Background
Introduction
2.1
This chapter provides the context for the current inquiry. It begins by summarising
the arguments put to the committee on the value and importance of establishing
effective whistleblower protections. It then notes the current legislative
framework that applies to the public sector, to registered organisations, and
to the corporate sector. This is followed by an overview of various
whistleblower inquiries that have occurred in Australia since the early 1990s
and the development of whistleblower legislation during that period. The
following section sets out some of the international developments in
whistleblower protection legislation as part of greater global moves to tackle
corruption. The chapter finishes with an analysis of Australia's current
whistleblower protection legislation as measured against specific best practice
criteria.
Context—why whistleblowing is important
2.2
The key arguments for establishing effective whistleblower protections are
essentially based on a view put by numerous submitters and witnesses that
whistleblowing was critical in fostering a culture of transparency,
accountability, and integrity. For example, Ms Serene Lillywhite, Chief Executive
Officer, Transparency International indicated that:
- whistleblower protection is integral to fostering transparency,
promoting integrity and detecting misconduct;
- protecting whistleblowers promotes a culture of accountability
and integrity in both the public and private institutions; and
- whistleblowing empowers citizens against corruption and
encourages the reporting of misconduct, fraud and corruption.[1]
2.3
Mr Jordan Thomas pointed out that whistleblowers perform a vital service
to both markets and organisations because:
- they force us to focus on our failings;
- they challenge our ideals; and
- they show the limits of law enforcement authorities,
self-regulatory organisations, and corporate compliance programs.[2]
2.4
As discussed below, several submitters and witnesses argued that a strong
whistleblower culture would have a positive transformative impact on
organisations by helping to drive organisational change from within.
2.5
For example, the Australian Institute of Company Directors (AICD) argued
that boards and directors have a critical role to play in establishing and
promoting a corporate culture that supports disclosure of wrongdoing:
...a speak-up culture within organisations. And this is very
much an issue that is top of mind for Australian directors and is very much
raised in the forums and committees with our members that we work with. We
believe the regulation of whistleblowing has a significant impact, as well, on
that culture of disclosure. The inadequacies in the current system limit the
ability of corporates, directors and whistleblowers to play their part in
ensuring the compliance of organisations with the law as a whole.[3]
2.6
Dr Simon Longstaff, Executive Director of the Ethics Centre argued that
it would be useful to draw a distinction between the reporting of wrong doing
as an ordinary regular practice and whistleblowing as a more extraordinary
event. The Ethics Centre argued for creating cultures in which it is entirely
normal for a person to spot a discrepancy between what the organisation says it
stands for and what it is actually doing, or to spot some element of risk
either to the corporation or to other people who have a legitimate interest in
the corporation's conduct. Viewed in this light, the Ethics Centre suggested
that whistleblowing should be seen as an extraordinary event where a person is
required to go outside the bounds of the organisation and its normal channels
in order to raise serious concerns about some aspect of the corporation's
conduct, or somebody associated with that corporation.[4]
2.7
In a similar vein, Mr Warren Day, Senior Executive Leader from the
Australian Securities and Investments Commission (ASIC) argued that a good
organisational culture should reduce the need for whistleblowers and that the
presence of a whistleblower indicated a failure of organisational culture and
compliance systems.[5]
2.8
Likewise, Mr Phil Ware, Member of the Association of Corporate Counsel Australia
took the view that whistleblower protection legislation should be designed to
encourage proactive internal compliance procedures:
The regulatory goal should not so much be a more effective
framework for corporate whistleblowing which is focused on punishment of
offenders, which is lagging and punitive, let alone the windfall enrichment of
whistleblowers and their lawyers via bounties in circumstances where they are
immune from costs. The regulatory goal, rather, should be improving the
