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Australia

Whiste-Blower Protections (AU0001)

Overview

At-a-Glance

Action Plan: Australia National Action Plan 2016-2018

Action Plan Cycle: 2016

Status: Inactive

Institutions

Lead Institution: Treasury

Support Institution(s): Australian Taxation Office, Australian Securities and Investments Commission, Australian Prudential Regulation Authority, Attorney-General’s Department, Department of the Prime Minister and Cabinet and other relevant agencies, state and territory governments, Parliament of Australia, Corporations, peak industry bodies (including Law Council of Australia, tax advisors, other law and accounting bodies), non-government organisations (including Australian Open Government Partnership Network, Transparency International Australia, Accountability Round Table), Board of Taxation, academia, and whistle-blowers

Policy Areas

Legislation & Regulation, Private Sector, Whistleblower Protections

IRM Review

IRM Report: Australia Mid-Term Report 2016-2018

Starred: No

Early Results: Pending IRM Review

Design i

Verifiable: Yes

Relevant to OGP Values: Civic Participation

Potential Impact:

Implementation i

Completion:

Description

Objective and description: Australia will ensure appropriate protections are in place for people who report corruption, fraud, tax evasion or avoidance, and misconduct within the corporate sector. We will do this by improving whistle-blower protections for people who disclose information about tax misconduct to the Australian Taxation Office. We will also pursue reforms to whistle-blower protections in the corporate sector, with consultation on options to strengthen and harmonise these protections with those in the public sector. Status Quo: The prevention of corruption, waste, tax evasion or avoidance and fraud relies upon appropriate protections for people who report these wrongdoings. Australian public servants who act as whistle-blowers have some protection under the Public Interest Disclosure Act 2013 (PID Act). While there are also protections available to corporate whistle-blowers, those protections lag behind the PID Act and protections available to whistle-blowers in other countries (such as the Dodd-Frank Wall Street Reform and Consumer Protection Act 2010 in the United States, and the Public Interest Disclosure Act 1998 (amended in 2013) in the United Kingdom). Current protections in the corporate sector are overly narrow and make it unnecessarily difficult for those with information to qualify for protections. In the 2016-17 Budget, the Government also announced it would introduce whistle-blower protections for people who disclose information about tax misconduct to the Australian Taxation Office. A research project into public interest whistleblowing, Whistling While They Work 2, is currently being led by Griffith University and is looking into improvements across the public and private sectors. The project is partly funded by the Australian Research Council, and its initial survey of organisational processes and procedures is now available at http://www.whistlingwhiletheywork.edu.au. Ambition: To reduce corruption, waste, tax evasion or avoidance, and fraud by ensuring protections are in place for people who report such activities. Relevance: This commitment will advance the OGP values of public accountability and transparency by: encouraging, protecting and compensating whistle-blowers whose information reveals artificial tax structures and misconduct; and reducing other forms of corruption, fraud and misconduct by ensuring corporate whistle-blowers are also encouraged, protected and compensated. OGP Grand Challenge: Increasing Corporate Accountability More Effectively Managing Public Resources; Timeframes December 2016 – June 2018; Lead agency Treasury (whistleblowers@treasury.gov.au); Other actors involved: Government - Australian Taxation Office, Australian Securities and Investments Commission, Australian Prudential Regulation Authority, Attorney-General’s Department, Department of the Prime Minister and Cabinet and other relevant agencies, state and territory governments, Parliament of Australia; Non-government: Corporations, peak industry bodies (including Law Council of Australia, tax advisors, other law and accounting bodies), non-government organisations (including Australian Open Government Partnership Network, Transparency International Australia, Accountability Round Table), Board of Taxation, academia, and whistle-blowers

IRM Midterm Status Summary

1. Improve whistle-blower protections in the tax and corporate sectors

Commitment Text:

Australia will ensure appropriate protections are in place for people who report corruption, fraud, tax evasion or avoidance, and misconduct within the corporate sector.

We will do this by improving whistle-blower protections for people who disclose information about tax misconduct to the Australian Taxation Office. We will also pursue reforms to whistle-blower protections in the corporate sector, with consultation on options to strengthen and harmonise these protections with those in the public sector.

