Protected Disclosures Amendment Bill

on behalf of the Minister of State Services: I move, That the Protected Disclosures Amendment Bill be now read a second time. This bill is designed to build on the current purpose of the principal Act to promote the public interest in two ways: first, by facilitating the disclosure and investigation of serious wrongdoing in or by an organisation; and, second, by protecting employees who, in accordance with the Act, make such disclosures. The bill has two parts. Part 1 contains amendments to the Protected Disclosures Act 2000. Part 2 contains a transitional provision.

In December 2003 Trevor Mallard, the then Minister of State Services, tabled a report in the House on the Act’s first few years. The report, which was prepared by Mary Scholtens QC, concluded that the Act had not been used a great deal, and that it had not always been used well. Without a central coordinator, the range of appropriate authorities to which employees disclosed was confusing. Some disclosures fell between the gaps in the jurisdiction of those authorities. Ms Scholtens also referred to a strong perception amongst some of those consulted on the Act that the identity of a whistle-blowing employee will not be protected. She concluded that the Ombudsmen could assist whistleblowers, coordinate referrals between appropriate authorities, and guide and review the Act’s operation. The bill gives the Ombudsmen that enhanced role. It also picks up on a number of other recommendations designed to improve the Act’s protections and processes.

The bill has been considered by the Government Administration Committee, which recommended two minor changes. The first is the insertion in clause 8 of new section 6C(2): “An organisation is not required to comply with a request made under subsection (1) if it is not a public sector organisation.” The amendment is designed to make it clear that a private sector organisation is not obliged to comply with a request from the Ombudsmen for information about the organisation’s internal procedures.

The second change is that new section 15E(3), in clause 8, be amended to include section 30 of the Ombudsmen Act. Including a reference to section 30 makes it an offence to refuse to provide to an Ombudsman the information specified in new section 15E. It applies only to public sector organisations, and the change is designed to enhance the workability of the section by providing a deterrent to a person who, without lawful justification or excuse, fails to comply with the lawful requirement of an Ombudsman.

The Ombudsmen will be authorised to provide information and guidance to public or private sector employees on using the Act at any time, not just on request. For example, the Ombudsmen will advise on what is serious wrongdoing and on whom to complain to. This should provide a filter for misguided disclosures, as well as encourage whistleblowers to throw light on serious wrongdoing.

Public sector organisations are required to have internal procedures on how disclosures must be made to them, and how such disclosures will be investigated. The Act requires that whistleblowers must first disclose in accordance with their employing organisation’s internal procedures, but complying with internal procedures can be difficult if there are none. Section 6C empowers the Ombudsmen to request the internal procedures and related information from the organisation concerned. As a result, organisations may be encouraged to have in place a good, effective protected disclosures policy. Employees’ confidence should also increase if they know what the employing organisation’s internal procedures are.

The Ombudsmen will have new powers to review and guide public sector organisations’ investigations of whistle-blowing, under section 15B, in clause 8. The power to guide investigations is facilitative rather than directive, and the power will be activated either on the organisation’s request or at the Ombudsmen’s discretion. This should help prevent disclosures of serious wrongdoing from circulating around various agencies without resolution.

Currently, the Ombudsmen may make reports to Parliament under section 29 of the Ombudsmen Act. Section 15C, in clause 8, specifies a number of matters on which the Ombudsmen may report about the exercise of their powers under the Protected Disclosures Act. The list includes the number and types of inquiries made to the Ombudsmen under the Act. This list is designed to provide Parliament with more information on how the Act is operating, and on how the Ombudsmen are carrying out their powers.

The new sections that I have just described come with information-requiring powers conferred by section 15E(3). The Ombudsmen will be able to acquire information from public sector organisations, in keeping with current limits on their investigative jurisdiction. Private sector organisations will not be required to comply, but will be encouraged to do so. There are inbuilt protections from misuse of such powers already in the Ombudsmen Act and in the bill.

