The committee considered whether reward and bounty systems such as those
used in the United States (US), Canada and parts of Europe, would be
appropriate for Australia. As noted in the previous chapter, the committee deliberately
separated its consideration of reward and bounty systems from compensation because
the committee considers that the nature and amount of compensation should be
determined by the detriment suffered by the whistleblower.
This chapter begins with a brief overview of reward and bounty systems
that exist in other countries. This is followed by a summary of the arguments put
to the committee about the possible introduction of a reward or bounty system
Professor A J Brown encouraged the committee to consider the advantages
and disadvantages of bounty systems as part of the overall approach to
Certainly the common ground should be that we need to look at
more serious remedies, in general, for compensation, for damage done, or for
the risk of damage, for detrimental action. But I think it would be good if the
committee seriously considers and has a look at what role bounty-type
arrangements might play, not necessarily as a straight copy of the US
arrangements, and the reasons for not creating perverse incentives and
artificial legal services markets—that is, creating a whistleblowing industry.
We have to look seriously at what is perverse and what is attractive out of
those sorts of options.
However, the key aspect for Professor Brown was working out a means to
recognise the high value of the information that a whistleblower might be able
To my mind, the issue is not really whether we go down the
road of bounties or rewards for individual whistleblowers but how we recognise
that whistleblowers provide information of incredibly high value. That value
then manifests very often in the recovery of fraud lost and in the imposition
of justifiable penalties for wrongdoing of a whole variety of kinds.
Bounty systems in other jurisdictions
The following sections provide a brief outline of several jurisdictions,
some of which, such as the US, have implemented bounty systems and some of
which, such as the United Kingdom (UK), have decided against them.
The US has whistleblower bounty programs that incentivize reporting of
securities, commodities, and tax violations, and fraud against the government. The
whistleblower program for securities is operated by the United States
Securities and Exchange Commission (US-SEC), the corporate regulator which, in
general terms, performs a similar role to ASIC. The US-SEC Whistleblower
Program (also called the Dodd-Frank Whistleblower Program) was founded on three
- the ability to report anonymously;
- enhanced employment protections; and
- the potential to receive monetary rewards.
Section 21F of the US Securities Exchange Act 1934, as amended by
the US Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010,
directs the US-SEC to make monetary awards to whistleblowers who provide
information that leads to successful US-SEC enforcement actions with monetary
sanctions over $1 million. Awards are required to be made in an amount
equal to 10 per cent to 30 per cent of the monetary sanctions. To ensure
that whistleblower payments would not diminish the amount of recovery for
victims of securities law violations, Congress established a separate fund,
called the Investor Protection Fund, out of which eligible whistleblowers are
Since the Dodd-Frank Whistleblower Program's first full year in 2012,
the US-SEC has awarded more than US $111 million to 34 whistleblowers whose
information assisted in bringing successful enforcement actions. Those enforcement
actions included US $584 million in financial sanctions, including disgorgement
of US $346 million of ill-gotten gains and interest.
Other US whistleblower programs with bounty systems include:
- the US Commodity Futures Trading Commission (CFTC);
- the US Internal Revenue Service (IRS);
- the US Department of Justice under the US False Claims Act.
Mr Jordan Thomas explained to the committee how the two different types
of bounty systems work in the United States. One system involves a person
actively filing a case on behalf of the government:
One is a regime based upon the False Claims Act—sometimes
called the 'qui tam' laws. People file a case under seal. Then the government
joins or does not join, but the person is acting in the place of the
government. And that has existed since the time of Abraham Lincoln. It is
particularly strong where the government has weaker resources or where there is
so much misconduct in this area that the government would benefit by having the
additional support that exists in private bar.
The other system typically involves the whistleblower providing a
tip-off to the relevant regulator:
The other regime is typified by the SEC, the CFTC and IRS
programs where a whistleblower is, essentially, what we call a '911 caller'.