effectiveness of internal compliance cultures. This is leading, proactive and
preventive.[6]
2.9
Mr Joshua Bornstein, Director/Principal from Maurice Blackburn Lawyers informed
the committee of his concerns about sub-standard corporate governance in
Australia:
I think there is a fundamental problem in Australian business
culture, which is that its corporate governance standards are poor. This
malaise feeds I think also into our political, legislative and regulatory
culture. There have been countless scandals in our banking and finance sector
in the last decade involving illegal and improper conduct. Many thousands of
consumers, including vulnerable retirees, have been ripped off. Wage and
superannuation fraud is now, in my experience, at an unprecedented level,
particularly impacting low-paid and vulnerable employees right across the
private sector. Bribery scandals regularly dog Australian companies trading
overseas, and company tax compliance in this country is a rolling scandal.[7]
2.10
Mr Thomas asserted that corporations serve a necessary social purpose
but can also cause great harm. He was of the view that encouraging those who
know of wrongdoing in
the workplace to speak out is essential to protecting the innocent
victims of such misconduct.[8]
2.11
However, Mr Thomas also pointed out that being a corporate whistleblower
is rarely easy or glamorous and can often involve great risk for the person
speaking out. Mr Thomas explained why reprisals occur even when it is not in
the corporation's best interest:
In agency theory it is recognized that there is an inherent
potential for conflict between the interests of an entity and the interests of
its agents – the ones who act for the company. So while a 'company' may
logically have an interest in acting legally and ethically, and in encouraging
its employees to report misconduct without fear of retaliation, its managers
and officers, as agents, may not share this corporate interest...The 'corporation'
may have no interest in harming the whistleblower, but the corporation can only
act through its agents. History, and countless surveys and media stories,
consistently show that those agents can and do retaliate against corporate
whistleblowers.[9]
2.12
Ms Julia Angrisano, National Secretary from the Financial Sector Union
(FSU) informed the committee that the feedback it received from its member
surveys indicates that workers lack trust in the current frameworks and
policies across the industry because they have experienced, seen or heard
practices that suggest a significant gap between policy and practice for
whistleblowers. The FSU gave some examples of the feedback that it had
received:
When we asked the reason for not accessing whistleblower
policies, many of our members told us that it is made very clear to them that
they should not rock the boat by calling out bad behaviours or that the system
rewards people who do what they are told. Often, they talk to us about the fact
that their pay system sometimes rewards them for selling an insurance policy or
another financial product that is worse than the current policy, but that is
the framework that they operate within.[10]
Our members contact us feeling like they have seen something
or they have heard something, but they are too scared to raise it, because they
have seen it happen in other circumstances where people just simply lose their
jobs or move on to another department or are isolated.[11]
2.13
The Australian Federal Police (AFP) informed the committee that whistleblowers
are important in detecting serious financial crime that is often sophisticated,
well concealed, and part of a culture of cover-up. The AFP noted that due to
the complex nature of serious financial crime there is often a low risk of
discovery by regulators and law enforcement unless whistleblowers are supported
in coming forward. The sorts of matters where whistleblowers may inform
investigations include foreign bribery, serious tax crime, identity crime,
corporate and government corruption matters and serious fraud offences. The AFP
argued that:
If people are discouraged from coming forward to regulators
or law enforcement due to lack of protections for their safety, protection from
legal action and the personal and financial impacts of disclosing company
information, there may be no case to prosecute. Where people do come forward,
but are not willing to give evidence, due to lack of protection for anonymity,
law enforcement may not have sufficient evidence to prosecute. This may not be
fixed solely by enhancing protections as court procedures can only go so far in
protecting witness identity.
