Impact of Loi Sapin II on Swiss business practices

March 28, 2024

This publication is authored by and reflected the views and opinion of PT Integrity Indonesia. More information about PT Integrity Indonesia is available on www.integrity-indonesia.com.

In 2016, France enacted Loi Sapin II, positioning itself as one of the early adopters of whistleblowing legislation within the European Union. The primary focus of this law is to combat corruption and bribery within French companies.

Sapin II has left a significant and enduring impact on French anti-corruption law. It introduced a stricter regulatory framework and fostered a more responsible business environment. This advancement is noteworthy, especially considering that prior to Loi Sapin II, France faced criticism for lagging behind other EU countries in addressing these issues.

One of the key provisions of the law mandates the establishment of an internal reporting mechanism within organizations. This mechanism, often referred to as the whistleblowing system, aims to facilitate the easy and safe disclosure of potential misconduct or breaches of the code of conduct by employees.

Similar to anti-corruption laws in other jurisdictions, such as the UK Bribery Act and the US Foreign Corrupt Practices Act, Loi Sapin II has extraterritorial reach. This implies that organizations meeting its criteria are subject to its provisions irrespective of their geographical location, with Swiss businesses not being exempted.

Navigating Loi Sapin II on whistleblowing practices

The Loi Sapin II mandates the establishment of a whistleblowing hotline for organizations meeting specific criteria, including:

Corporations with a workforce of at least 50 individuals and municipalities boasting 10,000 or more residents.
Corporations with gross revenue exceeding EUR 100 million
Foreign subsidiaries of French groups. Companies affiliated with a group whose parent organization's headquarters are situated in France and have a global workforce of at least 500 employees

Swiss businesses, irrespective of their geographical location, are subject to anti-corruption regulations if they meet any of the aforementioned criteria. For instance, a Swiss engineering firm operating as a subsidiary of a French construction company must implement an anti-corruption program, which includes a whistleblowing system, covering its international operations.

To enhance the protection of whistleblowers, the "Waserman Law" was enacted the following year. This legislation aligns the nation's legal framework more closely with the upcoming EU Whistleblower Protection Directive, thereby strengthening safeguards for whistleblowers.

While upholding key elements of Loi Sapin II, this law incorporates additional measures, including strengthening safeguards against retaliation, expanding the definition of whistleblowers, and providing them with career-long support.

Streamlining Compliance with Phoenix Whistleblowing Software

Enforcing anti-corruption laws can pose significant challenges for foreign companies, particularly when establishing robust whistleblowing systems. Substantial investment is required for developing these systems, encompassing initial setup expenses, ongoing expenditures for system maintenance, staff training, and regular evaluations. This array of costs makes adjusting investment levels challenging.

Another hurdle is ensuring the protection of whistleblowers from potential reprisals while maintaining confidentiality during investigations. With laws emphasizing whistleblower protection and compliance with GDPR, companies must employ secure platforms capable of handling sensitive information. Failure to do so can lead to severe consequences, including damage to reputation and financial penalties.

Furthermore, language barriers further complicate matters. Effectively managing cross-border operations necessitates efficient communication systems capable of accommodating various languages. This underscores the importance of having user interfaces accessible in multiple languages to facilitate a smooth whistleblowing process. Unfortunately, integrating extensive language support into existing frameworks demands significant time and resources.

Addressing these challenges head-on, Phoenix Whistleblowing, a secure Software as a Service (SaaS), offers customizable and multilingual platforms with support for over 50 languages. With Swiss-grade security measures in place, Phoenix Whistleblowing caters to a diverse array of stakeholders, whether you're a small entity, a multinational corporation, or a consultant working on behalf of clients.

This publication is authored by and reflected the views and opinion of PT Integrity Indonesia. More information about PT Integrity Indonesia is available on www.integrity-indonesia.com.