Protected Disclosures Amendment Bill — First Reading 
Protected Disclosures Amendment Bill — First Reading 
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Protected Disclosures Amendment Bill 
First Reading 
Debate resumed from 16 October. 
Hon ANNETTE KING (Minister of State Services) 
: 
 When I was last speaking in the first reading of the Protected Disclosures Amendment Bill I was pointing out that even with the Act’s protections whistle-blowing carries some personal risks to employees. But we all know that silence is not in the public interest. 
Measures in this bill are designed to give more substance to the Act’s protection. They include the Ombudsman assisting organisations to keep 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 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 the Act’s protection. An example of this change would be an employee say at a Wanganui Crown institute blowing the whistle on two staff who were burying toxic waste in riverbed shingle. Under the internal procedures the employee should first disclose to the human resources manager but if instead he or she discloses to the general manager he or she still comes within the Act’s protection despite technical non-compliance with one of the process steps in section 7 of the Act. 
In summary this bill is designed to improve aspects of the Protected Disclosures Act. It gives the Ombudsman an enhanced coordinating and helping role. As a result it should be easier for whistleblowers to bring serious wrongdoing to light and for organisations to investigate effectively. I think it is a good bill and I commend it to the House. 
SIMON POWER (National—Rangitikei) 
: 
 I think the Minister who has just resumed her seat Annette King probably summed up the intent of the Protected Disclosures Amendment Bill quite well when she said that whistle-blowing carries with it risks for the person or people who decide to make information public from an organisation with which they may have a relationship or association. She rightly made the point that often in these cases silence is not in the public interest. National will be supporting this bill going to the select committee and will wait with interest to see what particular submissions are made in respect of the bill. 
As the explanatory note states at the start of the bill: “The Bill is designed to give the Ombudsmen an enhanced guiding reviewing and investigating role …”. That is an important step that this legislation encourages. The Protected Disclosures Act 2000 was reviewed by Mary Scholtens QC and in the report she brought to light some evidence of delays and the like that make this legislation necessary today. The bill will give more explicit information and advising powers to the Ombudsman but of course the whistleblower in any set of circumstances takes on some considerable personal risk when deciding to take what is often a courageous step to bring to light information that is in the public interest. 
The provisions of the bill essentially do the following. The bill broadens the scope of who is a protected person and treats board members and volunteers in organisations as employees for the purposes of the Act. Although the National Party historically would be reluctant to see legislation define people as employees if indeed they had decided to contract in another way with a particular organisation for the purposes of this legislation it is an appropriate capture. The bill protects witnesses in support of a whistleblower. That is also an important provision for third parties who may stand alongside or provide support for those who are actually carrying out the so-called act of whistle-blowing. The bill allows protection for those who substantially comply with the Act but also for some minor technical failure. 
As was said earlier the Ombudsman can take a managing and coordinating role but the bill does not give the Ombudsman the role of advocate for the whistleblower. I think that is an important point. Ultimately the Ombudsman is not there to advocate a case but rather to exercise certain powers in order to ensure that the process around the disclosure of the information is kept as proper and as pure as possible. I wonder whether our own Dave McGee may find himself one of the first users of this particular legislation when it passes. I would certainly trust him to get it right if indeed he was one of the people charged with making some of the decisions carrying out some of the actions or exercising some of the powers that the Protected Disclosures Amendment Bill facilitates. 
As I said earlier the bill moves to apply the protection of employees to a wider group of whistleblowers. Chester Borrows said that a good example would be Clive Solomon who was a board member of the Whanganui District Health Board and who drew some public scrutiny to the practices at Wanganui Hospital. It will be interesting to see whether a bill such as this could have protected someone like Kit Richards at the time he entered into an interesting situation in respect of information from Timberlands. Although the bill gives the extension of protection and the provisions give a more facilitative role to the Ombudsman there is a desire for a fair and sensible regime to surround the disclosure of information where as the Minister put it—and I could not put it better myself—silence is not an option if the public interest outweighs the risk that that individual is taking in disclosing such information. 
On that basis National will be supporting the bill going to the select committee. We will take some interest in the more technical application of some of the provisions during the hearing of submissions on the bill. 
DARIEN FENTON (Labour) 
: 
 I am very pleased to speak in the first reading of the Protected Disclosures Amendment Bill. The introduction of the Protected Disclosures Act 2000 was a very important measure that this Labour-led Government enacted to provide protection for employees who make disclosures of information about serious wrongdoings in their organisations. This is known as whistle-blowing and I am sure most New Zealanders are very familiar with the term. 
