criteria, they can be protected from civil
or criminal litigation as a consequence of
making a protected disclosure. However,
the protections must be relied upon as
a defense to prosecution or a claim by a
whistleblower, meaning that a whistle-
blower is on the back foot and will have
likely already suffered the fall-out for
making the disclosure.
Further, a whistleblower's disclosures
in some cases can be referred to other
parties, including the Federal Police or
Australian Prudential Regulation Author-
ity (APRA). Given that the disclosure
cannot be made anonymously, a whistle-
blower's disclosure often leads to rapid
escalation of events completely outside of
the whistleblower's control.
and Employer Organizations
Australian Commonwealth Parliament
to allow employees to make protected
disclosures to government bodies in rela-
tion to breaches of union and employment
laws. Although the scope of this reform is
limited, these amendments are significant
as they have done away with the need for
a disclosure to be made in "good faith."
tax fraud or misconduct to the Australian
Tax Office (ATO) are not currently pro-
tected, given that only certain disclosures
relating to employment law or corporate
law misconduct can be protected under
the current legislation.
Given the government's crackdown
on tax evasion and fraud, it is expected
that proposed amendments may include
the ability for financial advisers to make
protected disclosures to the ATO regard-
ing their corporate clients' tax affairs.
However, such reforms are likely to be
hotly contested and vigorously opposed by
industry and professional groups.
ment will seek to implement provisions
that will allow for former employees,
officers and contractors to make protected
to employment related disclosures.
The current regime, by allowing only
current employees, officers and contrac-
tors to make protected disclosures, fails to
take into consideration that these parties
will suffer reprisal and career damage
if knowledge of their disclosure became
public. Under existing Australian legisla-
tion, if a whistleblower who is no longer
employed by a company took part in any
breach of corporation legislation them-
selves, they are not currently protected
from prosecution or civil action.
To bring Australia's corporate whistle-
blower scheme in line with best prac-
tice international laws and encourage
disclosures, it is expected that it will be
proposed for the "good faith" requirement
to be dispensed with.
Currently, for a corporate whistle-
blower to be entitled to protection for
making a disclosure relating to corporate
misconduct, their motive for making the
disclosure must not be malicious or for
a collateral purpose. The "good faith"
requirement is considered to deter poten-
tial whistleblowers, given that it creates
uncertainty of whether they will be
protected after they make the disclosure.
Minister Kelly O'Dwyer has suggested
that the Australian Government would
be seeking to introduce a "bounty-style"
reward system similar to that of the U.S.
Such a system would reward whistleblow-
ers who disclose high-quality information
that results in a conviction or monetary
penalty. It is suggested that a rewards
scheme would take into account the fi-
nancial consequences that whistleblowers
endure from disclosing information.
This "bounty-style" rewards scheme is
based on U.S. law which rewards whistle-
blowers with 10 to 30 percent of money
recovered, where sanctions exceed $1 mil-
lion. However, by international standards,
fines imposed on Australian companies
are relatively low. For such a scheme to be
successful in Australia, there will need to
be a substantial increase in the fines.
Further issues under consideration
include whether disclosures made to
in recent years the media has been
instrumental in revealing substantial
corporate misconduct.
nies Can Prepare
been broadly accepted by the Australian
corporate sector. Many industry sectors
are attempting to prepare themselves.
Businesses are able to prepare by:
1. arranging for an independent and ex-
blower policies;
and conduct;
sures;
offered to whistleblowers and how to
handle disclosures;
of whistleblower procedures; and
targeted for reprisals after making a
disclosure.
senting clients conducting business in, or
in connection with, Australia and through-
out the Asia Pacific region should flag the
potential reform of whistleblower protec-
tions to ensure they are not caught off
guard. While reform is never a certainty,
the key to preparing for such reforms will
be ensuring that employees are offered
suitable options for whistleblowing and
that suitable procedures and processes for
dealing with complaints are well known
throughout the company. Failure to adopt
such an approach could result in signifi-
cant financial and reputational damage
to the company.