Australian Public Sector Anti-Corruption Conference 2007

Whistleblowing in practiceProtections, procedures andmanagerial responsibilities

Dr A J BrownProfessor of Public LawGriffith Law School, Griffith UniversityProject leader, ‘Whistling While They Work’Non-exec director, Transparency International Australia

Contents

Introduction & legal landscape ‘A Problem’ Recognising and encouraging

public interest disclosures Protecting & supporting

whistleblowers (and others) Management obligations More questions & discussion

Queensland GovernmentCrime & Misconduct Commission

Queensland OmbudsmanOffice of Public Service, M&E

Griffith University

New South Wales GovernmentNSW ICACNSW OmbudsmanUniversity of Sydney

Western Australian GovernmentCorruption & Crime CommissionWA OmbudsmanPublic Sector Standards Commissioner Edith Cowan University

Australian Government Commonwealth Ombudsman

Australian Public Service CommissionCharles Sturt University

Transparency International Australia Victorian, ACT & NT Govts Ombudsman VictoriaNT Comr for Public EmploymentACT Chief Minister’s DeptMonash University

Australian Research Council

Whistling While They Work: Enhancing the Theory & Practice of Internal Witness Management in the Australian Public Sector

www.griffith.edu.au/whistleblowing

Integrity Agency Survey (Practices & Procedures) n=16Integrity Casehandler Survey n=82

Integrity Agencies

General Agencies

WWTW - Quantitative Research

Employee Survey

WAQldNSWCth

30463838573Agency Survey (Procedures)

11825323427

Total no. of public servants surveyed – 23,177Total responses – 7,663 (33%)

Case Study Agencies153444Selected8720282415Volunteered

Managers (n=513)Casehandlers (n=315)Internal Witness Survey n=240

n=828

Procedures Assessment 17528316056

http://www.griffith.edu.au/whistleblowing

http://epress.anu.edu.au/whistleblowing_citation.html

Second report: Whistling While They Work –A good practice guide for managing internal reporting of wrongdoing in public sector organisations

Peter Roberts, A. J. Brown &Jane Olsen, 2011

http://epress.anu.edu.au/whistling_citation.html

Elements of an organisationalwhistleblowing program:1. Organisational commitment2. Encouragement of reporting3. Assessment and investigation of reports4. Internal witness support and protection5. An integrated organisational approach

“the disclosure by organisation members (former or current) of illegal, immoral, or illegitimate practices under the control of their employers, to persons or organisations that may be able to effect action.”

Near & Miceli (1985: 4)

What is whistleblowing?

‘Public interest’ whistleblowing

As opposed to matters that are purely private, personal, or industrial grievances

Reform of Australian whistleblowing legislation

Jurisdiction Original Reformed Title

South Australia* 1993 Pending Whistleblowers Protection Act

Queensland* 1994 2010 Public Interest Disclosure Act

ACT 1994 2012 Public Interest Disclosure Act

New South Wales 1994 2010 Public Interest Disclosure Act

Commonwealth 1999 Underway? (Public Service Act, s.16)

Victoria 2001 Pending? Whistleblowers Protection Act

Tasmania 2002 2009 Public Interest Disclosures Act

Western Australia 2003 Pending? Public Interest Disclosure Act

Private sector* 2004 Pending? Corporations Act, Part 9.4AAA

NT 2008 -- Public Interest Disclosure Act

* Private sector coverage

State of reform –Australian whistleblowing legislation

Juris Reform Original 1. Effective system & oversight

2. Public disclosure

3. Effective remedies

ACT 2012 1994 1 1 NKTW

NSW 2010-11 1994 1 3 NKTW

QLD* 2010 1994 2? 2 NKTW

WA 2012? 2003 2? 2? NKTW

VIC ?? 2001 2? Missing NKTW

TAS 2009 2002 2? Missing NKTW

NT -- 2008 ? Missing NKTW

CTH Waiting… 1999? Proposed? Proposed? ???

SA* 2012? 1993 Missing NKTW NKTW

Corps Act* Stalled? 2004 Missing Missing NKTW

* Some private sector coverage NKTW: Not known to work

What’s all this got to do withNew Zealand?

State of knowledge:•Actual wrongdoing reporting rates?•Actual support / management responses?•Actual outcomes?

State of the regime / legislative framework(Protected Disclosures Act 2000):

1. Operational –- Comprehensive & tailored definitions of reportable

wrongdoing?- Low thresholds and multiple reporting paths?- Disclosures recognised by management?- Centrally monitored?- Procedures & support requirements?

2. Public whistleblowing – not recognised.3. Remedies –

- ‘May’ have an employment grievance?- Victimisation complaints processes (Human Rights)

‘A Problem’:Michelle, Peter & Alberto

1. Has Michelle done the right thing?Has Peter?

Is whistleblowing a good thing?