[…]

Milestones:

  1. Establish Parliamentary inquiry.
  2. Treasury to release a public consultation paper covering both tax whistle-blower protections and options to strengthen and harmonise corporate whistle-blower protections with those in the public sector.
  3. Development and public exposure of draft legislation for tax whistle-blower protections (informed by consultation). Recommendation to Government on reforms to strengthen and harmonise whistle-blower protections in the corporate sector with those in the public sector (informed by consultation).
  4. Finalise and introduce legislation for tax whistle-blower protections.
  5. Introduce legislation to establish greater protections for whistle-blowers in the corporate sector, with a parliamentary vote no later than 30 June 2018.

Responsible institution: Treasury

Supporting institution(s): Australian Taxation Office, Australian Securities and Investments Commission, Australian Prudential Regulation Authority, Attorney-General’s Department. For a full list of agencies, please see the Australia National Action Plan

Start date: December 2016 End date: June 2018

Editorial Note: This is a partial version of the commitment text. For the full commitment text, see the Australia National Action Plan available at https://www.opengovpartnership.org/wp-content/uploads/2001/01/Australia_NAP_2016-2018_0.pdf

Context and Objectives

This commitment seeks to establish whistleblower protection in the corporate and taxation sectors. Current whistleblowing protection at the Commonwealth level is either limited to the public sector or to contraventions of particular legislation. This commitment will extend protection of wrongdoing by or within corporations as well as providing protection for breaches of taxation legislation.

The Public Interest Disclosure Act 2013 (Cth) protects against reprisals for the disclosure of information about suspected wrongdoing within a Commonwealth government agency, by a public official or by entities that have contracts with the government to provide goods or services. It emphasizes ‘disclosures of wrongdoing being reported to, and investigated within, government.’[1] States and Territories have legislation with similar objectives.

The Corporations Act 2001 (Cth) extends limited protection to corporate actors who disclose information about an actual or potential contravention of the corporations legislation. Similar protections apply to disclosures about misconduct in a range of institutions regulated by the Australian Prudential Regulatory Authority (APRA), including banks, insurers and superannuation providers.[2] However, these existing whistleblower protections are limited to contraventions of particular legislation. There is no broad protection that may cover disclosure of corporate corruption, bribery, fraud, money laundering, terrorism financing or other serious forms of misconduct. There are no whistleblower protections in Australian tax laws.

During passage of amendments to the Fair Work (Registered Organisations) Act in November 2016 to include protection against reprisals for people who report corruption or misconduct in unions and employer organisations, the government committed to supporting a Parliamentary inquiry to look at extending these protections to the corporate sector.[3] The calls for a parliamentary inquiry follow a large number of previous inquiries and academic reports on whistleblowing protection in Australia.[4] One such report concluded that ‘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.’[5] These inquiries have recognized that whistleblowing is one of the most effective ways to expose and remedy corruption, fraud and other forms of misconduct.[6]

Overall, this commitment stands to have moderate potential impact. By reiterating the commitment to establishing a parliamentary inquiry, the commitment provides a means to examine increasing the scope of whistleblower protection in the private, public and non-profit sector. The wide-ranging inquiry will also provide a specific opportunity for public participation. Enhancing protection of whistleblowers within the corporate sector has the potential to substantially increase the accountability of corporate actors against a wide range of misconduct, including tax fraud, and the effectiveness of government agencies in enforcing regulatory compliance. Whistleblowing protection can also help to establish a culture of accountability and integrity, helping to ‘empower citizens’ against misconduct, corruption and fraud.[7]

The milestones to release a public consultation paper covering both tax whistle-blower protection, and then to progress the results of that consultation to legislation, are not as specifically defined. As Jessie Cato from Publish What You Pay Australia suggested, several of her member organisations were unclear about how the parliamentary inquiry related to the Treasury consultation on Corporate and Tax whistleblowing.[8] A number of people interviewed for this report were concerned that focusing on tax and corporate reforms, and attempting to legislate them separately, might complicate and perhaps restrict the scope of the whistleblowing protections, with any uncertainty over the coverage potentially affecting a potential whistleblower’s willingness to come forward.[9]

