Australia has made a first, very small, step towards uniform whistleblowing protection, but much more needs to be done.
Federal cabinet secretary Senator Joe Ludwig recently proposed a framework for whistleblowing protection within the Commonwealth public sector. The proposed scheme was in response to the Dreyfus Committee report of February last year, and comes more than 15 years after a Senate inquiry into public interest whistleblowing recommended legislation at the federal level. Under Ludwig’s proposals whistleblowers would be able to make protected disclosures to internal agencies, to the Commonwealth Ombudsman and, for the first time, to the media. Protections would include the ability to disclose anonymously, immunity from legal liability and, more generally, protection against victimisation.
Australia needs uniform Commonwealth legislation, but the proposed scheme is a step back from the standard set by the 1994 Senate Select Committee on Public Interest Whistleblowing. The Ludwig scheme is written for legislators, not whistleblowers. It manages whistleblowing, but it will not protect whistleblowers. And, it will not protect those whistleblowers who expose the systemic corruption that leads to systemic failure.
There are three main problems with the Ludwig scheme. First, the authorised authority for receiving and investigating public disclosures is the Commonwealth Ombudsman. The 1994 Senate Committee recommended that a new agency, a Public Interest Disclosure Agency (PIDA), be created. They specifically rejected the proposition that an existing agency continue as the principal agency for receiving and investigating disclosures reasoning that an independent agency needed to be created to gain the trust and confidence of whistleblowers. Nothing has changed since 1994. Both whistleblowing advocacy groups in Australia, Whistleblowers Australia and the Whistleblowers Action Group, argue for the establishment of a new agency, to break from the inaction of the past.
Secondly, the protections of the Ludwig scheme are of little value.
There are no prescribed penalties for victimisation, and no suggestion that the career of the whistleblower should be monitored for some time after the whistleblowing. Discrimination against a whistleblower doesn’t end with the whistleblowing; it persists for years afterwards. In the United States any employee who is discharged, demoted, suspended, threatened, harassed or in any other manner discriminated against is entitled to all relief necessary, which includes reinstatement with the same seniority status, twice the amount of back pay and compensation for any special damages including litigation costs.
Thirdly, the most effective whistleblowing legislation in the world is the US False Claims Act. The False Claims Act allows whistleblowers to initiate actions against false claimants on the government, and to receive compensation for their whistleblowing. The onus of proof is reversed. The False Claims Act has given whistleblowers rights that other legislation has denied. A false claim has meaning beyond simple fraud; it also includes false reporting of results in medical testing, environmental and safety violations, kickbacks and bribes.
Whistleblowers are entitled to 15-25 per cent of the fraud recovered.
The False Claims Act represents a pubic-private partnership between the government and the whistleblower, one of the most effective public-private partnerships of all. Since 1986, $20 billion of US federal fraud has been recovered through the False Claims Act. It is cost effective; the US government is now recovering $15 for every $1 invested in False Claims Act health care investigations. The False Claims Act has been so successful that 30 of the states in the US have adopted their own False Claims Acts, and countries as diverse as the UK and Lebanon are now considering False Claims Acts. Why shouldn’t Australia?
Whistleblowing results from regulatory failure. It has become important because, in many workplaces, monetary values have replaced the values of the public interest. Whistleblowers have become the independent regulators. A recent study of US corporate fraud found that the most important regulators of all were the whistleblowers. They identified 19 per cent of the fraud. The most recent statistics from the UK suggest a ten-fold increase in whistleblower cases in the past decade. The evidence in Australia is similar. But in Australia, the response to whistleblowing has been like the US response to universal health insurance. Whistleblowers have waited far too long, for far too little.
Dr Kim Sawyer is an honorary fellow at the School of Philosophy, Anthropology and Social Inquiry at the University of Melbourne.