They are, essentially, providing a tip. They are providing supporting
information, but only the agency has the discretion to investigate and
prosecute the case.
This section sets out some of the reasoning put forward by financial
regulators in the UK regarding decisions not to introduce a bounty system for
In 2013, the UK Department for Business, Innovation and Skills ran a
consultation process on a UK whistleblower framework, including financial
incentives for whistleblowers.
The government response indicated that the government did not believe that
incentives should be introduced.
Associated with that process, in July 2014, the UK Financial Conduct
Authority (FCA) and Bank of England Prudential Regulation Authority (PRA) informed
the UK Treasury Select Committee that:
Incentives in the US benefit only the small number of whistleblowers whose
information leads directly to successful enforcement action resulting in the
imposition of fines. They provide nothing for the vast majority of
There is as yet no empirical evidence of incentives leading to an
increase in the number or quality of disclosures received by the regulators.
Introducing incentives has been accompanied by a complex, and therefore
costly, governance structure.
The incentives system has also generated significant legal fees for both
whistleblowers and firms, although many whistleblowers are represented on a
contingency basis (no award, no fee).
Incentives offered by regulators could undermine the introduction and
maintenance by firms of effective internal whistleblowing mechanisms.
The FCA and PRA also noted that bounty systems may create the following
moral or other hazards:
- malicious reporting or entrapment;
- the whistleblower's conflict of interests potentially weakening
prosecution cases in court;
- inconsistency with the regulators' expectations of firms;
- the need for qualification criteria; and
- perceptions of large rewards for undertaking a public duty.
Other bounty systems
In mid-2016, the Ontario Securities Commission launched its Office of
the Whistleblower and its Whistleblower Program policy, which includes a bounty
system. Whistleblowers who report information that leads to monetary sanctions of
$1 million or more may be eligible for a financial award of up to $5 million.
Dr Sulette Lombard, Academic, Flinders Law School, informed the committee that
the bounty system differs significantly from the US system, firstly, because it
is capped, and secondly, because it is restricted to whistleblowing in respect
of securities offences, and is therefore narrowly focussed.
In South Korea, whistleblowers who contribute directly to increasing or
recovering government revenues can receive between four and 20 per cent of
these funds, with an upper limit of US $2 million. Whistleblowers who
serve the public interest or institutional improvement can receive up to US
As of May 2014 the largest reward paid was US $400,000 from a
case in which a construction company was paid US $5.4 million for sewage
pipelines that it did not build. Eleven people faced imprisonment and fines,
and the US $5.4 million was recovered.
Some limited reward systems have either been proposed or implemented in
some European jurisdictions. For example, in Italy, a commission for the prevention
of corruption established around 2012 made recommendations including issuing
rewards in return for useful disclosures.
In 2003, the Lithuanian government passed a resolution to reward people for
exposing financial crimes.
In Hungary anti-trust law qualifies whistleblowers for up to 1 per cent of the
fine collected from the employer capped at around €160,000.
Arguments for a reward system in Australia
This section summarises arguments that were put to the committee in
support of a bounty system for whistleblowers in Australia.
Dr Vivienne Brand and Dr Lombard argued in favour of a reward based
system, indicating to the committee that bounties could be a game changer in the
Australian corporate sector:
...any reform the committee considers ought to take into
account the potential for some form of financial incentive, reward or
compensation—a spectrum of those sorts of options—to really shift the level of
...we are strong proponents of financial rewards for
whistleblowing, recognising that that is just part of a bigger picture and that
it will not be the answer to all the issues that have been addressed, but that
a holistic view is important.
Mr Jordan Thomas argued in favour of a bounty system suggesting that it
can be relatively low risk and low cost for the government because the
government only pays a reward if the enforcement action is successful. Mr
Thomas noted that before the whistleblower program regulators had to build a
number of cases from the ground up, whereas now regulators are able to be much
more targeted and efficient in looking at potential wrongdoing.
