How banks' whistleblower scheme should work

The country's leading whistleblowing expert Michael Macaulay said the banks proposed industry-wide whistleblower scheme should meet soon-to-be developed ISO standard for whistleblowing schemes.

Whistleblowing at work

Banks have volunteered to create an industry-wide whistleblower scheme to raise the alert if Australian-style abuse of customers happens in New Zealand.

But the country's leading whistleblowing expert Michael Macaulay said it should meet soon-to-be developed ISO standard for whistleblowing schemes.

In a bid to stave off a costly royal commission into banking, the New Zealand Bankers' Association (NZBA) said the industry was willing to undertake a number of projects to increase public confidence that banks have not been behaving in the same abusive manner towards customers as their Australian parent banks.

This included the NZBA reviewing banks' whistleblowing policies, and "if appropriate" introduce a national standard.

"One of the most effective ways of tackling misconduct is ensuring their are clear processes and safeguards for employees to raise issues safely," NZBA chief executive Karen Scott-Howman said in a letter to the Reserve Bank and Financial Markets Authority last week.

The move mirrors that of the Australian banks in 2016, when they sought to stave off growing criticism of the way they had treated customers.

Macaulay, who is leading a trans-Tasman project on beefing up protection for whistleblowers, said New Zealand did not have a national whistleblowing standard yet, but that was about to change.

Perhaps as early as three months time there would be a new ISO standard for whistleblowing schemes against which the banks could measure their own schemes.

"We are developing a national standard in whistleblowing," Macauley said.

An ISO standard would be a world-first, and would provide clarity for organisations like the NZBA over the best practice standards their whistleblower schemes should meet, including processes to investigate whistleblowers' concerns, and protect them from being persecuted.

A successful whistleblower scheme within a private company included not only there being a written policy, but regular training of staff to use it.

"The world over, the reason people usually don't blow the whistle is they don't know what to do, and who to turn to," Macauley said.

"It's not that people lack courage.".

Macauley said research indicated many people also didn't trust their employers to protect them if they blew the whistle.

"People don't trust the response they will get," he said.

That may not have been helped by the poor treatment of whistleblowers at the New Zealand Transport Agency, which made headlines last year.

In addition to the ISO standard being developed, ministerial papers were being prepared on the Protected Disclosures Act, which is supposed to provide protections for whistleblowers.

Late last year State Services Minister Chris Hipkins announced a review saying there was "a strong view" the 17 year-old law needed updating to keep pace with international best practice.

In Australia, the Australian Bankers' Association commissioned the Review of Whistleblowing Protections by Australian Banks, which concluded the elements of a "best practice" whistleblower policy in a bank included making it crystal clear that an employee was not prohibited from communicating with regulators "at any time" about their concerns.

Whistleblowers within a bank should receive formal acknowledgement of their actions, and be kept updated about the steps the banks takes to investigate. Whistleblowers also needed to be protected, including protecting their identities. Staff must be trained in the policy, including those responsible for handling whistleblower-prompted investigations, the ABA said.

The full article first appeared on on 10 May 2018