Whistleblower protections in the corporate sector

Improve whistleblower protections in the tax and corporate sectors: Australia will strengthen protections for people who report corruption, fraud, tax evasion or avoidance, and misconduct within the corporate sector.

Completion Status:
Partially fulfilled

Commitment filtering:

Specific:yes

The commitment is specific because it targets a sufficiently narrow policy area, namely whistleblower protections for people who report corruption, fraud, tax evasion or avoidance, and misconduct within the corporate sector.

Measurable:yes

Based on how the commitment is formulated it is missing measurable actions on how Australia plans to “strengthen protections for people who report corruption, fraud, tax evasion or avoidance, and misconduct within the corporate sector”. However further research shows that this commitment relates to commitment 1.1 in Australia’s First Open Government National Action Plan, 2016-2018, which describes milestones for how the commitment for improved whistleblower protections in the tax and corporate sectors will be legislated.[1] Further, we understand strengthened protection as implementing the recommendations of an earlier parliamentary joint committee. The government had committed to supporting a parliamentary inquiry to examine the Registered Organisations Commission whistleblower amendments (passed by the parliament in 2016) with the objective of implementing the substance and detail of those amendments.[2] The inquiry (the Joint Parliamentary Committee on Corporations and Financial Services inquiry into whistleblower protections in the corporate, public and not-for-profit sectors) had concluded by the time of the 18th IACC.[3] Therefore, this commitment will be considered measurable based on the action to strengthen legislation by implementing the 2017 recommendations by the Joint Parliamentary Committee on Corporations and Financial Services.

[1] Australia’s First Open Government National Action Plan 2016-18, https://ogpau.pmc.gov.au/national-action-plans/australias-first-open-government-national-action-plan-2016-18

[2] Australia’s First Open Government National Action Plan 2016-18, https://ogpau.pmc.gov.au/national-action-plans/australias-first-open-government-national-action-plan-2016-18

[3] Parliament of Australia, Whistleblower Protections in the Corporate, Public and Not-for-Profit Sectors, 2016, https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Corporations_and_Financial_Services/WhistleblowerProtections

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Evaluation:

In February 2019, the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 finally passed both houses of parliament and became law.1 The bill amended the Corporations Act 2001 to consolidate and broaden protections and remedies for corporate and financial sector whistleblowers and amended the Taxation Administration Act 1953 to create a whistleblower protection regime for the disclosure of information by individuals regarding breaches of tax laws or misconduct relating to an entity’s tax affairs.

In many respects, Australia’s private sector whistleblower protections are now world-leading, including that whistleblowers can seek compensation and other remedies when they experience reprisal and where organisations fail in their duty to prevent detrimental acts to seek compensation and other remedies.2 However, only half of the recommendations of the Parliamentary Joint Committee on Corporations and Financial Services inquiry into whistleblower protections have been implemented,3 and some stakeholders believe that more needs to be done to strengthen whistleblower protections, including addressing shortcomings in the Corporations Act.4 The commitment is therefore considered partially fulfilled.

 

Challenges to effective commitment implementation
The initial reforms occurred when there was interest and support from the Commonwealth Treasury, the relevant minster and the parliament (the relevant minister has changed since then). However, there has been no progress since the passing of the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill to further strengthen Australia’s whistleblower protections, including to address the outstanding recommendations from the Parliamentary Joint Committee on Corporations and Financial Services inquiry. Some stakeholders have the sense – based on several interviews conducted for this report – that the government has no interest in doing so.

 

Opportunities to accelerate commitment implementation
This commitment focussed on whistleblower protection in the private sector only, not in the public sector. In 2019, the Senate referred an inquiry into press freedom to the Environment and Communications References Committee. The inquiry terms of reference included the whistleblower protection regime and protections for public sector employees.5 The committee has since recommended that the Australian government expedite reforms to the Public Interest Disclosure Act 2013 to address the deficiencies (including that disclosures are not always adequately investigated or the conducted report addressed) within existing legislative protections for disclosers (whistleblowers).6 There is, therefore, an opportunity for further whistleblower reform, including supporting a consistent and coherent national approach to whistleblower protection across Australia’s public sector and business organisations.

 

Recommendations

It is recommended that Australia enhance protections for whistleblowers, addressing the outstanding recommendations from the Parliamentary Joint Committee on Corporations and Financial Services inquiry, and to:3

 

  • ensure public interest whistleblowers (both private and public) have effective access to remedies for any detriment suffered for reporting, whether through acts or omissions
  • establish consistent best practice thresholds across sectors for onuses of proof, public interest costs indemnities, exemplary damages and civil penalties
  • establish a reward and legal support scheme based on returning a proportion of the financial benefits of disclosures directly to whistleblower welfare
  • establish a whistleblower protection authority to assist reporters, investigative agencies and regulators with advice, case support, enforcement action and remedies for detrimental conduct

Sources:
  1. Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019, No. 10, 2019, https://www.legislation.gov.au/Details/C2019A00010
    30 Dec 2021
  2. See for example, Transparency International Australia and Griffith University, Australia’s National Integrity System: the Blueprint for Action, November 2020, https://transparency.org.au/wp-content/uploads/2020/12/NIS_01_Summary_web.pdf
    30 Dec 2021
  3. Transparency International Australia and Griffith University, Australia’s National Integrity System: The Blueprint for Action, November 2020, https://transparency.org.au/wp-content/uploads/2020/12/NIS_01_Summary_web.pdf
    30 Dec 2021
  4. Stakeholder interviews, November 2021
    30 Dec 2021
  5. 30 Dec 2021
  6. The committee report is available at: Parliament of Australia, Terms of Reference, https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Environment_and_Communications/PressFreedom
    30 Dec 2021

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