I recall the furore surrounding Neil Pugmire that led to this bill. In the 1990s he was a psychiatric charge nurse at Lake Alice Hospital. He expressed concern to his then employer Good Health Wanganui over the release of dangerous psychiatric patients into the community. After raising the issue with his management and not getting a satisfactory response he went public with his concerns in the interests of public safety by releasing confidential material to a member of Parliament. Mr Pugmire was suspended and later sacked for his actions. Although the Employment Court eventually reinstated him to his former position he and his family had gone through a long and stressful employment disputes process as well as coping with the uproar in the media and in his community. 
What happened to Mr Pugmire was typical of the prevailing culture of fear in the workplace in the 1990s: fear of losing a job in a time of high unemployment and unprecedented power in the hands of employers. Thankfully this kind of unhealthy workplace is not acceptable to this Government and Labour has ensured that the dreaded culture of the 1990s has been changed for the better through legislation that promotes good faith the right to consultation and to be heard and the right to be represented through one’s union. 
When it comes to public services that are provided with public money our Government takes particular notice. Although an employee has a duty to his or her employer he or she has a higher responsibility to our society and to the Public Service to report acts of wrongdoing by his or her employer or organisation. This is because these are services to the people and for the people that are paid for by the people through their taxes. 
Some employers see the actions of whistleblowers as a breach of loyalty. Employees in this situation can face retaliation from employers when they attempt to stop inappropriate actions. That is why Labour passed the Protected Disclosures Act—to protect people like Neil Pugmire who blow the whistle on serious wrongdoings in their workplace. Employees are protected if they disclose a misuse of public funds or resources a risk to public health and safety or the environment a threat to the maintenance of the law or a public official acting oppressively discriminating against people improperly being grossly negligent or grossly mismanaging. 
Of course an employee must not simply act on something that he or she believes might be happening; he or she must have reasonable grounds for believing that the wrongdoing is true or likely to be true. There are also safeguards in the Act for employers in that employees have to follow set internal procedures to report suspected wrongdoing. If those internal procedures do not work employees may then complain to the appropriate authority. So the Protected Disclosures Act not only protects employees but also promotes transparency in Government and it protects the interests of individuals and the general public. 
Our reputation as a corruption-free country and our consistently good rating on the annual survey of Transparency International where New Zealand is identified as being first-equal with Finland and Iceland as the world’s least corrupt countries is vitally important. That is why the then Minister of State Services had a review of the operation of the Protected Disclosures Act 2000 to ensure that it was working as intended. This Act contains provisions requiring that review and a decision on whether any amendments should be made to the scope and contents of the Act. We know that that was a significant review and a significant report and the current Minister and others have referred to some of the amendments that are recommended in order to improve the operation and effectiveness of the Act. 
I was interested that the report said there have been very few successful efforts by employees to use the legislation. The Public Service Association in its submission on the review reported that it did not know of any and it questioned the extent to which the Act was being used effectively. It said that one member who had used the process had found it to be a long-drawn-out and not well-understood process and felt that the State Services Commission and the Ombudsman could have been much more responsive. But at the same time the association observed that the Act in itself although not widely utilised had value as a strong deterrent to wrongdoing in public sector organisations. I think that that is right and also that it shows that the Public Service is functioning well and according to the principles laid down in the  
Public Service Code of Conduct 
 which sets out the Government’s expectations of standards of behaviour and conduct for the Public Service. 
This bill is designed to improve aspects of the Protected Disclosures Act and it builds on the recommendations of the report which has as outlined in the explanatory note brought to light some evidence of delays inconsistencies and other difficulties in using the legislative procedures properly. 
 The report also highlighted some uncertainty from both organisations and employees as to how the legislative procedures in the Act could be used and how to go about accessing them and referred to a strong perception among some who were consulted on the Act that the identity of a whistle-blowing employee would not be protected. That goes to the heart of the effective application of this Act. We need to be absolutely sure that employees who set out to disclose wrongdoing in their organisations are protected and that the organisations and the employees are absolutely clear about the process. 
This amendment bill makes it easier for whistleblowers to bring serious wrongdoing to light and it will also make it easier for organisations to investigate such allegations effectively. It does this by enhancing the role of the Ombudsman. It gives the Ombudsman the ability to review employers’ protected disclosure procedures. Although many employers now have such procedures in place many do not and this will encourage employers to develop good procedures. The Ombudsman will also be able to give guidance to employees on how the Act works what a serious wrongdoing actually is and whom they can complain to. The Ombudsman will have new powers to review and guide public sector organisation investigations of whistle-blowing but this is a power that is facilitative rather than directive. In addition the Ombudsman can take over an investigation into serious wrongdoing in the public sector if insufficient progress has been made by the organisation but the whistleblower must consent. 
I am also pleased to see that the Act’s processes and protections will be extended to include volunteers board members and members of local authorities. For the purposes of the Act these groups will be employees in regard to confidentiality of identity and they will have immunity from liability and anti-victimisation measures under the Human Rights Act. 
