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Economics Legislation Committee
06/03/2018
Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017

CHAIKIN, Dr David, Private capacity

[12:21]

CHAIR: Welcome. Thank you for appearing before the committee today, Dr Chaikin. I invite you to make a brief opening statement should you wish to do so. Is there anything you wish to add about the capacity in which you appear today?

Dr Chaikin : Thank you, Chair and the committee, for inviting me to give evidence. My name is Dr David Chaikin, and I am the chair of the Discipline of Business Law in the University of Sydney Business School, but I also teach in the University of Sydney Law School. I'll be very brief in terms of an opening statement. This bill represents a substantial improvement from the current law. There are a number of stakeholders in whistleblower legislation and, in my view, to balance a different interest, this bill achieves that. The primary aim of the bill is to provide effective legal protection to whistleblowers who disclose misconduct or an improper state of affairs. A co-related objective of the bill is to encourage whistleblowers to disclose intelligence information and evidence of corporate misconduct to regulators and law enforcement agencies. The bill is intended to have a prophylactic effect so that regulators will be given early warning signs of inappropriate conduct and thereby take action.

The third underlying aim of the bill arises from the enforcement reality that government bodies will never have the resources to investigate every whistleblower complaint to the satisfaction of whistleblowers. Consequently, the bill mandates that public companies and large private companies create whistleblowers protection to ensure that potential whistleblowers are aware of their protections and that companies are providing fair treatment to their employees who are whistleblowers. Companies will be expected in the future to provide a more compliant approach and create a corporate culture that encourages whistleblowers to come forward and internally report misdeeds and that gives protection internally.

Finally, we should note that the risk of disclosure by whistleblowers in the modern world has been greatly increased for a number of reasons. This is evidenced by cases such as the Paradise Papers, the Panama Papers and the Bahamas Papers. I notice that in those three cases it was done anonymously—no rewards—and that has been actually of great benefit to our own regulators, particularly the Australian Taxation Authority.

It might be helpful to the committee if I made some observations in relation to some of the other evidence in order to clarify some things in terms of legislation. It was suggested that volunteers are not covered under the bill, but they are. If you examine section 1317AAA, unpaid contractors are covered. It's also suggested that all information disclosed by whistleblowers could not be used in a criminal proceeding. That's a misunderstanding; information can be used if it's obtained from another source. Law enforcement agencies commonly do that when information from a particular person has some protection in terms of its use.

In terms of the application of the bill in terms of regulated entities, the professionals—accountants, lawyers and so forth—are normally employed by service companies and therefore are clearly covered. In the case of not-for-profits, they are mainly corporations or they'll be covered because they are entities because they receive tax deductions. If we look at partnerships, unincorporated associations and those others who would not be covered, we see that there are constitutional issues there. We should note that there are state whistleblower laws, so maybe more should be done at that level of government than what's happening here at federal government.

In terms of liability, what may focus the attention of the board and directors of companies besides a company being made liable is that they the directors can be liable as accessories, so they themselves may face personal risk, which may incentivise them to do something further about this legislation. That's under 1317AB(2).

Finally, I make a general observation. I understand the position of whistleblowers. When I was in private practice, in a number of cases I advised whistleblowers as to why they shouldn't become whistleblowers, because of the law and what would happen to them. In my own view, this legislation will make a significant difference in terms of how lawyers will be able to use this to protect the interests of their clients. But it tells us of a bigger problem, and that is that whistleblowers may not have been properly informed about the contents of this bill. That tells us we should have an education policy—maybe ASIC should do something in this area—for what companies will have to do if they require mandatory policy. But that's an important step forward. I can understand why a number of whistleblowers may not think this bill goes far enough.

Those would be my observations in terms of some of the comments that have been made today.

CHAIR: I want to confirm that you're a member of the government's expert panel along with Professor Brown.

Dr Chaikin : That's correct.

CHAIR: In broad terms, can you tell the committee what the panel is constituted to do?

