Serious Fraud Office

What does ‘bad’ governance look like?

• maladministration (go to Ombudsman)

• poor implementation of design of policies

• ^^^ not usually intentional and we have accountability mechanisms to ensure this doesn’t happen.

Beyond these there are starker more intentional forms;

• Corruption (taking bribes)-> private actors pay public officials to get themselves a better deal (NZ is ranked highly on low corruption in Govt)

• Ignoring legal requirements -> to get decision in faster or more efficiently

  • But there are some, so we need a way to investigate this.

Serious Fraud office

• Works in parallel with the Ombudsman

• Primary body which investigates bribery and corruption in NZ

• Established by the Serious Fraud Office Act 1990 (expanded to cover corruption not just fraud)

  • Corruption not mentioned w/in act itself

  • Extended to cover corruption

SFO’s 3 step process

• Detection

• Investigation

• Prosecution

Detection

• Suspicion can arise due to complaint or tip-off from an individual or derived from the insights of the SFO

  • Whistle blowing; usually more impactful as a detection mechanism - an inside report into the failings of governance (

  • WB can be risky for individuals

    • Risk of being ostracized

    • Risk of retaliation; perception of disloyalty; what if the whistle blower is wrong?

      •  Tension between wanting them to whistle blow and having them be comfortable but balancing the risks that come with whistleblowing.

Protected Disclosures (Protection of Whistleblowers) Act 2022 Overview (s.7)

ted Disclosures (Protection of Whistleblowers) Act 2022 Overview (s.7)

• Diagram is aiming to simplify the whistleblowing procedure, so that they know their rights and promote the general goal of making individuals act as whistleblowers to promote good governance in NZ.

 

⭐️Secret step (section 9)

 

Who is a discloser under the act? (section 8)

• wide as possible

• Targeted at employees

• Designed to address vulnerability that those in employment-like relationships may experience in calling out corrupt behavior.

• Exhaustive list - although note current or former employees covered (if people raise concerns of bad behaviour and the org wants to get away with that behavior they will fire the employee but that doesn't matter for the act.

  • Not in list can't whistle blow

Is the Disclosure is a Protected Disclosure under section 9? (3 steps)

1) Whistle blower believes on reasonable grounds that there is, or has been, serious wrongdoing in or by the discloser’s organisation

• RG likely to have a subjective and objective element to it;

  • Subjective;  -> does the individual discloser believe reasonably that some form of wrongdoing is taking place -> intrinsically attached to the characteristics of the individual -> SFO/Ombudsman is allowed to take into account the individuals personality and characteristics and role to determine whether they meet this element.

  • Objective; construction inherently excludes 'excessively credulous or […] self-deluding beliefs'

  • Note s 11(4)(a); mistaken disclosers are still entitled to protection.

  • Don't want to be over run with 'bad' disclosures/nonsense, but you want people to disclose when they have a reasonable belief. Balancing people feeling comfortable reporting actual issues vs people submitting nonsense.

2) discloses information about that in accordance with this Act

3) does not disclose it in bad faith

Serious wrongdoing defined by section 10 as including;

• An offence

• Serious risk to public health, safety, the environment etc

• Unlawful, a corrupt, or an irregular use of public funds or public resources

• Oppressive, unlawfully discriminatory or grossly negligent actions.

Bad faith;

• Default presumption of discloser acting in good faith

  • Can be overturned by showing evidence of them acting in bad faith

  • Individuals who have a bone to pick

  • Prevent individuals from abusing it.

• Breaches of legal professional privilege do not constitute protected disclosures (s 39

How should disclosures take place under the act? (pt 1)

• Entitled to protection for a protected disclosure made to their organization … (s 11(2))

• If they [internal procedures] don't do it then Ombudsman investigates

• S 11(3) -> Ombudsman or SFO NOT MP's [MP's ensure political accountability], Journalists are not appropriate to whistle blow to.

• If you are seeking protections under act must do so under appropriate procedures.

How should disclosures take place under the act? (pt 2)

• Better to have a false alarm motivated by good faith than no WB at all.

• Additional procedural obligations under s 11(4); discloser is still protected

• Act is designed so that individual feel comfortable submitting complaints of whistleblowing -> adopts a non-technical way to promote this. Don't want to apply detailed procedural elements as a barrier.

• Reporting to wrong authority is a substantial failure

  • May seem harsh because journalists can show it more to the public;

  • But is a substantial failure because there is no guarantee that media will report it to a proper authority or act in best interest of the public

    • Don't want media to exaggerate etc

• Act allows people to disclose to another person (confidential basis and for purposes about whether or how to make a protected disclosure in accordance with act) -> share burden, prevent being isolated.

• See examples on slide

Protections whistleblowers are entitled to under the 2022 act (ss 17-23)

Confidentiality of the discloser

• Keeping your identity secret. A big deal to whistle blowers.

• Not guaranteed in practice 'best endeavor's' not absolute but imposes a high standard.

• Also limits information obtainable by the public under Privacy Act 2020 and Official Information Act

• Allows them to flexibly arrive at their own arrangements whilst requiring them to attempt wherever possible to protect the confidentiality of the discloser.

• Exceptions -> where it is required to disclose identity of the individual to help the investigation to move forward (Osborne v Callaghan innovation)

• Whistle blower can waive right to confidentiality