The HinSchG (German Whistleblower Protection Act) provides a legal framework to protect whistleblowers and ensure that their reports are appropriately addressed. A crucial question in implementing the HinSchG concerns the suitable organizational form of internal reporting channels. The law’s explanation emphasizes that there are no rigid requirements as to which persons or organizational units are best suited for this task. Instead, it is emphasized that the choice of organizational form depends on various factors, such as the size of the company, the nature of the activities, and the organizational structure.
The following is a closer look at the various organizational forms that can be considered in implementing the HinSchG. In particular, it is necessary to maintain the requirements for independence, confidentiality, and expertise to ensure that internal reporting channels can operate effectively and responsibly.
Internal reporting channel within the organization: A company can set up an internal reporting channel that either functions within a standalone department or is integrated into an existing department, such as the compliance department, the legal department, or the human resources department. This reporting channel can be operated by employees who either have a dual function or have been specially selected for this task. However, it is important that the internal reporting channel acts independently and potential conflicts of interest are excluded.
External service providers as an internal reporting channel: It is also possible to commission external third parties, such as law firms, external consultants, auditors, union representatives, or employee representatives, to set up and operate an internal reporting channel. These external third parties should act independently and confidentially and meet the legal requirements. Such an outsourced internal reporting channel can receive reports, investigate them, and report to the commissioning company. However, the commissioning company remains responsible for correcting and pursuing any violations.
Group-internal reporting channel as a group privilege: In group structures, an independent and confidential reporting channel can also be set up at another group company. This reporting channel can operate for several legally independent group companies (for example, parent, sister, or subsidiary companies). However, the responsibility for remedying violations remains with the company commissioning the service. Close cooperation between the internal reporting channel and the commissioning company is particularly necessary when examining the reports and carrying out follow-up measures. If the group management needs to be informed in certain cases or should be informed, for example, because a violation affects not just the specific company, the confidentiality of the whistleblower’s identity must be maintained and/or be carried out on behalf of the respective company. Of course, with regard to the respective implementation differences in the individual countries for internationally active groups, the respective “whistleblower protection law” must be observed. Internal reporting paths must also be possible in the working language prevailing in the respective company.
Joint reporting channel: For smaller companies with a workforce between 49 and 249, the HinSchG provides an additional simplification when setting up internal reporting channels: they can operate a joint reporting channel. These simplifications allow smaller companies to join forces and operate a joint internal reporting channel. The goal is to save resources, find a cost-effective and low-effort solution, avoid economic overload, and ensure the protection of whistleblowers even in smaller companies.
Joint reporting channel also in municipalities: In addition, municipalities, which are obliged to set up internal reporting channels under their respective state law to protect whistleblowers, can jointly operate internal reporting channels. This means that municipalities and municipal associations have the option of joining forces and setting up a reporting channel that is used by several municipalities or municipal associations. However, it should be noted that the municipalities and municipal associations must be functionally and organizationally independent. This ensures that the cooperation is effective and the interests of the participating municipalities and municipal associations are adequately taken into account. By jointly using internal reporting channels, participating municipalities can pool resources, save costs, and create synergies. This is particularly advantageous for smaller municipalities, which may not have sufficient resources to set up and operate their own internal reporting channel. The specific design and implementation of these joint reporting channels for municipalities is regulated by the respective state law in order to meet the specific circumstances and needs on site. It is important to consider the legal requirements of the HinSchG, particularly with regard to the independence, confidentiality, and effectiveness of the reporting channels.
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Status: June 2, 2023