Treasury comments that
information from whistleblowers can make an invaluable contribution to protecting investor interests and preserving market integrity, but they need to be shielded from the risks they face in coming forward. This paper examines possible reforms to current protections [and] sets out a range of concerns in relation to existing protections under Part 9.4AAA of the Corporations Act 2001 along with options for reform and questions which are designed to focus the discussion. ... Several of the potential reforms also relate to the whistleblower protections provided by the banking and insurance prudential legislation. However, as these provisions are relatively recent, broad changes to the protections offered by these Acts are not anticipated.The Department is
seeking ... feedback and comments on the options outlined in this paper, particularly any information about compliance costs, impacts on competition, existing business activities and any other impacts, costs and benefits. We also seek your advice on any potential unexpected consequences of these proposed changes.It notes that
the importance of protecting corporate whistleblowers has been recognised for many years. However, while legislative protections have been provided under the Corporations Act 2001 since 2004, they appear to have been poorly regarded and rarely used. At the time this paper was written, only four whistleblowers had ever used these protections to provide information to ASIC. As such, those with the best access to information still seem to feel as though they have least reason to disclose it. ... It is not only the regulatory role which whistleblowers can play that makes their protection important. Many others also assist in the detection of corporate and financial services misconduct, but most have either mandated responsibilities or financial incentives to do so. However, whistleblowers are particularly courageous because they take serious risks without, usually, any prospect of personal reward.Salient options identifies in the paper are -
Issue: Who can qualify for protection as a whistleblower? Many who might access information about corporate or financial services misconduct cannot qualify for protection because they do not fall into one of the categories currently covered.
Options: 1 That access to protection be extended to former employees, financial services providers, unpaid workers and business partners. 2 That protection be extended to any member of the public with access to inside information about corporate or financial services wrongdoing. 3 That the status quo be maintained.
Issue: Defining a 'subsidiary' for the purposes of the whistleblower protection provisions of the Insurance Act. The definition of 'subsidiary' under the Insurance Act is inconsistent with the definition under the other prudential Acts and the Corporations Act
Options: 1 That the definition of 'subsidiary' for the purposes of the whistleblower protection provisions of the Insurance Act be made consistent with the definition of subsidiary under the Corporations Act. 2 That the status quo be maintained.
Issue: What issues can be disclosed under whistleblower protections? Whistleblowers can only qualify for protection if they make a disclosure concerning an alleged breach of corporations legislation; whistleblowers cannot be protected if they make disclosures concerning other illegal corporate activities.
Options: 1 That whistleblowers have access to protection provided they make a disclosure concerning alleged illegal activities which ASIC can investigate. 2 That whistleblowers have access to protection provided they make a disclosure concerning alleged misconduct that ASIC can investigate. 3 That the status quo be maintained.
Issue: Should motive affect whether a whistleblower qualifies for protection? Often whistleblowers with genuine information may have (or be open to the accusation of having) malicious or secondary motives. However, whistleblowers can only qualify for protection if they make a disclosure in good faith.
Options: 1 That whistleblowers no longer be required to make disclosures in good faith to access protections under the Corporations Act. 2 That the status quo be maintained.
Issue: Should anonymous disclosures qualify for protection? As legislative protections cannot guarantee that a whistleblower will not suffer as a result of making a disclosure, many whistleblowers may wish to come forward anonymously. However, if the identity of a whistleblower who makes an anonymous disclosure is discovered, or they have to come forward later to provide evidence, they are unable to qualify for protection.
Options: 1 That whistleblowers no longer be required to identify themselves before making a disclosure to qualify for protection. 2 That a whistleblower's identity can only be required if it can be reasonably shown that their claims cannot be investigated without it. 3 That the status quo be maintained.
Issue: Should a court be able to order the production of documents which reveal a whistleblower's identity? There is concern whistleblowers may be discouraged from coming forward if a court can order the release of documents that reveal or tend to reveal a whistleblower’s identity.
Options: 1 That legislation require a court to consider the impact of requiring the production of documents revealing or tending to reveal a whistleblower's identity on the probability of future whistleblowers coming forward. 2 That legislation state the ASIC cannot be required to produce a document revealing or tending to reveal a whistleblower's identity unless an applicant can establish that the significance of those documents to their case outweighs the public interest in keeping the documents confidential. 3 That the status quo be maintained.
Issue: What confidentiality restrictions should apply to those receiving disclosures second-hand? Third parties who receive information provided by a whistleblower second-hand are not subject to the same restrictions regarding the use of that information as those who receive the initial disclosure.
Options: 1 That parties receiving information provided by a whistleblower second-hand, via the permission of the whistleblower, be subject to the same confidentiality restrictions as the initial recipients. 2 That the status quo be maintained.
Issue: Should prospective whistleblowers be protected for seeking legal advice? It may be difficult for many whistleblowers to determine whether or not they would qualify for protection.
Options: 1 That any disclosure made for the dominant purpose of seeking legal advice on a possible disclosure to a prescribed authority qualify for protection, regardless of other criteria. 2 That the status quo be maintained.
