Whistleblower protection

A whistleblower is a person who exposes any kind of information or activity that is deemed illegal, unethical, or not correct within an organisation that is either private or public. The information of alleged wrongdoing can be classified in many ways: violation of company policy/rules, law, regulation, or threat to public interest/national security or health and safety, as well as fraud, corruption and dishonesty.

In February 2017 MEAA made a make a submission to the Joint Parliamentary Committee on Corporations and Financial Services inquiry into whistleblower protections in the corporate, public and not-for-profit sectors.

In the submission MEAA said it believed it is important to acknowledge and examine the nexus between whistleblowers and journalists. Journalists have a duty in a healthy democracy to scrutinise the powerful, including government and business, so that society can be informed about itself. Journalists report in the public interest.

Journalists rely on sources for news stories. The relationship between a source and a journalist is one of trust. A confidential source has to be assured that they can trust the journalist to never reveal their identity. It is an obligation on journalists everywhere to protect the identity of confidential sources.

A whistleblower, as a good citizen performing a civic duty, seeks to bring to light wrongdoing: fraud, corruption and other forms of illegal activity; dishonesty and other unethical practices; threats to the public health and safety; and threats to the public interest.

Whistleblowers may seek to expose this information or activity by reporting it to industry regulators, government and law enforcement agencies, or through the media. But by exposing wrongdoing they also face the prospect of retaliation, so that the act of whistleblowing is done often at great personal risk.

Whistleblowing in the news

In recent years, vitally important public interest journalism has been written thanks to the courageous efforts of whistleblowers in the private sector. They deal with the exposure and revelations of live baiting in the greyhound industry, systematic wage fraud at 7-Eleven, rogue planners at Commonwealth Financial Planning, CommInsure avoiding payouts to sick and dying people, the mis-selling of financial products by Westpac, poor practices at NAB’s financial planning arm, insider trading at IOOF, allegations of compliance failures at Origin Energy’s oil and gas fields — all very large corporate citizens who have a civic duty to uphold.

Internationally, there have also been important news stories that involved whistleblowers exposing wrongdoing: the LuxLeaks scandal, the Panama Papers, the Unaoil expose and the allegations of kickbacks and facilitation payments at Leighton International.

Far too often, private sector whistleblowers who have acted in the public interest have been persecuted as a result due to a lack of acknowledgement of their vital role, effectively retribution by their employer or by the tacit failures of the industry they work in.[i]

There must be an understanding that the wrong that has been exposed must be righted and that the citizen who exposed the wrong should be praised and not punished.

Ethical journalism and whistleblowers

Under MEAA’s rules, all members of MEAA Media are bound by MEAA’s Journalist Code of Ethics.[ii] It is a requirement of the Fair Work (Registered Organisations) Act 2009 that MEAA’s rules are registered with the Fair Work Commission.

Only MEAA Media members can be investigated by MEAA’s National Ethics Panel for alleged breaches of the Code.

The Code was first developed in 1944. The code was reviewed and updated in 1984 and subject to a major review between 1994 and 1999 leading to the current MEAA Journalist Code of Ethics being instituted in February 1999[iii].

Aside from this requirement on individual journalists who are MEAA members, the Code is acknowledged by many media outlets across Australia as part of their codes of practice/conduct for editorial employees.

Clause 3 of the MEAA Journalist Code of Ethics states:

“3. Aim to attribute information to its source. Where a source seeks anonymity, do not agree without first considering the source’s motives and any alternative attributable source. Where confidences are accepted, respect them in all circumstances.”[iv]

The price being paid

MEAA member and Fairfax Media journalist Adele Ferguson has written important news stories exposing appalling conduct by corporations. Those stories have been written thanks to the courage of whistleblowers who have sought to expose wrongdoing. As Ferguson says:

Some of the country’s biggest scandals — Commonwealth Bank, National Australia Bank, Macquarie, IOOF and 7-Eleven — would not have come to light without the brave contribution of whistleblowers. They all paid a heavy price.[v]

Ferguson has documented how the whistleblowers have been persecuted for speaking out. Aside from the very great stress they faced, they have been subjected to the most appalling witch hunts, and extraordinary cover-ups have been undertaken to either hush-up or minimise the exposure of the corporate wrongdoing.[vi]

Rather than supporting whistleblowers, corporations have sought to categorise them as “leakers” who should be subjected to at least suspicion, if not outright intimidation and even whisper campaigns, often with the corporation using its massive resources to fund “unimaginably underhand back channel techniques” — many of which have also sought to intimidate, harass and muzzle the journalist reporting on the whistleblower’s allegation of corporate wrongdoing.[vii]

Many whistleblowers have been sacked or forced to leave their job; some have received death threats, been diagnosed with post-traumatic stress disorder and have had their names and reputations tarnished within the industry, effectively preventing them from finding employment in the same field. The effect on the individual whistleblower and their family can be far-reaching. And all for doing what a good citizen should do and is encouraged to do.

Unless whistleblowers can be afforded some substantial degree of protection, encouragement and support, “very few will go ahead and pay the high personal price to do the right thing under the current system”.[viii]

Journalists can also pay a high price for their reporting. Their news stories may be the subject of defamation actions in an effort to punish or silence future stories. These court actions may cause the journalist and media employer immense legal costs to defend — all for having told the truth in the public interest.

