In a submission to the Senate inquiry into the performance of ASIC, Sydney University academic Dr Peter Bowden said Australia needs an effective whistleblower protection scheme “urgently”.
“Australia is the only major English speaking country without protection for people who blow the whistle on corporate wrongs,” said Mr Bowden.
A second reason for the adoption of such a scheme are the financial and economic benefits, as demonstrated by extensive research into the subject, he said.
Australia would benefit from a rewards scheme for whistleblowers, similar to the measures enacted in the USA under the False Claims Act and the Dodd Frank Act, said Mr Bowden.
The Securities and Exchange Commission awarded an American whistleblower US$14 million in October last year for providing information that resulted in the recovery of “substantial investor funds”.
“The economic and ethical arguments in support of such a scheme are too large to be ignored … Department of Justice statistics show that in 2012 it recovered US$3.3 billion in settlements and judgements under the whistleblower provisions of just the False Claims Act,” said Mr Bowden.
But when it comes to the structure of any whistleblower protection scheme, Australia should look to the UK rather than the USA, according to Mr Bowden.
The USA has unique whistleblower protection schemes for different industries, he said.
“Instead of the US scheme, Australia should adopt one applicable to all industries and for the public sector, as in the UK, with a listing of wrongs against which the government will provide protection,” he said.
But Australia's corporate regulator should not be the organisation to oversee such a scheme, Mr Bowden added.
“ASIC’s performance on whistleblower investigation and resolution has been woeful,” he said.
This in itself is not surprising, since “investigations into wrongdoings do not appear to be a public sector strength”, said Mr Bowden. “A more comprehensive solution is for the Commonwealth Ombudsman (or similar body) to act as a coordinating and supporting agency for whistleblowing.
“The whistleblower can disclose his/her information to the regulator or the coordinator, as they wish. Corporations can also approach ASIC, which, for matters outside its competence and jurisdiction, it could pass back to the Ombudsman,” he said.