Dr Chaikin : Clearly I'm subject to confidentiality, but what I can say to you is that, in terms of the terms of reference, the first thing was that the panel was asked to look generally at the issue of whistleblower reform and then comment on the legislation. We did have some input—I can't say exactly what it was—but in my view all members of the expert panel, including me, were given ample opportunity to talk not only to Treasury but to the various arms of government. There was quite a frank exchange of views and a debate, as you would expert in any committee. That was stage 1.

Stage 2 was that we were asked to comment and advise the minister on the parliamentary report and to express our views. We were given ample opportunity to do that, and my understanding is that the government is currently considering that.

CHAIR: Phase 2 is ongoing?

Dr Chaikin : Phase 2, as far as I'm concerned, is ongoing, yes.

CHAIR: Thank you. You said that you believe the bill does improve the situation for whistleblowers and you've mentioned a number of ways in which that is appropriate. I do want to ask you, though, about the single act and the new authority, which seems to have come up repeatedly throughout the morning. Do you think that the bill conflicts with the PGAC's recommendation for a single private sector act? Do you think that this particular bill would make that outcome impossible in the future?

Dr Chaikin : I don't think it is in conflict. It is just that the bill does not include some things which the parliamentary committee considered in its recommendations. In terms of my own view about a single statute it depends on whether you are talking about combining public and private or including both the Corporations Act changes and the tax changes. Which one are you interested in comments on?

CHAIR: Let's go to the ATO's position—that two separate regimes is a better outcome. What's your position there?

Dr Chaikin : I understand what the ATO view is but I don't see any strong reason why there should be a single whistleblower act. I know that people talk about complexity of language but we have to admit that every piece of legislation has to be designed to be interpreted by the judiciary—and not by whistleblowers and the general public; they are not legally trained and it is a very difficult process to do that. So I don't accept the argument that it would be simpler for whistleblowers if we had a single act as a justification for doing that.

Of course, there are differences in relation to the ATO and other law enforcement issues, particularly on the issue of taxpayer confidentiality. The ATO, for very good reason, places great store on taxpayer confidentiality. At the end of the day, in order to run governments, you have to raise revenue. They have taken the view that part of that is having the confidence of taxpayers that they will not disclose the affairs of anyone. They have been extremely successful in that regard. Hence, for example, there is no provision in the legislation dealing with tax for emergency disclosure to the media. That would constitute an attack on a fundamental feature of the taxpayer legislation. ATO officers, if they disclose information about any taxpayer—they couldn't disclose anything to the whistleblower—risk criminal prosecution. So you can't just look at these as separate; you have to look at what else is underlying the rationale of the ATO. For my part, I think it is pretty convincing that there is no strong case to combine those in one act.

CHAIR: Thank you. That is a point that I don't think we had considered. I want to ask you about the potential establishment of a whistleblower authority. Obviously, ASIC is responsible for that at the moment. Do you think ASIC would be able to fulfil its role if it were the sole whistleblower authority?

Dr Chaikin : It depends on the content. If you are going to have a whistleblower protection authority, what are you going to give it in terms of powers? If we look at the ATO at the moment, and the way the legislation has been constructed, the idea is that the whistleblower would go to ASIC or APRA. ASIC would be a gateway and they would then channel that information to the law enforcement or regulatory authority. For example, if it involved foreign bribery, they would send it to the AFP. If it involved a breach of our foreign investment rules, it would go to Treasury. And they would have the knowledge as to where that information should go. If a whistleblower went to, say, the AFP, the AFP would say, 'You actually have to go to ASIC.' All government agencies and authorities would also have to be informed that that would be the procedure and that the whistleblower would only have dealings with ASIC or APRA. There is an advantage to that from an investigatory viewpoint. If ASIO is investigating, you don't want the whistleblower to have any knowledge of what is happening, particularly if the whistleblower has an agenda—which, under this legislation, is allowed because we don't have any requirements for bona fides. So I think there are sound policy reasons for the current construction.