Mr Thomas also set out areas in which the US programs had been successful:
...the American experience tells us that governments offering
incentives for corporate whistleblowers to report misconduct really does work.
First, surveys show that more than 80% employees, continue to report internally
first —an important sign of a healthy corporate environment. Second, after the
establishment of the SEC Whistleblower Program, many companies invested more
time and resources in strengthening their internal reporting and compliance
programs to encourage their employees to report internally, rather than
externally. Third, attorneys, accountants, compliance professionals and other gatekeepers
have reported being empowered because they now can argue that failure to do the
right thing or invest more in their compliance and integrity programs will
result in external reporting. Fourth, more organizations are self-reporting to
law enforcement and regulatory organizations because the probability of
detection associated with external reporting incentives is much higher than
ever before. Finally,
the success of American whistleblower programs has had a positive deterrent
impact by discouraging potential wrongdoers from engaging in wrongdoing.
Mr Thomas set out further arguments for a whistleblowing reward system:
- Employees owe a duty to employers, but have many other
important duties including to their company's shareholders and fellow citizens.
- The public compensating whistleblowers does not create
corrupt companies, but allowing wrongdoers to get away with crimes because
knowledgeable employees and culpable corporations remain silent surely does.
- Australia's primary focus should be on the real harm caused
to real people through corporate wrong doing.
- Whistleblowing works: it ferrets out crime, leads to reform
of corrupt corporate cultures, and protects innocent victims from corporate
- The option of whistleblowing to the government can and does
promote more robust internal corporate compliance and speak up programs.
- Establishing impossibly subjective eligibility standards
will ensure that corporate whistleblowers remain silent.
- Since whistleblowers often pay a heavy price for speaking
up, Australia should compensate these courageous individuals for the hardships
Both Mr Thomas and Mr Joshua Bornstein, Director/Principal, Maurice
Blackburn Lawyers noted that in Australia there are precedents for non-rewards
based incentives for reporting violations of law in Australia. For example, under
the ACCC's amnesty program, individuals and entities that are culpable for
illegal cartel activities are entitled to amnesty from prosecution if they are
the first to report the violations to regulatory authorities.
The ACCC provided further detail on how its immunity policy works, including
noting that it is a policy rather than legislation:
The main incentive, in fact almost the only incentive, that
we offer is immunity, but that only applies to people who are involved in
cartels. So it is actually quite narrow—a lot of the things that we investigate
are not cartels—and it is only if you are involved.
Our immunity policy is not done under the statute. It is a
policy, so it sits together with the Commonwealth prosecution policy.
The immunity policy is multilateral conduct; it helps to get
a person to self-report. There might be two or three people. If one of those is
encouraged to come in, that opens up the rest of the case.
Mr Bornstein argued that the reason why a bounty system sits
uncomfortably with our culture is because there is far too much acceptance of
lax standards of corporate governance. He suggested that those who benefit from
tax evasion, bribery and wage fraud have much to fear from whistleblower
Those incentives undermine the levers that those wrongdoers
use to try and prevent exposure. Companies who try to stop whistleblowing use
the carrot and the stick with their workforces. It can be a financial incentive
and it can be the threat of being expelled or punished or excluded from the
organisation. The only effective way to overcome big threats and big money is
to offer proportionate incentives and protection to the whistleblower, ensure
that their disclosure is dealt with quickly and effectively, and provide
The IBACC was in favour of a bounty system as part of a broader
improvement to a compensation scheme. However, the IBACC acknowledged that
while the majority of submissions supported substantially improved compensation
rights, many submitters were more hesitant, if not hostile, towards the notion
of rewarding the voluntary disclosure of corporate or not-for-profit
The [IBACC] respects the differences of views in terms of the
introduction of a reward system. It would mark a major innovation and change in
the Australian legal landscape. That, of itself, is no reason not to do it. The
[IBACC] remains of the opinion, as expressed in its Submission, that an
independent rewards system, supporting a reformed compensation scheme, is a
desirable reform in Australia for the benefit of those in the community to
stand up to report misconduct.
