New Chance for Openness in Australia

australian-law-810x540WIN is delighted to publish this article by Professor AJ Brown on the exciting new amendments now making their way through the Australian Parliament. Why are these amendments so important? Anna Myers, WIN’s ED, explains at the end of this blog that these amendments focus on the crux of whistleblower protection, which is to reinforce and maintain credible and accountable governance at all levels of the private and public sectors. This means being able to hold those who have power to account for their conduct. But will the EU follow Australia’s lead?

After a long gestation, Corporations Act amendments passed by Australia’s Senate last week promise a whole new level of whistleblower protection in the private sector, with flow-on effects for the public sector, once approved by the entire parliament in February next year.

Whistleblower protection is also featuring prominently in Australia’s ongoing debate over a new national integrity commission. It is especially topical given the role played by whistleblowers like Jeff Morris in uncovering the wrongdoing at the banking royal commission.

Recently as well, the role of James Shelton and Brian Hood could be told. These were managers who stepped up to reveal appalling foreign bribery by Australia’s Reserve Bank-owned companies, Securency and Note Printing Australia – the nation’s biggest and worst corruption scandal.

So the Australian government’s amendments to overhaul protections for corporate employees could not come at a better time.

Previous plans to limit this to extreme, unlikely emergencies have been shelved. Instead, if employees blow the whistle at least to a regulator, and nothing is happening in 90 days, it is relatively simple for them to go public.

There are some hoops to go through, and time will tell if they are still too tight. But this will be Australia’s most powerful driver yet, not just for companies to improve their culture and compliance but for regulators and law enforcement agencies to change their previous lax ways.

A second big step is no shock to organisations already putting in place better whistleblowing policies. Public and larger companies will face the world’s first-ever requirement to not simply have a policy “on paper” but spell out exactly how they plan to “support and protect” those who speak up, before anyone starts taking out reprisals.

Again, it’s a huge, culture-changing step.

Many companies are quite good at getting their employees to reveal wrongdoing so they can deal with it themselves. Where they fall down is in making sure their people don’t come off second-best, or worse, as a result. With new requirements and a lot of new research on what to do, including from our own Whistling While They Work 2 project, that can change.

Third, the amendments start to fix the problem that until now only deliberate, direct criminal “victimisation” of whistleblowers could ever be punished – something that’s almost impossible to prove, and consequently, never has been.

In the future, any “detrimental” acts or omissions could result in an employer’s liability for compensation. Most importantly, this will include liability for a failure to prevent such impacts – such as by having no protection policy or failing to implement it.

This is also a world-first, rolled out to all organisations. It follows on initial protections applying to union whistleblowers since 2016, making the organisation liable if it failed to fulfil ‘a duty to prevent, refrain from, or take reasonable steps to ensure other persons under the respondent’s control prevented or refrained from, any act or omission likely to result in detriment’ to a whistleblower.

Now, as highlighted earlier this year in Transparency International’s new Practice Guide for Whistleblowing Legislation, it’s an approach set to be extended more broadly, to all companies and corporate bodies.

There are devils in the detail. It is still likely to be tough for whistleblowers to activate these rights, which will have to be tested in the courts.

In Australia, at least, part of the answer to that is still a whistleblower protection authority, which most agree is also needed. A properly resourced agency was recommended by last year’s unanimous report of the Joint Parliamentary Committee on Corporations – and features in crossbench proposals for a national integrity commission tabled in recent weeks. The government is still in the process of respond to that report.

With these new corporate rules on the table, it’s even clearer how out of date Australia’s public sector whistleblower protections have come.

But with these rules, there will be a new fighting chance for whistleblowers, and for corporate transparency and accountability to actually take hold.

AJ Brown is a Professor of Public Policy & Law at Griffiths University in Queensland, Australia. AJ is also a Board member of Transparency International and the International Whistleblowing Research Network.

Comment from Anna Myers, Executive Director, WIN

It strikes me how much the debates in whistleblower protection have evolved when I read AJ Brown’s blog and I see the substance of the amendments currently before the Australian Parliament. It is well known to those of us working in the field that legal protection is only one of the factors that protects those who speak up in the public interest. But it is an important one. The law sets the boundaries of acceptable conduct in response to a whistleblower and, if constructed properly, recalibrates the balance of power between an individual and an organisation (and the people who run it) on whom many whistleblowers depend for their livelihood, personal and professional well-being. Until very recently “legal protection” focused solely providing whistleblowers the right to claim redress for wrongs suffered at work. Applied properly, such laws should deter employers from going after whistleblowers.

However, as these laws necessarily put the onus on the whistleblower as a claimant to take their employer to court, there are some serious drawbacks. The court’s first focus is on the actions of the individual whistleblower (and too many decisions have strayed into the motivations of the whistleblower and away from information that triggered the disclosure) and only secondarily on the actions of the employer or defendant. That said, with strong reverse burdens of proof, for example, such laws can provide important redress, compensation and in some jurisdictions, injunctive relief. But the burden on the whistleblower remains too high and the struggle from beginning to end is still too costly for an individual to bear.

As whistleblowing has moved very rapidly from being the back-up mechanism for when our accountability systems fail, to a front line of defence against overreaching secrecy and cross border corruption, we need to focus as much on the accountability mechanisms as we do the individual whistleblowers. The responsibility for both should be on those who have the power to act. This means finding ways to ensure that organisations and those who run them account for how they treat a whistleblower and how they handle (or fail) to handle the disclosure. The Australian amendments are huge step in the right direction, making it clear that employers have a duty to support whistleblowers and prevent harm, and that liability flows for having failed to fulfil that duty. They have to account for whether or how they acted or failed to act to protect whistleblowers.

This is great … for Australia. But what about in Europe where a draft directive to protect whistleblowers is now before the EU Council? While Australia is building on experience, the EU seems to be starting from scratch. This is baffling as there is plenty of whistleblowing experience in Europe and evidence to show is needed. Instead, the European Commission’s draft directive makes some fundamental and basic errors. It fails to grasp whistleblowing laws are about proper oversight and accountability, and not about regulating employee-employer relationships. The former focuses on ensuring information flows to those legally responsible for any harm or damage caused (most often an employer) and to those authorities with power to act while keeping a watchful eye on the public’s right to know. The latter means controlling how information flows and who gets to communicate it while keeping a watchful eye on protecting employers’ reputations. Europe faces a choice: does it want to improve democratic accountability or does it want to reinforce organisational risk management?

I know which approach to whistleblowing actually makes a difference to our well-being, does the EU?

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