The Minister for Financial Services, Superannuation and Corporate Law, the Hon Chris Bowen MP, today released an options paper exploring strategies for improving protections for corporate whistleblowers.
Information from whistleblowers can make an invaluable contribution to the protection of investor interests and the preservation of market integrity. However, whistleblowers must be shielded from the risks they face in coming forward.
Currently, corporate whistleblowers are protected under Part 9.4AAA of the Corporations Act 2001. However, these protections have been in place since 2004 and only four whistleblowers have felt safe enough using them to provide information to ASIC.
"I am concerned that the existing protections for corporate whistleblowers contain fundamental shortcomings," Mr Bowen said.
"The options considered in this paper are important steps towards ensuring corporate whistleblowers are adequately protected."
Issues include:
- who is allowed to qualify for protection as a whistleblower – former employees, for example, currently do not qualify;
- what types of issues can be disclosed under the protections – some matters which ASIC can investigate cannot currently be the subject of a protected disclosure;
- whether motive should affect protection – currently an individual with malicious motives cannot be protected even if the information they disclose is genuine;
- whether anonymity should affect protection – many whistleblowers may wish to be anonymous, but if they do not disclose their name from the start then, should they later need to come forward, such as to give evidence, they cannot be protected;
- when can a Court can order the production of documents which reveal a whistleblower's identity – there is concern that whistleblowers will be discouraged from coming forward unless there is further guidance on this issue;
- what confidentiality restrictions should apply to those receiving disclosures second-hand – there may be a loophole in post-disclosure confidentiality protections; and
- whether prospective whistleblowers should be protected for seeking legal advice – this may encourage more whistleblowers to come forward by providing greater certainty in relation to how the law operates.
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.
Copies of the paper can be obtained from the Treasury website: www.treasury.gov.au.
The closing date for submissions is 21st December 2009.
22 October 2009