While Professor Brown supported the careful introduction of reward
systems, he noted that it would be important to ensure consistency across all
sectors and regulatory areas. Importantly, however, Professor Brown also drew
attention to the need for significantly higher penalties that would then allow
for both greater compensation for individual whistleblowers and increased funds
to support the functions of a whistleblower protection agency.
Arguments against a reward system
This section summarises some of the many arguments put to the committee during
the inquiry against a reward system in Australia. While many submitters and
witnesses focussed on the ethical implications of a bounty system and the
potential for perverse incentives to produce counter-productive outcomes, other
submitters focussed on the practical concerns that a bounty system would raise.
Ms Serene Lillywhite, Chief Executive Officer of Transparency
International, did not support a US style bounty system for whistleblowers
because, in her view, the US system does not provide all the necessary
protections and may in fact preclude whistleblowers from accessing other
It may provide some form of compensation...but it is still not
necessarily meeting all the issues in terms of providing adequate whistleblower
The other point that I think still requires some
consideration is whether the introduction of a bounty system, for want of a
better word, would potentially preclude a whistleblower from seeking other
forms of civil remedy or civil justice. Would there be the requirement, for
example, that by accepting a bounty you effectively forego your right to other
forms of natural justice?
Similarly, Mr Gentilin was cautious about a bounty system and argued
that other measures would be more beneficial in protecting whistleblowers:
I am not supportive of a bounty system similar to the one
currently in place in the US. This is not to suggest that the US bounty system
has not been successful. If one looks at it purely through the lens of
increased disclosures, an argument could be made in favour of a bounty system.
However, this inquiry has been launched under the banner of increasing
whistleblower protections. I believe there are more effective ways to achieve
this than through the introduction of a bounty system.
Ms Rebecca Maslen-Stannage, Chair of the Corporations Committee, Law
Council, told the committee that the Law Council did not support a bounty
system which risked setting up perverse incentives, and preferred a
compensation system instead. The Law Council argued that getting the
legislative settings right was the key to reducing the incidence of
victimisation so that whistleblowers would feel safe to report wrongdoing
internally and seek to change an organisation from within.
Mr Warren Day, Senior Executive Leader, ASIC noted that in ASIC's
experience, the majority of whistleblowers who contact the regulator are
motivated by altruism.
He also raised serious practical considerations that could arise from the
application of a bounty system:
You can see a scenario where there are two people working
side by side. One is actually the whistleblower and the other one knows nothing
about what is going on, but they work in the same place. The second person is
completely oblivious to what is going on. Management come down from on high and
think there is a leak and are really concerned they have a whistleblower and
want to take harmful action against both employees. We would say that the
second employee, the person who is oblivious to what is going on, is just as
victimised as the first person, even though they are not the whistleblower.
This is something we want to point out.
Where we see a circumstance that people have been victimised
on the basis that they are potentially a whistleblower—they have been
victimised because of that—we think there needs to be some way for that to be
considered as well, whereas, with a rewards scheme, it is only the person who
has actually put the information there who is considered.
In light of the potentially unfair distribution of a bounty in the
scenario set out above, ASIC pointed out that a compensation system has the
advantage of potentially providing resources to a broad range of
whistleblowers, whereas a reward based system only assists a small proportion
of whistleblowers who are associated with cases leading to a successful
prosecution and large fines.
The Institute of Internal Auditors told the committee that it did not
support a bounty system and that rewarding whistleblowers should not be
...whether the whistleblower comes from the ranks of internal
audit or not, one must ponder how paying someone for doing the right thing can
restore a healthy culture.
[The Institute of Internal Auditors] Australia agrees with
that position and does not agree with the US position where whistleblowers can
be rewarded with part of the moneys recoverable. 