Should it be encouraged?

Why?

Table 2.13. Relative importance ofemployee reporting (means) p.45Casehandler & Manager Q14, Integrity Casehandler Q9

How important do you believe each of the following is for bringing to light wrongdoing in or by your organisation/public sector organisations?

1=not important to 4=extremely important

(a)Case-

handlers(n=285)

(b)

Managers(n=410)

(c)Integrity

Casehandlers(n=70)

a Routine internal controls (e.g. normal financial tracking, service monitoring) 3.24 3.24 3.26

b Internal audits and reviews 3.19 3.06 3.27

c Management observation 3.36 3.30 3.17

d Client, public or contractor complaints 2.94 2.97 3.09

e Reporting by employees 3.42 3.30 3.51

f External investigations 2.66 2.59 2.94

g Accidental discovery 2.45 2.37 2.36

Table 2.13. Relative importance ofemployee reporting (means) p.45Casehandler & Manager Q14, Integrity Casehandler Q9

How important do you believe each of the following is for bringing to light wrongdoing in or by your organisation/public sector organisations?

1=not important to 4=extremely important

(a)Case-

handlers(n=285)

(b)

Managers(n=410)

(c)Integrity

Casehandlers(n=70)

a Routine internal controls (e.g. normal financial tracking, service monitoring) 3.24 3.24 3.26

b Internal audits and reviews 3.19 3.06 3.27

c Management observation 3.36 3.30 3.17

d Client, public or contractor complaints 2.94 2.97 3.09

e Reporting by employees 3.42 3.30 3.51

f External investigations 2.66 2.59 2.94

g Accidental discovery 2.45 2.37 2.36

Former Head of Forex, NAB, Luke Duffy arriving at court for his committal hearing, 22 March 2005. Photo: Sydney Morning Herald.Sentenced to 2.5 years jail (minimum 16 months), 15 June 2005.

NAB corporate affairs manager Robert Hadler hasconfirmed the rogue trading was uncovered bya whistleblower.

"The initial investigation was revealed by a colleagueon the trading desk in our trading floor in Melbourne,“Mr Hadler said.

"He reported that to senior management; [a] thorough investigation was launched and we worked out the full extent of losses and have reported it immediately to the market, and to the regulators and the police."

Despite being uncovered by a whistleblower, Mr Hadler says the bank's systems would have detected it in due course.

"The trades were unauthorised and not properly recorded and that's why they weren't picked up in the first instance by the systems," he said.

-- ABC News Online, 14 January 2004.

No29%

(n=2188)

Yes71%

(n=5473)

Saw wrongdoing (defined) in last two years?

Reported the most serious wrongdoing?

All respondentsn=7663

No57%

(n=3125)

Yes39% (n=2146)

(28% of all respondents)

YesWrongdoing only reported in their official capacity, and/or manager only reporting

employees below level

29% (n=619)

No(potential whistleblowing)

70% (n=1497) (20% of all respondents)

Likely to have reported as partof normal role?

Yes38% (n=549)

No(public interest whistleblowing)

61% (n=913) (12% of all respondents)

Wrongdoing was personnel or workplace grievance?

Missing n=202

Missing n=30

Missing n=35

An overview of whistleblowing in the Australian public sector

p.38

Australia (12%): 197,000NZ core (12%): 4,337

How much whistleblowing goes on?

Figure 4.1. Reporting Paths of Non-Role Public Interest Reporters (%)

Employee Survey, Q28 (n=858)

50.138.17.11.7

1.20.90.50.3

Internal97.1

External2.9

Initial report

None51.3

Internal only39.0

Mixed7.6

External only2.1

Further report(s)

‘Internal’ includes reports to one of the following: supervisors, senior managers, CEOs, internal ethical standards units, internal audit or fraud units, internal ombudsmen or complaints units, human resource or equity and merit units, internal hotlines and counsellors and peer support officers.‘Internal only’ includes reports made only to one of more recipients in the ‘Internal’ category.‘External’ includes reports to one of the following: external hotlines or counselling services, unions, government watchdog agencies, members of parliament and journalists.‘External only’ includes reports made only to one or more recipients in the ‘External’ category.‘Mixed’ includes reports made to both ‘Internal’ and ‘External’ recipients.

Sample advice to public employees regarding reporting points

Queensland Government 2009

A Key Metric: How many don’t report?

