Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

() (): On behalf of the Parliamentary Joint Committee on Corporations and Financial Services, I present the committee's report, entitled Whistleblower protections.

Report made a parliamentary paper in accordance with standing order 39(e).

by leave—On behalf of the Joint Standing Committee on Corporations and Financial Services, I present the committee's report on its inquiry into whistleblower protections. The inquiry into whistleblower protections was referred to the committee by the Senate on 30 November 2016.

There were 75 submissions received by the committee and we conducted five public hearings—one in Brisbane, one in Melbourne, and three in Canberra—to provide individuals and organisations the opportunity to provide evidence to the committee.

The committee's work on this inquiry was also greatly assisted by a substantial body of academic work over the past two decades on whistleblower protections, and I notice Professor AJ Brown is in the gallery. He did some fine work for the committee and presented on numerous occasions to the committee, and I thank him for that.

The committee used the best-practice guidelines set out in the Breaking the silence report as a systematic basis for conducting this inquiry and structuring this report.

Australian academic Professor Brown brought the report to the committee's attention and has been a leading researcher into whistleblowing. I understand Professor Brown, as I just said, is in the chamber this afternoon, so again I thank him for his work.

The committee found that effective whistleblowing protection is essential in both fostering integrity and accountability, and also deterring and exposing misconduct, fraud and corruption.

It became evident early on in our inquiry that while Australia's public sector whistleblowing laws were relatively comprehensive, they were lacking within the private sector.

The Moss review has also identified areas where public sector whistleblowing legislation would benefit from reform.

The committee heard evidence which noted gaps in our current laws, making it very difficult:

Through evidence received it became obvious there were significant inconsistencies—not only between various pieces of Commonwealth public and private sector whistleblower legislation, but also across the various pieces of legislation that apply to different parts of the private sector.

One of the committee's main recommendations is that the public sector whistleblower protection legislation remain in a separate act and all private whistleblower protection legislation be brought together within a private single act, and I'm sure the members opposite will have comments about that as well.

Subsequently, the committee has recommended that the government examine options to ensure ongoing harmony and alignment between whistleblower protections in the respective public and private sector acts.

The committee also recommended the establishment of a whistleblower protection authority to be housed as a single body or within an existing body, that can:

In addition to this, the committee has also made important recommendations on:

I'd like to thank all of those who have contributed to this inquiry into whistleblower protections.

Whilst the committee was unable to include specific whistleblower stories in the report to ensure protection of whistleblowers, the committee would like to acknowledge those who shared their experiences as a whistleblower with the committee to ensure we were fully informed about the sections in need of reform, and, in particular, the journeys they went through during their whistleblowing time.

I thank the committee members for their participation and contribution to this important inquiry, and, of course, to this report.

I thank: the Deputy Chair, Senator Deb O'Neill; Senator Nick Xenophon, who is a passionate advocate for whistleblower protections and a driving force behind a lot of this report. I also thank my parliamentary colleagues: the member for Forde, Senator John Williams, the member for Mackellar, the member for Griffith, the member for Burt, Senator Chris Ketter and Senator Peter Whish-Wilson.

It would also be remiss of me not to thank Hansard and Broadcasting, and also, in particular, the secretariat for the work that they did on aligning the members and also putting up with some of the issues that were raised.

Finally, to the committee secretariat—particularly Patrick Hodder and Jon Bell—who put an enormous amount of work into ensuring the committee has had the opportunity to liaise with the academics, whistleblowers and other representatives, and to ensure we were able to put forward informed recommendations to protect whistleblowers. That's what this report is about: the protection of whistleblowers against reprisals.

Without further ado, I commend the report to the House.

Matt Keogh (Burt, Australian Labor Party) Share this | Link to this | Hansard source

'Dobbers kiss robbers' was a catchcry of many school playgrounds around Australia, including mine. Unfortunately, it's this mentality that has made it so hard to detect corporate and other wrongdoing, and it needs to change if Australia is going to clean up its act and stop sliding further down the global Corruption Perceptions Index. It's essential to ensure that corporate, environmental, financial, banking and employer crime, and fraud, corruption and misconduct are stopped. It's also essential to ensure a culture of public accountability and integrity. Encouraging employees to report wrongdoing by their employer, and protecting them when they do, is an important part of preventing corruption in both the private and public sectors. Employees are uniquely placed to recognise misconduct both in the workplace and by their employers; generally, they are often the first to detect illegal behaviour. Unfortunately, all too often those employees don't want to do anything about the misconduct on their own.

For me as a new MP, and I'm sure for the Australian public, the conduct of this inquiry and the report produced by the Parliamentary Joint Committee on Corporations and Financial Services is an example of the great work that can and does come from members and senators from across political divides working together to achieve better outcomes for our nation. To that end, I would also like to thank the great assistance given to us by the secretariat and all those who made submissions to the committee.