The journalists may also be subpoenaed to reveal the identity of their sources for the news story and, because Australia lacks uniform national shield laws, the prosecution can be undertaken in a jurisdiction that does not offer journalist privilege protections in its Evidence Act — with the result that an ethical journalist, maintaining their ethical obligation to never reveal the identity of a confidential source, faces the prospect of being convicted for contempt of court and of being fined, jailed, or both, as well as having to carry a criminal conviction for simply doing their job.

The contrast between public and private whistleblowing protections

A June 2014 paper[ix] provides an important comparison of Australia’s whistleblower protection rules for the public and private sectors. The report found: “In the private sector, legislative protection is considerably weaker. The primary provisions are contained in Part 9.4AAA of the federal Corporations Act 2001… However 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. These provisions have been subject of widespread criticism and are the focus of a federal parliamentary committee inquiry into, among other matters, the protections afforded by the Australian Securities and Investments Commission to corporate and private whistleblowers.[x]

“Other limited protections provisions exist for whistleblowers who assist regulators in identifying breaches of industry-specific legislation such as the federal Banking Act 1959, Life Insurance Act 1995, Superannuation Industry (Supervision) Act 1993 and Insurance Act 1973, but these types of protections are also typically vague and ill-defined, with no agency tasked with direct responsibility to implement them.”[xi]

Given the spate of whistleblower incidents recently, particularly in the banking and finance industry, this situation needs to be urgently remedied.

MEAA welcomed that the Senate Economics Committee “has called for private sector laws to be placed on a par with those protecting public sector whistleblowers, which were substantially bolstered in recent years. Australia’s laws also lag behind those of other OECD countries, including the US and UK”[xii].

Disclosures to the media

In its submission MEAA said disclosures to the media should be protected where:

1. the whistleblower honestly believes on reasonable grounds that it is in the public interest that the material be disclosed;
2. the whistleblower honestly believes on reasonable grounds that the material is substantially true;
3. the whistleblower honestly believes on reasonable grounds either that:

i. to make an internal disclosure is likely to be futile or result in victimisation of the whistleblower; or

ii. the disclosure is of such a serious nature that it should be immediately brought to public attention.

Recommendations

In response to questions raised in the December 2016 discussion paper Review of tax and corporate whistleblower protections in Australia, MEAA made several recommendations including allowing all types of interested parties who could become whistleblowers be included in the Corporations Act. “Consideration should be given to allow all interested parties to bring to light any wrongdoing. These categories should be expanded to include spouses and families and also shareholders. The aim, in short, should be to provide for the maximum possibility of legitimate whistleblowing opportunities to bring to light wrongdoing which, in turn, should allow whistleblowers to be afforded proper protections.

MEAA recommended consideration should be given to consolidating all public and private sector whistleblower legislation[xiii] to improve the Public Interest Disclosure Act which is still less than perfect, while also eliminating the private sector’s sub-standard regulation and protection of whistleblowing.[xiv]

MEAA also recommended that anonymous disclosures should be protected and penalties imposed for any deliberate or accidental breach or disclosure of the identity of an anonymous whistleblower. “Mechanisms should be created to allow disclosures to be made that ensure anonymity and that allow disclosures to be made without any reference to the corporation, its officers or employees.”

MEAA added that whistleblowers should be able to make disclosures to a reliable investigatory body and that disclosures to the company’s auditor or nominated persons within a company be removed. “The nature of whistleblowing is the exposure of wrongdoing and it is not suitable for company officers, employees or nominees to be involved because past experience suggests that whistleblowers are particularly vulnerable to retaliation in these cases. “

MEAA also recommended the creation of a federal corruption watchdog, or an independent statutory office or Public Interest Disclosure Panel[xv] with broad-based membership and full powers to investigate whistleblower claims. Whistleblowers need an advocate and a body they can trust.

[i] http://www.walkleys.com/whistleblowers-need-more-protection-adele-fergusons-speech-at-the-press-freedom-australia-dinner-2016/ and http://www.theage.com.au/business/energy/chilling-tale-of-origin-energy-whistleblower-20170124-gtxuhz.html

[ii] https://www.meaa.org/meaa-media/code-of-ethics/

[iii] https://www.meaa.org/faqs-meaa-journalist-code-of-ethics/

[iv] https://www.meaa.org/meaa-media/code-of-ethics/ MEAA emphasis

[v] http://www.theage.com.au/business/energy/chilling-tale-of-origin-energy-whistleblower-20170124-gtxuhz.html

[vi] http://www.walkleys.com/whistleblowers-need-more-protection-adele-fergusons-speech-at-the-press-freedom-australia-dinner-2016/

[vii] ibid

[viii] ibid

[ix] http://transparency.org.au/wp-content/uploads/2014/06/Action-Plan-June-2014-Whistleblower-Protection-Rules-G20-Countries.pdf

[x] ibid

[xi] ibid

[xii] http://www.smh.com.au/business/workplace-relations/calls-for-reform-to-weak-whistleblower-protections-20160421-gobnnp.html

[xiii] The UK’s Public Interest Disclosure Act protects most workers in the public, private and voluntary sectors. The Act protects workers from detrimental treatment or victimisation from their employer if, in the public interest, they blow the whistle on wrongdoing.

[xiv] As MEAA has previously highlighted, Part 9.4AAA of the Corporations Act 2001 is inadequate for whistleblowers. The wrong-doing covered in the part is unclear, anonymous complaints are not protected, there are no requirements for internal company procedures, there is no oversight agency and compensatory mechanisms are ill-defined or do not exist. ASIC is ill-equipped to regulate or prosecute private sector whistleblowing matters.

[xv] As proposed by Liberty Victoria.