Figure 2.4. Inaction rates (very/extremely serious)

51.9

75.0 72.768.8

60.0

66.7

55.0 52.2

42.2

37.0

16.7

11.212.5

20.0

8.3

18.317.4

14.1

7.4 8.3

16.1 18.8 20.0 20.826.7 29.3

43.8

0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

75

80

85

90

95

100

B H F C G D A E I

Case study agencies

% o

f re

spo

nd

ents

wh

o o

bse

rved

ver

y/ex

trem

ely

seri

ou

s w

ron

gd

oin

g

Did not report, no action, no-one else reported

Did not report but dealt with by self / others reported

Report

Missing

Mean28.6% nationally

Fig 2.4p.49

Case study:Michelle, Peter & Alberto

2. What impacts do the possible motives of Michelle and/or Peter have on how any of these issues need to be investigated?

Why do employees report?

Triggers according to the WWTW data:

• Nature & seriousness of wrongdoing;

• Personal involvement / affected(NB can also be history of conflict, dysfunctionality, poor mgt, mixed motives);

• Ethical and/or legal responsibility;

• Confidence in protection not as high a priority for reporters, but low confidence a big factor for non-reporters;

• Belief something will/must be done (the vital issue for both reporters & non-reporters).

• naïve whistleblowers - come forward without considering there might be risks of reprisals or negative reactions;

• trusting whistleblowers – come forward anticipating there are some risks but may underestimate them or assume that dealing with them will be simple;

• risk managers - anticipate the risks more accurately and are likely to already have higher coping skills, but are unlikely to come forward unless confident of support;

• risk avoiders - over-estimate the risks, under-estimate the solutions and are even less likely to come forward, but who may end up pleasantly relieved if they do; and

• ‘kamikaze’ witnesses - proceed without regard for reprisal risks. (Anderson 1996)

The diverse reality of whistleblowing...

Case study:Michelle, Peter & Alberto

3. What are the issues that need to be investigated, and how?

4. What are the main risks involved in what Alberto decides to do next?How should he address them?

Case study:Michelle, Peter & Alberto

5. Assume all allegations are true, and proven.

Are any options open to Alberto or management to address the issues relating to Michelle’s performance and travel claim?

If so, how, and what are the risks involved?

Figure 5.1. Treatment by managementand co-workers (%)

Public interest whistleblowers(non-role reporters, reporting other

than personnel or workplace grievances)

N=913

Treated well or sameby management and

co-workersN=686 (78%)

Treated badlyby management and/or

by co-workersN=191 (22%)

Treated badlyby management

onlyN=113 (13%)

Treated badlyby managementand co-workers

N=46 (5%)

Treated badlyby

co-workers onlyN=32 (4%)

Missing=36 (4%) N=877

Figure 5.2. Proportion of reporters indicatingbad treatment by management (%)(n=55 agencies)

0

1

2

3

4

5

6

7

0-5% 6-10% 11-15%

16-20%

21-25%

26-30%

31-35%

36-40%

41-45%

46-50%

51-55%

% of all reporters indicating treated 'quite' or 'very' badly by management

Nu

mb

er

of

ag

en

cie

s

Cth (n=17)

NSW (n=20

Qld (n=12)

WA (n=6)

What is ‘good’ treatment?

‘This incident has done nothing for my career in this organisation as I have tended to just stay in low-key positions and away from the stress of finding fraud again. Basically, I have withdrawn and taken on interests outside my work that involve me in more interesting projects and life experiences. Yet my experience could have been a lot worse, such as, conspiracy within the organisation or management not taking it seriously. It [was] the biggest fraud this organisation has experienced. Part of me is proud to have had the courage to report it, part of me doesn’t want to know about it.’

- ‘Successful’ whistleblower, Internal Witness Survey

Risk factors for perceived mistreatment

For mistreatment by management: 1. Matter has gone external (chicken or egg?) 4.7x 2. No positive outcome from investigation (ditto?) 4.1x 3. Wrongdoing was directed at the whistleblower 3.5x 4. Wrongdoer(s) at a higher level than reporter 2.7x 5. Wrongdoing perceived to be serious 1.8x 6. Wrongdoing perceived to be frequent 1.8x

For mistreatment by co-workers: 1. Wrongdoing perceived to be serious 3.5x 2. Lack of any positive outcome from investigation 3.2x 3. More than one person involved in wrongdoing 2.8x 4. Size of immediate workgroup <20 people 2.1x

Additional risk factors (where otherwise low-risk): 1. More than one internal reporting stage before resolved; 2. Outcome positive, but no investigation or investigation unknown; 3. Reporter employed part-time, casually or on contract.

Protective factor (against co-worker mistreatment, otherwise high-risk): 1. Age of reporter (older).

