CALL FOR REVIEW OF AUSTRALIA’S PRIVATE SECTOR WHISTLEBLOWER LAWS
The US Securities and Exchange Commission (SEC) has recently published figures which show that Australia has been one of its top foreign sources of tip-offs under a US scheme rewarding whistle-blowers with cash incentives. The US scheme gives rewards to whistleblowers in the order of 10 to 30 per cent of any financial penalties paid over US$1 million as a result of their tip-off.
The release of the SEC figures has prompted further criticism of Australia’s private sector whisteblower laws. Experts are calling for a major review of the Australian laws, and suggest that a US-style rewards should be considered for the Australian system. In 2013, a spokesman from the Federal Attorney-General’s Department said that they were still considering the merits of an Australian scheme and will continue to work with the private sector in that regard. The Australian Securities and Investments Commission (ASIC), has also made a submission to a Senate inquiry into ASIC’s performance, calling for changes to the current whistleblower laws, including that the laws be extended to cover former employers, company advisers such as accountants and unpaid workers such as interns and volunteers. ASIC’s submission revealed that it received 845 ‘potential whistleblower reports’ last financial year, 129 of which were referred to ASIC’s compliance, investigation or surveillance teams for further action.
PUBLIC INTEREST DISCLOSURE (PID) SCHEME
Australia’s first federal stand-alone whistle-blower protection scheme, effected by the Public Interest Disclosure Act 2013 (Cth) (PID Act), commenced on 15 January 2014. The PID Act aims to promote integrity and accountability in the Australian public sector by encouraging the disclosure of information in the public interest. The new scheme aims to encourage disclosure of information by protecting people who make disclosures from the adverse consequences that may otherwise flow from the disclosure of information relating to suspected wrongdoing. The PID Act applies to current and former employees of the Australian public service but does not otherwise extend to disclosures made by private citizens. The PID Act applies to a broad range of disclosures including those relating to corruption, illegality and maladministration.
The PID Act sets out strict requirements as to how agencies are to allocate the handling of disclosures, when a disclosure must be investigated and by whom. The PID scheme is administered by the Commonwealth Ombudsman. Further information on the scheme is available here
AUSTRALIAN MINERS URGED TO GET BEHIND GLOBAL TRANSPARENCY PUSH
‘Publish What You Pay’, a global network of not-for-profit organisations, is encouraging the Australian mining industry to follow the Canadian example and support the push towards increased transparency in relation to government payments. The Canadian government has promised to introduce mandatory reporting standards for mining, oil and gas companies operating overseas. Recommendations as to these reporting standards have been made by a working group consisting of Canadian mining industry bodies and watchdog organisations. The reporting requirements proposed by the working group relate to the disclosure of taxes, royalties, licence fees and payments to government. An Australian representative of ‘Publish What You Pay’ has claimed that mandatory disclosure legislation will improve public accountability and reduce corruption.
REVIEW OF ANTI-MONEY LAUNDERING LAWS ANNOUNCED
The Federal Attorney-General's Department and the Australian Transaction Reports and Analysis Centre (Austrac), which monitors the movement of large sums of money, have announced a broad review of Australia's anti-money laundering and counter-terrorism financing regime (AML/CTF). According to the terms of reference, the review will examine the policy objectives of the AML/CTF regime and whether the provisions of the AML/CTF regime remain appropriate for the achievement of those objectives. Further, according to an issues paper published by Austrac and the Federal Attorney-General’s Department in December 2013, the review will also consider whether the AML/CTF regime should be expanded to apply to lawyers, accountants, real estate agents and trust and company service providers.
ROYAL COMMISSION INTO UNION CORRUPTION
On Monday 10 February 2014 a Royal Commission into Trade Union Governance and Corruption was announced. The terms of reference are broad – the Commission will investigate and report on bribes, secret commissions or other unlawful payments or benefits arising from arrangements between unions or their officers and any other party. The terms of reference are available here. For more information, please see our briefing here.
ASIC RELEASES WHISTLEBLOWER INFORMATION SHEET
The Australian Securities and Investment Commission (ASIC) has issued guidance on whistleblowers, as defined by the Corporations Act 2001 (Cth). The Information Sheet sets out the definition and protections available to whistleblowers under the Act. ASIC also described how it will deal with information received, including how it will communicate with whistleblowers and what action will be taken in response to a report of misconduct. Specifically it notes that a Whistleblower Liaison Officer within ASIC will contact whistleblowers as maters are actioned. ASIC emphasises that it will only take action if it will have an impact on the market and benefit the general public.
AUSTRALIAN FEDERAL POLICE APPEARS BEFORE SENATE COMMITTEE
On Monday 24 February 2014 the Australian Federal Police (AFP) appeared before the Senate Estimates Committee. The AFP noted that foreign bribery is a difficult area to investigate given much of the evidence is overseas, and there is a need for mutual assistance from other countries to receive evidence in a form that will be accepted by Australian courts. The AFP confirmed that it currently has 13 active foreign bribery investigations, and is taking measures to comply with recommendations made by the OECD in 2012 to increase Australia’s enforcement of foreign bribery. In this regard, the AFP referred to a Memorandum of Understanding between the AFP and ASIC and the creation of a fraud and anti-corruption division within the AFP. The Senate Committee heard that AFP are working with ASIC to improve their working relationship, to enable the agencies to work more effectively in the foreign bribery area.
ASIC APPEARS BEFORE SENATE COMMITTEE
ASIC appeared before a Senate Committee on 19, 20 and 21 February 2014 as part of an inquiry into the performance of ASIC. During these hearings, ASIC commented on the relationship between ASIC and the AFP regarding corporate crime, including bribery and corruption and the ASIC Chairman Greg Medcraft highlighted the difficulties the AFP have in obtaining evidence from foreign jurisdictions. Medcraft stated that ASIC and the AFP had recently strengthened their working relationship. The Committee heard that while the jurisdiction of ASIC and the AFP overlap, there is a difference in the powers and limitations of each agency. It was suggested that changes to the legislative framework to create a better relationship between the AFP and ASIC, would result in a more efficient delivery of justice and ‘coordinated Commonwealth response’ to bribery and corruption.
CRIME FIGURE HIRED LABOR POWER-BROKER GRAHAM RICHARDSON TO LOBBY DEVELOPERS
The Sydney Morning Herald reported that allegedly corrupt building owner George Alex hired Labor power-broker Graham Richardson to help lobby developers and secure building contracts in the mid 2000’s. A former bankrupt, Mr Alex was repeatedly pursued by the Australian Tax Office over unpaid tax returns and was examined by law enforcement agencies over dealings with organised crime figures. Mr Richardson consulted for Mr Alex for a period of at least one year in order to secure work in the construction industry.
Businessman Jim Byrnes has also agreed to testify at the royal commission on union corruption about building union bribery, union links to organised criminals and the allegedly underhand dealings of Construction, Forestry, Mining and Energy Union (CFMEU) boss Brian Parker. Mr Byrnes says that he will identify at least four serving or former CFMEU organisers receiving bribes from builders such as Mr Alex. Mr Byrnes’ allegations about inappropriate ties between union officials and Mr Alex corroborate claims made by two CFMEU officials turned-whistle blowers, Brian Fitzpatrick and Andrew Quirk.