Completion

Milestone 1.1: This milestone was completed. The Parliamentary Joint Committee on Corporations and Financial Services (‘PJCCFS’) established an inquiry to examine whistleblower protections in the corporate, public and non-profit sectors on 30 November 2016.[10] The Committee invited submissions on its website for more than two months.[11] Over 75 submissions were received.[12] The Joint Committee held public hearings in Brisbane, Melbourne and Canberra.[13]

After extensions of the original reporting date of 30 June, the Committee reported in September 2017 (Parliamentary Joint Committee on Corporations and Financial Services, or ‘PJCCFS Report’),[14] after the period of implementation considered in this report. The Committee’s recommendations included bringing private sector whistleblowing protections into a single Act and aligning those protections with public sector protections, and that the Commonwealth, States and Territories should harmonise whistleblowing protection across Australia. It also recommended that a reward system be introduced in proportion to any penalty imposed as a result of whistleblowing disclosures, and that a Whistleblower Protection Authority be established.[15]

Milestone 1.2: This milestone was completed. Treasury released a consultation paper reviewing tax and corporate whistleblower protections in Australia on 21 December 2016.[16] The paper called for submissions on reforms to existing protections under the Corporations Act and similar provisions as well as a proposal for specific protection under tax legislation. The paper included consideration of the scope of the reforms including whether the information to be covered should be comprehensive across Commonwealth legislation, the range of whistleblowers and agencies to whom disclosures can be made should be expanded, anonymous disclosures, requiring companies to put in place internal systems for internal disclosures, and establishing an oversight agency. The consultation paper also stated that it was intended to complement the Parliamentary Inquiry with submissions made available to the parliamentary committee.[17]

The department advertised the consultation paper on its website.[18] It received 34 submissions from corporate bodies and peak organisations, religious and non-profit organisations, civil society organisations and individuals and published on that website.

Milestone 3: This milestone saw limited completion as of 30 June 2017. A draft of a proposed Treasury Laws Amendment (Whistleblowers) Bill 2017 was released for public comment on 23 October 2017, with submissions due by 3 November 2017.[19] This draft included feedback on the range of submissions received as part of the consultation process.

Milestones 4 and 5: These activities were scheduled to begin in the second year of implementation of the action plan and had not started as of June 30, 2017.

Other than the submissions received as part of the consultation process, there was no evidence of results of this commitment as of the time of writing this report.
Next Steps

The commitment as framed concentrates on exposing wrongdoing within the corporate sector or in relation to taxation. Civil society stakeholders interviewed for this report all commended extending the scope of any reforms beyond corporate and tax whistleblowing as reflected in the scope and recommendations of the PJCCFS inquiry. The next steps could therefore include:

  • Establishing a process of evaluation of the implementation of any legislative reforms introduced under the commitment;
  • Responding to the recommendations of the PJCCFS, including reforms to the Public Interest Disclosure Act and other elements of public sector whistleblowing, including collaboration through a multistakeholder group.

[1] Treasury, Review of tax and corporate whistleblower protections in Australia, Consultation Paper, 20 December 2016, at p6, https://treasury.gov.au/consultation/review-of-tax-and-corporate-whistleblower-protections-in-australia/ (‘Whistleblowing Consultation paper’).

[2] Whistleblowing consultation paper at p 5.

[3] Commonwealth Hansard, Fair Work (Registered Organisations) Amendment Bill 2014 – Second Reading, Senate, 21 November 2016, p 2745 (Senator Xenophon), https://www.aph.gov.au/Parliamentary_Business/Hansard/Hansard_Display?bid=chamber/hansards/5e26e672-7115-4c74-85bb-c6d311556c93/&sid=0158.

[4] For example, the discussion at Parliamentary Joint Committee on Corporations and Financial Services, Whistleblower Protections, September 2017 pp 11-25, https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Corporations_and_Financial_Services/WhistleblowerProtections (‘PJCCFS Report’); Philip Moss AM, Review of the Public Interest Disclosure Act 2013, July 2016, https://pmc.gov.au/government/legislation-review/statutory-review-public-interest-disclosure-act-2013 (‘Moss Review’).