Whether or not improved whistleblower protections would
encourage people to come forward and disclose wrongdoing would depend on how
the system is framed, and whether the public has the confidence that the system
can ensure any protections.[12]
2.14
The Governance Institute of Australia (GIA) argued that whistleblowing
has a critical role to play in identifying and stopping misconduct in the
corporate sector, but it is only one aspect of companies' overall programs to
ensure compliance with regulation and to prevent and detect misconduct:
Whilst we do not consider that misconduct and illegal
activity is endemic within Australian companies, our members' experience is
that whistleblowing usually occurs when other avenues that already exist have
been exhausted or failed. Again, we note our support for significant reforms in
this area.[13]
2.15
The International Bar Association Anti-Corruption Committee (IBACC) argued
that, from the submissions to this inquiry, it appeared that those who blow the
whistle outside of the public sector do so at their own risk and at their own
peril:
There have been numerous reports, inquiries and research done
over the years that have looked at this question, and yet still the messenger
and the message are attacked, and the underlying conduct seems not to be
addressed or, if it is addressed, it is addressed privately and out of the
public spotlight.[14]
Protections in the private sector have generally been
non-existent...Whistleblowers face a large number of severe sanctions on and
processes of adverse consequences for them. They are real, they are emotional
and financial, and they can affect people for many years thereafter, when all
they were doing, invariably, was their job, by reporting something that they
observed to the company by which they were employed, and they, in turn, became
the target of an attack—from the company or from those engaging in the
behaviour—to suppress it.[15]
2.16
The Law Council of Australia (Law Council) considered whistleblower
protection reform to be urgent. However, the Law Council cautioned that
piecemeal regulation would be insufficient, and that careful policy analysis
was necessary to ensure that regulation led to genuine behavioural and
structural change.[16]
2.17
The AICD argued that legislative reform that took account of best
practice indicators could lead to substantial improvements in Australia's
corporate whistleblowing framework, particularly given the current anaemic
framework.[17]
Public interest disclosure
2.18
Whistleblowing is often technically referred to as public interest
disclosure. Whistleblowers play a critical role in identifying and preventing
misconduct. Legislative protections have existed for public sector
whistleblowers in most Australian states and territories since the 1990s. Protections
for private sector whistleblowers were not legislated until 2004.[18]
Commonwealth public sector
2.19
The Public Interest Disclosure Act 2013 (PID Act) is intended to
promote the integrity and accountability of the Commonwealth public sector by:
- encouraging and facilitating the making of disclosures of
wrongdoing by public officials;
- ensuring that public officials who make protected disclosures are
supported and protected from adverse consequences relating to the making of a
disclosure; and
- ensuring that disclosures are properly investigated and dealt
with.[19]
Registered organisations
2.20
In November 2016, the Parliament passed amendments to the FWRO Act which
strengthened whistleblower protections for people who report corruption or
misconduct in unions and employer organisations. The amendments provide
protections to whistleblowers who disclose information about contraventions of
the law, including current and former officers, employees, members and
contractors of organisations.[20]
Amendments that were introduced by the Senate and passed both Houses include:
- defining what constitutes a reprisal;
- civil remedies against reprisals;
- awarding of costs against vexatious proceedings;
- civil penalties for reprisals;
- criminal offences for reprisals;
- that protections have effects despite other Commonwealth laws;
- provisions for the investigation and handling of disclosures;
- time limits for investigations;
- disclosures to enforcement agencies; and
- protection of witnesses.[21]
Corporate whistleblowing
2.21
Current protections for whistleblower disclosures in the corporate
sector are contained in Part 9.4AAA of the Corporations Act 2001 (Corporations
Act) which was introduced as part of a range of corporate legislative reforms
in 2004. Those protections:
- confer statutory immunity on the whistleblower from civil or
criminal liability for making the disclosure;
- constrain employer rights to enforce a contract remedy against
the whistleblower (including any contractual right to terminate employment)
arising as a result of the disclosure;
- prohibit victimisation of the whistleblower;
- confer a right on the whistleblower to seek compensation if
damage is suffered as a result of victimisation; and
- prohibit revelation of the whistleblower's identity or the
information disclosed by the whistleblower with limited exceptions.[22]
2.22
For public interest disclosures concerning misconduct or an improper
state of affairs or circumstances affecting the institutions supervised by the
Australian Prudential Regulation Authority (APRA), whistleblower protections in
the following acts may apply:
- the Banking Act 1959;
- the Insurance Act 1973;
- the Life Insurance Act 1995; and
- the Superannuation Industry (Supervision) Act 1993.[23]
Previous inquiries and reviews
2.23
In 2005, the Parliamentary Library published a research note on
whistleblowing in Australia. The library noted that whistleblower protections
became a significant issue in the late 1980s and early 1990s when inquiries
identified that the common law was unable to provide employees with a right to
disclose information about the workplace and protection from reprisals.
