The German Chemical Industry Association, a partner of the prominent anti-corruption public interest group Transparency International, has lobbied European Union officials in opposition to strengthening whistleblower rights in the EU.
Berlin-based Transparency International (TI) has been advocating for improved whistleblower protections throughout Europe for the past decade.
Yet it entered a formal partnership this year with the German Chemical Industry Association (VCI), which has lobbied against this.
This past June 7, six weeks after the European Commission proposed an EU-wide whistleblower protection law, a VCI lobbyist met with a Commission official in Brussels.
Both the lobbyist and the official confirmed to Mark Worth of the European Center for Whistleblower Rights that VCI raised questions about the legislation.
“They expressed the usual kinds of business concerns about finding the right balance in terms of proportionality. They had an issue about over-burdening the regulatory environment,” said Renate Nikolay, the top staffer for European Justice Commissioner Věra Jourová. “There is concern in the business environment: ‘Is the law really necessary?’ ”
Specifically, Nikolay told the European Center that the VCI lobbyist was worried about the right of employees to disclose inside information to the public.
The proposed EU law would give workers more freedom to tell the public or the media about corruption and public health dangers.
This is seen as critical to ensure that hidden crimes and dangers can be exposed, investigated and remedied.
The Commission specifically cited Panama Papers, LuxLeaks, the Volkswagen emissions scandal and other cases as a rationale for developing a law with comprehensive protections.
VCI lobbyist Tobias Brouwer told Nikolay that the proposed whistleblower law, known as a Directive, leans too far in favor of employees.
“In particular, we believe that the scope of the Directive is too broad and the potential for misuse (is) great,” said Attila Gerhäuser, head of VCI’s Brussels office.
Gerhäuser said VCI also is concerned the Directive would protect employees who report not only criminal violations, but also company activities that are illegitimate but not necessarily illegal.
“This will lead to problems of legal uncertainty,” he said.
Despite VCI’s opposition and “pushback from businesses and certain political parties,” Nikolay said “this proposal will not go away. After so many scandals and revelations, we need transparency. Whistleblowers take a big risk for society.”
Two months before VCI’s lobby visit in Brussels, TI’s German affiliate announced it had entered a formal partnership with VCI (Verband der Chemischen Industrie) to push for pro-industry reforms to Germany’s lobbying rules. TI-Germany said it “will be supported. . .by an unusual partner,” and that “with VCI it has achieved an association of stakeholders on behalf of VCI’s concerns.”
In an interview with the German newspaper Südwest Presse in May, TI-Germany Chair Edda Müller was asked, “The German Chemical Industry Association supports you. Why is that?” Müller responded, “In this case, VCI approached us.”
A TI-Germany spokesperson told Corporate Crime Reporter earlier this month that TI does “not take any project related funding from companies, also not in this case.”
Since 2009 TI received at least $950,000 in grant funding from the European Commission to research and campaign for stronger whistleblower laws in Europe.
TI-Germany has a whistleblower working group that calls for stronger whistleblower systems – including for all private companies.
Yet, TI-Germany entered a partnership with VCI, which has criticized the EU’s proposed whistleblower law.
VCI President Kurt Bock, the recently retired CEO of German chemical multinational BASF, spoke about his new partnership with TI at a VCI membership meeting in Ludwigshafen on September 27.
“Unusual alliances open up new opportunities – and also so many doors,” Bock said.
But Mark Worth of the European Center for Whistleblower Rights said that the door to the European Commission was already open for VCI to lobby against the whistleblower law – it is unclear why an industry group with VCI’s size and influence would need assistance with its lobbying.
“Transparency International has abandoned its long-held mission to defend and protect the public interest by allowing itself to be corrupted by some of the largest corporate interests in Germany – from the chemical industry, at that,” Worth told Corporate Crime Reporter last week. “This really defies explanation. Whatever spin TI puts on the situation, it can’t overcome the perverse symbolism of TI working hand-in-hand with the likes of Monsanto, Bayer and BASF. Is this TI’s new constituency – chemical multinationals? What happened to the people? What happened to the victims of corruption? Does TI still care about them?”
VCI represents than 90 percent of Germany’s chemical industry, which has 1,700 companies and annual sales of $223 billion.
Worth reported that VCI spent between $4.87 million and $5.15 million on lobbying the European Parliament and European Commission in 2017, according to the EU’s Transparency Register. Ten people affiliated with VCI have been granted access to Parliament premises.
VCI’s vice presidents are prominent players in the chemical industry. They include Werner Baumann, chair of Bayer, which merged with Monsanto in June 2018, Martin Brudermüller, chair of BASF, the world’s largest chemical producer, and Christian Kullmann, chair of Evonik Industries, the world’s largest specialty chemicals producer, which is owned by Germany’s largest coal company RAG.
And VCI is not the only corporate interest that TI has partnered with in recent years.
Worth said that TI’s Berlin headquarters in Berlin accepted $1.37 million from corporate interests in 2016 and $1.15 million in 2017 – about 5 percent of its restricted and unrestricted income, annual reports show. This proportion has nearly doubled since 2007, when 2.8 percent of its income came from the private sector.
Worth said that recent corporate donations include $400,000 from Big Four accounting firm Ernst & Young in 2017, $192,000 from engineering multinational Siemens in 2017, $41,000 from the Italian natural gas company SNAM in 2017, $16,000 from the Norwegian aluminum multinational Norsk Hydro in 2016-17, and $8,000 from the Finnish pulp and paper manufacturer Stora Enso Oyj in 2017.