![Financial Services Minister Kelly O'Dwyer says a strong legal framework needs to encourage whistleblowers to speak up.](http://web.archive.org./web/20171001200813/http://www.afr.com/content/dam/images/g/q/a/y/s/v/image.related.afrArticleLead.620x350.gys5vc.png/1506850862345.jpg)
Earlier this year Origin Energy whistleblower Sally McDow settled a blockbuster legal action that alleged significant and dangerous compliance breaches, a deliberate cover-up by Origin management and potential breaches of the Corporations Act and ASX listing rules.
The case and McDow were significant because she was the first whistleblower in Australia to bring a legal action in the Federal Court of Australia using whistleblower protections under the Corporations Act.
The case was settled before going to trial, but it added to the growing weight of evidence that whistleblower protections were deficient and corporations need to do better.
Her chilling allegations and treatment as a whistleblower came smack bang in the middle of a parliamentary inquiry into whistleblowers and as the stigma attached to being a whistleblower was starting to change.
![Sally McDow.](http://web.archive.org./web/20171001200813/http://www.afr.com/content/dam/images/g/t/x/u/p/f/image.imgtype.afrArticleInline.620x0.png/1505315314469.jpg)
Fast forward to today and the federal government moved a step closer to improving the lot of whistleblowers when it quietly unveiled an expert advisory panel including the terms of reference to help review draft legislation.
The panel, unveiled late last week, will look at recommendations released earlier this month by a parliamentary joint committee, including a reward system for whistleblowers and the establishment of a Whistleblower Protection Authority, which will have the power to investigate criminal and non criminal reprisals and pay a "replacement wage" to the whistleblower that is commensurate with their salary until compensation or an adverse action claim is brought by the whistleblower.
Panel appointments include a treasury official to chair the panel, representatives from other government agencies and four external appointments. They include Griffith University professor A.J. Brown, who is one of the country's leading authorities on whistleblower laws, University of Sydney business school associate professor David Chaikin, Chartered Accountants Australia head of tax Michael Croker and Deloitte partner John Nguyen.
In a statement the financial services minister Kelly O'Dwyer acknowledged the need for a strong legal framework that encourages whistleblowers to speak up and companies to develop whistleblower policies. She confirmed that the draft legislation would be introduced later this year.
In a speech in June, O'Dwyer highlighted the contribution and sacrifices made by whistleblowers, including Jeff Morris, who she referred to as Australia's best known recent whistleblower, who exposed misconduct at CBA's financial planning arm. "His anonymity was not protected, he was subject to death threats, he lost his job and in the end he lost his whole family. This is absolutely unacceptable," O'Dwyer said.
"We want to make the wrongdoer – not the whistleblower – the focus. The Turnbull government is determined to change our whistleblower laws to better protect people like Jeff Morris."
For the public, Morris' decision to become a whistleblower helped spur significant reform of the financial planning industry and resulted in tens of millions of dollars paid in compensation to ripped off customers.
Improvements to whistleblower protections come too late for Morris, McDow, the CommInsure and 7-Eleven whistleblowers and many others, but if done properly, they will help others.
Sally McDow became a whistleblower in 2015 alleging a management cover-up inside Origin Energy that included serious non-compliance with regulations relating to safety and the environment, hundreds of wells in Australia and New Zealand that had not been maintained for more than 10 years, leaks of oil and gas, contaminations, a failure to inform regulators or the ASX of breaches and the altering of reports to the board on risk and compliance issues.
In at least one case the regulatory and legislative breaches were so serious they could have cost people their lives, the statement of claim alleges. To fix some of the problems would have allegedly cost tens of millions of dollars.
Within months of becoming a whistleblower McDow was made redundant. Origin denied the job loss was related to her whistleblowing. It also denied her other allegations.
Then a few months ago both parties settled.
But it is hard to forget McDow's statement of claim, lodged in the Federal Court in January, which painted a disturbing picture of her life as a whistleblower, including bullying, a smear campaign, stress, job loss and difficulty getting another job.
She says management told staff without her consent she was a whistleblower who had "made stuff up" and was "going to make us lose our jobs", was "having a mental breakdown and calling it stress leave" and "is a faker and wants to hurt us".
After she was made redundant she applied for other jobs, and was told by a recruitment agency she was not employable in Brisbane due to her "known" status as a whistleblower and that she should change her name or move to another country.
A highly credentialed lawyer with almost 20 years experience in senior compliance roles, working on international investigations related to money laundering (Enron, organised crime and Christopher Skase), corruption and bribery, ethics and employee codes of conduct, McDow decided to use her experience to set up CPR Partners, or Culture, Performance Reputation, to help companies, governments and non profits get on the right track. It also offers mentoring to whistleblowers.
"I started CPR Partners because my own experience was that there were no apparent solutions," she said. "No one was addressing these issues cohesively for organisations, advisors or individuals. Organisations are receiving expert advice from multiple sources – lawyers, accountants, crisis managers, brand managers etc but the advice can be a short-term fix to comply with a specific requirement and not cohesively linked to culture for the longer term."
It is good timing as regulators and politicians alike have done a lot of jawboning about the importance of culture, reputation and customers.
More recently, they have started to act. This was nowhere more apparent than the move by the Australian Prudential Regulation Authority to launch a public inquiry into the Commonwealth Bank's culture, governance and accountability frameworks.
It follows a string of scandals at CBA linked to a culture that put profit before people and its treatment of some whistleblowers.
Shareholders are also starting to focus on culture, realising that companies that deliver good economic returns but have a questionable culture are fast becoming an investment risk.
Convenience store giant 7-Eleven has so far forked out $150 million in compensation to thousands of employees after being caught overseeing a flawed business model that resulted in systemic underpayment of wages across its franchise network.
Others including pizza giant Domino's has had its share price battered amid similar allegations and retirement village operator Aveo has also seen its share price crumble after a joint Fairfax Media investigation uncovered a litany of questionable business practices including churning of residents, fee gouging and misleading marketing promises made to some of the country's most vulnerable people.
The banks, the franchise sector and retirement village operators have had their reputations hit and attracted investigations by the regulators. In the case of the banks, they face the added ignominy of a royal commission if Labor wins the next election.
"The stark reality for organisations and advisers is that focus on culture is now mandatory and not optional. Not only must leaders focus on culture to mitigate risk but it is a core expectation of the community to do business," McDow said. "Not only do well managed organisations demand good culture of themselves they are now demanding evidence of good culture and good practice before they do business with others."
As the community takes a stand on poor behaviour and new laws are introduced, maybe corporate malfeasance and whistleblowers will become less of an issue.