Under section 15A, the Ombudsmen will be able to take over a public sector organisation’s investigation of serious wrongdoing alleged against it. The trigger is that the Ombudsmen consider that insufficient progress has been made by the organisation, and that the whistleblower consents to the takeover. The Ombudsmen may also investigate in conjunction with that organisation. In addition, the Ombudsmen will take on a coordinating role, under section 15, in relation to protected disclosures that have already been made to another person or body.

This, again, applies only with the whistleblower’s consent. In exceptional circumstances, such as an emergency, an Ombudsman may refer the disclosure on to an appropriate authority or to a Minister to investigate. Alternatively, she or he may investigate when the matter relates to a public sector organisation.

On the topic of extending the Act’s processes and protections, this bill extends the Act to a wider range of people and bolsters the Act’s protections. The term “employee” will include volunteers who work for no reward. Board members and members of local authorities will be able to whistle-blow under the Act. Both groups will be employees for the purposes of confidentiality of identity, immunity from liability, and the anti-victimisation protections in the Human Rights Act. Contractors are already covered by the Act.

Even with the Act’s protections, whistle-blowing carries some personal risk to the employee, but silence is not in the public interest. Measures in the bill designed to give more substance to the Act’s protections include the Ombudsmen assisting organisations to keep the confidentiality of disclosers, expanding the Act to protect volunteers of information in support of an existing disclosure of serious wrongdoing, expanding protection to people who reasonably but mistakenly believe they are disclosing serious wrongdoing, declaring agreements unlawful that seek to contract out of the Act, and clarifying that disclosers are not excluded from the Act merely because they did not refer to the Act by name when disclosing.

Further, technical non-compliance with the Act’s processes for whistle-blowing will no longer prevent an employee from coming within its protections. According to section 6A, in clause 6, provided that the whistleblower has substantially complied with the Act, the technical breach will not disqualify him or her. Here is an example of the effect of this change. An employee in a Wanganui Crown research institute blows the whistle on two staff who are burying toxic waste in riverbed shingle. Under the internal procedures, the employee should first disclose to the human resources manager, but, instead, she discloses to the general manager. She still comes within the Act’s protections, despite technical non-compliance with one of the process steps in section 7.

In summary, this bill is designed to improve aspects of the Protected Disclosures Act. It gives the Ombudsmen an enhanced coordinating and helping role. As a result, it should be easier for whistleblowers to bring serious wrongdoings to light, and it should be easier for organisations to investigate effectively. I think this is a good bill, and I commend it to the House.

It is a pleasure to follow Dr Worth after he read his speech. Personally, I preferred it when Annette King read it out as a first reading speech. We each have our personal preferences about that speech—

💬 Jacqui Dean: It’s the same bill.

But this is the second reading. It was excellently done, and I say “Well done.” to Dr Worth.

I am very glad that the National Government has picked up this excellent Labour bill—the Protected Disclosures Amendment Bill. Perhaps Government members were not quite ready for it, because the bill on the Table is still in David Parker’s name. But at least they are honouring David Parker and the previous Labour Government for having brought this excellent bill to the House. They have not quite gotten around to getting their own Minister’s name on the bill.

💬 Hon Steve Chadwick: Or their own speech.

That is right—or even getting their own speech.

Although it is a very good bill, I have to question the Government’s priority: it is saving us from the recession via the Protected Disclosures Amendment Bill. This bill goes along with the reinstatement of knighthoods—that was also going to save us from the recession, as was the bike lane. But it is a good bill, and therefore it is good that we are debating it.

This bill will make it easier for whistleblowers to bring serious wrongdoing to light, particularly in Public Service organisations. There are a few potential whistleblowers out there in the Public Service now that National has taken office.

💬 Hon Steve Chadwick: They’re flooding in.

Plenty of them are flooding in, I can tell members, because there is a great deal of concern in the public sector at the moment about the National Government’s agenda for the Public Service. We can understand why whistleblowers would be concerned when today Tony Ryall made his long-awaited announcement about the cap on Public Service numbers.

