Protected Disclosures (Protection of Whistleblowers) Bill

on behalf of the Minister of State Services: Tēnā koe, Mr Speaker. I move, That the Protected Disclosures (Protection of Whistleblowers) Bill be now read a first time. I nominate the Education and Workforce Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House.

This bill repeals the Protected Disclosures Act 2000, replacing it with a new Protected Disclosures (Protection of Whistleblowers) Act.

New Zealand is a world leader in integrity, transparency, and openness and is consistently at the top of Transparency International’s Corruption Perceptions Index. New Zealand was also one of the first countries in the world to introduce a dedicated law to protect whistleblowers, the Protected Disclosures Act 2000. This law exists to support people in the public and private sectors to expose criminal, fraudulent, or other serious misconduct in their workplace by protecting them from unfair dismissal or treatment. An effective regime for disclosing serious wrongdoing in the workplace is critical to maintaining New Zealand’s high standard of integrity, openness, and transparency. Employees who uncover serious misconduct, fraud, and corruption in public and private workplaces need and deserve effective organisational processes and legal protections. Whistleblowers are critical to maintaining public confidence in the integrity of Government and business in New Zealand.

International research has found that reporting by employees is the single most important method by which wrongdoing in or by an organisation is brought to light. Serious wrongdoing when it does occur can cause significant damage to business, our State services, and New Zealand’s reputation. It can undermine both the confidence of the public in the organisation and the trust of employees in their colleagues.

It is the people who work within an organisation who are often in the best position to detect wrongdoing. In some cases, wrongdoing can’t be detected unless it is reported by an employee who witnessed it. One of the biggest hurdles to uncovering serious wrongdoing is the reluctance of employees to make a report. They either don’t know the organisation’s policy for reporting or they fear retaliation or are not confident the report will go to someone in the organisation who can do something about it. An “if in doubt, speak up” culture can also act as a deterrent to wrongdoers so that wrongdoing is less likely to occur in the first place.

Recent academic evaluations, anecdotal evidence, and several misconduct cases suggest that New Zealand’s legislation is not working effectively and lags behind international practice in a number of key areas. A 2017 investigation into the treatment of whistleblowers at the Ministry of Transport identified a number of areas where the current regime is unclear, confusing, and creates barriers to making disclosures that require changes to the underlying legislation. The law is now 20 years old, and it’s not working as well as it should. People don’t always know how to use the Act or feel safe using it. This needs to change. If we want to maintain our high integrity standards, we must continue to work hard to tackle serious misconduct in New Zealand. It is vital we get this right when something is wrong. People need to be able to raise issues safely without fear of punishment or reprisal.

In August 2018, the Government decided to review the Act and engage with the public on options for change. The State Services Commission undertook targeted consultation with stakeholders across the public and private sectors in February and March 2018 to gather perspectives on the strengths, issues, and challenges with the Act and the benefits and risks of different reform choices. This included the State Services Commission engaging with individuals with experience of making a protected disclosure; professional bodies; unions; business, community, and voluntary sector representatives and organisations; oversight and regulatory agencies; Public Service agencies; academics; and experts. The commission also reached out to media organisations.

This targeted engagement highlighted a number of weaknesses with the current regime. In particular, there is general confusion around what the Act does and how to use it, and the processes for disclosing wrongdoing are frequently non-existent or overly complex. Those insights informed public engagement on how the Act could be improved over October to December 2018. These reviews showed the aims of the Act remain sound, but the legislation is currently weak or silent in certain areas.

People don’t feel safe raising concerns. Griffith University research found that nearly 30 percent of employees across Australian and New Zealand workplaces did not know what support their organisation provides to those who report wrongdoing. People are unclear about how to make a disclosure and what it means. The Griffith University research in 2016 found also that the New Zealand Government ranks below most Australian jurisdictions in relation to the strength of organisational processes for dealing with disclosures internally. People don’t have confidence that their organisations will act on their concerns. Transparency International’s National Integrity System report on New Zealand concluded that a significant number of whistleblowers encounter inaction, which perpetuates the belief amongst employees that there is no point in flagging or raising concerns. Most of the available evidence relates to the public sector and little is known about how disclosures are handled in the private sector.

