France: Whistleblowing in the spotlight
Whistleblowing is currently a key issue in French human resources management. More companies are introducing schemes to enable employees to report wrongdoing, often contained in corporate “codes of ethics”. In March 2007, a government-commissioned report proposed a framework for company procedures in this area. We look at the report’s main recommendations and at the example of the Bouygues construction and media group, which recently adopted a code of ethics that includes whistleblowing rules.
On this page:
Framework for whistleblowing schemes proposed
Bouygues code of ethics
Whistleblowing at Bouygues
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KEY POINTS
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On 6 March 2007, Paul-Henri Antonmattei, the dean of the law faculty at Montpellier university, and Philippe Vivien, the head of human resources at Areva, a France-based energy multinational, presented a report on the employment law aspects of company “codes of ethics” and staff whistleblowing procedures (Chartes d’éthique, alerte professionnelle et droit du travail français: état des lieux et perspectives) (PDF format, 1.34MB) (on Ministère de l'emploi, de la Cohesion Sociale et du Logement website). It was commissioned by the employment minister, Gérard Larcher, in December 2005, in the wake of the Enron scandal in the US. In that case, America’s seventh-largest company, employing 21,000 staff in more than 40 countries, had lied about its profits and was accused of concealing debts, eventually forcing the firm into bankruptcy in December 2001. At one of the largest corporate trials in America’s history, senior Enron managers were convicted of fraud and conspiracy in May 2006. The scandal was the driving force behind new legislation in the US that holds executives responsible for what happens at the companies for which they work.
The first part of the report looks at company “codes of ethics” or “ethics charters” – documents that lay down rules for corporate and employee behaviour in areas such as financial probity, respect for the law and preventing bribery and corruption. It states that such codes exist in significant numbers in France, particularly in larger companies – the example of Bouygues is examined below. However, based on their analysis, the authors of the report say there is little consistency in the content of such codes. And their legal standing is unclear. Accordingly, the report suggests that the legal position of codes of ethics should be clarified, as should the way in which they are implemented and controlled. While stressing that such documents remain subject to the rule of the law, the authors state that they see no need to draw up a set of specific rules and regulations relating to codes of ethics.
The second part of the report looks at company schemes relating to whistleblowing by employees, which can be contained within codes of ethics, as is the case at Bouygues.
Framework for whistleblowing schemes proposed
In December 2005, the National Commission for Data Protection and Liberties (Commission Nationale de l’Informatique et des Libertés, CNIL) introduced a system for authorising staff whistleblowing schemes that conform with the law on privacy and data protection. It provides that schemes should be restricted to the financial, accounting, banking and anti-bribery areas and lays down rules on the procedures to be followed. Since then, around 600 companies operating in France have introduced whistleblowing schemes that are in line with the CNIL rules.
Experts agree that whistleblowing schemes operate in a legal “grey area”. The French section of the global anti-corruption organisation Transparency International has suggested that a clause on whistleblowing schemes be inserted into the French Labour Code. In their report, Antonmattei and Vivien support this proposal, although without wishing to impose a single model or primary legislation.
The report proposes defining a whistleblowing (alerte professionnelle) procedure as a group of rules that enable either an employee or another person carrying out an activity at an enterprise to inform the head of the enterprise, or someone else designated for this purpose, about the following:
- acts that contravene legislative or regulatory measures, collective agreements or ethical/professional rules, which may have a grave detrimental effect on the functioning of the enterprise;
- activities that affect people’s rights or individual liberties, which may not be justified by the nature of the task to be accomplished nor proportionate to the purpose; and
- activities that harm the physical or mental health of employees.
- the types of activities that may trigger the procedure;
- the people who are able to use the procedure;
- the people to whom such activities should be reported;
- the means for acknowledging and dealing with the reported activities;
- the name or the role of the people who are responsible for acknowledging or dealing with any reported activities;
- the ways of informing any people implicated; and
- the anonymous and/or confidential character of the procedure. Although the authors believe that it is preferable for the whistleblower’s identity to be revealed, they also envisage certain situations where anonymity may be maintained.
If there is no collective agreement in place on the topic, the report suggests that the head of an enterprise may implement a whistleblowing scheme, after consultation with the works council or other employee representatives and informing the labour inspectorate. The report states that such a scheme should cover all the points listed above and that employees should be informed before its introduction.
The report stresses that no employees who “blow the whistle” in good faith should be punished, dismissed or suffer any discrimination – direct or indirect – especially as regards pay, training, reclassification or any career-related disadvantage, or regarding changes to, or renewal of, their contract. Any dismissal or other detriment suffered by the whistleblower should be null and void in law.
While the report emphasises that codes of ethics are important, it also notes that, ultimately, the law needs to remain the final arbiter. It stresses the key role played by consultation with regard to codes of ethics and the introduction of whistleblowing procedures and notes that, once in place, these need to be reviewed constantly.
Finally, the authors hope their study will open up a discussion on these issues, and say that legislative intervention is not an urgent priority.
The report is to be presented to the National Collective Bargaining Commission (Commission nationale de la négociation collective), so that the social partners can examine the issue and the possible need for reforms in this area, while it will also feed into consideration of the matter at the ministry of employment.