💬 Hon Steve Chadwick: We felt it coming.

Yes, there have been a lot of requests for a definition of the cap, and we heard it today. National has moved a few departments out and put a few agencies in, and has come up with a number.

💬 Hon Steve Chadwick: Contracts.

Yes, contracts are in. But in the end it is all just spin because the Public Service will be cut under the National Government. We have already seen those announcements, and people from those agencies are already deeply concerned about the future of their jobs. They will be welcoming the fact that this Protected Disclosures Amendment Bill is before us now.

Jobs are being cut—

💬 Jacqui Dean: Nonsense!

Jacqui Dean says it is nonsense, but jobs are being cut at the State Services Commission, the Tertiary Education Commission, the Ministry for the Environment, and the National Library. Jobs are being cut in all those organisations. National paraded around New Zealand during the election campaign saying that it would cap the Public Service—cap, but not cut. Sue Kedgley, who is in the House today, was with me in the Wellington Central campaign. The National candidate for Wellington Central constantly berated me when I said that there would be job cuts in the Public Service. But that is what we have seen. This is not a cap; this is a cut.

💬 Hon Member: Focus on the bill!

I am focusing on the bill. It is public servants who will be protected under the Protected Disclosures Amendment Bill. They are the people who will be protected, and they are the people who are concerned about National’s agenda of cutting the Public Service—not capping it; cutting it. Mr Ryall made that announcement today.

This bill gives an enhanced role for the Ombudsman. I think that is extremely important because the Office of the Ombudsman is a position in our system that is regarded by everybody as a neutral party that can be relied upon to involve itself in disputes and make progress on them. Under this bill the Ombudsman can review an employer’s protected disclosures procedures. That is extremely important, because at the moment the Protected Disclosures Act states that people’s first point of call has to be those procedures. But what if those procedures do not exist? We already know that a number of organisations do not have those procedures. This Act allows the Ombudsman to get into those organisations, review them, and make sure that those procedures are in place.

The Ombudsman can also give guidance to employees about how the Act works. That is important, too, because not everybody knows the detail of what they are supposed to do if they have a complaint. If something is going on that deserves this kind of complaint, we need to ensure that people can complain even if they are not aware of the detail of the Act or of this new provision. The Ombudsman now has the power to get in there and give guidance. That power has two good results. The first is that it will be able to filter any misguided complaints, which occasionally, from time to time, can be made. That will be an outcome of this bill. The power will also support and encourage people who want to bring to light genuine examples of wrongdoing.

The bill also gives the Ombudsman the power to take over investigations into wrongdoing if progress slows, particularly in the public sector. That is important because sometimes things can be swept under the carpet. We have seen an example of this again today with Tony Ryall and his announcement around the cap on the Public Service; he was spinning his way through it and not wanting to give us the full story.

Things can be swept under the carpet in the Public Service from time to time. Inquiries will be called by this Government, and progress can slow in those inquires. It is no different when someone makes an application under the Protected Disclosures Act. The Ombudsman now has the ability to take over those investigations into serious wrongdoing, and I think that will mean that those investigations will come through far more quickly.

Another important extension in this legislation is the extension of the definition of “employee”. Up until now, the term “employee” has been strictly defined as paid employees, but quite often in some of the public sector organisations that we are talking about employees are actually board members or members of local authorities who might have things to bring to light. I know that when the Government Administration Committee heard submissions on this bill it heard from somebody who had been employed at the Hawke’s Bay District Health Board. In this case, the person was a paid employee, but, given some of the things that were happening at the Hawke’s Bay District Health Board, it could have been a board member who felt the need to use Protected Disclosures Act. Up until now, that person would not have been able to do that, but this bill extends the definition of the term “employee”, and I think that is a very good thing.