The bill continues the purpose of the existing Act. It is presented as a new Act, not an amendment, to make the bill clearer and more accessible. The bill is simpler and will be easier to follow. The key changes in the bill are: allowing people to report serious wrongdoing direct to an external authority, if they wish; strengthening protection for disclosers by outlining what those receiving disclosures should do; requiring public sector organisations to provide support for disclosers; extending the coverage of serious wrongdoing to include misuse of public funds or resources, whether in a public or private organisation, and to include non-Government persons performing a statutory function or exercising a statutory power or acting on behalf of a public sector organisation; requiring public sector organisations to state in their published internal procedures how support for disclosers will be provided; and making it clear what behaviour is not acceptable by listing the ways in which retaliation against the discloser may occur. The bill creates a new schedule to the Act that names the most likely appropriate authorities for a particular subject matter. This is because the number of appropriate authorities to whom a disclosure can be made is confusing to navigate and can leave would-be disclosers unsure about who to report to.

These changes should provide more assurance to people wanting to make disclosures. In addition, the State Services Commission is continuing to provide the standards and guidance for speaking up in the State services. The Government is taking a two-phased approach to strengthening our protected disclosures regime. The first is this bill, addressing the key deficiencies in the Protected Disclosures Act 2000. The State Services Commission will investigate further possible amendments to the Act in a second tranche of work, including the potential for a one-stop shop for disclosures. The bill strikes a balance between encouraging and protecting whistleblowers while putting in place appropriate safeguards to minimise vexatious allegations and an onerous compliance burden for organisations.

In conclusion, the Government is committed to protecting New Zealanders who speak up about serious wrongdoing in the workplace. I look forward to the select committee process. As with any piece of legislation change that is as large as this, there are bound to be further refinements that can be made during the select committee process. I look forward to engaging constructively with members on both sides of the House, stakeholders, and members of the public to ensure that that happens. I commend this bill to the House.

Thank you, Mr Speaker. I’m pleased to take a call on this Protected Disclosures (Protection of Whistleblowers) Bill, and I acknowledge the Minister who’s just taken his seat, the Hon Peeni Henare. The National Party is pleased to support this bill at first reading. We are particularly keen that the select committee tease out a number of issues, and I may touch on a few of those, but I’m heartened to hear in the Minister’s contribution that he sees the select committee process as rather vital and important and that he is wishing to work not only with the public and private sector—encouraging them to submit, as I do, as well; an encouragement to anyone who has an interest in this topic to do so—but the Minister’s also indicated a strong willingness to work with parties across the House.

I suppose it goes without saying—but we’re in Parliament; we might as well put it in Hansard—that National believes that actually having whistleblower protections is important, and we certainly acknowledge that the current law is not so much out of date, I would argue, as not as comprehensible as it could be—or put in a different form: it’s not as accessible as it could be. So we’re very supportive of this modernising.

I personally think it’s a particularly good idea to set it out as a new Act—sorry, that’s presumptive of me—as a new bill, it may become an Act in time—but as a new bill rather than trying to make an amendment. I think, again, that’s a very good call by the Government in this regard. It’s often—and I’m not a lawyer; I’m sure my learned colleague Paulo Garcia will speak to this more—that amendment bills just mess things up, and the very simple intention here is to make the process as accessible and easy as possible.

The fact that there are particular provisions now which will include the use of public funds in the private sector, or in the NGO sector, is particularly good. I’ll confine most of my comments, if you will, to the public fund side of things. Parliament, ultimately, is that power of authorising the spend of money, and one of the key things we try to do as parliamentarians is make sure that the moneys are spent appropriately. We, obviously, do that through excellent conversations with Ministers at Estimates and annual reviews with chief executives. But, actually, it becomes quite important, over time, if there’s information from individuals who are working with public funds, who have a protection—obviously, the nature of this bill: a protection—to be able to speak, that there’s going to be an obligation on the State services to provide that protection is vitally important, but I think, too, it is a very positive step that the protections are being extended to those who are speaking in a private corporation or within a charity or an NGO, they’ll be protected if they are using public funds. So, as I understand it at the moment, the current law doesn’t quite extend that far. So that’s a rather positive step there.

