Foreign bribery scandals involving Australian companies would "most likely not be detected at all" without company insiders blowing the whistle, the Australian Federal Police has warned.
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In a submission to a government inquiry into whistleblower protections, the AFP raised concerns about corporate cover-ups and said the law needed to be changed to help employees exposed to wrongdoing speak out and be protected.
The submission, to the parliamentary joint committee inquiry on whistleblower protections, says current protections for whistleblowers are insufficient to encourage insiders to come forward, especially in the private sector.
"In the corporate context, there may be a culture of 'cover up', where potential whistleblowers are discouraged or prevented from raising their concerns," the submission says.
"This may occur where wrongful conduct was consistent with a corporate entity's usual 'way of doing business'.
Regulators and advocacy groups have been pushing for greater whistleblower protections for years.
Australian Securities and Investments Commission chairman Greg Medcraft has also backed offering money to whistleblowers in recognition of the risks they took and the damage that could be done to their career prospects.
The government inquiry is seeking submissions about improving Australia's public and private sector whistleblower regime, including the possibility of paying rewards.
The AFP says corporate fraud and foreign bribery are, by their nature, secretive processes, and with few witnesses, whistleblowers become an even more vital part of any investigation.
"Many AFP investigations have been instigated by whistleblowers and in many cases there are convergences with regulatory misconduct," it says.
"In many cases, foreign bribery offences are only detected when reported by whistleblowers, without which they would most likely not be detected at all."
Rio Tinto is one of several large Australian companies to be investigated recently over foreign bribery claims. The case relates to payments made to secure a project in Guinea.
It follows the Unaoil scandal, which revealed millions of dollars worth of bribes being paid behalf of corporate behemoths including Samsung, Rolls-Royce, Halliburton and Leighton Holdings.
The AFP says corporate whistleblowers face significant disincentives, including personal and financial costs, for speaking out.
"There is currently a lack of effective means to address these issues while potential whistleblowers weigh up the costs of coming forward to their personal lives and careers.
"In the absence of proactive measures to assist whistleblowers and offset future personal and financial costs, it is difficult for law enforcement to encourage cooperation and obtain valuable information."