Should we have a separate authority? You have to have a pretty strong reason for creating a new institution, and I haven't heard any sound reason to support that. After all, when you create a new institution, although people have argued that they are going to make ASIC more accountable, that institution would have to find its own feet and create its own networks. That is a costly and time-consuming process. At this stage, I do not see any advantage to that. But I could change my mind in due course.

CHAIR: If ASIC were appropriately resourced and empowered to do the job, you believe they are capable of doing that?

Dr Chaikin : Certainly in terms of providing that gateway to deal with whistleblowers.

CHAIR: If the government did decide to establish a separate whistleblower authority, there is nothing in the legislation before us that would prevent that?

Dr Chaikin : No.

CHAIR: Can you see any reason why this legislation should be delayed in its implementation?

Dr Chaikin : First of all, I want to emphasise that I don't believe there are any defects in the legislation. There may be differences of opinion in terms of where the balance should lie—reasonable men and women can disagree in terms of policy—but I do not think differences of opinion are a good reason for delaying a bill which will create substantial immunities and protections for the whistleblower. If things turn out right, maybe by July this year we will actually have legislation in force. It will benefit those people who may wish to be whistleblowers but have decided they will wait until the legislation goes forward. We do not know whether that set of people exists or how many of them there are. Certainly, if a person came to me who wanted to be a whistleblower, I would say wait until the bill comes into force because you're going to have a substantial advantage in terms of asserting your rights if there is any retaliation.

CHAIR: There has been some reference today to the bounty scheme that operates in the US. Can you give the committee a very brief explanation of how that might work and why it is or isn't applicable to the Australian circumstances?

Dr Chaikin : I will refer to the United States first because I had what I called a professional whistleblower as a client and I had dealings with some of the US law firms in terms of what takes place. Perhaps I could give an illustration—first of all, in terms of bounties. Most whistleblower victims in the United States get either no money or very small amounts of money. That is the reality. We should not be confused by the headline news that Birkenfeld got $100 million-plus—because his lawyers got a third of that, $33 million. That is the first point in terms of a perspective on what will happen.

Let me say a few words about the United States bounty schemes. They have been part of the fabric of the enforcement laws since the foundation of an independent republic. Bounty schemes proliferate at all levels of government. But the bounty system is tied to the unique tradition in US culture of the privatisation of law enforcement—which we don't have; we think that should be with a public authority—and, more recently, the litigation culture in the United States. In the United States the bounty system depends on the contingency fee system for lawyers, who aggressively pursue claims of litigation not for the public interest but, rather, for their own private personal benefit. In extreme cases unethical lawyers will advise their whistleblowing clients as to what information should be stolen or computer hacked so as to maximise their profit-making recovery. What happens is that the lawyer will negotiate with the IRS and with the Department of Justice in terms of the percentage. They will say: 'If we get you this particular type of information, what value is that to you?' If they don't say they've already got that information, that becomes part of the matrix in terms of what actually takes place.

So I'm reluctant at this stage to just copy the US bounty system. It would be sad if people only came forward because there was money for them at the end of the day.

Senator KETTER: You responded to some written questions that we provided to you. We asked about the fact that the registered organisations regime has a duty imposed on companies, or the employers there, to take reasonable steps to prevent people under their control from disadvantaging a whistleblower. Your response to that was that 'the imposition of such a duty on companies to support or protect whistleblowers may have an unintended consequence of imposing onerous, complex and costly obligations on companies'. Can you explain that further.

Dr Chaikin : First of all, if you want to talk about legal uncertainty, what is the content of that duty? We don't even know what the content of that duty is or how you breach it. And then, thinking in terms of negligence, you may have to show that has caused the particular detriment. So there is that legal uncertainty. My main argument is that I believe there is sufficient in the legislation in terms of the reversal of the onus of proof and legal costs so that you have changed the balance and helped the whistleblower. I think I mentioned in that answer that, if there were a duty to support whistleblowers, what about other employees? What happens if I, as your co-worker, said that these were false, venal, malicious allegations against me? In companies—I don't know how frequent it is but I know a number of cases—employees make anonymous complaints to injure your position as a competitor or because they don't like you. So I think there should be a general duty to support all workers in relation to work and safety and other legislation.

