Kelly O'Dwyer said 'whistleblowing plays a critical role in uncovering corporate and tax misconduct'. Credit:Josh Robenstone Corporate Australia is littered with whistleblowers who take on enormous risk for no personal gain, in fact to their great detriment. If they wait until they leave their job, they aren't classified as a whistleblower and therefore have no protection. Indeed, current legislation does not provide additional protection for documents that contain whistleblower information, including information that might reveal a whistleblower's identity. But 2017 is offering a glimmer of hope for potential whistleblowers that things might finally be starting to change.

CBA whistleblower Jeff Morris. Credit:Rob Homer A consultation paper released on Tuesday by Financial Services Minister Kelly O'Dwyer reviewing tax and corporate whistleblower protections raises the right issues, and calls for submissions that include questions such as "Should financial rewards or other types of rewards be considered for whistleblowers? Why or why not?" It is an inconvenient time to release a consultation paper with a quick turnaround for submissions to close on February 10, but at least Treasury had the foresight to say submissions will be sent on to a separate parliamentary inquiry into whistleblowers, which was announced last month after some deft political manoeuvring by Senator Nick Xenophon and Senator Derryn Hinch. In releasing the consultation paper, Minister O'Dwyer said "whistleblowing plays a critical role in uncovering corporate and tax misconduct". She is right. It isn't about bashing up companies, but help them improve their handling of whistleblowers. As it has often been said, you can judge the culture of an organisation by the way it treats whistleblowers.

Many will say they can't justify doing that to their family. Jeff Morris, CBA whistleblower The consultation paper highlights the findings of a landmark research project into whistleblowing, Whistling While They Work 2, spearheaded by Griffith University's professor of public policy and law, A. J. Brown, in conjunction with bodies including ASIC. The project surveyed 702 organisations and its preliminary research found almost one in four organisations had no particular system for recording and tracking wrongdoing concerns and "did not currently have any strategy, program or process for supporting and protecting staff who raise concerns". The survey also found that only 46 per cent of organisations provided potential whistleblowers with access to a management-designated support person inside the organisation. This spells out clearly that Australia needs to get with the pace and create a holistic approach to dealing with whistleblowers.

It was a point raised by the Governance Institute last month when it said Australia has a once-in-a-lifetime opportunity to do this right. It urged the Senate Inquiry into Scrutiny of Financial Advice not to make any recommendations on whistleblowing systems until the final results of the Griffith University project had been completed. The plight of whistleblowers has been put in the spotlight in the past few years following high-profile scandals including at the Commonwealth Bank, its life insurance division CommInsure, National Australia Bank, IOOF and 7-Eleven. Without these whistleblowers coming forward, none of these cases would have come to light. These whistleblowers, and others, catapulted whistleblowing into the public and political arena and highlighted the shortcomings in the law. Griffith University's A.J. Brown sees the consultation paper as a positive first step. He said the questions raised in the paper demonstrate the breadth and complexity of the issues that need to be resolved and the importance of getting business to engage. The paper looks at a range of issues, including whether the definition of a whistleblower is too narrow or broadened to include former employees, financial services providers, lawyers, accountants, unpaid workers and business partners.

Importantly, it also raises the controversial issue of rewarding whistleblowers. Indeed, the consultation paper says a reward system could encourage greater levels of nuisance reporting to securities regulators. "As the SEC has noted on its website, only 34 complaints out of 14,000 received since the inception of the whistleblowing reward program in 2011 have resulted in rewards being paid," the paper said. But it says if the reward system is structured properly, it may create a strong inducement to report. "The fact that the SEC has received 14,000 complaints since inception of the program, even if few of them resulted in rewards, demonstrates the power of a monetary incentive system in driving conduct." There is little doubt that whistleblowing will be a big agenda issue next year but at the end of the day its success or otherwise will depend on whether a holistic approach with standalone legislation is taken or the government – and business – squibs and we are left with a piecemeal approach with lots of different legislation and a lot of confusion.