Following those inquiries, all Australian states and the Australian Capital
Territory (ACT) adopted some form of public interest disclosure protection
legislation.[24]
2.24
In 1991, the Gibbs committee review of Commonwealth Criminal Law
recommended that catch-all secrecy provisions should be replaced with
provisions limiting penal sanction for the unauthorised disclosure of official
information to specific categories required for the effective functioning of
government, such as defence and foreign affairs. The Gibbs committee concluded
that appropriate protections should be provided for disclosure of other
information in the public sector.[25]
2.25
In 1991, the Senate Standing Committee on Finance and Public
Administration concluded that the Commonwealth Ombudsman has often been
unsuccessful in resolving major and complex complaints and made the following
observations in relation to whistleblower protections:
Perceived failings were that the Ombudsman's investigations were ineffectual, that there was no power to
resolve any serious deficiencies which might have been detected or to protect
complainants effectively and that members of the Ombudsman's staff were too
close to the public servants they were sent to investigate.[26]
2.26
This led the committee to make the following conclusions and
suggestions:
...that the Ombudsman should be responsible at least for
filtering whistleblowing complaints or redirecting them if appropriate to
another agency. In some cases it would be necessary for the Ombudsman to
undertake a full investigation into a whistleblowing allegation.
To deal with whistleblowing allegations and to enable the
Ombudsman to fulfil a role as an external review body as outlined above, the
Committee recommended that the Ombudsman establish a specialist investigation
unit within its Office. This new aspect of its operations would also be able to
target areas for systemic reform, but its activities would remain separate from
the bulk complaint work of the Ombudsman because of the different investigative
approach required.[27]
2.27
In 1994, a Senate Select Committee on Public Interest Whistleblowing
acknowledged that whistleblowing is a legitimate form of action within a
democracy. That committee also indicated that national leadership and education
would be required in addition to the legislative changes it recommended,
including:
- the establishment of the public interest disclosure agency to
receive disclosures, act as a clearing house, arrange for investigations,
ensure protection of whistleblowers, and provide a national education program;
- that legislation cover both the public and private sectors;
- that the states, territories and industry work with the
Commonwealth to address areas of Commonwealth constitutional limitations in
relation to private sector whistleblowing, including consideration of an
industry ombudsman;
- that legislation extend to policing, academic institutions,
health care and banking;
- not allowing anonymous disclosures;
- exemption of public interest disclosures from most secrecy
provisions;
- that protection of whistleblowers be conditional on correct
procedures being followed;
- that victimisation of whistleblowers should be investigated;
- that the subject of whistleblowing be protected in accordance
with the principles of natural justice and that false allegations should
constitute an offence;
- that Legal Aid should be available to whistleblowers; and
- that a reward system should not be considered.[28]
2.28
In 1995, another Senate Select Committee examined unresolved
whistleblower cases. There were also several unsuccessful attempts at a federal
level to introduce whistleblower legislation.[29]
2.29
In 2004, this committee considered corporate sector whistleblower
protections as part of its inquiry into the Corporate Law Economics Reform
Program (CLERP) (Audit Reform and Corporate Disclosure) Bill 2003 (CLERP Bill).
At the time the committee noted:
The latest spate of corporate failures has once again
highlighted the problems created by a culture of corporate silence which allows
wrongdoing to go undetected. It has raised public awareness of the crucial role
that personnel can have in uncovering corporate wrongdoing. Most recent studies
into whistleblowing agree that change is needed on two main fronts a cultural
shift in attitudes toward whistleblowers and legislative reforms to both
encourage and maintain this change.[30]
2.30
The committee considered the whistleblower scheme in the CLERP bill to
be 'sketchy in detail', with scant information in the legislation and the
Explanatory Memorandum on the obligations of companies to ensure that they have
in place a whistleblower scheme.[31]
2.31
The committee made a number of recommendations to offer greater
encouragement for whistleblowers to come forward and for companies to
investigate wrong doing, including:
- requiring corporations to establish a whistleblower scheme;
- requiring ASIC to publish guidance notes for companies on
whistleblower schemes;
- clarifying the application of legislation to employees of
contractors;
- replacing the 'good faith' test with 'an honest and reasonable
belief';
- requiring that disclosures are about serious matters;
- providing for anonymous disclosures and confidentiality; and
- allowing ASIC to represent the interest of a person who is
alleged to have suffered a reprisal.[32]
2.32
In 2009, the House of Representatives Standing Committee on Legal and
Constitutional Affairs considered public sector whistleblower protections and made
recommendations, including:
- the introduction of legislation for public sector whistleblower
protections;