This consensus whistleblowers report makes significant recommendations that the government should implement to ensure whistleblowers are protected, supported, given guidance and provided with proper opportunities to raise their concerns. A key recommendation is a single piece of legislation for whistleblower protections in the private sector. This will provide clarity and ease of navigation for all. It's also important that the nature of such legislation be harmonised with the existing extensive public sector protections that should also be expanded. While this may not initially occur through a singular public and private sector piece of whistleblower protection legislation, it is my view, and that of my fellow Labor committee members, that it would be preferable if a single piece of legislation was employed to effect the other recommendations of the committee so as to ensure that provisions not only start out harmonised but remain so, as well as to ensure that unnecessary distinctions between the private and public sector are not created when it comes to whistleblowing protections.

Importantly, it is recommended that the scope of whistleblower protections be expanded to apply whenever a current or former employee, contractor or volunteer has a reasonable belief that there has been a breach of any law of the Commonwealth; any law of a state or territory by an entity covered by the Fair Work Act or relating to a constitutional corporation; or an industry code or professional standard with force of law or prescribed as having protections apply. This extended scope is vital to ensure the capacity to expose breaches of, for example, the insurance industry code, the superannuation industry code and many other voluntary industry codes that apply to the financial services sector and many others. It is therefore vitally important that, along with adopting the committee's recommendations, it is prescribed that such codes are picked up by the legislation. Additional obligations will also be placed on law enforcement agencies in their dealing with whistleblowing disclosures as well as a regime for protections when disclosures are made to the media.

Finally, after much consideration, it is the committee's unanimous view that, as well as providing adequate—and, importantly, timely—access to compensation for whistleblowers where required, it is important that they have access to part of the penalties obtained against wrongdoers where successful action against them is taken. These will be determined by a whistleblower protection authority within legislated percentages and will come from the penalties that are imposed by a court. These two recommendations will be a significant shift in Australian law, but a necessary one. This is not only to encourage greater disclosure and enforcement against corporates and financial service wrongdoing but also to incentivise firms to ensure they have appropriate and genuinely functioning internal disclosure mechanisms, and this is now the case in many jurisdictions.

I strongly encourage the government to promptly attend to implementing all of the recommendations of the committee. I commend the report to the House.

Bert Van Manen (Forde, Liberal Party) Share this | Link to this | Hansard source

I seek leave to make a statement.

Leave granted.

I'm pleased to rise today and speak on the report of the Parliamentary Joint Committee on Corporations and Financial Services on whistleblower protections in the corporate, public and not-for-profit sectors, as has been tabled by the chair of the committee, the member for Swan, who is now acting in the role of Deputy Speaker.

This inquiry was tasked with looking at a wide range of matters in the space of whistleblowing. It looked at effective ways to integrate strong whistleblower protections, at what, if any, compensation arrangements should be put in place and at how these have worked in other jurisdictions. Furthermore, it examined what measures are needed to ensure an effective access to justice for people who make or may make disclosures and then require protection as a whistleblower in the sectors I mentioned earlier.

I believe there are two key considerations that must be made in considering the legislation around whistleblowing. Firstly, why is it so important? Secondly, how do we protect whistleblowers both when they come forward and afterwards? It was clear from many submissions and witness testimonies that whistleblowing is critical for fostering a culture of accountability, integrity and transparency. I want to make the point that it remains vital as a strong deterrent against misconduct, fraud and corruption. This was made particularly clear regarding information provided to the committee by the Australian Federal Police.

The AFP made it very clear that whistleblowers play an important role in detecting serious financial crime that is often sophisticated, well concealed or part of a culture of secrecy. Furthermore, the AFP noted that, due to the nature of such crimes, there is a very low likelihood of them being uncovered by law enforcement at all unless whistleblowers feel secure in coming forward. This is a great example of why ensuring we have a robust framework around whistleblowing is so important. The AFP said the types of matters where whistleblowers become vital players in criminal investigations include foreign bribery, serious tax crime, identity crime, corporate and government corruption and serious fraud offences. Yet, despite there being a generally positive view of whistleblowing, it was pointed out to the committee that being a whistleblower is rarely easy or glamorous and can often involve great risk both publicly and personally to the person speaking out. Perhaps inevitably, then, evidence showed current protections for whistleblowers remain not as robust as they could be. So the recommendations in the report and the legislation ultimately introduced must have practical effects in both the public and the private sector, enabling effective investigation and avenues of appeal in cases of retaliation against a whistleblower.

Whistleblowing, in my view, is an essential part of our democracy. We're well aware that free speech and the importance of protecting and even advocating it has been high on the public agenda, but Australians in any workplace or in any sector must also have the ability to speak out and governments must act to protect the capacity of those people to do so. The committee has recommended that the public sector whistleblowing protection legislation remain in one act, while the various private sector whistleblowing protection legislation be brought together in another single act but separate from the first one. It is also recommended that the government examine options for ensuring ongoing harmony between the whistleblowing protections in these respective acts. This is important because, as outlined in the hearings, a recent analysis of whistleblower protections across G20 countries found that, whilst Australia's public sector whistleblowing laws were relatively comprehensive, they were lacking in the private sector. We looked at the establishment of a whistleblowing protection authority, which would be effective in overseeing the implementation of the whistleblower regime in both the public and the private sector.

