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Whistleblower Policy

1. Purpose

Western Asset (the Firm) is committed to operating an ethically sound business. The Firm acts as a fiduciary, and as such, we are entrusted to act in the best interests of our clients. Policies and procedures have been adopted to ensure that employees uphold their obligations and place the interests of the clients before their own or the Firm’s. Our parent organisation, Legg Mason, Inc., has also adopted a code of conduct that applies to all employees and generally addresses concepts of good business conduct and ethics.

Each employee is expected to uphold the Firm’s values in every aspect of his or her role and should the employee feel that these values are being disrespected such instances should be reported timely. The Enhancing Whistleblowers Protections Bill 2018, protects employees and other eligible persons from being dismissed or otherwise penalised by the Firm for reporting unethical activity, malpractices or wrongdoing within the workplace.

2. Application

This policy applies to directors, employees, volunteers, contractors and consultants. It also applies to a person or organisation with a relationship with the Firm who reports serious misconduct within or by a Firm’s employee/s.

3. Definitions

Discloser: An individual who discloses wrongdoing or an eligible whistleblower

Disclosure: Information provided by whistleblower/discloser

Eligible Recipient: An officer/senior managers of the Firm, Internal/External Auditors, Actuaries, Local regulators (i.e. ASIC, APRA, or any other Commonwealth body prescribed by regulation and qualify for protection under the Corporations Act), Law enforcement bodies, Lawyers, or another person authorized by the entity to receive disclosures.

Non-Disclosable Matters: Disclosures that are not about Disclosable Matters (eg. work-related grievances or disclosures for which there is no reasonable grounds for the suspicion), do not qualify for protection under the Corporations Act but may be protected under other legislation, such as the Fair Work Act 2009.

Personal Work-Related Grievance: Issues that may arise in the course of employment that are not Disclosable Matters under legislation. Examples include: interpersonal conflict, workplace disagreements, promotions, performance matters and/or suspension, termination or staff discipline.

Whistleblower: A person who reports serious misconduct in accordance with this policy and that qualifies for protection under the Corporations Act.

Whistleblowing: The disclosure by or for a witness, of actual or suspected misconduct in an organisation that reveals fraud, corruption, illegal activities, gross mismanagement, malpractice or any other serious wrongdoing.

Whistleblower Protection Officer and Whistleblower Investigation Officer: The Firm’s Compliance Manager, Mimi Cavaye

4. Descriptions of Misconduct

In light of the company’s role as a trusted fiduciary to our clients and given the nature of our business in the highly regulated securities industry, it is important that incidents involving known or suspected misconduct by officers, directors, managers, employees, independent contractors or customers be reported promptly.

Examples of misconduct to be reported include, among other things, known or suspected:

  • violations of applicable state or federal securities regulations
  • violations of fiscal or accounting rules
  • misappropriation of assets, goods, services or resources
  • insider trading
  • conflicts of interest that breach the company’s fiduciary duty
  • violations of the company’s Compliance Manual or personal trading policies
  • violations of applicable regulatory requirements
  • an activity that represents a danger to the public or financial system; or
  • any perceived misconduct or an improper state of affairs or circumstances in relation to the Firm

Not only are such behaviours prohibited by regulatory authorities, they also violate the company’s policies and Code of Ethics.

If you know of or even suspect misconduct of the type described above, you must promptly report a detailed and factual account outlining the people and circumstances involved.

Note – this policy and the Australian Whistleblower regulations, (in most cases) do not apply to general, personal work-related grievances.

5. Who Can Receive a Disclosure

It is expected that in most instances staff would report to the local Compliance Manager (the Whistleblower Protection Officer) or the Human Resources Manager in the first instance.

In order for disclosers to qualify for protection under legislation, they must make a disclosure to one of The Firm’s ‘eligible recipients’.

Eligible Firm recipients include:

  • An officer/senior manager of The Firm
  • An internal or external auditor (or member of an audit team)
  • Actuaries
  • Local regulators (i.e. ASIC, APRA, or any other Commonwealth body prescribed by regulation and qualify for protection under the Corporations Act)
  • Law enforcement bodies
  • Lawyers
  • A person authorized by the entity to receive disclosures that may quality for protections

6. How to Make a Disclosure/Procedures

At noted above, it is expected that in most instances staff would report to the local Compliance Manager (the Whistleblower Protection Officer) or the Human Resources Manager in the first instance.

Should staff feel uncomfortable to speak with the local Compliance Manager, Human Resources, or other officers/senior managers within the Firm, an anonymous Ethics Reporting Line is available and disclosures made in this manner will be protected under the Corporations Act.

Ethics Reporting Hotline representatives will accept concerns raised and report the matter to the appropriate channels for review, such as senior management at Western Asset or the Legg Mason, Inc. Board.

The Ethics Reporting Hotline is available to staff via Compass.

If you are not an employee you may contact the Whistleblower Protection Officer or the Human Resources Manager for further information on the Ethics Reporting Hotline.

