AmCham, CPDP, Penkov, Markov & Partners, and Transparency International Bulgaria Discussed Bulgaria’s Whistleblowing Act Implementation

On November 30th, 2023, AmCham Bulgaria in partnership with Penkov, Markov, and Partners, and in cooperation with the Commission for Personal Data Protection (CPDP) and with Transparency International Bulgaria (TIB) organized “Bulgaria’s Whistleblowing Act – Needed Steps Towards Good Governance”. The event was hosted at Penkov, Markov & Partners Office. The event as attended by the representatives of CDPD: Ventsislav Karadzhov, Chairman, Atanaska Georgieva, Director, Whistleblowing Signals Channel Directorate, Lyubomir Grancharov, State Expert, Legal and International Affairs Directorate, of Penkov, Markov & Partners Team: Vladimir Penkov, Chairman and and Senior Partner, Asen Apostolov, Associated Partner, Nikolay Voynov, Associated Partner, and Anna Krusteva, Attorney-at-law, as well as by Kalin Slavov, Executive Director, TIB, and Ivan Mihaylov, CEO, AmCham Bulgaria.

In his opening remarks, Ivan Mihaylov pointed out the unique blend for some strategic cooperation between the four organizations that made the event possible: a business association, a regulator, a reputable law firm, and a prominent NGO with a global impact. In particular to the Whistleblowing Act, the Chamber and Transparency International Bulgaria engaged in the process of transposition of the European Directive for Whistleblowing back in 2021, as well as the chamber-to-member partnership built over the years with “Penkov, Markov and Partners”.

“Back in 2021, AmCham Bulgaria was kindly invited by Transparency International Bulgaria to take part in the transposing of the European Whistleblowing Directive. We were glad that several experts from the members volunteered, and some of them were part of the PMP team,” he said before the audience. “This true evidence of partnership among friends. And today we are expecting an open and in-depth discussion with the Chairman of the Commission for Personal Data Protection, and some of the top experts of CPDP, because the whistleblowing topic is very important for the business, for the whistleblowers, to the society. It gives additional leverage to the businesses if they need to grow and show before their potential investors that they comply with the ESG at a larger scale.”

“Whistleblowing empowers people to report ill-behaviour and ill-practices thus improving their organizations, saving public and corporate funds, and even saving lives,” he concluded.

Ivan Mihaylov, AmCham Bulgaria CEO

CPDP – The Regulator’s View on Bettering the Organizations

The rule of law, democracy, and the rule of legitimacy are the foundations of good governance. Nowadays, in order to have good governance, it is also required that the activities of the public and private sectors are directed towards achieving and ensuring the protection of whistleblowers.

The protection of these individuals is highlighted as a top priority not only by Bulgarian but also by European law, as the infringements they report affect the public interest not only in the public but also in the private sector.

Over the years, international practice has established the finding that citizens’ trust in public authority is built and preserved in a state governed by the rule of law in two stages. First, the administration must establish clear rules on how it receives and handles whistleblowing. Then it must ensure that the established legal and ethical norms of conduct are respected.

Thus, compliance with applicable regulations (legal, regulatory, and internal), objective control, and transparency in the work must be closely linked to whistleblower protection activities.

Bulgarian law designates the Personal Data Protection Commission as the Central Authority for external whistleblowing.

The mission and vision of the Personal Data Protection Commission will significantly support the organizing of whistleblower protection activities because a strong premise for this has already been established over time – by demonstrating and promoting that a public environment is evolving in which the privacy and personal space of citizens is guaranteed through a system of prevention, accountability and control measures against the unlawful processing of personal data.

Personal Data Protection Commission does not act in a repressive manner, but reports on all pages of interest.

The Commission implements existing international, European, and national legislation by creating a public environment in which the interests of individuals are protected, while at the same time objectively taking into account the interests of employers as personal data controllers.

This practice will also be applied to the Whistleblowing Act – taking into account the interests of both whistleblowers and interested parties (those whistleblowing against).

The Word of the Legal Professionals

During his opening remarks, Vladimir Penkov, Chairman and Senior Partner at Penkov, Markov & Partners, pointed out:

“Probably due to experience, I understand very well the historical burden associated with the topic we have in Bulgaria. Also, the existing in some cases resistance of the business related to the implementation of the new legal regime, as well as why anonymous reports shall not be reviewed under the local Whistleblowing Act”.

Vladimir Penkov, Chairman and Senior Partner at Penkov, Markov & Partners

He did put some emphasis on the aspects regarding the effectiveness of the new reporting system and the manners for ensuring its transparency and integrity – “without fear on the side of the whistleblowers and without concerns for defamation”.

Aiming to provide a strong background for a fruitful discussion, Ana Krusteva, Attorney-at-law at Penkov, Markov & Partners, presented the key points of the local Whistleblowing Act. The presentation outlined the scope of persons who may report breaches and who may enjoy protection, the material scope of the law in view of the national specifics, the obliged business entities, as well as the three-tier whistleblowing system, including internal and external reporting and public disclosure of information on breaches.

Kalin Slavov, Executive Director, TIB, underlined the undeniable correlation between the ESG concept and the whistleblowing directive as a part of the word Governance in one of the most important business abbreviations currently. His presentation focused on the correlation of corporate values with the employees’ opportunities for whistleblowing at the companies. Directives are important, however, an organizational culture, encouraging people to speak up for the problems they see before moving on to whistleblowing, is crucial for the prevention of much larger whistleblowing cases.

Whistleblowing’s directive implementation in Bulgaria is a value transformation. It is an evolution of the organizational culture of Bulgarian businesses, that shares the values of trust, transparency, and accountability. This implies an environment in which speaking up about irregularities and potential challenges is not seen as negative for the person raising the issue but rather an opportunity for timely resolution and improvement of processes. It is the role of “internal reporting channels,” as referred to in the Law.

Kalin Slavov, Executive Director, Transparency International Bulgaria

Summary of the Open Discussion

The panel discussion that followed was moderated by Nikolay Voynov, Associated Partner at Penkov, Markov & Partners. During the session (including direct Q&A with the audience) the panelists shed light on various aspects of the new legal regime, including challenges which the CPDP is facing being the central national authority in the Whistleblowing field, anonymous reporting, signals not falling within the scope of the law, procedural conundrums, etc.

As part of the discussion, Asen Apostolov, Associated Partner at Penkov, Markov & Partners and Head of the Whistleblowing practice of the law firm, shared his views on the topic from the perspective of the business entities obliged under the Whistleblowing Act – challenges arising in relation to the appointment of company whistleblowing officers, establishment of internal reporting channels, group policies for companies operating in more than one Member State.

“Minding the country specifics in Bulgaria related to the manner of transposition of the EU Whistleblowing Directive, the local business should be very attentive when structuring its internal reporting channels, especially in cases where global Whistleblowing group policies are being implemented”.

Asen Apostolov, Associated Partner, Penkov, Markov & Partners

Nikolay Voynov closed the discussions with remarks concerning the place of Whistleblowing compliance in the broader context of ESG regulations and the upcoming new standards that the business should comply with.

“The protection of whistleblowers is one of the sub-topics regarding the sustainability, covered by ESRS G1 Business Conduct related to the upcoming compulsory ESG reporting in the EU under the CSRD. This put the Whistleblowing compliance in much wider perspective as one of the indicators that will be scrutinized in the process of determining ESG compliance which will be decisive for the long-term competitiveness of the respective business organization and the sustainability of its supply chain.”.

Nikolay Voynov, Associated Partner, Penkov, Markov & Partners

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