This bill is about encouraging accountability and transparency while at the same time providing better protections for those who put their jobs or positions on the line when they make decisions to disclose wrongdoing in their organisations. As a member of the Government Administration Committee to which this bill is being referred I look forward to hearing submissions on the bill and returning it to the House. 
KATE WILKINSON (National) 
: 
 In rising to speak to support the first reading of the Protected Disclosures Amendment Bill it is useful to note firstly the intention or objective of the original 2000 Act. The Act was intended to operate by facilitating the disclosure of serious wrongdoing facilitating the investigation of that serious wrongdoing and protecting employees who make disclosures under the Act. The Act also provided for a review to be made of its operation no sooner than 2 years after its commencement. In fact that review took place as we have heard in 2003 and indeed the review appears to be somewhat comprehensive comprising some 90-plus pages. Four years later the results—or some of the results—of that review can now be found in the bill before this House. The reason why it has taken so long to get here is certainly anyone’s guess. 
We have heard that the bill seems to have two main objectives. Firstly it seeks to give the Ombudsman a more substantial managing and coordinating role in an attempt to reduce the risks of confusion and the risks of disclosures of serious wrongdoing falling between the gaps in various organisations’ investigative jurisdictions. Secondly the bill seeks to clarify and extend the group of people who can make disclosures of serious wrongdoing—that is who can be a whistleblower—and therefore come within the protection of the Act. For example as we have heard volunteers and board members may now be treated as employees for most of the purposes of the Act. Currently and in summary the Act protects an employee or a former employee of an organisation who discloses serious wrongdoing from retaliatory action from the employer and from civil and criminal suit in relation to the making of that disclosure. 
I have read the 2003 review of this Act and it is interesting to note certain things. There is no comprehensive data on the extent to which the Act has been used because there is no particular organisation that has any oversight of the legislation. I am not sure that this bill goes so far as to remedy this although it does give the Ombudsman a more substantial managing and coordinating role which is specifically described as “not an advocacy role for the whistle-blower”. The report also noted that the original whistleblower’s Act had not resulted in a significant volume of protected disclosures of serious wrongdoing and that there was some lack of knowledge or awareness of the terms of the legislation and how indeed it should be applied. In fact the Chief Ombudsman noted: “Although the Office had been surprised by the paucity of complaints under the Act during the first two and a half years those it received had been time consuming.” 
When it first became law the Act was expected to trigger an avalanche of whistle-blowing which did not prove to be the case. It may well be however that the mere presence of this Act and prospective whistleblowers having access to information and therefore seeing why something was happening was sufficient to allay their suspicions. Many submissions leading up to the 2003 review both from employer representative groups and employee representative groups indicated they had little if any experience to report either positive or negative with the Act. 
There appears to have been some confusion as to who indeed could make a disclosure about what and from which organisation. Should or could for example elected members of local authorities—say mayors and councillors—come within the definition of an “employee”? To cover this confusion the bill does extend that definition as we have heard of “employee” to include firstly a person who is a member of the board or governing body of the organisation and secondly a person who works for the organisation as a volunteer. An issue was also raised in relation to anonymous disclosures. Some have the view that anonymous disclosures are not covered by the legislation the protections available to others cannot be provided to persons whose identity is not known and “as you do not know whether the person is an “employee” within the Act you do not know whether the Act covers them.” 
A further concern raised in the 2003 report was whether it was inappropriate for the Act to require organisations to accept such anonymous disclosures. This issue of confidentiality is important. Although the Act does attempt as one of its protections for whistleblowers to confer on them confidentiality and privacy there does seem to be some scepticism “and the ability to provide full confidentiality to someone disclosing wrongdoing is almost non-existent” and is considered to be “a fundamental problem for staff.” This is to be balanced however with the guidelines relating to natural justice to the effect that a person is entitled to know the identity of his or her accuser. Perhaps this is an issue that could be considered further at the select committee. 
National supports the first reading of this bill the efforts to improve the operation and administration of the Protected Disclosures Act 2000 and the recommendations of the 2003 review. It is important however that protecting whistleblowers and indeed giving them the confidence to be whistleblowers is not just a matter for legislative change. Ongoing operational improvements are also very important. The 2003 review noted that the Chief Ombudsman gave examples of employers not recognising a disclosure as a potential disclosure and where the whistleblower’s identity had indeed been revealed without considering those confidentiality obligations. His view was that this indicated inadequate processes and a lack of understanding of the legislation. Consequently the protections under the Act may appear to be ineffective and may be one reason why the Act has not been used much—whistleblowers simply do not feel secure enough about their protections. 
Closer examination of this bill by the select committee is required. National supports the bill at its first reading and we support its referral to the select committee for closer scrutiny so that the review that was carried out 4 years ago in 2003 can be scrutinised. 
Debate interrupted.