Sources of help, assistance and support

Sources of help & supportTotal

(n=213 139)

1. Other work colleagues at my level 50% 52%

2. My family 44% 52%

3. Other work colleagues below my level 22% 25%

4. A union or professional association (5)

16% 19%

5. My supervisor (6) 16% 10%

6. A counsellor or counsellors (4) 14% 22%

7. Senior managers 13% 8%

8. Internal ethics, audit, investigation unit 12% 5%

9. Human Resources / EEO unit 7% 4%

10. External govt watchdog agencies (14)

4% 2%

11. Member(s) of Parliament 3% 4%

12. Internal support program (=8) 2% 5%

13. Whistleblower support group 2% 4%

14. The media 2% 3%

15. Other community based support 2% 1%

16. Other specialist officers or units 1% 1%

Table 9.7p.215

Internal Witness Survey(Case study agencies)

Q47:After report? (n=213)

Q57: After experienced bad treatment or harm?(n=139)

• 46% of agencies had no procedures for identifying whistleblowers who need management support and protection

• 30% of agencies had no staff responsible for protecting whistleblowers from reprisals

• 70% of agencies did not carry out any assessment of the risks of reprisal when officials blow the whistle

• In case study agencies, less than 1% of public interest whistleblowers made it onto the ‘radar’ of agency whistleblower support programs

• In case study agencies, 42% of managers and casehandlers believed that disciplinary action is ‘sometimes’ or ‘often’ used as a cover for reprisals

How much effort is going into whistleblower management?

Only 5 out of 175 agencies had ‘reasonably strong’ procedures measured against the Standard

  Agency rankings Agency B A M P N E C F D O L G K H I

Procedures comprehensiveness 2 1 10 8 12 3 15 6 14 5 11 13 - 7 9

Indicator Survey1 results:                              

1. Attitudes to reporting 2 1 9 12 6 3 10 5 4 11 14 13 8 15 7

2. Awareness of legislation 4 2 1 7 3 6 11 13 5 8 9 10 15 14 12

3. Awareness of policies 5 1 2 10 6 3 4 7 9 12 8 13 15 14 11

4. Whistleblowing propensity 3 1 2 6 8 4 5 7 9 10 13 11 14 15 12

5. Trust in org response 3 2 4 1 11 7 12 8 15 6 5 9 13 10 14

6. Inaction rate (serious) 1 13 6 4 7 14 8 5 10 12 3 9 11 2 15

7. Knowledge of investigation 7 5 9 1 2 4 11 12 3 6 13 10 8 15 14

8. Treatment following report 1 6 7 3 5 11 2 9 14 10 13 4 8 12 15

                               

Sum of ranks 26 31 40 44 48 52 63 66 69 75 78 79 92 97 100

Overall ranking 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

                               

Whistling While They Work – AustraliaOverall ranking of case study agency performance

Second report: Whistling While They Work –A good practice guide for managing internal reporting of wrongdoing in public sector organisations

Peter Roberts, A. J. Brown &Jane Olsen, 2011

http://epress.anu.edu.au/whistling_citation.html

Elements of an organisationalwhistleblowing program:1. Organisational commitment2. Encouragement of reporting3. Assessment and investigation of reports4. Internal witness support and protection5. An integrated organisational approach

The big institutional risksof mishandling whistleblowing

1. Organisational injustice, leading to exposure to liability for failure in duty of care to employees.

2. Damage to reputation – it’s still going to come out eventually.

3. Suppression of internal disclosures, ‘speaking up’ culture – leading to larger, festering problems.

Employers have already been held liable for failing to protect whistleblowers

Wheadon v State of NSW, NSW District Court (2001)No. 7322 of 1998

NSW Police ServiceBreach of duty of care to its employee

$664,270 in damages:- failing to provide a proactive system of protection;- failing to give support and guidance;- failing to prevent conduct of colleagues who ostracised him.

Written by JJ on Jul-27-10 5:07am

                                                         

A Key Metric: How many don’t report?

Figure 2.4. Inaction rates (very/extremely serious)

51.9

75.0 72.768.8

60.0

66.7

55.0 52.2

42.2

37.0

16.7

11.212.5

20.0

8.3

18.317.4

14.1

7.4 8.3

16.1 18.8 20.0 20.826.7 29.3

43.8

0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

75

80

85

90

95

100

B H F C G D A E I

Case study agencies

% o

f re

spo

nd

ents

wh

o o

bse

rved

ver

y/ex

trem

ely

seri

ou

s w

ron

gd

oin

g

Did not report, no action, no-one else reported

Did not report but dealt with by self / others reported

Report

Missing

Mean28.6% nationally

Fig 2.4p.49

If in doubt, report (and you can trust in the fairness of the response)

Key message of importance to staff:

Do not leave the welfare of your employees who report, to chance

Key message to management:

Key messages from the research