On 22 March 2018 the Senate Economics Legislation Committee delivered its report on the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017.
Despite a diversity of views, the Committee cited a consensus that the Bill was a step forward and should be passed [Recommendation 3, para 3.93]. But also said that a review of the effectiveness of this law, after an unspecified period, be kept under ‘active consideration’ [para 3.84, Recommendation 1, para 3.87].
The following are some extracts from the Report – the first being the majority view.
Committee view
3.83 The committee is aware that many contributions have commented that the bill has not implemented all recommendations of the PJC inquiry. The committee also notes that many said that the bill strikes a good balance.128 Nevertheless, a minority of
contributors continue to believe that the bill is inadequate, suggesting that passing the bill as it stands would mean that nothing more would be done and that it would be an opportunity lost,129 while some like the Law Council seemed to suggest that it would be better to withdraw the bill altogether and ‘get it right’.[footnote omitted] Most however, do suggest that the bill should be passed acknowledging that the bill is an improvement on current arrangements, and is at the very least a good step towards reform.
3.84 The committee also notes that the Australian Competition and Consumer Commission remarked that passing this bill would not preclude further development of whistleblower protection.[footnote omitted] Furthermore, it notes Dr Vivienne Brand’s suggestion
to include a requirement for review in the bill, so that the possibility of further development is kept open, and, in particular, the recommendations of the PJC that had not been implemented will remain under active consideration.[footnote omitted] It believes this suggestion is worthy of consideration.
3.85 The committee notes the reservations expressed by the Senate Standing Committee on the Scrutiny of Bills with respect to the reversal of the onus of proof and the possibility of ASIC’s decisions in effect amending primary legislation.
3.86 On balance, the committee is satisfied that the bill is a move in the right direction and will be a valuable contribution to whistleblower protection. It notes that the government is continuing to work on its response to the PJC inquiry, and that further reforms may well be the result.
The Labour senators gave a separate report, some of which is as follows.
Role of unions
1.7 What is also clear is that, in some key areas, the whistleblowing protections set out in this bill set a lower bar than the whistleblowing protections set out under the Registered Organisations bill. Under the Registered Organisations bill, registered organisations have an explicit duty to support and protect whistleblowers and whistleblowers have a lower threshold to meet when seeking compensation.[footnote omitted] The Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 does not place an explicit duty to support and protect whistleblowers and sets a higher threshold for whistleblowers who are seeking compensation.
1.13 Labor Senators remain concerned that the attitude of this Government is to establish one rule for companies and other rule for unions. This bill, and the lack of inclusion of registered organisations such as unions, is yet another sign of this political philosophy.
Potential culprits not covered by legislation
1.29 Labor Senators also wish to mention other issues which, at the time of this report, have not been sufficiently addressed by this Government:
(a) The concern raised by the Queensland Nurses and Midwives Union that large charities and not-for-profits might not be captured under this legislation (in the context of whistleblowing in aged care facilities)[footnote omitted].
(b) The Law Council of Australia’s concern that volunteers are not covered by this legislation[footnote omitted] (noting that Dr Chaikin advises that they would be covered as ‘unpaid contractors’)
c) That partnerships, such as those of the big four accounting firms would not be captured under the corporate whistleblower protections. Both the Law Council of Australia and Treasury could not conclusively answer this question.
The Australian Greens also made a separate report, some of which is extracted below.
Whistleblower rewards [bounties – the much overlooked issue]
1.5 Offering legal protections is often not enough for someone who has knowledge of fraudulent activities to come forwards with information and risk their financial security, job security and mental health. One of the most important and progressive recommendations of the Parliamentary Joint Committee was to introduce a reward scheme for whistleblowers (Recommendations 11.1 & 11.2) to encourage people to expose misconduct and enable tax authorities to reclaim money.
1.6 This is not a radical idea. The US False Claims Act was passed in 1863. It now allows whistleblowers to receive up to 30 per cent of reclaimed money that has been stolen or avoided from government authorities. In 2015, 80 per cent of the around $3.5 billion recovered by US Justice Department was a result of actions taken by whistleblowers.
1.7 Rewards work. They encourage disclosure. They recover ill-gotten gains. And they help compensate whistleblowers. The Australia Greens support the implementation of the recommendations of the Parliamentary Joint Committee in relation to rewards.
Senator Rex Patrick’s gave a dissenting report – saying it’s just not good enough.
1.1 ….
I understand that perfect can be the enemy of the good, but this Bill ain’t even good (yet). It is ambiguous and confusing and the provisions as they currently stand do not effectively protect whistleblowers, nor are they sufficiently workable for companies that will be subject to them.
25.3.18
[APH website: Senate Report, Bill Tracker; TT website: Draft Bill; Bill Introduced; Report Summary; FJM; LTN 57, 23/3/18; Tax Month March 2018]
Study questions (answers available)
- Did the majority recommend passing the ‘Whistleblower’ bill?
- Did they also recommend, that the law include provision, for its operation to be reviewed, in the future?
- Is it true that the protections for whistleblowing, against unions’ (Registered Organisations), are not as strong under this Whistleblowers Bill?
- Might large professional partnerships be outside the range of parties obliged to protect whistleblowers?
- Is the US experience that 20% of the $3.5b recovered, under the US False Claims Act, was as a result of whistleblowers?
- Can ‘perfect be the enemy of good’ – especially in the context of whether this Bill should be passed?
[answers:1.yes;2.yes;3.no(stronger);4.yes;5.no(80%);6.yes(accordingToSenatorPatrick)]