Bouygues code of ethics
As noted in the Antonmattei–Vivien report, numerous major French companies have introduced ethics charters, often including whistleblowing provisions, in the past few years. A notable recent example is a “group code of ethics” adopted in 2006 by Bouygues, a major France-based multinational. Bouygues’ business activities focus on: construction, through Bouygues Construction (building, civil works and electrical contracting), Bouygues Immobilier (property development) and Colas (roads); and telecoms/media, through TF1 and Bouygues Telecom. Operating in 80 countries, the Bouygues group employs more than 122,500 people worldwide. In 2006, its sales amounted to €26.4 billion, of which €7.8 billion were generated outside France.
The code of ethics (PDF format, 145K) (on Bouygues website) calls on each employee of the company to comply with a professional ethic, set out in the form of “principles that govern actions” that seek “to promote exemplary behaviour under all circumstances”. Implementation is the responsibility of a group ethics officer, directly appointed by the chair of the group’s board.
Comprising 18 principles, the code covers general topics, such as a need for all employees to: comply with the laws and regulations of the country in which they perform their business activity; respect each other; and acknowledge the “higher interests” of the group.
The principles exhort employees to avoid conflicts of interest – they may not accept outside work that could affect their performance or judgment in the performance of their duties in the group. The code stresses the need for transparency and reliability in group communications, in particular with regard to providing shareholders with reliable, quality information. All employees must protect the company’s assets.
One principle relates to ensuring financial probity: “The operations and transactions carried out by the group must be recorded in an accurate and fair manner in each company’s accounts.” Employees must exercise particular vigilance in the transfer of funds and must comply with the laws and regulations that govern financial activities, ensuring confidentiality of all non-public information that could affect share prices.
Other topics covered include sustainable development and respect for the environment. The code sets out the group’s commitment to sustainable development. It adheres to the UN Global Compact (a set of human rights, labour standards, environmental and anti-corruption principles for multinational companies) and pursues “innovative solutions” in these fields. It seeks to reach the best standards in the field of environmental protection. Each employee must maintain a safe working environment and make sure that they minimise the impacts of their activity on the environment.
The group undertakes to maintain political neutrality. It is committed to treating all clients and suppliers with honesty and equity. Regarding corruption, the code states that: “The negotiation and performance of contracts must not give rise to behaviour or actions that could constitute active or passive corruption.” The group adheres to the Organisation for Economic Cooperation and Development convention on combating bribery of 17 December 1997, prohibiting the corruption of all foreign public officials in all forms.
Whistleblowing at Bouygues
The final principle in the Bouygues code is dedicated to whistleblowing. It states that, when confronted with an ethical problem, employees must inform their line manager or the manager of the company in which they work. It is then the responsibility of the line manager and company officers to assist employees; if necessary, they should consult the company’s legal and/or human resources departments and outside advisers.
Employees reporting breaches of the rules laid down in the code of ethics are protected: “No action may be taken against an employee who in good faith reports a breach of the rules laid down in the code.” Further, employees may use the group whistleblowing facility, which is in accordance with the general authorisation issued by the CNIL in December 2005 (see above).
The group’s whistleblowing facility covers:
- Corruption. The employees who are likely to be whistleblowers are listed as corporate managers and employees from the procurement, projects, works, corporate services, IT, commercial and marketing departments.
- Accounting irregularities. In this context, the code states that the employees likely to be involved are corporate officers, managers and employees from the consolidation, accounting, cash management and finance departments.
- Stock market irregularities. In this area, according to the code, whistleblowing may involve corporate officers, managers and employees from the cash management and finance departments and, in general, all employees who may hold privileged information.
Use of the whistleblowing facility is optional. It should be used only in compliance with the applicable laws and regulations and in “the exceptional cases where the line management channel, the whistleblowing facilities offered by the law or the control systems within the group or the company concerned may not work”. The fact that an employee refrains from using the whistleblowing facility may not lead to any consequences for the employee concerned.
Whistleblowers must identify themselves, the code states. Their identity will be treated in the strictest confidence. Abuse of the whistleblowing facility will render the perpetrator liable to disciplinary action, as well as legal action. However, use of the facility in good faith, even if subsequently the facts are found to be inaccurate or are not proven, will not render the whistleblower liable to any disciplinary action.
The code also lays down rules on:
- The role of the group ethics officer, to whom data and information should be provided by whistleblowers.
- The content of whistleblowing. For example, “only facts, data and information put forward in an objective manner, that are directly connected to the areas that fall within the scope of whistleblowing (corruption, accounting and stock market irregularities) and that are strictly needed for verification operations, will be taken into account”.
- The rights of people targeted by whistleblowing. For instance, they will be informed of the data held concerning them as soon as the whistleblowing has been logged, and may access the data and request correction or deletion if the data is “incorrect, equivocal or out of date”. Targets will be informed of the allegations made against them and of the rules that govern the group whistleblowing procedure and the terms and conditions for exercising their access and amendment rights.
- The outcome of using the whistleblowing facility. After the case has been examined, the group ethics officer will inform the managers concerned. The latter will then carry out the appropriate investigations and decide on the consequences of any breaches recorded, such as disciplinary action or referrals to the administrative or judicial authorities.
- The storage period for the personal data concerned.
This article was written by Beatrice Harper, researcher/writer, European Employment Review.
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