New Zealand appears to have missed the opportunity to transform - rather than merely tidy up – its whistleblower legislation.
The Education and Workforce Select Committee has now published its report on the Protected Disclosures (Protection of Whistleblowers) Bill, following public consultation earlier this year. While the report proposes measures to improve the Bill as introduced, it does not incorporate some of the more far-reaching suggestions put forward during the consultation.
The Green Party of Aotearoa NZ presented a differing view from the majority of submitters, by registering strong disappointment. Echoing Transparency International New Zealand (TINZ)’s view, they support the changes as far as they go. Both organisations consider that in many ways, this legislation only tidies up the existing system rather than transforming it to be more fair and effective.
Whereas submitters provided the Select Committee with sound, workable and proven policy models and practices that it could have adopted, it chose not to.
Positives from the bill
TINZ supports the intent of the Bill, in particular an approach that aims to strengthen organisational culture in organisations that use public sector funding. It makes progress towards providing more confidence and protection for people to speak up about wrongdoing.
Improvements in the revised Bill include greater clarity about how to report and how to qualify for a protected disclosure, and greater recognition of the need to incorporate tikanga Māori and alternative processes.
TINZ supports the extension of the scope of the Act to include any organisation (private or public) where it is suspected that public funds or resources have been misused. We support clarity and options for who people can report to, fewer requirements about why they should report, and increased confidentiality protection for people who report wrongdoing.
But the Bill falls short of the robust legislation this country needs.
There is clear evidence that New Zealand really does need much more robust legislation. Griffith University’s Whistling While They Work 2 survey of protected disclosure regimes in Australasia, was released in 2017. Conducted in conjunction with New Zealand’s Ombudsman and Victoria University of Wellington, it was the first survey to rank whistleblowing processes across New Zealand and Australia.
The New Zealand public sector fared relatively poorly. Of the 10 Australian and New Zealand public sector jurisdictions that responded, New Zealand’s public organisations – central and local - ranked near the bottom at eighth. Our legislation was described as “weak, patchy and outdated” by Professor A J Brown, who led the research.
The findings of the Griffith research coincided with the release of Sandra Beatie’s report of her investigation into whistleblower treatment within the Ministry of Transport, in relation to the Joanne Harrison fraud. Beatie found that four staff within the Ministry who raised concerns about Harrison’s behaviour, suffered disadvantage in processes she was involved in.
The Griffith research, coupled with the Beatie report, added impetus to calls for an urgent and substantial overhaul of our 20-year-old legislation. At the time, then State Services Commissioner (now Public Service Commissioner) Peter Hughes, along with Chief Ombudsman Peter Boshier, called for the legislation to be reviewed.
“It is vital that Public Servants can raise concerns about suspected wrong-doing safely and without fear of punishment or reprisal.” Hughes said speaking up was not just about fraud or criminal wrong-doing: “It is essential that when someone sees something they are concerned about, for any reason, that they raise it so it can be looked into and dealt with. When people raise issues, they have to be able to do that safely and confidently, with a process that is clear, easy to understand and simple to access.”
In the TINZ submission on the Bill to the Committee, one of our key points was that the definition of serious misconduct was too narrow to capture the red flags that are critical indicators to uncover or deter fraud or corrupt or unlawful behaviour.
In our view the bill fails to support early detection, which is more often indicated by ‘red flag’ behaviour such as repeated failure to follow financial control procedures.
This was exactly the case in the Ministry of Transport case. Phrases such as “grossly negligent” or “gross mismanagement” describe the outcome which can be an end point of a period of behaviour and actions that are inappropriate, not following rules, secretive, or collusive.
We suggested that the meaning should be broader to include wrongdoing that harms or threatens the public interest (e.g. including corruption, financial misconduct and other legal, regulatory and ethical breaches).
The Select Committee report acknowledges our submission - and those of others - on this point:
“Many submitters said that the definition of “serious wrongdoing” in clause 10 is too narrow to capture “red flags” within the workplace that could be indicators of fraud, corruption, or unlawful behaviour”.
However, the report proposes to simply re-order the definition and uses the vague term of an act or omission that poses “a serious risk”.
The Bill needs to both clarify and broaden this definition. It also needs to encourage more people to speak up without fear of censure. The Whistling While They Work research identifies what is needed and why to support those who speak up about wrongdoing:
- Ethical culture, and the ethical leadership of an organisation, have far more impact on the treatment of whistleblowers than rules and regulations.
- Tips through confidential reporting are the most important sources for bringing wrongdoing to light within any organisation.
- The majority of those who speak up suffer adverse effects of reporting – most commonly stress and emotional strain, even when the reporting experience is positive.
- People are more likely to speak up when they have trust in the processes and see there is organisational support for whistleblowing, i.e when they feel safe to report without censure.
- Risk assessments for individual disclosers and the organisations, are more likely to lead to better outcomes for both.
Another area in TINZ’s submission related to the inclusion of the private sector and NGOs in the legislation.
In Australia all public companies, large proprietary companies and proprietary companies that are trustees of registrable superannuation entities, have been required to have a whistleblower policy available to officers and employees since the start of this year. That has to include who, how, legal protection, investigation procedures, fair treatment and clear accessibility of the information.
Whistleblowers in the Australian private sector can also disclose on matters where there is an ‘improper state of affairs or circumstances’. The value of including this broader criteria is that this sort of reporting can indicate a systemic issue that the relevant regulator should know about to properly perform its functions. It may also relate to business behaviour and practices that may cause consumer harm.
It is not clear why the New Zealand government has not taken this opportunity to encourage a stronger ethical approach within the private and NGO sector.