Similarly, Dr Simon Longstaff from the Ethics Centre did not support
incentives for people to disclose wrongdoing and argued that incentives would
be inconsistent with the duty to act in good faith for the benefit of an
employer or in the public interest:
I think, two wrongs do not make a right, and the fact that
there are incentives in some environments to do wrong does not mean that they
should matter, because it is the nature of the incentive itself that corrupts
the underlying relationship which ought to motivate people to come forward, and
the solution in this case is to provide adequate protections for individuals
who have exhausted the internal mechanisms for raising their concerns, which
should be, ideally, in place.
Dr Longstaff also argued that the ends do not justify the means, and
that instead of looking at bounty systems, the focus should instead be on
remedying the situation which leads to people suffering detriment:
We should not have people losing their jobs. We should not
have people who are subject to some kind of reprisal, even in the broad terms
which have been talked about here today. That is what we need to fix, rather
than just compensate people for a failure to address the underlying problem
itself. I just do not think that it is a healthy situation for society at large
or for people in organisations—whether it is the public sector or the private
sector—to have people raising concerns motivated, principally, by the prospect
of some reward as a result of having done so. It should be a matter of duty
that one acts from, and that should be underpinning the relationship in this
Mr Matthew Chesher, Director Legal and Policy, MEAA did not support a
scheme such as the Dodd-Frank legislation in the US. He argued that there
should be no incentive for a person to disclose, beyond restoring or
maintaining the position that they held, in a financial sense, prior to a
disclosure having taken place.
Mr Trevor Clarke, Director, Industrial and Legal from the ACTU was
cautious about a US style incentive system for whistleblowers, arguing that it
would be a sad day if all enforcement processes were based on the idea that you
get something out of it rather than do it because it is the right thing to do.
He suggested instead that the relevant regulator could be given some discretion
to allocate, on compassionate grounds, a percentage of a fine to a
With respect to the public sector, the Queensland Ombudsman argued that
a bounty system is not consistent with the duties and responsibilities of a
public servant to receive a reward for disclosing information about wrongdoing. The reporting of wrongdoing is integral to the
ethical obligations of persons in public sector employment.
Some submitters and witnesses also drew attention to the perverse
incentives and counter-productive outcomes that a bounty system may engender.
For example, Dr Brand and Dr Lombard from Flinders University raised
ethical concerns relating to the temptation for whistleblowers to hold
information longer to increase their reward under a bounty system.
Mr Lucas Ryan, Senior Policy Advisor, AICD outlined similar concerns:
Firstly, if there were an opportunity for whistleblowers to
receive some sort of financial reward from their disclosure, there may be a
perverse incentive for whistleblowers to sit on information and to wait for
wrongdoing to grow to a greater extent, so that when they made their disclosure
with the hope of receiving a bounty the extent of their reward is greater. As I
said moments ago, the purpose of the framework should be to try to encourage
whistleblowers who want to raise instances of corporate wrongdoing in the hope
that they are corrected. People who do that should always want to go to the
company in the first instance and see that happen as soon as possible. But, if
there is an opportunity for them to make more money by watching corporate
wrongdoing spiral out of control, there is a significant hazard in that.
Mr Ryan also pointed out that financial rewards may encourage
whistleblowers to access information about a company by illegitimate means. He indicated
that the AICD had heard of such scenarios occurring in the US.
In addition, Mr Gentilin warned that a bounty system might not produce
more useful information, but might instead merely result in more meritless
My view of the bounty system—if our goal is to increase the
number of disclosures and tips, then I say go for it. You will get an increased
number of disclosures. My question is: will it encourage people to make
meritless disclosures? That is the risk you run. Any time you are put an
incentive scheme in place in any walk of life, there are intended and
unintended consequences. You have to be prepared for both.