I am not convinced of the necessity or desirability of this provision. If it is to change the corporate culture, there is enough incentive in the legislation by reversing the onus of proof. In the case of public companies and large private companies, not only are they going to have to have a whistleblower policy but if they don't implement that in such a way that they can make that defence under the legislation—which is not only to have a system and measures to protect whistleblowers in general but to be able to prove what steps they took in terms of due diligence in this particular case—they will be held liable. So I think there is enough there—satisfactory provisions which will both assist the whistleblower and persuade companies to change their corporate culture. But we don't know; we'll have to wait and see in that respect.

Senator KETTER: You say that the duty is too onerous for companies and banks and that it creates a legal uncertainty. Would you say that that applies equally to where this duty does currently exist—in relation to registered organisations?

Dr Chaikin : It's difficult for me to comment on that because I don't have sufficient understanding of the way the unions work; I have more familiarity with companies. Registered organisations aren't companies; they're different animals. We shouldn't just have a process where we say, 'We've done it for the registered organisations; therefore, we should stick it, in relation to companies.' This bill has been designed, specifically, to deal with companies, with corporate governance and structures, and I'm not sure how helpful it is to point out in the bill that in other legislation there may be something else there. This does the job.

Senator KETTER: This bill does depart from the regime under the registered organisations.

Dr Chaikin : My understanding is, yes.

Senator KETTER: You might have partially answered this question earlier. You make the comment in your submission that one of the advantages of the bill is that it doesn't create a new expensive bureaucratic organisation to oversee the regulatory regime. I take it you're referring to the suggestion we should have an office of the whistleblower or a whistleblower authority.

Dr Chaikin : Yes.

Senator KETTER: How do you respond to the broad range of submissions? You might have been here when Jeff Morris was giving his evidence. There are some fairly strong arguments in favour of having such an authority or organisation to advocate for whistleblowers who are up against big corporations, in many situations, putting their financial circumstances at risk as part of that. How do you respond to that?

Dr Chaikin : Firstly, who's to say a whistleblower protection authority, unless you threw a lot of the money at it, would have the power or influence over ASIC? That's quite a big assumption that's been made in those submissions. It's pie-in-the-sky hope in my own deal. How you make ASIC accountable—this legislation's not going to help that—depends upon a whole range of other matters. That would be my response, in terms of this idea that I create this authority and it's going to have the power to make sure that those particular whistleblower claims are properly dealt with.

What you would have is, potentially, an adversary. You'd have two bureaucracies fighting over it. ASIC would have to spend a lot of time justifying to this authority what it has or has not done, in terms of the investigation—when ASIC will not be telling anybody except those they wish to cooperate with. So I don't think it's a useful suggestion to say that we can solve the problems that whistleblowers may have had with ASIC by creating a new authority.

Senator PATRICK: In your evidence, both in your submission and in your opening statement, you talked about it being for the judiciary to work out what is here. I'm going to put it to you—and come back to me hard if you like—that in actual fact that's topsy-turvy. The law is designed to alter conduct and we provide officials with the ability to sanction people if they don't conform to the expected conduct. For example, we have speeding laws that are designed to encourage people to not go above a particular speeding limit, and the fines help do that. It just concerns me that this legislation, in your view, is written for the judiciary and not to give a clear and unequivocal message to both whistleblowers and corporations.