The concern primarily, from this side—and it’s not enough for us to stop the support of the bill—is to make sure that we’re not going to have, if you will, vexatious whistleblowing. It’s really, really good the way that clause 8, I think it is, defines who can make a disclosure, and clause 10 indicates on what. I think it’s really important that that’s wide and open. But on this side of the House, we’re just really keen to make sure that that’s not going to allow vexatious or silly people, for want of a better word, to come in and make some outlandish claims that could do damage to a private company, to a State entity, to an individual. In other words, it’s making sure that there’s a balance that we facilitate—encourage, even—disclosures. We want people who have information to blow that whistle, to do so loudly, and they must be allowed to do that—they must be protected. But we do want to make sure that where something’s falsely declared deliberately, that that’s not going to be protected, and, secondly, to minimise, where we can, the damage where someone—even in, if you will, good conscience—declares something, whistle-blows it, but it turns out to be patently false and, importantly, patently damaging to that entity, that the entity’s not going to suffer as a consequence. So I suspect it’s going to be quite technical to get that balance right.

But, again, I welcome—and I think the National Party welcomes—the opportunity to work with Government, to move through a select committee process, and to make sure that all voices are heard. I suppose it’s going to be the very nature of this bill; if we’re going to be protecting whistleblowers, we need everyone to come in and have their say to ensure that not only do we have, as the Minister’s indicated, a bill that is fit for purpose in this modern environment but a bill that just makes sure that we’re not going to end up defaming, for want of a better word, or harming the public sector or private entities that take public cash. So with that very short contribution, we’d like to commend this bill, at first reading, to the House.

Thank you, Mr Speaker. It’s a great honour to be speaking on the Protected Disclosures (Protection of Whistleblowers) Bill 2020, and it’s important to note that New Zealand does have a strong reputation in this space for being a world leader in integrity, transparency, and openness and also has consistently been top of Transparency International’s Corruption Perception Index, and I think that’s important to state up front.

So what this legislation does is it builds upon that culture and modernises it, and it’s really important that here in New Zealand we, in our workplaces, build a culture where wrongdoing is not accepted and where we encourage, whether employees or employers or whoever is in that workplace environment, to be able to come forward when they see issues or actions that are considered to be wrong. An effective regime for disclosing serious wrongdoing in the workplace is critical to maintaining that high reputation that New Zealand has for integrity, and this Government is dedicated and committed to protecting New Zealanders who speak up about serious wrongdoing in the workplace.

New Zealand was also one of the first countries in the world to introduce a dedicated law to protect whistleblowers, and that was the Protected Disclosures Act in 2000, and this law exists to support people in the public and in the private sectors to expose criminal, fraudulent, and other serious misconduct in their workplaces by protecting them from unfair dismissal or treatment. So what’s happened recently is that there’s been some reviewing, some research, and a good amount of work done to identify where the shortfalls are with the existing legislation, and there are some clear problems that have been outlined. I’m going to go through these very quickly.

The problems are that both organisations and disclosers are somewhat confused about when to use the Act as it has been—so it’s been underutilised. Secondly, disclosers are unclear about how to make a disclosure internally, and some organisations are also unclear about how to respond once accusations have been made. It’s been found that it is difficult for disclosers to navigate the system for reporting concerns, and also that disclosers fear speaking up because they may lack the confidence or the protections available to them. So this bill seeks to address those problems, and it primarily does that by supporting and enabling people to come forward more readily and giving that information to people to disclose in a way that they feel protected and that their own livelihoods won’t be threatened by coming forward with that information.

So allowing people to report serious wrongdoing directly to an external authority if they wish is important, and also strengthening the protection for disclosures by outlining what those receiving disclosures should do exactly. Important to also note is the requiring of public sector organisations to provide support to those disclosing—that they’re not left to suffer in silence; that, when they are disclosing, they’re provided support. Extending the coverage of serious wrongdoing to include misuse of public funds or resources—and that’s very important, whether they be in a public or a private organisation—and to include NGOs performing a statutory function, exercising statutory power, or acting on behalf of a public sector organisation.

It’s really important to make clear what the process is, and making clear what behaviour is not acceptable, and listing the ways that can prevent retaliation in a situation where someone’s making an accusation—so making it very clear about what that process is. The bill creates a new schedule in the Act that names the most likely or appropriate authority for particular subject matter. This is because the number of appropriate authorities to whom a disclosure can be made is confusing to navigate. People don’t know where to go or how to go about it, and this could mean that disclosers are unsure where to report and how to go about it.