The Ombudsman will also have the ability to report on how many disclosures come in under the Act, how they are processed, and how they are dealt with. Again, that is very important because if we did not do that we would not know whether the Act was working well. The review that was done in 2003, which my learned colleague Mr Worth referred to, did, indeed, show that the Act was not actually being used a great deal and had not been used well when it was used. That is not good, because the protection for people to blow the whistle when they see corruption and wrongdoing is a vital protection to have in our law. If the law was not being used well, that meant there was something wrong with the law—the review showed that. Partly it was due to the absence of a central coordinator: someone who was trying to bring together what was happening in this area and who was trying to give guidance both to organisations and to employees about what their rights were. That is the role that the Ombudsman has now been given, and I think that will see a great deal more use of the Act.

As I have said, I also think we will see a great deal more use of the Act because National is in office, and public sector organisations are running scared. The huge amount of uncertainty that is going on in the Public Service at the moment, driven by National’s policy—

💬 Jacqui Dean: That’s not true.

I say to Jacqui Dean that I am sorry, but it is exactly true. There is unbelievable uncertainty in Wellington at the moment because the National Government is not being clear about its policy. Today Tony Ryall tried to come clean and explain what his cap was, but he actually left more questions unanswered. We do not know what the floor is at the moment. Tony Ryall has put forward a policy today to say what the maximum number of public servants will be. There is no minimum number—no minimum number, at all—so the floor can fall out and National can return to its policies of the 1990s, gutting the Public Service, and bringing in consultants and contractors.

To return to the bill, it is an important kind of bill because it gives Public Service organisations confidence that their procedures will work, and that the Ombudsman will be there to assist them and ensure that the legislation will work into the future. I commend this bill as an excellent bill brought forward by the Labour Government. It is still in the name of David Parker, which is an excellent testament to him, and is, perhaps, a testament to the shambolic scenes we saw earlier on the other side of the House. It will protect those who wish to blow the whistle on wrongdoing, which is an important right in our society. I am glad to see that the National Government has picked up this bill.

Unlike the previous speaker and new member, Grant Robertson, I intend to treat the second reading of the Protected Disclosures Amendment Bill with the seriousness it deserves.

Firstly, I note that that the previous speaker was extolling the virtues of the previous Minister of State Services for bringing in this bill. It is interesting that the Labour Government had 9 years to bring in these provisions. It took it 8 of those years to bring this bill before the House and then it went to a select committee. How long has it taken the National Government to bring this excellent bill to the House? It has taken 6 months. Now that is what I call commitment, that is what I call progress, and that is what I call looking after people.

This bill gives effect to the recommendations of a 2003 review. So, in other words, the Labour Government had a review in 2003 and did not introduce this bill until 2007.

What kind of efficiency is that? As far as I am concerned, it is not very fantastic. The Labour Government showed a distinct lack of commitment to this issue, but luckily the National Government has brought this bill to the House within 6 months of becoming the Government. That, by the way, was after an extremely busy first 100 days of the National Government; it brought through a number of very important and critical bills that will be to the benefit of the people of New Zealand. The 2003 review of the Protected Disclosures Act 2000 found many delays and inconsistencies around the legislative procedure of the Act. It also found that there was a lot of confusion about some definitions and a general lack of confidence in the protection of a whistleblower’s identity. I believe that when a whistleblower feels so strongly that he or she needs to make a complaint, then that person needs the protection of the law.

The Protected Disclosures Amendment Bill went to the Government Administration Committee that, at that time, was chaired by my excellent colleague Shane Ardern. Four written submissions were received on the bill from groups and individuals, and one submission was heard. I hope that in the course of the second reading, we will hear from one of the members of the select committee who considered the bill at that time. I am sure that one of those members will be able to provide us with some insight into the bill. Although the 2003 review found that there are no fundamental problems with the substance of the Act, it found that roles and processes could be easier to follow and that guidance should be available to people who are proposing to make disclosures.

The bill improves aspects of the Protected Disclosures Act. It enhances—

💬 Grant Robertson: Nearly there!

In Parliament it is all about the timing, and I feel so passionately about this bill that I want to use all of the time I have.

Debate interrupted.

The House adjourned at 6 p.m.