Dr Chaikin : When I said judiciary—every legal draftsman will be thinking of how this is going to be interpreted. Every policymaker who's involved in that drafting process will be trying to think how this is going to be interpreted as a matter of practice. Of course, you can't predict to 100 per cent but there's a lot of legal certainty in this legislation. There's a lot of legal certainty, in terms of what the legal cost rules are, what the evidentiary burden is, what each party will have to prove. I didn't mean by my statement that the legislation should be drafted without taking into consideration the public. Of course that should be, but drafting legislation has to be in language that is going to be interpreted by judges, not in language that the general public might wish to see. That's their role, in respect of legislation. I think this bill can quite easily be explained. I've spoken to a number of employment lawyers, including one who said that, if he'd had this bill, he would've been able to negotiate a bigger settlement. And that's what's important. But I think you've made a very important point that whistleblowers in the general community need to be educated as to what this bill means.

Senator PATRICK: I'll just say that I think, when we send instructions to drafters, it's for a particular purpose, and one of the final checks they make is to consider what a judge may or may not think about the particular wording or meaning of a provision. But, if you get to court and it's the court's job to interpret something, you've failed as the person who's written the legislation, unless of course it's some strange circumstance that the legislator didn't think of. Let's go to one idea that appears to come across in your submission: it's been put in some of the submissions that the legislation requires the whistleblower to establish intent in circumstances of detriment, where detriment has occurred. Is it your view that that's the burden, or do you take some other view?

Dr Chaikin : I think it's completely wrong. I cannot see, from the language that's used, that you can impose an intent. It's quite clear that the only person who has to deal with the state of mind of the regulated entity is the regulated entity. It's quite clear that they have to prove negative propositions that they did not have, at the time, a state of mind whereby part of the reasons for their conduct concerned the whistleblower conduct. There's nothing in the language there that suggests that intent has to be proved by the whistleblower. I can't think of any statutory interpretation that would lead you to that. People are reading into that something that's not in the language, and the courts don't do that in Australia. They may do in America, but they don't do that here.

Senator PATRICK: So, you're satisfied that if you can show a set of facts that show for example that detriment only occurred after the whistleblower moment then that would be sufficient to invoke the compensation remedy?

Dr Chaikin : The situation is this: at that point in time, the whistleblower would've discharged the onus. If nothing else happened—if there was no other witness and no documents—the claim would be made out. However, the regulated entity has the evidential burden, and the ultimate legal burden, of proving that they did not have that state of mind at the time when they made that decision which caused detriment to the plaintiff. In my view, it's quite clear what the provision is.

Senator PATRICK: So, you are saying there's a state-of-mind question that's in there?

Dr Chaikin : Yes, but the state of mind has to be disproved by the regulated entity, by the company. The whistleblower has no obligation and is not required to prove a state of mind of the defendant. That information is in the knowledge of the company. That's one of the reasons why you reverse the onus of proof. I cannot see, from the plain language of that provision, why the whistleblower would have any obligation at all.

Senator PATRICK: You mentioned a circumstance where you said that the tax law prevents the disclosure of information. I'll come to the Morris test shortly. You would accept that there are circumstances where tax information can and should be exposed, for example in the interests of justice? Surely the parliament's in a position to be able to protect a whistleblower in circumstances where they might disclose something like that for the public interest?

Dr Chaikin : I don't think that's the role of the media in relation to tax affairs. You would undermine a fundamental tenet of our system. Every member of parliament—the idea. You can imagine, if you opened up that little nod—

Senator PATRICK: We have privilege, so we have that anyway.

Dr Chaikin : No, but what I'm trying to say is: the whole population, including those who are privileged and wealthy or in positions of power, can have the confidence that their affairs will be kept confidential and not be leaked in any circumstances to the media, obviously unless there's a court action. Many people settle with the ATO because they don't want it to go into the public arena, which is a useful tool sometimes for collecting increased revenue; it's one of their leverages of power. I can't think of a reason why we'd want to tinker with that tradition in Australia. We should be very proud of what it has done in terms of ensuring that all taxpayers can have confidence that what they submit to the tax authorities will be kept confidential.

Senator PATRICK: Even in the circumstance of wrongdoing?

Dr Chaikin : Even in the circumstance of wrongdoing.

