Jonathon Duniam (Tasmania, Liberal Party) Share this | Hansard source

I, too, am pleased to make a contribution to the second reading debate on the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017. And while he's still here, I acknowledge the contribution of Senator Patrick, not just to this debate but to the whole process. It's pleasing to hear that it's not just my phone calls you ignore, but also ministers' as well! But it is an important piece of legislation. As Senator Patrick and other contributors—Senator Hume, as well—outlined, it has been a long road for those who have been a part of this process to get to this point.

Turning to the key provisions of the bill before going through a bit of the background and some of the reasons why: in broad terms, it is important to provide these protections as whistleblowing is a big part of public debate in Australian politics. As I heard Senator Hume mention just before about the current landscape with regard to protections available to whistleblowers and the laws relating to how they're dealt with, the two words that come to mind are 'fragmented' and 'confusing'. They're difficult to navigate, and, as a result, the protections available are lacking, are ineffective and, therefore, act as a deterrent to those who might otherwise out the conduct we've been referring to here. Senator Patrick mentioned the royal commission into the banking sector—a very good example of why we should have in place mechanisms for the private sector when it comes to making sure people are held to account while also acting within the confines of the law.

The bill before us in effect introduces new protections into two separate acts. Firstly, the Corporations Act 2001 will be amended to create a single, strengthened whistleblower protection regime that covers the corporate and financial credit sectors. Secondly, the Taxation Administration Act 1953 will be amended to add new protections to tax whistleblowers who report tax misconduct. These are two very important areas that I'm pleased to see are going to be addressed as part of this legislation.

Part 1 of the bill strengthens protections for corporate whistleblowers by expanding the protections to a broader class of persons. It also expands the list of disclosures that can be protected. It extends the protections to cover third-party disclosures in certain circumstances and provides greater protection of whistleblower confidentiality, which is incredibly important. We've seen situations where that certainly hasn't been the case. It improves access to compensation for whistleblowers because ultimately, as we've seen, there is a cost associated with undertaking the act of a whistleblower. It is creating a new penalty offence so that law enforcement agencies will be better able to take enforcement action and it introduces a whistleblower policy requirement for all large companies.

The bill also amalgamates the protections contained in several acts into the Corporations Act, in effect creating a bit of a one-stop shop. The consolidation covers the following acts: the ASIC Act 2001, the Banking Act 1959, the Insurance Act 1973, the Life Insurance Act 1995, the Superannuation Industry (Supervision) Act 1993, as well as adding protections for conduct that contravenes the National Consumer Credit Protection Act 2009 and the Financial Services (Collection of Data) Act 2001, which were not covered under the existing law.

The second part of the bill introduces new protections for those tax whistleblowers in the Taxation Administration Act 1953, which are broadly consistent with the enhanced protections under the Corporations Act, so we have a consistent approach there, and will facilitate disclosures about tax misconduct. As others have said, it does strike the right balance between ensuring and encouraging genuine whistleblowers do come forward while also removing the protections for vexatious complaints, which I heard Senator Patrick talking about in his contribution. We will make sure people don't use these mechanisms to raise, in effect, vexatious complaints and do damage that they should otherwise not be doing.

I'll just go to the background, the road to where we are today with regard to this piece of legislation and the much needed protections that they do now bring into place. Obviously, anyone who has followed the whistleblower public debate understands that it is described as a public good. People who blow the whistle on misconduct, on corrupt behaviour, are performing an essential function in the community, so therefore they are deserving of protection. There have been a number of pieces of work undertaken by parliamentary committees. A quick glance has shown that we had the Parliamentary Joint Committee on Corporations and Financial Services table their report, Whistleblower protections, which I'll come to shortly, about the importance of whistleblowers; the Senate Standing Committee on Economics with its final report on the performance of the Australian Securities and Investments Commission; Treasury's review of tax and corporate whistleblower protections in Australia; the Moss review, which reviewed the Public Interest Disclosure Act in 2013; and the Brown and Lawrence report on the strength of organisational whistleblowing processes, just to name but a few. I can come back a little later to some of the work that was done in those reports.