I join the committee in acknowledging the work on this inquiry that has been greatly assisted by a substantial body of academic work over the past few decades. I also acknowledge the contribution of the witnesses and the submitters who participated and the secretariat for the detailed work they have done to assist us on the committee. I also thank my colleagues on the committee and the chair. I commend this report to the House.

Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

by leave—This is a unanimous report of the Parliamentary Joint Committee on Corporations and Financial Services, which is no mean feat when you consider that the committee has on its membership Greens, Senator Xenophon from the Nick Xenophon Team, Liberals, Nationals and Labor representatives, and, perhaps even more remarkably, both members of the House and senators. Yet, despite all of our differences, we were able to come up with a unanimous report in relation to this very significant whistleblowing inquiry.

The reason that whistleblowing protections are important is fairly obvious when you think about the individual whistleblowers. It's an incredibly dangerous thing to do. To blow the whistle on unlawful conduct or conduct that breaches your professional standards or your industry codes, particularly when you've found out about these breaches through work or through a contract that you might have with a principal, can result in anything from just a slap on the wrist, to being demoted, to losing pay, to even being sacked, to having your reputation ruined, to not being able to get a job in the same industry, to not being able to earn an income. These things are serious ramifications, and so it is important for individual whistleblowers that there be a strong regime of protection in place in order to ensure that their lives are not ruined just because they've done the right thing by disclosing wrongdoing.

Similarly, and much more importantly, in my view, the importance of having a pro-whistleblowing culture should not be disregarded when it comes to the public benefit of that culture—not just the private benefit to whistleblowers in that they get protected but the public benefit that we obtain as a nation from having wrongdoing brought to light and finding out about it so that regulators are in a position to take action. For example, corporate tax evasion harms everyone. If corporates aren't paying their taxes, then it's you and me and people in our electorates who are then turned to to pay taxes to make up the shortfall. If firms are engaging in environmental vandalism and tipping toxic chemicals into the river, that's something that harms the environment and harms everybody who enjoys it. So there is a public benefit in that wrongdoing being brought to light by people who are getting access to information about it. I think when we talk about a pro-disclosure culture or a pro-whistleblowing culture, it is the public benefit that is really motivating us as a parliament to look at what can be done to extend whistleblower protections to the private sector and the not-for-profit sector and to strengthen them in the public sector. This is a report that is really very significant, I think, in that it deals with that desire to have a pro-disclosure culture.

It's also important because it tries to grapple with the questions about why someone should blow the whistle—why someone should disclose unlawful conduct or conduct that breaches professional standards or industry codes. It's certainly the first parliamentary inquiry in which I've been able to have a discussion about Immanuel Kant with a witness. We did quite enjoy the discussion around whether people should do the right thing because they should do the right thing, or whether it would be possible to look at rewards or incentives for people to be forthcoming with information about wrongdoing. As the member for Burt said, this is a fairly significant change of approach for Australia. There are some precedents—there are some bodies that will pay rewards for information about criminal offences, for example—but to look at a possibility of incentivising people to come forward with information about wrongdoing is quite a new thing for us to have looked at. So it was really useful that we got such differing perspectives from such expert bodies and witnesses. We were so grateful to all of the submitters that took the time to make a submission to our inquiry, no matter where they stood on any of the issues they came and spoke to us about. Each of the submissions was very useful; I certainly appreciated it and I know the other members of the committee did as well.

This report does recommend the possibility of incentives or rewards being paid. If someone discloses information about wrongdoing to a regulator and they're then able to get a successful prosecution or proceeding brought against the wrongdoer, this report recommends that there should be the possibility of a reward being paid to the person who has given the information. It does not recommend the right or the entitlement to a reward, but a discretion on the part of the regulators or a whistleblower protection authority—which we have suggested establishing—to be able to pay a reward if they consider a number of things, including that the information was material to getting the good result in the proceedings, or in the prosecution, as the case may be. We were informed during the course of the inquiry by some expert witnesses from the US who had been looking at their own security bodies that the Securities and Exchange Commission has been implementing its own rewards system—though they used slightly different language there—for some time now, and they've seen very strong results in terms of increased numbers of prosecutions and success. So it is a new idea. It's something that's been kicking around for a while, but it's a new thing for a committee like ours to have considered in any detail. I think it's a very sensible recommendation to allow a bit of flexibility for the regulators to be able to make a decision to pay a reward in appropriate and limited circumstances.

I want to join with the other members of the committee in thanking all of the members of the committee for their collaborative approach. Of course, I thank you, Deputy Speaker Irons, as the chair of the committee, and the deputy chair, Senator O'Neill. I particularly wanted to thank members of the secretariat like Patrick Hodder and Jon Bell, who have been incredibly supportive and, might I also say, patient with the committee. I also want to again thank everybody else who made a contribution. There are a range of members of the secretariat whose names appear on the inside of the report, and I encourage people to have a look at those names and to be grateful for the work that has been done. Also, to the people undertaking logistical work, Hansard, the broadcasters and other people who have made this inquiry possible, I wanted to record my thanks as well.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

On indulgence, I congratulate the committee for coming up with the report. It's been unanimous. Well done to the members of that committee.