Background
In Spain, the transposition of European Directive 2019/1937 on the protection of persons who report breaches of Union law ("Whistleblowing Directive") was implemented through Law 2/2023 of 20 February 2023 ("Law 2/2023").
Although Law 2/2023 provided for the establishment of an independent authority to oversee whistleblower protections, such an authority had not been created by the time the law was enacted. As a result, whistleblowers were left to report infringements solely through internal channels that companies were required to implement.
The absence of an independent external authority was thought to undermine confidence in the reporting system, particularly in Spain, where a whistleblowing culture is not yet fully embedded in society. It should be noted that, prior to the law's enactment, whistleblower protections under Spanish law were fragmented and lacked effective enforcement mechanisms, which discouraged many individuals from reporting due to fear of reprisals or accusations of disclosing confidential information.
Approval of the statute of the independent whistleblower protection authority
On 29 October 2024, the Spanish Government approved the Estatuto de la Autoridad Independente de Protección del Informante ("Statute"), establishing the Spanish administrative body responsible for ensuring compliance with the provisions of Law 2/2023.
The IWPA's primary mission is to ensure the protection of individuals who report regulatory infringements and to serve as a key institutional pillar in the fight against corruption.
Independence and autonomy
The Statute provides that IWPA shall operate with full organisational and functional autonomy, independent from the government, public sector entities, public authorities, or any other public or private organisation. This means the IWPA cannot seek or accept instructions from public authorities or external entities. Without prejudice to its independence and autonomy, for organisational and budgetary purposes, it will be linked to the Ministry of the Presidency, Justice, and Parliamentary Relations.
IWPA's scope and functions
The functions of the IWPA include (among others):
- processing information and communications received through the external reporting channel from whistleblowers regulated by Law 2/2023;
- when necessary, taking measures to protect and support whistleblowers; and
- initiating, investigating, and resolving sanctioning proceedings under Law 2/2023.
Since the approval of Law 2/2023, there has been political debate regarding the scope of powers that the IWPA should hold. Some have argued that, if the authority were granted investigatory powers, it could function similarly to a secondary prosecution office. On the other hand, critics contended that without such powers, the authority would have to refer cases to other bodies, potentially diminishing its impact and effectiveness.
The passing of the Statute has resolved this debate. It explicitly states that the IWPA is not entitled to perform the functions of the Public Prosecutor’s Office, the courts, or the judicial police, and it cannot investigate matters already under investigation by those bodies. Therefore, once the IWPA becomes aware that a court or the Public Prosecutor’s Office has initiated proceedings concerning the same facts, it must suspend its own proceedings and provide necessary information and support to these authorities.
As a result, the Statute establishes two main points: first, that the Public Prosecutor’s Office takes precedence over the IWPA in investigations, and second, that the IWPA will only have investigative and sanctioning powers concerning offences regulated under Law 2/2023.
This clear delimitation of functions appears to be a positive aspect of the Statute, as it ensures that the IWPA can focus its efforts and resources specifically on protecting whistleblowers. However, for firms that face a whistle blow in Spain, it does mean that in time they may need to deal with two agencies (over different issues but having complementary powers), rather than one.
What can those doing business in Spain expect?
The implementation of the IWPA marks a significant step forward in Spain’s fight against white-collar crime. By safeguarding whistleblowers and strengthening anti-corruption frameworks, it not only aligns Spain with EU standards but also reinforces Spain's commitment to combating white-collar crime in an increasingly complex global landscape.
In this sense, the IWPA is expected to have a transformative impact on combating white-collar crime in Spain:
- Increased Reporting: The new framework reduces barriers to reporting misconduct, likely leading to an increase in whistleblower disclosures.
- Enhanced Corporate and Social Accountability: The establishment of an external body will help strengthen the whistleblowing culture in Spain by protecting individuals who report infringements.
- Judicial Collaboration: By working closely with prosecutors and other authorities, the IWPA could accelerate the investigation and prosecution of white-collar crimes.
