Whistleblowers should get compo inquiry finds

Australia is a nation that turns sports players into national icons. We lionize them and treat them as heroes. But there is another type of hero, the whistleblower, who, until now has been smeared, abused and even sacked for exposing misconduct, fraud and corruption.

A joint parliamentary committee into whistleblowers has taken up their plight and in a much anticipated report tabled on Wednesday recommends whistleblowers be financially rewarded for their bravery in a system similar to the bounty system in the United States.

The inquiry also suggests setting up a Whistleblower Protection Authority for whistleblowers to take their allegations and have them investigated.

Most of all the recommendations are aimed at protecting whistleblowers from reprisals by amending the law. At the end of the day, it is now up to the government to fix the piecemeal system and create a better framework.

If the reward system and protections are implemented properly it will mean that whistleblowers won't have to make a choice between justice and financial security.

Many would-be whistleblowers stop short of blowing the whistle after seeing what happened to people such as Commonwealth Bank whistleblower Jeff Morris and Origin Energy whistleblower Sally McDow.

Morris exposed systemic misconduct including forgery and fraud in CBA's financial planning division. What he went through reads like a Stephen King thriller.

Besides destroying his career, he put his family through extraordinary stress and says he put his life in danger by upsetting one of the people he had dobbed in. Yet for the public, his whistleblowing helped spur reform the financial planning industry and resulted in tens of millions of dollars paid in compensation to ripped off customers.

McDow, a highly credentialled lawyer and former senior compliance manager at Origin Energy, alleged significant and dangerous compliance breaches at its gas and oilfields, spills and explosions, a deliberate cover-up by management and potential breaches of the Corporations Act. Soon after using the company's internal whistleblower procedures, she lost her job.

She settled a case against Origin and recently set up CPR Partners, an advisory firm that provides guidance on culture, performance and reputation, including whistleblowing.

The proposed changes are too late for McDow and Morris, but as McDow says: "Bounties will likely result in a huge increase in whistleblower reports based on the experience seen in the US. Organisations who are aware of systemic issues which fall under whistleblower reporting should take steps to address these issues proactively instead of waiting for a report to be filed.

Companies know only too well the damage that can be wrought when whistleblowers aren't contained, particularly if they take their concerns to the media. You don't need to look much further than the Commonwealth Bank (both in financial planning and its CommInsure division), National Australia Bank, IOOF and 7-Eleven.

If the proposals go through, it will give companies a lot to chew over.

This story Whistleblowers should get compo inquiry finds first appeared on The Sydney Morning Herald.