So, by strengthening these provisions in the Act, this enables New Zealand to continue to have a strong reputation for being transparent, for being open, and for enabling a culture to be built where employees are able to report wrongdoing and have a feeling that they know where to go, how to report it, and that they are protected in that process should they be making allegations that are found to be justified. I look forward to the select committee process. As with any piece of legislative change as large as this, I’m sure there are going to be some significant contributions from members of the public and organisations who wish to have their say, and I look forward to those. I commend this bill to the House.

National supports this bill, the Protected Disclosures (Protection of Whistleblowers) Bill, to select committee. The provisions in the bill to make changes to the way whistleblowers are and can be treated, make changes to and clarification of some of the processes around whistleblowing to provide protection to the person making a complaint. Some of the provisions in the bill have been well explained, even in this early stage of the first reading, so I’m not going to go through them all. There are just a couple of points and questions I would like to raise as the bill goes into its select committee process.

The first is that the bill adds a new schedule containing examples of the most likely appropriate authorities to whom whistleblowers can turn to make a complaint and examples of the nature of concerns they deal with. If this can be codified in legislation, then it will provide a very useful pathway for whistleblowers to know where to go when they wish to make a complaint. We must always remember that people who seek to undertake a whistleblowing function are in a highly charged emotional environment because anything, any circumstance, could have promoted this desire to tell: tell the truth, tell their side of the story. So the clarity that is signalled to be provided in this bill is a very important part of this amendment bill.

This brings me to the way that this matter is being treated in the bill by way of a schedule. A schedule is a time-limited thing. It exists on the day unless there is a mechanism to add more or less agencies—or, in this case, I should say, appropriate authorities—whom the whistleblower can approach. And that underlines the need for a good, thorough select committee process, because there will be a number of views, both within Parliament and also by submitters, as to how best not only to achieve that schedule—if it is to be at a schedule and a schedule is often used to list agencies and list other matter—but decide who those appropriate authorities are.

They may exist in the Protected Disclosures Act. They may well already—I apologise; I haven’t had a chance to go back and have a look at that Act. There may well be that mechanism in the Act or this could be a new form of drafting, a more modern form of drafting which places these matters into the schedule. So I signal that while I, potentially, won’t be sitting on the select committee, this will be one of those instances where a lot of care needs to be taken that the spirit and the intent and the provision in this Act is carried through into the final result, and we’ll be keeping an eye on that one and making a contribution.

The other area I just wanted to highlight at this first reading—we’re all so fresh to this bill so we haven’t had an opportunity, as we do in the select committee process, to speak with any certainty or authority on it, particularly if we’re not lawyers. However, I also raise a question around the provision set out in clause 11(4) which provides for a discloser who is entitled to protection, even if “(a) they are mistaken and there is no … wrongdoing; or (b) they do not refer to the name of this Act when making the disclosure;”—so that’s more technical, and then “(c) they technically fail to comply with this section or section 13 (as long as they have substantially complied)” with the provisions that are being put into this bill. It has been raised by my colleague, and I think it was right to raise it—that query around vexatious or mischievous disclosures, and I think very strong provisions need to be put in and a mechanism should be in the bill. Again, it may well be, but we have not had the opportunity to really have a good scrutiny of the bill. But this is the other part of this bill where I think that vexatious, mischievous, or another motive for disclosing behaviour, an activity—whatever it is—needs to be very carefully crafted within this bill.

Having said those two matters, National does support this bill to select committee.

Thank you, Mr Speaker. I don’t intend to take a long call on this Protected Disclosures (Protection of Whistleblowers) Bill, but I think it’s important to state the main points of it and why New Zealand First supports it.

The first thing I actually want to do is reference the State Services Commission analysis and advice. In the first paragraph, they’ve wanted to define what the problem is and then move on to the approach to solve that problem. I think they sum it up quite well when they state that the research that they conducted found that reporting by employees is the single most important method by which illegal or corrupt activity in the workplace is brought to light. Obviously, a clear and effective regime that not only supports but encourages people to speak up about the serious wrongdoing is an absolute essential nature and element of a strong integrity framework, and obviously we pride ourselves in New Zealand on that strong integrity framework that we have and base our society on. Basically, that’s the intent and purpose of what this bill is and what it wants to achieve.

