February 23, 2019

Whistleblowing reforms in Australia show the way

On 19 February, the Australian parliament unanimously passed new legislation that will give corporate whistleblowers greater protection, and could have a culture-changing impact on the way companies in Australia operate. The EU and G20 should take notice.

Global Firsts

The reforms included in the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 are world leading in two respects, and set a new benchmark for whistleblower protection.

First, legal protections now apply before a whistleblower starts to experience reprisals. Typically, action to protect whistleblowers is only taken after retribution has started. By the time compensation rights are triggered, the protections they offer are usually too little, too late.

Now, all public and large proprietary companies are required to spell out how they will “support and protect” those who speak up before they begin to experience any detrimental effects.

This culture-changing step is crucial. Many companies are good at getting their employees to reveal wrongdoing. Their problem is knowing how to actually protect them when they do.

Second, and backing this up, a company can now be held liable if it fails to prevent detrimental acts –by having no support plans in place, or neglecting to implement them, for example.

Granting whistleblowers the right to sue for such a failure is a world first.

The new rules for whistleblowing outside the company also set a new benchmark. Whistleblowers are protected if they choose to go to certain prescribed bodies rather than through internal company channels. And if they blow the whistle to a regulator and nothing happens within 90 days, or if there are emergency circumstances, it is now relatively simple for them to go public and still be protected.

TI Australia chair Fiona McLeod, Senator Rex Patrick (Centre Alliance), Gerard McManus (Senior Strategy Adviser to Minister for Employment, Kelly O’Dwyer) and Professor A J Brown (TI Board) celebrate the new whistleblowing law in Australia’s Parliament House (19 February 2019).

An example to others

The new law is in line with many of the recommendations that Transparency International has been making for years. The definition of what kinds of wrongdoing can be reported has been massively expanded and clarified. The scope of who is covered has also been widened to include not only employees, but former employees, contractors, volunteers, and the spouses and dependents of employees. Importantly, it will now be easier for whistleblowers to get compensation and other remedies if they suffer because of speaking out.

The European Union would do well to follow this example as it puts the finishing touches to its ground-breaking EU-wide directive on whistleblower protection.

Some EU countries are still arguing that employees must always blow the whistle internally first, or risk forfeiting all protection. Transparency International and many other partners are calling on the European Union to follow the lead of countries like Australia, as well as Ireland, Italy, Canada, Ghana, Romania and Serbia, and allow whistleblowers to report directly to law enforcement agencies and competent authorities without the risk of losing protection.

G20 leaders, hosted this year by Japan, have also announced that stronger whistleblower protection will be on their agenda. Whistleblowing is one of the main priorities of the G20 Anti-Corruption Working Group (ACWG). We’ve heard similar pledges before (see here, here , here ) without concrete standards or commitments being adopted. Australia’s reforms have set the bar for the ACWG, giving the whole G20 a unique opportunity to ‘walk the talk’ and show their commitment with those who speak up against corruption. To do so they should adopt and effectively implement a strong G20 whistleblower high level principle.

Hope in the dark

It was in Australia’s year as G20 host (2014) that a joint assessment of whistleblowing laws initiated by Transparency International Australia revealed the weak state of the country’s private sector whistleblower protections — on a par with Russia and Saudi Arabia at the time.

Transparency International’s Corruption Perceptions Index has also seen Australia sliding backwards since 2012. But this overhaul of private sector whistleblower protections provides a glimmer of hope that the strong, bipartisan integrity reforms Australia needs can be achieved.

There is more to be done, including a matching upgrade to public sector whistleblowing laws, legislative consolidation, a reward scheme and, crucially, a well-resourced whistleblower protection authority to actually implement these laws. These were also the recommendations of the pivotal, unanimous parliamentary inquiry in 2017 that led to this week’s reforms, and drew heavily on submissions by TI Australia and its research partners.

With other integrity reforms currently stalled or becoming fractious, including debate over the design of a new federal anti-corruption agency, this first major step offers hope for the future, both in Australia and abroad.

Whistleblowing reforms in Australia show the way

Global Firsts

An example to others

Hope in the dark

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