The committee also heard that in the US, some corporations had started
to try to evade the bounty systems by putting contract conditions on employees
banning them from participating in bounty systems. The US-SEC has pursued cases
against those contract arrangements:
One is an overly broad confidentiality agreement, which does
not say—in many cases—you cannot go to the cops, but it is so broadly written
that that would be an natural interpretation. The second thing is notice
provisions—something that would require people, if they have contact with law
enforcement authorities or regulators, to notify their organisations. That has
a chilling effect on people. In the US, because you could report anonymously,
that actually violates the law. The third area that we see is in broad labour
provisions that say that, 'You agree that you won't make a claim or receive any
money for reporting wrongdoing against the organisation,' which undermines the
regimes within the US.
Third party legal interests
Evidence to the committee also indicated that the bounty system in the
US had provided enough of a financial incentive to create a legal services
market for whistleblowers.
Some submitters and witnesses were concerned by the potential for third
party interests to be seeking to profit from whistleblower bounty systems by
offering legal and other services to whistleblowers. The Institute of Internal
Auditors had concerns about the US bounty system and argued that:
All that it has done is create a market for increased
litigation and litigation funders. It is our view that the courts in Australia
have sufficient latitude to compensate individuals commensurate with the
damages incurred, and [Institute of Internal Auditors] Australia would not
support the proposition of financially rewarding whistleblowers as occurs in
Evidence in the US shows—you have the False Claims Act, the
Dodd-Frank Act and a plethora of state legislation covering whistleblowers, and
it has created a whole market where lawyers are profiting out of this and
basically ambulance chasing. I do not think we really need that in Australia. I
think that would be the last place you would want to go.
Clayton Utz also argued that a bounty system may lead to a litigation
culture perpetuated by litigation funders which may put a strain on court and
regulator resources and businesses that would have to defend the actions.
By contrast, Mr Bornstein from Maurice Blackburn had a different view. He argued
that a bounty system would counterbalance the pernicious effect of third
parties profiting from wage fraud schemes and tax evasions schemes. Mr
Bornstein also argued that the law currently protects against vexatious claims:
The law does this already; if you bring a vexatious claim
under the Fair Work Act then you might get a costs order against you. So, if
you impose a threshold—that it cannot be vexatious—then you eliminate a lot of
the froth and bubble that is generated when people talk about adopting the US
model of having incentives.
Timing of the introduction of a reward
Some submitters and witnesses discussed whether it may be appropriate to
reconsider a reward or bounty system at another time.
The AICD noted that there are some challenges with the operation of the
US whistleblower bounty system and that the US bounty system was put in place
sometime after other whistleblower protections were established:
... Firstly, they have a different cultural context to us. They
have a previous whistleblowing act that introduced similar protections that we
are contemplating with ours.
Secondly, they have a strong history of qui tam provisions,
which previously operated under American law that we do not have here in
Australia. The AICD is particularly concerned about some of the moral hazards
that arise from a bounty scheme. That is not to say that in five years, 10
years time or whenever we review the system, if it has not gone far enough,
they might be hazards we are willing to take. But in the short-term, our view
is that there is enough scope to improve the whistleblowing framework now that
we do not need to contemplate entertaining those moral hazards.
The AICD suggested reconsidering a bounty system after other measures
have been given a chance to work:
Our suggestion is that the types of improvements that we have
outlined in our submission—and we believe the genuine focus of boards and
corporates to improve practices—supported by a better regulatory environment,
will materially shift that conversation and the experience within Australia.
Our suggestion, then, is: why don't we do that, and have a look at bounties as
part of a post-implementation review, which, as a matter of good practice, we
think is something we should be doing with all substantive reforms in a
relatively short period.
Limitations of a bounty system
based on existing low penalty regime
ASIC suggested that there is benefit in deferring the consideration of a
rewards system until more comprehensive whistleblowing reform has been
implemented, and in particular the operation of a new compensation regime has
been assessed. ASIC also noted that this would also allow time for higher
monetary penalties to be introduced.
Despite the fact that some countries have already adopted a
rewards system to encourage the reporting of corporate wrongdoing, ASIC does
not consider that a rewards system that is dependent on successful prosecution
and the level of penalties imposed would be effective in Australia at this time
(generally, in other jurisdictions, the reward payments are calculated as a
proportion of the penalty imposed).