- rights for people in the public sector to raise concerns without
fear of reprisal;
- a requirement for whistleblowers to act in 'good faith';
- a definition of who is able to be a whistleblower;
- a suggestion for future consideration of whether members of the
public may be able to make public interest disclosures;
- that the Commonwealth Ombudsman be the authority for receiving
and investigating public interest disclosures and for oversight of the public
interest disclosure scheme in the Commonwealth;
- the types of disclosure that should be protected;
- that the motive of the whistleblower should not prevent the
disclosure from being protected;
- that protection not apply to disclosures that are 'knowingly
false';
- that protections include immunity from criminal liability, civil
penalties and certain civil actions;
- obligations for agencies to establish whistleblower protection
procedures;
- provision for disclosure to the media and Members of Parliament;
and
- protection for disclosures to third parties such as legal
advisors, professional associations and unions where the disclosure is made for
the purpose of seeking advice or assistance.[33]
2.33
In March 2013, the Public Interest Disclosure Bill 2013 (PID Bill) was
introduced to the House of Representatives.[34]
It sought to make a number of reforms and bring a new act to replace limited
whistleblower protections that previously existed in the Public Service Act
1999. The PID Bill overlapped with earlier private members Bills on
whistleblower protections introduced by Mr Andrew Wilkie MP.[35]
2.34
The House of Representatives Standing Committee on Social Policy and
Legal Affairs considered both the PID Bill and Mr Wilkie's Bills. That
committee tabled an advisory report in March 2013, recommending that the PID
Bill be passed with amendments to clarify continuity of protection, protections
for external disclosures and protections from reprisals.[36]
2.35
The Senate Legal and Constitutional Affairs Legislation Committee also
examined the provisions of the PID Bill and made recommendations, including:
- adding protections for disclosure to supervisors;
- clarifying provisions for misleading or false claims;
- clarifying requirements for external disclosures; and
- removing a clause that was ineffective in relation to parliamentary
privilege.[37]
2.36
In its inquiry into the performance of ASIC, the Senate Economics
References Committee made recommendations on whistleblower protections
including:
- broadening the definition of whistleblowers and scope of relevant
information;
- protecting the identity of whistleblowers and anonymous disclosers;
- a review of Australia's framework for protecting corporate
whistleblowers drawing on the 2009 Treasury options paper as appropriate;
- changes to requirements for whistleblowers to act in good faith;
and
- remedies for whistleblowers who are disadvantaged and
consequences for those taking reprisals against whistleblowers.[38]
2.37
The Senate Economics References Committee also published an issues paper
on corporate whistleblowing as part of its inquiry into scrutiny of financial
advice which lapsed at the end of the 44th Parliament.[39]
The committee invited submitters to the current inquiry to comment on the
issues paper.
2.38
In October 2016 the government released the 'Moss Review' of the effectiveness
and operation of the PID Act. The Moss Review found that:
- the PID Act had only been partially successful partly due to its
recent implementation and ineffective operation of the framework;
- the mechanisms under the PID Act which
facilitate investigation of wrongdoing were overly complex; and
- the categories of disclosable conduct
were too broad and should be focussed on the most serious integrity risks.[40]
2.39
The Moss Review made recommendations including:
- strengthening the ability of the Commonwealth Ombudsman and the Inspector-General
of Intelligence and Security (IGIS) to scrutinise and monitor the decisions of
agencies, and increasing the number of investigative agencies;
- a greater focus on significant wrongdoing and expanding the
grounds for external disclosure; and
- redrafting the PID Act using a principles-based approach and
better protections for witnesses and whistleblowers.[41]
2.40
In December 2016, Australia's First Open Government National Action
Plan 2016–18 (the action plan) was finalised. The action plan includes a
commitment to improve whistleblower protections in the tax and corporate
sectors as follows:
Australia will ensure appropriate protections are in place
for people who report corruption, fraud, tax evasion or avoidance, and
misconduct within the corporate sector.[42]
We will do this by improving whistle-blower protections for
people who disclose information about tax misconduct to the Australian Taxation
Office. We will also pursue reforms to whistle-blower protections in the
corporate sector, with consultation on options to strengthen and harmonise
these protections with those in the public sector.[43]
2.41
As part of the action plan the government committed to examining the
Registered Organisations Commission (ROC) whistle-blower amendments with the
objective of applying those amendments to the corporate and public sectors:
The Government has committed to supporting a Parliamentary
inquiry (Inquiry) to examine the Registered Organisations Commission
whistle-blower amendments with the objective of implementing the substance and
detail of those amendments to achieve an equal or better whistle-blower
protection and compensation regime in the corporate and public sectors.[44]
2.42
The timetable for government action set out in the action plan is shown
in Table 2.1 below.
