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Inquiry into NFP Whistleblower Protections

13 December 2016 at 11:07 am
Lina Caneva
The federal government has moved a step closer to integrating whistleblower protections into Commonwealth law, just as new research reveals an urgent need for whistleblower reform particularly in the not-for-profit sector.

Lina Caneva | 13 December 2016 at 11:07 am


Inquiry into NFP Whistleblower Protections
13 December 2016 at 11:07 am

The federal government has moved a step closer to integrating whistleblower protections into Commonwealth law, just as new research reveals an urgent need for whistleblower reform particularly in the not-for-profit sector.

On 30 November 2016, the Senate referred an inquiry into whistleblower protections for the corporate, not-for-profit and public sectors to the Parliamentary Joint Committee on Corporations and Financial Services  with a reporting deadline of June 2017.

At the same time Australia’s largest whistleblowing research project released its preliminary results highlighting the “urgent need for comprehensive but well-informed reform of the nation’s whistleblowing laws”.

The snapshot of whistleblowing processes and procedures across 702 public sector, business and not-for-profit organisations from Australia and New Zealand, was collected by the Whistling While They Work 2 Project between April and July 2016.

According to project leader Professor A J Brown from Griffith University’s Centre for Governance and Public Policy it is also the first survey to systematically compare self-reported evidence from organisations on their whistleblowing processes, across the public, business and not-for-profit sectors.

“The first results confirm the importance that organisations of all types are placing on processes for encouraging employees to report wrongdoing, but also point to areas of challenge to be focused on in the next stage of research, as well as in law reform,” Brown said.

He said the study highlighted key gaps in the current system particularly in not-for-profit organisations.

The study found that 36 per cent of not-for-profit organisations and 26 per cent of businesses had no particular system for recording and tracking wrongdoing concerns while another 33 per cent of businesses and not-for-profit organisations did not currently have any strategy, program or process for supporting and protecting staff who raise concerns.

As well, 51 per cent of not-for-profit organisations and 49 per cent of businesses indicated they did not assess the risks of detrimental impacts that staff might experience from raising wrongdoing concerns, either at all or until problems began to arise.

Only 32 per cent of not-for-profit organisations and 39 per cent of businesses provide potential whistleblowers with access to a management-designated support person inside the organisation as part of their response and only 13 per cent of not-for-profit organisations surveyed have any mechanisms for ensuring adequate compensation or restitution if staff experience reprisals or other detriment after raising wrongdoing concerns.

“Even when trying hard to encourage their staff to report, too many organisations clearly lack the specific guidance and incentives they need to realise their own goals of actual protection,” Brown said.

“Although most governments have modernised their whistleblowing regimes, the results point to aneed for further reform and stronger oversight even in the public sector – but for the private and not for-profit sectors, a well-informed legislative overhaul is now especially overdue.”

Whistling While They Work 2 involves Griffith University, Australian National University, University of Sydney and Victoria University of Wellington. It is supported by the Australian Research Council and 23 partners including the Australian Securities and Investments Commission, CPA Australia, Transparency International Australia, and the leading public integrity agencies of all Australian and New Zealand jurisdictions as well as the NSW Ombudsman.

“The time has never been better for a comprehensive approach, rather than piecemeal extension in different regulatory areas – given that in at least 87 per cent of businesses, reporting procedures already extend across a broad spectrum of reporting, such as fraud, corruption, abuse or mistreatment of customers, and health, safety and environmental dangers,” Brown said.

Brown said there were some highlights in the study.

Among those highlights were that 90 per cent of organisations reported having processes for ensuring appropriate investigations or management actions in response to wrongdoing concerns raised by staff and 89 per cent indicated they had formal, written whistleblowing procedures or policies.

“This welcome result shows just how badly law reform is needed,” Brown said.

“Currently, narrow protections such as in Australia’s Corporations Act don’t even allow for anonymous reporting.”

“If our laws are to support the scale and diversity of organisations’ existing efforts to use whistleblowing as a tool of good governance, such results show they need fundamental reform.”

The latest federal parliamentary inquiry will look at:

  • the development and implementation in the corporate, public and not-for-profit sectors of whistleblower protections
  • the types of wrongdoing to which a comprehensive whistleblower protection regime for the corporate, public and not-for-profit sectors should apply
  • the most effective ways of integrating whistleblower protection requirements for the corporate, public and not-for-profit sectors into Commonwealth law
  • compensation arrangements in whistleblower legislation across different jurisdictions, including the bounty systems used in the United States of America
  • measures needed to ensure effective access to justice, including legal services, for persons who make or may make disclosures and require access to protection as a whistleblower
  • the definition of detrimental action and reprisal, and the interaction between and, if necessary, separation of criminal and civil liability
  • the obligations on corporate, not-for-profit and public sector organisations to prepare, publish and apply procedures to support and protect persons who make or may make disclosures, and their liability if they fail to do so or fail to ensure the procedures are followed
  • the obligations on independent regulatory and law enforcement agencies to ensure the proper protection of whistleblowers and investigation of whistleblower disclosures
  • the circumstances in which public interest disclosures to third parties or the media should attract protection.

The parliamentary committee is inviting submissions by 10 February 2017 and has released its terms of reference.

The Whistling While They Work 2 report can be downloaded here.

Lina Caneva  |  Editor  |  @ProBonoNews

Lina Caneva has been a journalist for more than 35 years. She was the editor of Pro Bono Australia News from when it was founded in 2000 until 2018.

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