Wednesday, 5 December 2018
Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017; Second Reading
I rise to make a contribution on the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017. At the outset, I indicate that Labor will be supporting this bill. We wish to acknowledge the tireless work of many stakeholders in this space who have fought for so long to see strength in protections for whistleblowers. In particular, Labor wishes to note the indefatigable Professor AJ Brown, Mr Jeff Morris, the Law Council of Australia, Transparency International and the Australian Council of Trade Unions, all of whom led the charge for these changes. It's been a matter of public record that Labor has a very longstanding commitment to enhancing whistleblower protections. In government Labor introduced the landmark Public Interest Disclosure Act 2013 for public sector whistleblowers, and Labor has already committed to introducing tax whistleblower protections.
Earlier in this term of parliament, the Parliamentary Joint Committee on Corporations and Financial Services handed down its report into whistleblower protections. It makes sweeping recommendations to enhance protections for whistleblowers, and I hope to expand on my observations, being the deputy chair of that committee, and our amazing report. Senator Ketter has just left the Senate chamber, but I note he was a very significant participant in the evidence received and the significant recommendations made by that committee.
In response to the report, the government committed to strengthening protections for private sector whistleblowers. But the original bill that they put forward just under one year ago can only be described as weak and ineffective. Their initial proposal failed to enhance protections for whistleblowers in line with that PJC report, which basically gave them a blueprint for excellence. Their proposals did not match the substance and detail of the whistleblower protections included in the Fair Work (Registered Organisations) Amendment Bill 2014, and they were criticised by key stakeholders for falling far short of providing protections that private sector whistleblowers need and deserve. In fact, Professor AJ Brown, a leading expert on whistleblower protections, who gave evidence at the Brisbane hearing—and he is a member of the government's own expert panel—reportedly called the original bill 'a limited step' and 'more a sideways than a forward step on key issues'.
It's taken an extraordinary 12 months for the government to come up with the amendments to strengthen the bare bones bill that they first proposed, and Labor wishes to acknowledge in the course of the development of this matter before us today the hard work of Senators Patrick and Griff to force the government to strengthen this bill somewhat. It's disappointing that the government had to be dragged to action on this important issue. It's a theme that we see time and time again in this place—a Liberal government absolutely desperately resisting action on corporate misconduct. We've got to remember that this is a government that fought against the banking royal commission for 600 days, voting against it 26 times, and led by a Prime Minister who called it a 'populist whinge' and a 'reckless distraction'. Twenty-six times it was opposed by this Prime Minister.
It is disappointing but not surprising that it took so much effort to force this government into action on corporate whistleblowing. As Mr Jeff Morris stated:
I guess I see this as a bit of a parallel thing to the banking royal commission, where the government's finally, kicking and screaming, bowed to the inevitable and had a banking royal commission …
The banking royal commission is shining a light on the widespread misconduct in the financial services industry. As Commissioner Hayne stated in the royal commission's interim report, our banks and financial service providers have been gripped by greed and 'the pursuit of short-term profit at the expense of basic standards of honesty'.
One of the most shocking things about the banking royal commission has been how long this conduct went unchecked and also the sheer number of people who failed to blow the whistle on misconduct and potential crimes that were occurring. Their behaviour didn't happen in a vacuum. It happened in a culture that really did not enhance whistleblowing in any way and, in fact, they acted in a way that opposed the great civic action that whistleblowers undertake.
I want to acknowledge that we've just been joined in the public gallery by none other than Professor AJ Brown. I'd already quoted you twice in this speech before you entered. You have our sincere thanks for your contribution to this as a matter of significant public policy.
One of the best ways to ensure that misconduct is prevented, detected and punished is to have strong, effective whistleblower protections. But, for too long, whistleblowers have been subjected to appalling treatment. Labor has heard stories of whistleblowers who did the right thing and reported misconduct, only to have their careers destroyed by companies that did not want to act, companies that ignored their calls for action, companies that let them be bullied and victimised, companies that made their positions at work untenable and companies that ruined their professional reputations.