2.43
In December 2016, the government established a review of tax and
corporate whistleblower protections in Australia. A consultation paper was
released and submissions were due by 10 February 2017.[45]
Table 2.1: Timetable for
National Action Plan whistleblower commitments
| Milestone |
End date |
| Establish Parliamentary
inquiry. |
30 June 2017 |
| Treasury to release a
public consultation paper covering both tax whistle-blower protections and
options to strengthen and harmonise corporate whistle-blower protections with
those in the public sector. |
March 2017 |
(i) Development and public
exposure of draft legislation for tax whistle-blower protections (informed by
consultation).
(ii) Recommendation to
Government on reforms to strengthen and harmonise whistle-blower protections
in the corporate sector with those in the public sector (informed by
consultation). |
July 2017 |
| Finalise and introduce
legislation for tax whistle-blower protections. |
December 2017 |
| Introduce legislation to
establish greater protections for whistle-blowers in the corporate sector,
with a parliamentary vote no later than 30 June 2018. |
By 30 June 2018 |
Source: Australian
Government, Australia's First Open Government National Action Plan 2016–18,
December 2016, p. 16.
International developments
2.44
This section sets out some of the international developments in
whistleblower protection legislation as part of greater global moves to tackle
corruption.
2.45
The international legal framework has been strengthened to combat
corruption and establish effective whistleblower protection laws as part of an
effective anti-corruption framework. Whistleblower protection requirements have been
introduced in the following ways:
- the United Nations Convention against Corruption;
- the 2009 Organisation for Economic Co-operation and Development (OECD)
Recommendation of the Council for Further Combating Bribery of Foreign Public
Officials in International Business Transactions (Anti-Bribery Recommendation);
- the 1998 OECD Recommendation on Improving Ethical Conduct in
Public Service;
- the Council of Europe Civil and Criminal Law Conventions on
Corruption;
- the Inter-American Convention against Corruption; and
- the African Union Convention on Preventing and Combating
Corruption.[46]
2.46
In 2010, the G20[47]
established an Anti-Corruption Working Group in recognition of the significant
negative impact of corruption on economic growth, trade, and development. In
November 2011, the G20 agreed to support the compendium of best practices and
guiding principles for whistleblower protection legislation (G20 Compendium),
prepared by the OECD.[48]
2.47
The G20 Compendium underscored the critical importance of promoting and
protecting whistleblowers in order to deter, detect and combat fraud and
corruption:
Encouraging and facilitating whistleblowing, in particular by
providing effective legal protection and clear guidance on reporting
procedures, can also help authorities monitor compliance and detect violations
of anti-corruption laws. Providing effective protection for whistleblowers
supports an open organisational culture where employees are not only aware of
how to report but also have confidence in the reporting procedures. It also
helps businesses prevent and detect bribery in commercial transactions. The
protection of both public and private sector whistleblowers from retaliation
for reporting in good faith suspected acts of corruption and other wrongdoing
is therefore integral to efforts to combat corruption, promote public sector
integrity and accountability, and support a clean business environment.[49]
2.48
The G20 Compendium identified the following specific features of
whistleblower protection mechanisms:
- definitions and scope:
- whistleblowing definition;
- good faith and reasonable grounds requirements;
- scope of coverage of persons afforded protection; and
- scope of subject matter or protected disclosures;
- mechanisms for protection:
- protection against retaliation;
- criminal and civil liability;
- anonymity and confidentiality; and
- burden of proof lowering in relation to retaliation;
- reporting procedures and mechanisms:
- channels for reporting;
- hotlines; and
- use of incentives to encourage reporting;
- enforcement mechanisms:
- oversight of enforcement authorities;
- availability of judicial review; and
- remedies and sanctions for retaliation; and
- awareness-raising and evaluation mechanisms.[50]
2.49
At the Brisbane G20 Leaders' Summit in November 2014, the G20 leaders
recognised the need to take concrete, practical action on corruption and
