How can Australia set the standard for managing whistleblowing?

With whistleblowers making major headlines in recent years, many businesses are assessing their role in encouraging individuals to speak up against unethical behaviour.

When Brian Hood first raised his concerns about questionable behaviour at Note Printing Australia (NPA), he didn’t consider himself a whistleblower.

“I just reported things internally up the line to the chief executive, who I directly reported to in my role,” said Hood, the former company secretary at NPA, a subsidiary of the Reserve Bank of Australia (RBA).

“But I was met with resistance and fobbed off, and it gradually escalated to a point where I was being harassed, intimidated, isolated and abused.”

In 2013, Hood took his concerns “externally” to the media, which seized on the story of how overseas agents employed by NPA and sister RBA company Securency were paying bribes to win note-printing contracts.

The lurid revelations included illegal attempts to do a deal with former Iraqi dictator Saddam Hussein, in contravention of international sanctions. In another incident, A$400,000 of taxpayer funds was sent to a Malaysian arms dealer in return for his support in winning a lucrative contract.

By going public, Hood became one of Australia’s most high-profile whistleblowers, so it was appropriate that he was on the podium last week for the launch of the world’s largest current research project into whistleblowing, Whistling While They Work 2.

A new support structure for whistleblowers

Led by researchers from Griffith University, Australian National University and the University of Sydney, and supported by 22 regulatory and professional organisations, including CPA Australia, the project invited every public sector agency and all of Australia’s 31,000 public unlisted and large proprietary companies to participate.

A similar approach is being taken in New Zealand, where partners include Victoria University of Wellington, the State Services Commission and the Ombudsman NZ.

The project has two phases: a survey of organisational processes and procedures and a more comprehensive – and anonymous – survey of staff and managers.

The aim is to gain an understanding of the prevalence of whistleblowing and how organisations are responding. From there, project leaders are looking to develop a framework that will help organisations benchmark themselves against peers in the effective management of whistleblowing.

“We need a process which means that people don’t have to go to the media as a first port of call, that ensures that people are taken seriously and are given feedback all the way through the investigation." Brian Hood

It’s hoped the results will also play into the law reform process, particularly the creation of a new Australian Standard on Whistle Blower Protection Programs, which has currently lapsed.

For Brian Hood, the goal is for Australia to create a “structured set of processes” around whistleblowing that will encourage more people to speak up and also make the reporting of wrongdoing “less adversarial.”

“A whistleblower feels isolated and exposed, and they feel they are at risk,” said Hood, speaking at the launch of the research project in Sydney this week.

“A lot of people won’t take that step of reporting what they see even if they have the inclination to speak out, because they have heard all the ‘war stories’ of what happens to whistleblowers.

"We need a process which means that people don’t have to go to the media as a first port of call, that ensures that people are taken seriously and are given feedback all the way through the investigation."

Protection agency for whistleblowers?

 The project leader, Professor A. J. Brown from Griffith University in Queensland, said the scale of the research was a groundbreaking opportunity to understand the prevalence of whistleblowing and how organisations were responding.

“Because we are independent, we are uniquely placed and employees will tell us if they have seen wrongdoing and what has happened when they reported it,” said Brown.

The study will uncover the extent to which employees have been reporting wrongdoing to their managers, who have taken no action.  It will also deliver results on the “inaction rate,” where people see wrongdoing but do not, for various reasons, speak up about it.

“Even if the organisation has been unaware of it, we will know that people have been reporting wrongdoing to their managers and that it hasn’t gone any further.

“We’ll also be able to pinpoint the incidence of people who are seeing wrongdoing but not speaking up about it, and that ‘inaction rate’ will be one of the key metrics the study will be able to gather.”

“All we can ever expect ASIC to do – and all ASIC will ever do – is to deal with breaches of the Corporations Act, and that leaves the rest of the whistleblowing issues hanging in the wind.” Prof AJ Brown

Brown described Australia’s current legislative and regulatory approach to whistleblowing as “patchwork” and said he hoped the study would help build the case for a central agency for the private and not-for-profit sectors.

“We have a federal system with state-based legislation for the public sector, and that is as it should be and I’m not suggesting the clock needs to be turned back on that,” he said.

“What we probably need is a central agency, one whistleblower management protection office that services all the regulators and has a relationship with the Fair Work regime and employment protection.”

Brown believes that one federal body, rather than “dribs and drabs of measures”, could provide a better model for coordination that could also assist the public sector through education and training, and developing better organisational frameworks to tackle wrongdoing.

It was unproductive, he said, to expect corporate regulator the Australian Securities and Investments Commission (ASIC) to deal with all aspects of whistleblowing.

“To keep having a debate which just says that ASIC should do more to protect whistleblowers is to make a big mistake,” said Brown, adding that this was simply not in ASIC’s territory.

“All we can ever expect ASIC to do – and all ASIC will ever do – is to deal with breaches of the Corporations Act, and that leaves the rest of the whistleblowing issues hanging in the wind.”

Although Whistling While They Work 2 is the world’s largest study of its kind, Brown said his work with Transparency International had helped him understand that Australian corporate and public culture was comparatively healthy by world standards.

He doesn’t think that it’s culturally more difficult for Australians to blow the whistle or speak up. “I just think it’s a misreading of the Australian culture and it’s fully compensated for by Australian egalitarianism and the idea of a fair go,” he said.

“I think we are already doing some basic things right here, and we also need to identify what they are … I think the study will also help that.”

CPA Australia is a partner organisation in the Whistling While They Work 2 project, together with, among others: ASIC, Independent Broad-based Anti-corruption Commission (IBAC), Commonwealth and State Ombudsmen. 

For information on the project and participation: www.whistlingwhiletheywork.edu.au/

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