

The Netherlands, a country well respected in many regards for its commitment to organized labor and workers’ rights, fails even to marginally protect a different class of vulnerable employee: the whistleblower.

In one of his seminal studies, Professor Peter van der Velden found whistleblowers in the Netherlands exhibited significantly higher incidents of mental health problems, including depression and anxiety, than their fellow countrymen. Eighty-five percent of the whistleblowers in the study demonstrated severe to very severe mental health problems, and nearly half of them reached clinical levels — a sign that legal intervention is warranted.

Scholars and practitioners familiar with the FCPA likely know of the significant role whistleblowers play in the U.S. anti-corruption framework. Whistleblowers can provide invaluable information aiding the discovery of corporate bribery, a stance well-supported by the U.S. Securities and Exchange Commission’s Office of the Whistleblower and its whistleblower compensation program.

The legal protections afforded whistleblowers in the United States include a requirement to, in cases where whistleblower tips lead to a successful enforcement action, pay the individual a reward of between 10 percent and 30 percent of the sanctioned amount. Although most successful FCPA corporate sanctions driven by whistleblower information are confidential, largely for the protection of those individuals, the SEC reportedly paid a BHP Billiton insider $3.75 million for a tip that led to a $25 million penalty.

That is to say, incentives drive active prosecution. But the incentive structure cannot operate without adequate protections for those whistleblowers risking their careers and wellbeing for corporate transparency.

Across the Atlantic, the Dutch legal system prohibits public sector employers from discriminating against those who report misconduct in the police, the defense sector, and local and central governments to the competent authority. It further requires public sector employers to protect the whistleblower from harassment and intimidation from his or her colleagues.

However, the protections afforded public employees do not extend to the private sector. Most of the country’s employees, then, are exposed to retaliation, harassment, and given little choice but to resign their positions lest suffer grave mental health concerns.

Professor van der Velden traces the mental health problem to an increase in stress in a volatile work environment and the ever-present danger of reprisals, factors that can well be curbed with active enforcement of a whistleblower protection law.

To its credit, the Dutch government has set up an anonymous channel for potential whistleblowers to receive much-needed advice and to connect the employees with the appropriate authorities, but after that, employees are left to fend for themselves.

Particularly in a country that has refrained from actively pursuing corporate entities for breaching their anti-corruption responsibilities, strong whistleblower protections in the Netherlands can promote more transparent business practices and foster a cooperative environment in light of obligations assumed under the OECD anti-bribery convention. Only then can the Netherlands serve as a paradigmatic champion of workers’ rights.

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Jesse Van Genugten, pictured above, is a 3L at Georgetown University Law Center
. He was a 2018 Summer Associate at Shearman & Sterling LLP in the firm’s New York City office.  He can be contacted here.

The views expressed above are those of the author only, and not of Shearman & Sterling LLP.