Dr Lombard also argued that a bounty system may not work in Australia
because the penalties for corporate wrong doing are much smaller than the US in
many cases and a portion of the fine may not necessarily be attractive.
Previous parliamentary inquiries
did not support a bounty system
The committee notes the findings of three previous parliamentary
inquiries which did not support financial reward or bounty systems:
- In 1989, the House of Representatives Legal and Constitutional
Affairs Committee rejected any suggestion that a system of rewards or bounties
be introduced in Australia concluding that such a system was incompatible with
accepted principles and practice within Australian society.
- In 1994, the Senate Select Committee on Public Interest
Whistleblowing recommended that a reward system should not be considered
because it would be contrary to the purpose of a scheme which should encourage
the development of appropriate ethical standards.
- In 2009, the House of Representatives Standing Committee on Legal
and Constitutional Affairs inquiry into public sector whistleblower protections
considered reward and bounty systems. That committee concluded that:
...recognising whistleblowers where they have made a
contribution to the integrity of public administration sends an important
message about the value of an open pro-disclosure culture. Agency heads should
actively consider recognising whistleblowers within their organisation through
their own existing rewards and recognition programs.
The committee has considered the experiences of other jurisdictions with
whistleblower financial reward and bounty systems. The committee notes that
reward systems exist in a number of jurisdictions similar to Australia,
including the US and Canada. To date, reward or bounty systems have not been
taken up by Australian states or territories.
The committee acknowledges that there were strong arguments put forward
by both proponents and opponents of financial reward and bounty systems.
However, it considers that a reward system would motivate whistleblowers to
come forward with high quality information. This information would otherwise be
difficult to obtain. The committee considers that a reward system will motivate
companies to improve internal whistleblower reporting systems and to deal more
proactively with illegal behavior.
The committee also acknowledges that the submissions that did not
support a reward system in Australia focused primarily on the US style
Dodd-Frank bounty system, which provide uncapped rewards to whistleblowers and
have a broad focus. The arguments presented against a reward system center
largely around the concern that it would establish unethical incentives to
The reward system proposed by the committee would place a cap on the
reward being paid to a whistleblower, be reflective of the information that is
disclosed and be determined against a number of criteria so as to mitigate
against perceived negative consequences of a US style bounty system.
The committee recommends that following the imposition of a
penalty against a wrongdoer by a Court (or other body that may impose such a
penalty), a whistleblower protection body (such as that recommended in Chapter
12) or prescribed law enforcement agencies may give a 'reward' to any relevant
The committee recommends that such a reward should be determined within
such body's absolute discretion within a legislated range of percentages of the
penalty imposed by the Court (or other body imposing the penalty) against the
whistleblower's employer (or principal) in relation to the matters raised by
the whistleblower or uncovered as a result of an investigation instigated from
the whistleblowing and where the specific percentage allocated will be
determined by the body taking into account stated relevant factors, such as:
- the degree to which the whistleblower's information led to the
imposition of the penalty;
- the timeliness with which the disclosure was made;
- whether there was an appropriate and accessible internal whistleblowing
procedure within the company that the whistleblower felt comfortable to access
- whether the whistleblower disclosed the protected matter to the
media without disclosing the matter to an Australian law enforcement agency or
did, but did not provide the agency with adequate time to investigate the issue
before disclosing to the media;
- whether adverse action was taken against the whistleblower by
- whether the whistleblower received any penalty or exemplary
damages (but not compensation) in connection to any adverse action connected
with the disclosure; and
- any involvement by the whistleblower in the conduct for which the
penalty was imposed, noting that immunity from prosecution, seeking a reduced
penalty against the whistleblower etc. is dealt with by separate processes and
that a reward would be regarded as a proceed of crime, if the whistleblower had
been involved in criminal conduct (i.e. immunity or reduced penalty, not the
reward is the benefit and incentive).
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