Turning first to the Parliamentary Joint Committee on Corporations and Finance Services and their Whistleblower protections report of September last year, chapter 2 provides some context to this whole issue. It goes into the issue of why whistleblowing is important in the Australian political and financial landscape. The report says:

The key arguments for establishing effective whistleblower protections are essentially based on a view put by numerous submitters and witnesses that whistleblowing was critical in fostering a culture of transparency, accountability, and integrity.

It goes on to cite an example provided by Ms Serene Lillywhite, who, at that time, was the CEO of the organisation Transparency International. She indicated in her submission to the inquiry that:

Further:

Another submitter, Mr Jordan Thomas, in his submission to the same inquiry pointed out:

… that whistleblowers perform a vital service to both markets and organisations because:

Indeed, some of those I will look to a little later in the debate.

Further evidence in that particular inquiry, from the Australian Federal Police—which is interesting to take the point of view of a law enforcement agency and how they deal with these issues:

… informed the committee that whistleblowers are important in detecting serious financial crime that is often sophisticated, well concealed, and part of a culture of cover-up.

Again, this is referring to the banking royal commission. The misconduct that has been talked about, the shocking findings, the terrible actions that were perpetrated by many have been uncovered there, which is in line with what the AFP are saying with regard to their submission to this particular inquiry. The AFP noted:

… that due to the complex nature of serious financial crime there is often a low risk of discovery by regulators and law enforcement unless whistleblowers are supported in coming forward. The sorts of matters where whistleblowers may inform investigations include foreign bribery, serious tax crime, identity crime, corporate and government corruption matters and serious fraud offences.

The AFP went on to argue that:

If people are discouraged from coming forward to regulators or law enforcement due to lack of protections for their safety, protection from legal action and the personal and financial impacts of disclosing company information, there may be no case to prosecute. Where people do come forward, but are not willing to give evidence, due to lack of protection for anonymity, law enforcement may not have sufficient evidence to prosecute. This may not be fixed solely by enhancing protections as court procedures can only go so far in protecting witness identity.

Whether or not improved whistleblower protections would encourage people to come forward and disclose wrongdoing would depend on how the system is framed, and whether the public has the confidence that the system can ensure any protections.

Of course, another submitter said:

The Governance Institute of Australia … argued that whistleblowing has a critical role to play in identifying and stopping misconduct in the corporate sector, but it is only one aspect of companies' overall programs to ensure compliance with regulation and to prevent and detect misconduct …

Obviously, it is an issue that these submitters, those people who participated in that inquiry and provided evidence, agree should not be taken lightly; therefore, work needs to be put in, and that's why this legislation is critically important.

The current landscape, as has been discussed, is fragmented and confusing, which is why we saw the need to reform it and why submissions were made to various inquiries, including the Senate Economics Legislation Committee inquiry into this particular piece of legislation. Currently in Australia we have protections under three main pieces of legislation. There are state and territory protections as well, of course, and I'll turn to the Tasmanian laws shortly. Federally, as has already been referred to in this debate, we have the Public Interest Disclosure Act 2013, the PID Act; the Corporations Act; and the Fair Work (Registered Organisations) Act 2009. The PID Act has application across the Commonwealth Public Service, statutory agencies and other Commonwealth authorities, the Defence Force and contracted service providers for Commonwealth contracts. It applies, in the main, to disclosures made within government—that is, disclosures to 'authorised internal recipients'. In this situation, whistleblowers can disclose directly to their supervisors as well as to the authorised internal recipient of the relevant agency, which is prescribed in the legislation and set out in whatever arrangements apply to the relevant agency. The authorised recipient can include the Commonwealth Ombudsman if it's considered appropriate. Of course, circumstances would vary from agency to agency.

In addition to internal disclosure, it's possible to make a disclosure externally, such as to the media or to a member of parliament, providing certain conditions are met. Whistleblowers, under this legislation, are protected if they go public believing on reasonable grounds that an investigation into the internal disclosure was inadequate and if wider disclosure satisfies public interest requirements, which, of course, are set out in the legislation.

