Whistleblowing in practice Protections, procedures and managerial responsibilities

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

Contents • Introduction & legal landscape • ‘A Problem’ • Recognising and encouraging public interest disclosures • Protecting & supporting whistleblowers (and others) • Management obligations • More questions & discussion

Whistling While They Work: Enhancing the Theory & Practice of Internal Witness Management in the Australian Public Sector Western Australian GovernmentCorruption & Crime CommissionWA OmbudsmanPublic Sector Standards Commissioner Edith Cowan University Australian Government Commonwealth OmbudsmanAustralian Public Service CommissionCharles Sturt University Queensland GovernmentCrime & Misconduct CommissionQueensland OmbudsmanOffice of Public Service, M&EGriffith University New South Wales GovernmentNSW ICACNSW OmbudsmanUniversity of Sydney Victorian, ACT & NT GovtsOmbudsman VictoriaNT Comr for Public EmploymentACT Chief Minister’s DeptMonash University Transparency International Australia Australian Research Council www.griffith.edu.au/whistleblowing

Cth NSW Qld WA 73 85 83 63 304 56 27 60 34 31 32 28 25 175 118 Case Study Agencies Internal Witness Surveyn=240 Volunteered 15 24 28 20 87 Casehandlers (n=315) Selected 4 4 4 3 15 n=828 Managers (n=513) WWTW - Quantitative Research General Agencies Agency Survey (Procedures) Procedures Assessment Employee Survey Total no. of public servants surveyed – 23,177Total responses – 7,663 (33%) Integrity Agencies Integrity Agency Survey(Practices & Procedures) n=16 Integrity Casehandler Survey n=82

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 organisationsPeter Roberts, A. J. Brown &Jane Olsen, 2011http://epress.anu.edu.au/whistling_citation.htmlElements of an organisationalwhistleblowing program: • Organisational commitment • Encouragement of reporting • Assessment and investigation of reports • Internal witness support and protection • An integrated organisational approach

What is whistleblowing? • “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) ‘Public interest’ whistleblowing As opposed to matters that are purely private, personal, or industrial grievances

Reform of Australian whistleblowing legislation * Private sector coverage

State of reform –Australian whistleblowing legislation * 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 • 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.45 Casehandler & Manager Q14, Integrity Casehandler Q9

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.

How much whistleblowing goes on? All respondents n=7663 Saw wrongdoing (defined) in last two years? No 29% (n=2188) Yes 71% (n=5473) An overview of whistleblowing in the Australian public sector p.38 Reported the most serious wrongdoing? No 57%(n=3125) Yes 39% (n=2146) (28% of all respondents) Missing n=202 Likely to have reported as partof normal role? Yes Wrongdoing 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) Missing n=30 Wrongdoing was personnel or workplace grievance? No (public interest whistleblowing) 61% (n=913) (12% of all respondents) Yes 38% (n=549) Australia (12%): 197,000NZ core (12%): 4,337 Missing n=35

Further report(s) Initial report None 51.3 50.1 38.1 7.1 1.7 Internal 97.1 Internal only 39.0 Mixed 7.6 1.2 0.9 0.5 0.3 External 2.9 External only 2.1 Figure 4.1. Reporting Paths of Non-Role Public Interest Reporters (%) Employee Survey, Q28 (n=858) ‘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) Mean28.6% nationally Fig 2.4p.49

Case study: Michelle, Peter & Alberto • 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).

The diverse reality of whistleblowing... • 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)

Case study: Michelle, Peter & Alberto • What are the issues that need to be investigated, and how? • What are the main risks involved in what Alberto decides to do next?How should he address them?

Case study: Michelle, Peter & Alberto • 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?

Public interest whistleblowers (non-role reporters, reporting other than personnel or workplace grievances) N=913 Missing=36 (4%) N=877 Treated well or sameby management andco-workers N=686 (78%) Treated badlyby management and/orby co-workers N=191 (22%) Treated badlybyco-workers only N=32 (4%) Treated badlyby managementand co-workers N=46 (5%) Treated badlyby management only N=113 (13%) Figure 5.1. Treatment by managementand co-workers (%)

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

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 2.7x5.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 Internal Witness Survey(Case study agencies) Q47: After report? (n=213) Q57: After experienced bad treatment or harm?(n=139) Table 9.7p.215

How much effort is going into whistleblower management? • 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

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

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 organisationsPeter Roberts, A. J. Brown &Jane Olsen, 2011http://epress.anu.edu.au/whistling_citation.htmlElements of an organisationalwhistleblowing program: • Organisational commitment • Encouragement of reporting • Assessment and investigation of reports • Internal witness support and protection • An integrated organisational approach

The big institutional risksof mishandling whistleblowing • Organisational injustice, leading to exposure to liability for failure in duty of care to employees. • Damage to reputation – it’s still going to come out eventually. • 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 Service • Breach 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) Mean28.6% nationally Fig 2.4p.49

Key messages from the research Key message of importance to staff: If in doubt, report (and you can trust in the fairness of the response) Key message to management: Do not leave the welfare of your employees who report, to chance

Whistleblowing in practice Protections, procedures and managerial responsibilities