New research has raised concerns about how New Zealand organisations are protecting those who speak out about wrongdoing. Do we need to do more to look out for our whistleblowers?
Hayley Bryan remembers the exact moment she decided to blow the whistle on a multi-million-dollar fraud.
As chief executive of computer system company Datasouth, she had been growing suspicious about the business’s operations and rang owner Gavin Bennett for answers in March 2011.
“One day I said to him on the phone, he was in Australia, I said ‘Gavin, are we solvent?’ and he said to me, ‘There’s different ways to measure solvency’ and I knew at that moment, well, it’s a simple equation isn’t it.”
Soon after, Bryan had gathered evidence of what she suspected – fraud on a massive scale – and phoned the Serious Fraud Office (SFO).
That call led to a jail sentence for Bennett, who had been living the high life in Australia, on fraud charges totalling $103 million.
But despite being so high up in the company, Bryan said blowing the whistle was a frightening and “hideous” experience.
“Personally, it was hard and it all happened after the big earthquake in Canterbury, so our clients and staff were under an enormous amount of pressure … I think for me the pressure and the stress was around feeling the weight of the responsibility for these businesses and our staff, they’d lost homes and they were then going to be losing their jobs.”
Bryan, who is full of praise for the support she was shown by the SFO after approaching them, is aware she was freed of the fear that would come with blowing the whistle when you’re not in charge.
She is sure other staff would have had an inkling of what was going on, but probably had no idea who to talk to or what would happen if they did.
A clearer picture of that reluctance, and the lack of a framework to support employees who come forward with information about wrongdoing, has been revealed in new world-leading research.
Led by Professor A J Brown of Queensland’s Griffith University, the Whistle While They Work 2 survey is the first to rank whistleblowing processes across New Zealand and Australia.
Almost 700 organisations across 19 industry groups and public sectors – including 65 New Zealand public agencies and local governments – took part in the research, which was conducted in conjunction with the Ombudsman and Victoria University.
The New Zealand public sector came in at the middle of the pack for the strength of its whistleblowing processes, ranked across five key areas: incident tracking, support strategy, risk assessment, dedicated support, and remediation.
But of the 10 Australasian public sector jurisdictions, New Zealand was near the bottom, ranked eighth with only Tasmania and the Northern Territory behind.
It points to a complacent attitude in New Zealand, a country considered relatively corruption-free but far from exempt from problems that need to be exposed.
Recently it was revealed two staff members at the Ministry of Transport tried raise the alarm about fraudster Joanne Harrison, but claim they were forced out of their jobs.
In an interview with RNZ, the whistleblowers said they alerted senior managers to fake invoices and dubious travel Harrison was taking, but nothing was done.
“When we raised issues sometimes we were told, ‘You’re only here to pay the invoices and if they’re signed and approved that’s all you have to worry about’.”
Harrison was sent to prison in February for stealing $723,000.
Can you blow the whistle in NZ?
Yes, but essentially you had better follow the strict set of rules if you want to be shielded under the Protected Disclosures Act.
There is a plethora of government agencies that can receive disclosures of wrongdoing, including the Ombudsman, the Commerce Commission, the SFO, and Inland Revenue.
Unless there are exceptional mitigating circumstances, such as the person you need to report the issue to being involved in the wrongdoing, you generally need to have tried to raise the concerns internally before heading to the watchdogs.
Leaking to the media is one avenue whistleblowers can take as it can often lead to an issue being exposed and dealt with quickly, but there is no protection under the law.
Journalists will do their best to protect their sources, but if management figure out where the leak came from on their own then whistleblowers are in trouble.
Even when disclosing information through appropriate channels, there can still be serious repercussions like being ostracised from colleagues, and difficulties in gaining new employment in a sector.
Is our law up to scratch?
Looking at the initial findings of the research, it appears not.
The Act was drafted in 2000 and there have been calls for a review for some time.
Brown agrees and believes New Zealand’s “fairly patchy” legislation is in desperate need of a refresh.
The study found that while most organisations had whistleblowing policies and procedures in place, almost a quarter had no strategy for supporting staff who raised concerns, while more than 80 percent had no compensation plan in place for whistleblowers if they suffered detrimental outcomes.
There was no statutory requirement for this support and protection while the Ombudsman in New Zealand, unlike its Australian counterparts, had no power to enforce standards.
Brown said New Zealand had been complacent in the area of whistleblowers, but there was now an opportunity to leapfrog Australia and design a world-class framework.
To assist this, the second phase of research would survey employees of public and private organisations and Brown encouraged New Zealand organisations to take part.
Both the Ombudsman and the State Services Commission agree New Zealand’s law is in need of a refresh.
Debbie Power, SSC deputy commissioner, admitted the results showed there was work to do and it had already begun.
“In terms of the law itself, the Act is now 17 years old and, while it was best practice when it was passed, we don’t believe that it still is.”
Judge Peter Boshier, the Chief Ombudsman, is keen on a joint group made up of his own office and the SSC to provide oversight of the frameworks set up to support whistleblowers.
New Zealand may have a reputation as being corruption-free but there should be no complacency, Boshier says.
“We’ve pretty much just let this thing wind its way without having a good look at it since it was enacted.
“It’s a good idea and conceptually is really sound but it’s latent and it’s waiting to spring into life. The seed’s in the ground, it just needs a jolly good watering and sunshine to spring into life.”