[5] Simon Wolfe, Mark Worth, Suelette Dreyfus and A J Brown, Whistleblower Protection Laws in G20 Countries: Priorities for Action, September 2014, p 25 available at http://pandora.nla.gov.au/pan/148392/20140917-0713/blueprintforfreespeech.net/wp-content/uploads/2014/09/Whistleblower-Protection-Laws-in-G20-Countries-Priorities-for-Action.pdf (accessed 6/4/2018).

[6] Simon Wolfe, Mark Worth, Suelette Dreyfus and A J Brown, Whistleblower Protection Laws in G20 Countries: Priorities for Action, September 2014, p 10.

[7] Testimony before the PJCCFS by Ms Serene Lillywhite, Chief Executive Officer, Transparency International, Committee, Hansard, 27 April 2017, p 2.

[8] Interview with Jessie Cato, National Coordinator, Publish What You Pay Australia, Melbourne, Vic, 24 August 2017.

[9] Professor AJ Brown, Griffith University and Director, Transparency International, Phone meeting, 1 September 2017; Peter Timmins, Access to information advocate and Convener Australian Open Government Partnership Network, Sydney NSW, 23 August 2017, Jessie Cato, National Coordinator, Publish What You Pay Australia, Melbourne, Vic, 24 August 2017. See also submission to the PJCCFS inquiry of Ms Rebecca Maslen-Stannage, Chair, Corporations Committee, Business Law Section, Law Council of Australia, Committee Hansard, 28 April 2017, p. 15, https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Corporations_and_Financial_Services/WhistleblowerProtections/Submissions.

[15] PJCCFS Report.

[16] Treasury, Review of tax and corporate whistleblower protections in Australia, Consultation Paper, 20 December 2016, at p6, https://treasury.gov.au/consultation/review-of-tax-and-corporate-whistleblower-protections-in-australia/

[17] Whistleblowing Consultation Paper at 1.

[18] Treasury, ‘Review of tax and corporate whistleblowing protections in Australia’, at https://treasury.gov.au/consultation/review-of-tax-and-corporate-whistleblower-protections-in-australia/.

[19] Treasury, ‘Treasury Laws Amendment (Whistleblowers) Bill 2017 - Exposure Draft’, https://consult.treasury.gov.au/market-and-competition-policy-division/whistleblowers-bill-2017/.


Commitments

  1. Strengthen Anti-Corruption Framework

    AU0016, 2018, Anti-Corruption Institutions

  2. Political Donation Transparency

    AU0017, 2018, Legislation & Regulation

  3. Data Sharing

    AU0018, 2018, E-Government

  4. Improve Public Service Practice

    AU0019, 2018, Capacity Building

  5. Access to Information

    AU0020, 2018, OGP

  6. Enhance Public Engagement Skills in the Public Service

    AU0021, 2018, Capacity Building

  7. Independent Review of the Australian Public Service

    AU0022, 2018, Capacity Building

  8. Expand Open Contracting

    AU0023, 2018, E-Government

  9. Whiste-Blower Protections

    AU0001, 2016, Legislation & Regulation

  10. Beneficial Ownership Transparency

    AU0002, 2016, Beneficial Ownership

  11. Extractive Industries Transparency

    AU0003, 2016, Beneficial Ownership

  12. Combating Corporate Crime

    AU0004, 2016, Anti-Corruption Institutions

  13. Data Innovation

    AU0005, 2016, E-Government

  14. Public Trust in Data Sharing

    AU0006, 2016, Capacity Building

  15. Digitization of Government Services

    AU0007, 2016, Capacity Building

  16. Information Management and Access Laws

    AU0008, 2016, Capacity Building

  17. Freedom of Information

    AU0009, 2016, Capacity Building

  18. Access to Government Data

    AU0010, 2016, Capacity Building

  19. Electoral System and Political Parties

    AU0011, 2016, Money in Politics

  20. National Integrity Framework

    AU0012, 2016, Anti-Corruption Institutions

  21. Open Contracting

    AU0013, 2016, Capacity Building

  22. OGP NAP

    AU0014, 2016, OGP

  23. Public Participation

    AU0015, 2016, Capacity Building