endorsed the 2015–16 G20 Anti-Corruption Implementation Plan. The plan
noted that:
The G20 has already recognised the significance of this issue
by adopting the G20 Guiding Principles for Legislation on the Protection of
Whistleblowers. The G20 now has the opportunity to build on this valuable
work and ensure all G20 countries implement comprehensive and effective
protections for whistleblowers in both the public and private sectors, ensuring
G20 countries lead by example.[51]
2.50
The specific deliverable agreed by the G20 in relation to whistleblowers
was:
G20 countries will conduct a self-assessment of their
whistleblowers protection frameworks in both the public and private sectors,
with reference to the OECD Study on G20 Whistleblower Protection Frameworks,
Compendium of Best Practices and Guiding Principles for Legislation, and
consider next steps.[52]
2.51
The 2017–18 G20 Anti-Corruption Action Plan continued its support
for whistleblower protections, noting that:
Encouraging the reporting of suspected actions of corruption
is critical to deterring and detecting it. We will promote this goal, including
reviewing our progress in implementing legislative and institutional
protections for whistle-blowers.[53]
Analysis of international and Australia's whistleblower protections
2.52
The whistleblower protections in G20 countries were analysed in 2014
against principles for best practice set out in Table 2.2 below. Australia's
laws, were found to be comprehensive for the public sector, but lacking when
compared to international best practice for the private sector as shown in
Tables 2.3 and 2.4 below. The review suggested that in the private sector the
scope of wrongdoing covered is ill-defined, anonymous complaints are not
protected, there are no requirements for internal company procedures,
compensation rights are ill-defined, and there is no oversight agency
responsible for whistleblower protection.[54]
2.53
In May 2017, Professor Brown and his colleagues reported on their survey
on the strength of organisational whistleblowing processes and procedures in
Australia which was conducted as part of the Whistling While They Work 2 research
project. The survey's 699 respondents covered 10 public sector jurisdictions,
five private industry groups and four not-for-profit sector groups. The
analysis examined the self-reported presence of: incident reporting and tracking, support strategies
for staff, risk assessment processes for reprisals, dedicated support staff and
remediation processes.[55]
2.54
The results which are summarised in Table 2.4 show that even when trying
hard to encourage their staff to report integrity challenges, there is much
that organisations can do to ensure whistleblowing processes are robust. The
report also noted the following:
In particular, under the current state of guidance and
incentives, most sectors are finding it difficult to realise their own goals of
having processes which provide strong staff support and protection.
The results highlight that efforts towards strong processes
for ensuring support and protection can and should be enhanced, across all
sectors and in individual sectors.
Importantly, while size of organisation is a significant
factor in the strength of processes, sectoral differences remain irrespective
of size. This indicates that regulatory environment, oversight, operating
conditions, professionalization, skills and industry leadership are also
critical factors.[56]
Table 2.2: Summary of best practice criteria for
whistleblowing legislation.
|
Criterion |
Description |
| 1 |
Broad coverage
of organisations |
Comprehensive
coverage of organisations in the sector (e.g. few or no'carve-outs') |
| 2 |
Broad definition of reportable
wrongdoing |
Broad
definition of reportable wrongdoing that harms or threatens the public
interest (e.g. including corruption, financial misconduct and other legal,
regulatory and ethical breaches) |
| 3 |
Broad definition of whistleblowers |
Broad
definition of '[whistleblowers' whose disclosures are protected (e.g.
including employees, contractors, volunteers and other insiders) |
| 4 |
Range of internal / regulatory
reporting channels |
Full range
of internal (i.e.
organisational) and regulatory agency reporting channels |
| 5 |
External
reporting channels (third party / public) |
Protection
extends to same disclosures made publicly or to third parties (external
disclosures e.g. to media, NGOs, labour unions, members of Parliament) if
justified or necessitated by the circumstances |
| 6 |
Thresholds for
protection |
Workable thresholds for protection (e.g.
