Amsterdam/Brussels, 14/04/2016 (Agence Europe) - With the worlds of business and politics still reeling from the Panama Papers scandal, the members of the European Parliament on Thursday 14 April adopted,by a decisive majority (503 in favour, 131 against and 18 abstentions), the highly controversial report by Constance Le Grip (EPP, France) on the directive for the “protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure”, commonly known as the business secrecy directive.
The aim of the directive is to create a European framework in order to improve the protection, within Europe, of know-how, which includes all production and organisation procedures and techniques acquired by experience in order to produce a good or supply a service, which are currently very often the subject of unfair practices, particularly by third countries, most frequently China, due to the fact that the European laws are too fragmented (see EUROPE 11454). However, according to many members of the European Parliament, particularly the Greens/EFA, and NGOs, in its current form the directive could expose whistleblowers and journalists to legal proceedings if they reveal information which could be considered business secrets, such as the Panama Papers (see EUROPE 1153) or LuxLeaks (see EUROPE 11193).
“I am not opposed to a harmonisation of the European legislations”, Julia Reda (Greens/EFA, Germany), shadow rapporteur to Le Grip's report and head of the charge against the legislative draft, told EUROPE, “but the definition of article 2 is clearly in favour of businesses”. She argues that the directive will give businesses a certain amount of legal uncertainty, which will allow them to cry business secrets whenever their interests are at stake. The onus will then be on the journalists and whistleblowers to prove that they acted in favour of the public interest. The MEP proposed to postpone the vote on the day it took place, but this was rejected.
Her opinion, naturally enough, is not shared by the rapporteur. “I have fought on behalf of the EPP group to ensure that the guarantees for the work of journalists and the protection of whistleblowers brought into the text are real and unambiguous”, she said, stressing shortly before the vote that it was absolutely essential to adopt a European legal framework and to put an end to the “patchwork of different national legislative provisions” in order to “fight industrial and economic espionage; theft, of which our European businesses are the victims”. The report was supported by the vast majority of members of the S&D, ECR and ALDE, with the Greens and the GUE/NGL (other than the Czech shadow rapporteur Jirí Mastálka and the Czech delegation) mostly opposing it. The EFDD and ENL were at sixes and sevens over it, according to a source close to the dossier.
Within civil society, many NGOs spoke out against the draft directive, amongst them Corporate Europe (see EUROPE 11526) and the European Association for the Defence of Human Rights (known by its French acronym, AEDH), which recently launched a call to the citizens to speak to their MEPs about the issue. Online, three petitions against the vote were circulated, collecting more than 800,000 signatures, the change.org petition alone garnering 530,000 of them.
Businesses, on the other hand, seem happy. “We are pleased with the text adopted at the European Parliament today”, said Ilias Konteas, an adviser with BusinessEurope. He said that the directive will help to avoid fraudulent appropriations by third countries. He went on to say that the legislative act would also be beneficial in the framework of the negotiations for the transatlantic trade and investment partnership (TTIP), as the EU will have adopted a common legal basis. This point is particularly relevant as the issue of business secrecy is also being debated on the other side of the Atlantic at the moment.
“The text is satisfactory, although we have a number of regrets”, Charles Laroche, public affairs adviser at the international association Fragrance, who has been following the dossier closely since the European Commission published its communication in November 2013, told EUROPE. The statute of limitations, in other words the period of time during which a company may take legal action, has been left to the discretion of the member states, with a minimum period of six years, in line with the position adopted by the Council. Finally, there is no definition of the starting date to calculate the start of period when the plaintiff became aware of the wrongdoing. Another issue is that access to business secrets in the framework of legal proceedings is not sufficiently restrictive, compared to the initial text. “This will have an extremely deterrent effect on businesses”, Laroche explained, “as in order to prove that there has been a wrongdoing, businesses are often obliged to reveal production secrets, which could expose them even more”, he explained.
It now remains for the Council to adopt the directive under point A at a forthcoming session, according to a source. Then, the member states will have two years to transpose it. “Now that the directive has been adopted, it is the duty of journalists at national level to ensure that the governments do not increase its scope of application when they implement it”, Reda commented, as the directive is a minimum regulatory pillar, allowing the member states leeway to tighten it up if they wish. (Original version in French by Pascal Hansens and Maëlle Didion-stag)