Senator PATRICK: Okay, thank you for saying that. The final question I want to go to is the Jeff Morris test. In one of your answers, you walked through and said: this is how this legislation would've assisted Mr Morris in each of these circumstances. I followed that through only up until the point where you went on to say, in the context of his media disclosure: 'However, the bill allows for media disclosure in exceptional circumstances where there is an imminent risk of serious harm or danger to public health or safety or to the financial system. It is likely that, on the facts of the scenario faced by Morris at the time, he would've qualified for emergency disclosure under the bill in that there was an imminent risk of serious harm to the financial system.' Pretty much every witness that has appeared today disagrees with your position on that. Can you please elaborate on why you think those circumstances would have permitted that provision of the bill to come into play.

Dr Chaikin : I'll answer that question, but if I could just say that this legislation is obviously a balance of various interests. Governments do not like uncontrolled whistleblowers going to the media. If I'm an investigator, an uncontrolled whistleblower can be a huge danger in terms of an investigation. It can affect the results of the investigation. Before this, there was no protection. The other thing to remember is the whistleblower can still go to the media, but they're not going to get the advantage of this bill. They'll have to go back to the common law protections. They could decide to do that, with all the problems that has.

I appreciate that, in terms of how that provision is to be interpreted, there are those who say that Mr Morris may not qualify. It's a speculation because I don't know all the various facts, at that time, as to what Mr Morris's position was. But looking at it retrospectively, I think that, if there are systemic violations by major financial institutions and that's what you've disclosed, and if you've made a whistleblower complaint and the agency has not responded or told you anything, then, in those circumstances, it could constitute a threat to the reputation, safety and stability of the financial system. But I want to make another point, and that is that, in order to qualify for this, the whistleblower will have to give to the authority with whom they made that disclosure advance notice of their intention to go to the media and make an emergency disclosure. What would that mean in practice? The agency, if it hasn't been doing anything, had better get up and do something. That could propel them, and then they would inform the whistleblower.

Senator PATRICK: Isn't that a safeguard enough to lower the threshold to a much lower bar? I would put it to you that, with hindsight, you may be correct in saying what Mr Morris disclosed was sufficient to get close to the test, but sometimes when you're a whistleblower you don't know what you're about to uncover; you only know part of what you're about to uncover. You've said there's a check in place—you have to go to the regulator first and then you make the disclosure. Surely that bar can be lower, and that keeps everyone on their toes?

Dr Chaikin : The media have their own agenda, as we all know.

Senator PATRICK: Yes, but this is the whistleblower's means to an end. The media may have a particular role here, but the whistleblower is using it as a means to a particular end. It's not about what the media is or isn't doing; it's about getting to a point where finally some action is taken. If that means the media's doing it for whatever reason, that may suit the whistleblower and it may benefit the public.

Dr Chaikin : In terms of my own view, there are other interests at stake—law enforcement and regulatory interests—and I think this is the proper balance. If you have a case where they give notice of intent, one possibility may be that they'll get an injunction. That's a real possibility.

Senator PATRICK: Sure.

Dr Chaikin : What you're doing is giving the regulatory authority an opportunity to respond so that a whistleblower who doesn't know what's happening is not being informed, which will often be the case. We know that investigations can take years and whistleblowers will not be satisfied. You can't have the whistleblower being told, for example in a foreign bribery case: 'We've been delayed because a particular government of a foreign country is trying to undermine the carrying of the investigation.'

Senator PATRICK: But in some sense you're making my argument. If the fact that the whistleblower has to go to the regulator first—and they may seek an injunction, but at least it raises everyone's awareness—surely the threshold can be lower. That may encourage the regulator to behave properly. If they are behaving properly, they'll get their injunction.

Dr Chaikin : I think that's a good argument in terms of lowering the threshold. I'm not sure what the wording would be in response to that, but I think it does fit together in terms of a justification for lowering the threshold.

Senator PATRICK: Thank you for your evidence.