The current system operates as an enormous disincentive for whistleblowers to come forward. This is bad not just for those whistleblowers with the personal impact that it has on them. When whistleblowing doesn't occur, we are all harmed. Whistleblowers are absolutely critical to our efforts to crack down on corporate crime and corruption. As the Australian Federal Police argued through the Senate inquiry process into this bill:
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.
There are significant problems facing corporate Australia, from the scandals and rip-offs that have come to light through the banking royal commission to bribery allegations, chronic underpayment of superannuation, tax fraud and other illegal and improper conduct. We need whistleblowers to come forward. We need them to help our regulators and we need them for law enforcement agencies to detect and gather evidence sufficient to punish the unworthy conduct. This is why Labor passionately believes we must do more to protect whistleblowers.
As I said in my opening comments, this bill, as originally drafted, was wholly inadequate. Labor senators outlined a number of concerns about the original bill in our additional comments to the Senate Economics Legislation Committee inquiry. The fundamental problem with the original bill, which has only been partly addressed by the government's proposed amendments, was that it was far too weak to provide whistleblowers with meaningful protection. Mr Jeff Morris said:
It's kind of like just playing a game of paying lip-service to something. What troubles me is the parallel here—that this is called whistleblower legislation but, compared to what it could achieve, this is just a pale shadow of the real thing. … When you look at the recommendations of the PJC, and indeed, the submission of Professor Brown, it's just apparent that there's so much more that could be so easily achieved. What I don't understand is that the benefits that would flow through it are so massive.
For context, for those who might not fully understand why he features so significantly in my speech, Mr Morris was the whistleblower who really brought to light the issues around the Commonwealth Bank and inappropriate business activities that are now a part of the public record here in the country. He certainly featured very strongly in the banking royal commission. And I can remember meeting Mr Morris in my office in the main street of Gosford in my first term of parliament in the other place between 2010 and 2013. Not only was Mr Morris able to outline very, very clearly to me the issues that he was seeing in his workplace, which have since been prosecuted at the level of the royal commission, but he was also able, sadly, to document for me the significant damage to his personal life that resulted from him undertaking this important civic action.
Some of the key measures that are missing from the bill, highlighted by Professor AJ Brown, include a chilling list of things that could have been attended to by this government which isn't willing to go far enough to protect the Australian public. The separation of criminal and civil remedies remains unaddressed. The government had the opportunity to, but didn't, undertake action to provide for civil remedies for detriment flowing from a failure in duty to support or protect. They didn't take up the opportunity to embed a best-practice version of reverse onus of proof or a reasonable filter against individual personal and employment grievances. Neither did they put in a realistic and appropriate protection for third-party disclosure—for example, by media—or public disclosure. This is a missed opportunity to do the best work that could have been done and should have been done in the name of the Australian people, following from the good work of thought leaders in academia and civic leaders who brought forward the issues, and from the work of a joint parliamentary committee that worked very hard to deliver a unanimous report with significant recommendations to guide the action of the government. Despite all that, we are left where we are—a few steps forward, rather than undertaking the whole journey.
The government's proposed amendments do significantly improve the original bill that they offered us a year ago, and, once again, I do wish to acknowledge the work that the Centre Alliance has done to actually force the government to amend this bill. The amendments proposed would clarify the eligible recipients of disclosures, addressing concerns raised by the Law Council of Australia, the Australian Institute of Company Directors and others that the broad array of eligible recipients might place undue burden on internal compliance policies within companies.
The amendments would also replace the protection of emergency disclosures with two categories of protected disclosures: an amended emergency disclosure category based on substantial imminent danger to a person's health or safety or the natural environment and a new public interest limb based on a broad public interest test. These amendments would also change the definition of 'journalist' for emergency and public interest disclosure categories to cover journalists— (Time expired)