Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 (Cth) Update: What Does it Mean?

Protective measures for whistleblowers are not new in Australia (see Part 9 Corporations Act), however, they are fairly limited in scope and leave potential whistleblowers vulnerable to discrimination and victimisation. The aim of the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 (Cth) (Bill) is to improve the effectiveness of the existing protections for whistleblowers through enhanced definitions, clearer protections and harmonised remedies for breaches. In particular, the Bill, among other things:

  • extends the group of people eligible to make disclosures who are then eligible for protection
  • broadens the types of wrongdoing eligible whistleblowers can make disclosures about, for example, the Bill refers to disclosures about “misconduct” or “an improper state of affairs”
  • expands the group of people who can receive a whistleblower’s disclosure, including ASIC, APRA, an external auditor, the Australian Federal Police and, in limited circumstances, a journalist or Parliament
  • removes the requirement that the whistleblower’s disclosure must be made in ‘good faith’ and replaces it with the requirement that the whistleblower has “reasonable grounds” to suspect wrongdoing
  • allows anonymous disclosure
  • strengthens the immunities available to eligible whistleblowers
  • increases penalties for both individuals and corporations where a whistleblower’s identity is revealed without consent
  • creates a civil penalty and allows for criminal prosecution where eligible whistleblowers have been victimised
  • requires public and large proprietary companies to maintain a policy complying with the Bill and any related regulatory guides and imposes penalties for failure to comply

Although these amendments do pave an admirable path in providing for and protecting people wishing to make disclosures regarding a corporation’s conduct, they are not without their practical difficulties. A corporation may find it hard to properly investigate an anonymous disclosure, and the unintentional disclosure of identity without consent poses significant penalties. Corporations may also struggle to identify what ‘misconduct’ and ‘improper state of affairs’ mean in relation to an activity which may attract disclosure. These are matched equally to the difficulty that corporations will have in ensuring that managers and supervisors who are able to receive disclosures, are adequately trained to be able to identity and respond appropriately.

What do Corporations Need to Do?

The Bill requires positive action by corporations through the implementation of a comprehensive whistleblowing policy addressing the Bill and any regulatory guides issued. If a corporation already has a whistleblowing policy, a complete review will be needed to ensure that it is compliant with the changes. Corporations will also need to ensure that their updated whistleblowing policy is communicated and made available to staff and third party suppliers and contractors etc.  This is in addition to ensuring that senior management receive appropriate training on the whistleblowing policy including how to manage disclosures made to them.   

The current deadline for compliance is 1 January 2019, so time is certainly ticking.

Financial Services Updates

Financial Services Updates