Senator BUSHBY: Thank you, Doctor Chaikin, for assisting us today. On that particular issue, your evidence is that not every regulator that's had a disclosure made to it by a whistleblower is sitting on its hands and doing nothing or worried about how its reputation will look. In many cases those regulators are undertaking work, which could be put in jeopardy by a public disclosure of that information. And you think that the bill presents an appropriate balance between those risks. Is that right?

Dr Chaikin : Very much so. We have a system whereby we created anti-money-laundering laws where banks have to whistleblow on their clients if it's a reportable suspicious transaction. That's quite a low threshold as well, if you look at the anti-money-laundering laws. It depends on what is disclosed. It may be that what is being disclosed they already know about. It may be something which is critical. Whether they act upon it or not may depend upon who is dealing with that. There are all sorts of factors in terms of law enforcement. But yes, whistleblower complaints, depending on what is in them, will frequently be acted upon, certainly if it's something of value and certainly if it fits in with something they already know. It depends upon the detail and it depends upon the content.

Senator BUSHBY: So, in your view, the bill strikes an appropriate balance?

Dr Chaikin : I believe so, yes.

Senator BUSHBY: And it reflects also the divergent views on this particular point of this part of the bill, where you've got the Law Council agreeing more with what you're saying and others who have different views. I think the Law Council wants to make it even harder. But this is a balance that looks at all the different, competing potential benefits from either making it a tighter threshold or a looser threshold, and this strikes an appropriate balance?

Dr Chaikin : That's right. Because some whistleblowers—their information will be of no value whatsoever, but they have been bullied and subject to reprisals. Some are more critical, and normally the more critical stuff tends to come from people who are higher up in the organisation, who have access to information about crimes or significant corporate misconduct.

Senator BUSHBY: To follow up on the questions about Jeff Morris—in your view, if the bill that we're looking at today, as proposed, was in place when he disclose the information that he was aware of, would that have benefited him personally? Would the bill have made it an easier pathway for him?

Dr Chaikin : Definitely. Obviously, we're are trying to think backwards—if he'd had all those protections, Mr Morris may have acted differently and ASIC may have acted differently.

Senator BUSHBY: When you say 'differently'—in ways that would have delivered better public outcomes?

Dr Chaikin : In ways that would have been of more assistance to Mr Morris. The CBA is under a lot of pressure these days. They may have acted differently, and one would hope that the bill will incentivise them to do so in the future.

Senator BUSHBY: Coming back to disclosures, it's the case, is it not, that not all disclosures that might be made by whistleblowers to the media are made in good faith? Would that be at fair comment?

Dr Chaikin : Yes, people have their own agenda.

Senator BUSHBY: And there's a need to balance the potential for bad-faith disclosures with the public benefit from the good-faith ones?

Dr Chaikin : That's right. What we've done in the bill, which is very significant, is, by removing the bona fide requirement, essentially what we've done, from a litigation perspective, is—the company cannot go and ferret through all the records to find information to show that the whistleblower didn't act in good faith. You don't have your employment record history on display, because that's what happens when you put a bona fide requirement in. Again, that's a significant improvement in the legislation.

Senator BUSHBY: Do you consider that disclosures to the media about allegations that turn out not to be true can have a lasting reputational impact on those who the allegations were made against?

Dr Chaikin : Very much so. Reputational damage is something which has become increasingly difficult for companies to control because it's not only distributed through traditional media but through social media, and it can undermine confidence in that institution.

Senator BUSHBY: So it's important to get the balance right there again?

Dr Chaikin : Absolutely.

Senator BUSHBY: In your view, does the bill strike the right balance between protecting whistleblowers from retaliation and reprisals and encouraging whistleblowers to make disclosures so that the matters that are raised can be resolved appropriately?

Dr Chaikin : Yes, I believe so.

CHAIR: Thank you very much, Dr Chaikin, for appearing before the committee today. The committee will now suspend for lunch. I think we probably need 20 minutes, so we might resume at 1.30.

Pr oceedings suspended from 13:09 to 13:31