As we’ve heard, this bill seeks to repeal the current 20-year-old Protected Disclosures Act, and the main reason for that is because it’s outdated; it’s not working as well as it should; and, most importantly, as it notes, not only do people not actually know how to use the Act properly but they don’t feel safe in using it. I think that it’s important that we need to remedy that.

The half a dozen main key changes that this bill wants to achieve, first, is to report serious wrongdoing direct to an external authority. We’ve heard that from both sides and how extremely important that aspect is. It strengthens the protection for disclosures, it requires a provision of support for disclosures, it extends the coverage of serious wrongdoing to include misuse of public funds or resources and other important extensions as well, it requires public sector organisations to state in their published internal procedures how support for disclosers will be provided, and ensures listing the ways in which retaliation against disclosers may occur.

So I think wrapped up in the intent and the purpose of this bill is obviously making sure that the Act is fit for purpose, that it’s working well, that it’s effective, and most importantly, from New Zealand First’s point of view, people actually feel safe in using that and supported in using that. I think that the bill that is in the House as it stands is a balanced bill—the intent and purpose of it is balanced. Obviously, it’s quite a large bill, and, as we’ve heard from both sides already, the select committee process will be a very important stage in this moving through the House. We look forward to hearing from the submitters and the experts and their advice on any potential changes to the bill in moving forward, and New Zealand First commends it to the House. Thank you.

It’s a pleasure to take a call in support of the Protected Disclosures (Protection of Whistleblowers) Bill and its referral to select committee. One of the most precious parts of this country we share is that we are a country that is largely—not totally; largely—free of corruption. And what we need to continuously do as a Parliament is ensure that we are adopting best practice in continuing to protect our country in that regard. If you look at the things that make New Zealand have a competitive advantage for investment, being an attractive country for people to both travel to and to employ and be an entrepreneur—to live all those things—that culture of being a country in which there is a low tolerance for corruption, misuse of public money, and those things is really critical.

We also should reflect on the history in which the original 2000 Act was brought into law. There was significant concern in the 1990s that staff members that worked in institutions in the mental health sector—where patients that posed a very real risk to the public were inappropriately being released into the public—felt that they could not disclose such information without being in breach of both their employment obligations and others. There was great hope, if you reflect on the parliamentary debate in 2000, when the original Act was passed. When I read the State Services Commission review of that legislation, I was surprised by how infrequently the mechanisms of that 2000 law have been used. I think the issues that are addressed in that review and subsequently in this bill are part of it, but I also think one of the issues is that very few people are actually aware that such a law exists and that there are legal protections for people who make such disclosures.

Now, the first thing we’ve got to try and get right is where that threshold is for a wrongdoing to be of sufficient moment to justify breaking the normal legal conventions of people’s responsibilities and lives. It’s important that we frame that correctly, because what we don’t want to do is create a legal framework where someone that’s got a snitcher or a beef or something else within the organisation where they work can misuse these sorts of legal mechanisms, and so that definition is important. I think it’s equally appropriate that we have a debate about the extent to which this legislation applies to those in the private sector as well as the public sector. Because the public sector is funded by taxes, there is an extra obligation to make sure that those public moneys are appropriately expended, but, equally, we can all think of examples in large corporate organisations where there can be wrongdoing of which there needs to be a mechanism to resolve.

The other part that we need to focus on within this law is how far the protections go. How far do we protect people that may act in bad faith with a disclosure, people that may have ill motivation? How do you try and get that balance right between a regime that will genuinely help New Zealand flush out wrongdoing, fraud, or corrupt activities while, at the same time, not creating a mechanism that can be misused or that adds a level of uncertainty for those people in those organisations that it covers?

So National supports the bill’s introduction. We support its referral to the select committee. We really do ask for New Zealanders who have a passion about New Zealand retaining—and I’m very proud that, when the John Key - Bill English Government left, New Zealand was ranked No. 1 in the world as the least corrupt country in the world. That is something we must jealously guard. Improvements in this law can help us do that, but it is one of those issues where the detail matters. And that’s where National will be deeply engaged in the select committee process to ensure that we get the detail and the balance of this law right.