Turning to protections under the act, should an individual make a public interest disclosure as defined under the act, there will be protection for that individual from any civil, criminal or administrative liability, and no contractual or other remedy or right may be enforced or exercised against the individual on the basis of that disclosure. Conduct is disclosable if it falls within the broad concept of wrongdoing in the public sector. Disclosable conduct includes conduct which unreasonably results in danger to the health or safety of one or more persons; unreasonably results in, or increases a risk of, danger to the health of one or more persons; contravenes Australian law; constitutes maladministration; or involves a waste of government money. That, of course, is something we should all be avoiding. As has been mentioned already, the Moss review investigated the effectiveness of public interest disclosure legislation and highlighted that it had only been partially successful for a number of reasons.

Turning to current protections federally with regard to the private sector, we've got the Corporations Act 2001. Current protections for whistleblower disclosures in the corporate sector are contained in part 9.4AAA of that act, which was introduced as part of a suite of reforms in 2004. We've also got protections for public interest disclosures concerning misconduct or an improper state of affairs or circumstances affecting the institutions supervised by the Australian Prudential Regulation Authority, APRA, in the following acts: the Banking Act, the Insurance Act, the Life Insurance Act and the Superannuation Industry (Supervision) Act—those pieces of legislation that I said earlier on were being consolidated under one piece of legislation. I also mentioned the Fair Work (Registered Organisations) Act 2009. In 2016 this parliament passed amendments to that act, strengthening whistleblower protections for people who report on corruption or misconduct in unions and employer organisations. The amendments were part of an agreement negotiated by the government with the Senate crossbench to establish the new Registered Organisations Commission and strengthen the governance of trade unions.

That is a bit of a snapshot of the lie of the land federally. As has been pointed out by a number of reviews, including the Senate inquiry which finally led to this piece of legislation we have before us, there were improvements to be made, and so here we are making them.

I will turn now to Tasmania, where the issue of whistleblowing is very regularly talked about in the public debate. We have a number of local identities who have spent a lot of time advocating for changes to whistleblower laws and increased protections. In Tassie we have the Public Interest Disclosures Act 2002. The purpose of that act is to encourage and facilitate the making of disclosures of improper conduct by public officers or public bodies; to protect persons who make such disclosures, and others, from reprisals; to provide for the matters which are disclosed to be properly investigated and dealt with; and to provide all parties involved in such disclosures with natural justice.

Disclosures about improper conduct can be made to the Integrity Commission of Tasmania, to the Ombudsman or directly to the relevant agency. Of course, we do have an Integrity Commission, which was set up five or six years ago and is the entity which deals with the majority of public sector related claims of misconduct. We've seen some very interesting findings from that body over recent times. It does have a great range of powers at its disposal to deal with the problems that have been raised by those making the complaint. It's good to see entities like that operating effectively. In some cases the act in Tasmania requires that certain disclosures can be made directly to the Ombudsman—for example, if it's a complaint relating to Tasmania Police. A disclosure about the commissioner for police could be made to the Ombudsman. Generally, though, disclosures about improper conduct are made to the Integrity Commission.

An act of improper conduct, under the Tasmanian legislation, has a very similar definition to that in the federal laws we are talking about here. But, again, the findings of the royal commission and the awful things that we've heard about in the public debate prove the point as to why this legislation is so critically important and why we need to do the best we can by those in our community, particularly in the private sector, who are willing to stand up and speak out against acts of misconduct and corruption. Providing them with protections, a better mechanism, a more straightforward and streamlined approach to the laws relating to whistleblowing, is an excellent thing to be doing, and it is pleasing to be speaking on this legislation here at the end of the parliamentary year. Like Senator Patrick and Senator Hume, I commend this bill to the Senate and thank those senators who've had a huge hand in putting it together—in particular, Senator Patrick—for their work on this. I commend the bill to the Senate.