honest and reasonable belief of wrongdoing, including
protection for 'honest mistakes'; and no
protection for knowingly false disclosures or information) |
| 7 |
Provision and
protections for anonymous reporting |
Protections
extend to disclosures made anonymously by ensuring that a discloser (a) has
the opportunity to report anonymously and (b) is protected if later
identified |
| 8 |
Confidentiality protected |
Protections
include requirements for confidentiality of disclosures |
| 9 |
Internal disclosure procedures
required |
Comprehensive
requirements for organisations to have internal disclosure procedures (e.g.
including requirements to establish reporting channels, to have internal
investigation procedures, and to have procedures for supporting and
protecting internal whistleblowers from point of disclosure) |
| 10 |
Broad protections against retaliation |
Protections
apply to a wide range of retaliatory actions and detrimental outcomes (e.g.
relief from legal liability, protection from prosecution, direct reprisals,
adverse employment action, harassment) |
| 11 |
Comprehensive remedies for retaliation |
Comprehensive
and accessible civil and/or employment remedies for whistleblowers who suffer
detrimental action (e.g. compensation rights, injunctive relief; with
realistic burden on employers or other reprisors to demonstrate detrimental
action was not related to disclosure) |
| 12 |
Sanctions for retaliators |
Reasonable
criminal, and/or disciplinary sanctions against those responsible for
retaliation |
| 13 |
Oversight authority |
Oversight by
an independent whistleblower investigation / complaints authority or tribunal |
| 14 |
Transparent use of legislation |
Requirements for transparency and
accountability on use of the legislation (e.g. annual public
reporting, and provisions that override confidentiality clauses in
employer-employee settlements) |
Source: Wolfe, Worth, Dreyfus,
and Brown, Breaking the Silence: Strengths and Weaknesses in G20
whistleblower protection laws, October 2015, p. 6.
Tables 2.3 Strengths and
weaknesses in G20 country public sector whistleblower protections laws
Source: Simon Wolfe, Mark Worth,
Suelette Dreyfus, and A J Brown, Whistleblower Protection Laws in G20
Countries: Priorities for Action, September 2014, p. 6.
Table 2.4 Strengths and
weaknesses in G20 private sector whistleblower protections laws
Source: Simon Wolfe, Mark Worth,
Suelette Dreyfus, and A J Brown, Whistleblower Protection Laws in G20
Countries: Priorities for Action, September 2014, p. 7.
Table 2.5: Strength of
whistleblowing processes by sector & jurisdiction / industry
Source: A J Brown and Sandra A
Lawrence, Strength of Organisational Whistleblowing processes – analysis
from Australia, May 2017, p. ii.
2.55
The results of the survey analysis indicate:
- significant efforts by public and private sector organisations to
improve whistleblower protections;
- the higher relative strength of whistleblower processes in the
public sector compared to the private sector;
- that larger organisations appear to have stronger processes;
- that the finance and insurance industry group appear to have
stronger processes than some other sectors;
- the comparative weakness of local government processes, relative
to central government, in all jurisdictions other than Victoria; and
- the need for clearer guidance, and either statutory or industry
requirements, or incentives, across key areas of whistleblowing processes
especially for the private and not-for-profit sectors.[57]
2.56
The authors note that the stronger public sector results (compared to
the private sector) are consistent with stronger legislation over a period of
time and the international history of more comprehensive research into public
sector whistleblowing processes over private sector ones.[58]
However the results also show significant variations between public sector
jurisdictions which raise questions about the difference in those frameworks
and their implementation.[59]
2.57
The report also concluded that legislative reforms such as the
implementation of the PID Act, led to a significant improvement in the
Commonwealth whistleblowing processes, which are now among the strongest in
Australia. The report notes for example that:
Commonwealth agency heads came under a direct statutory
responsibility to take 'reasonable steps... to protect public officials who
belong to the agency from detriment, or threats of detriment' relating to
disclosures.
...the two jurisdictions who scored most strongly for risk
assessment – the Commonwealth and ACT – are the only jurisdictions
where, by statute, agencies are required to have processes for assessing risks
that reprisals may be taken against the persons who make those disclosures.[60]
2.58
The following chapters focus on the evidence the committee has received
arguing for and against a range of potential reforms to whistleblower
protections.
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