Kia ora, Mr Speaker. Ngā mihi nui ki a koutou. Kia ora. I rise on behalf of the Green Party to support this the Protected Disclosures (Protection of Whistleblowers) Bill.

Our country and our world is actually better for the actions—the courageous actions—of whistleblowers in the past. So many examples that we would think absolutely abhorrent today were only stopped or brought to light because someone had the integrity and the courage—and, actually, probably had to face a huge amount of pressure—to stand up for what they believe in as right. So I want to thank every single whistleblower in New Zealand and around the world. We’ve seen high-profile individuals from Snowden in the US to our own whistleblowers in New Zealand uncovering examples of public misspending and private unlawful behaviour. I want to thank them.

This law is about improving the existing regime, which dates back 20 years. I note in 2017 the Ombudsman, Judge Boshier, said we need to give it a shot of adrenaline, and this is what I think we’re achieving in this legislation. We look forward to hearing the select committee submissions. I note there’s been widespread consultation in the development of the bill, but it’s important to get those voices heard.

I note National members are raising concerns around vexatious whistleblower applications. I’d note there are protections designed into the legislation. But, look, I don’t think anyone whistle-blows for the fun of it. They’re doing it because they believe in it and they’re trying to uncover something. Of course, there are examples where maybe the facts are in doubt or there’s some grey area. That’s dealt with by this legislation. But, look, I don’t think a potential hypothetical risk of vexatious complaints should be a barrier to us giving the legislation that shot of adrenaline the Ombudsman has called for. The Green Party is proud to support.

I rise to speak briefly on the Protected Disclosures (Protection of Whistleblowers) Bill. As previous speakers have mentioned, New Zealand has a good reputation in many areas, and to be clean and the least corrupt in the world is one of the good reputations that New Zealand has, of course, along with what we call clean, green New Zealand. So it’s important for us to have a good system to protect whistleblowers to make sure that New Zealand will stay corruption-free, and the Protected Disclosures Act itself is now outdated. It’s 20 years old. Therefore, it is time for us to have more protection for whistleblowers, and this bill indeed has the intention to make sure that whistleblowers have access to protection and are able to make any particular contact with authorities to report any particular serious wrongdoings.

So this bill itself has two main categories. One is to give whistleblowers greater certainty and protection, and, secondly, to expand the scope of serious wrongdoing. So for that reason, the bill itself, indeed, is trying to define the meaning of serious wrongdoing, and it is very important for us to have a clear definition. So this bill itself has this particular intention to do that. I think it is a good move, a good attempt. Therefore, for that reason, I think the committee should have a chance to go through this. Also, this bill actually enables whistleblowers to report serious wrongdoings directly to the authorities concerned at any time.

So this is important, again, because, firstly, you know the definition and, secondly, you have the access. You have a channel to report directly to concerned agencies straight away, at any time. So this is another intention of this bill, and the bill, of course, as I said, tries to protect the whistleblowers and has specific definitions and specific procedures. Even if whistleblowers make some mistakes, they can still be protected so long as they’re not wilfully doing this and so long as the whistleblowers are not intentionally damaging the reputation of a particular company or a particular organisation.

Also, this bill itself attempts to clarify the internal procedures. I think it’s very important that all organisations have a proper process in terms of dealing with these whistleblower issues. This bill itself will clarify all the step-by-step processes and it has a chart—I think it’s very clear.

At the same time, of course, we need to have some kind of balance, because there could be some people there who may be unhappy with his or her organisation or company and therefore might take some advantage and take some revenge. Therefore, it’s important for us to protect the reputation of a particular company, or a particular organisation, from the damage such kinds of people may cause. So it is a balancing issue, and I believe the committee will be able to go through all these details and come up with good procedures, good process, and we will have the chance to listen to people, listen to submitters, and also to listen to officials and get the fine line there. But in the end, we want to make sure that we have a good system there to protect whistleblowers at the same time as we have good systems there to protect our organisations and our businesses or companies.

So the committee will work in this area, and we look forward to having this particular chance to listen to various views and to improve the bill and make it much better when the bill comes back to the House. Thanks.

Bill read a first time.

Bill referred to the Education and Workforce Committee.

The House adjourned at 12.45 p.m. (Wednesday)