The Firm recognises that some disclosers may wish to seek additional information before making a formal disclosure. In this instance the Firm’s local Whistleblower Protection Officer or Human Resources Manager should be contacted.

7. Legal Protections

The company will and is obligated to undertake a timely preliminary assessment of the facts or evidence and will conduct an internal review of the reported incident. Our non-retaliation policy protects those who make a report of known or suspected misconduct based on a reasonable belief that such misconduct is occurring or has occurred.

The Whistleblowers Protections Bill 2018 provides enhanced protections for those who report misconduct by:

  • allowing whistleblowing reporting based on reasonable grounds of suspicious wrongdoing
  • allowing anonymous disclosure
  • penalties for individuals (up to $200,000) and corporates (up to $1million) for disclosing a whistleblowers identity or causing detriment to a whistleblower
  • strengthening criminal and/or civil immunities for whistleblowers
  • provide an avenue for public interest and emergency disclosures of misconduct to Parliament and/or journalists
  • expanded powers available to the courts in favour or a person who is found to have suffered loss, damage, or injury as a result of detrimental conduct, including against a body corporate that breaches an existing duty to prevent third parties from causing detriment to the whistleblower

Disclosers are protected from the following in relation to their disclosure:

  • a) Civil liability
  • b) Criminal liability
  • c) Administrative liability

8. Support and Practical Protection for Disclosers

The Firm is committed to operating an ethically sound business and will provide assistance and practical protection in line with the Whistleblowers Protections Bill 2018.

Not only will the Firm’s Eligible Recipients be required to provide confidentiality and support to the discloser, there is also available confidential and anonymous counselling services available to all Firm staff as outlined in the staff handbook and within Compass.

Confidentiality

The Firm will protect the confidentiality of the discloser’s identity and is also obligated to ensure that the identity of a discloser or information that is likely to lead to the identification of a discloser remains confidential.

Exception to the discloser’s confidentiality is available if a person discloses the identity of the discloser to one of the following:

  • ASIC, APRA or a member of the Australian Federal Police
  • A legal practitioner
  • A person or body prescribed by the regulations; or
  • With the consent of the discloser

It is illegal for a person to identify a discloser or disclose information that is likely to lead to the identification of the discloser and if this were to occur a formal complaint for breach of confidentiality could be made to either the Firm or directly to ASIC, APRA or the ATO for investigation.

Discloser protection from detrimental acts or omissions

In practice the Firm will determine the potential risk of detrimental acts or omissions to the discloser. This assessment may take into account the current business environment (i.e. staff who may suspect the discloser, support services available, strategies to minimize stress, and processes for ensuring management are aware of their confidentiality obligations).

Should a discloser feel that they have suffered loss, damage or injury as a result of disclosure it is encouraged that they seek independent legal advice or contact regulatory bodies such as ASIC, APRA or the ATO. Compensation and other remedies can be sought through the courts.

9. Handling and Investigating a Disclosure

Upon receipt of a whistleblower disclosure, the Firm will take the following steps:

  • a) Eligible recipient, if not the Whistleblower Protection Officer, will contact the Whistleblower Protection Officer
  • b) Initial assessment to be undertaken to determine if the disclosure:
    • qualifies for protection; and
    • a formal, in-depth investigation is required
  • c) Following initial assessment, the Whistleblower Protection Officer in coordination with relevant Firm parties, will agree on the next steps and how best to mitigate potential risks within the firm, including potential retaliation and or confidentiality concerns
  • d) The Whistleblower Protection Officer will communicate with the discloser and advise them as to whether or not the Firm has determined if the disclosure qualifies for protection or not
  • e) All of the above would be expected to be complete within 2 weeks, although depending on the complexity and ability to complete initial investigations, this time frame could be altered
  • f) Note - the Firm must receive the discloser’s consent prior to disclosure of any information internally that is likely to lead to the identification of the discloser as part of the investigation process, unless:
    • a. The information does not include the disclosers identity
    • b. The Firm removes information relating to the discloser’s identity or other information that could be expected to identify them
    • c. It is reasonably necessary for the investigating the issued raised in the disclosure
  • g) The Firm will proceed with investigation and take into consideration:
    • a. The nature and scope of the investigation
    • b. The person(s) within and/or outside the Firm that should lead the investigation
    • c. The nature of any technical, financial or legal advice that may be required to support the investigation;
    • d. Objectiveness, fairness and independence; and
    • e. The expected timeframe for the investigation
  • h) The discloser will be provided with regular updates, if they can be contacted (note these can also be through anonymous channels). And anonymity must not be compromised when these updates are provided

Note – should there be a perceived conflict for the Whistleblower Protection Officer, the steps outlined above referencing the Whistleblower Protection officer would apply the Human Resources Manager or another Firm officer determined to be appropriate.

Investigation documentation, internal reporting and discloser communication

The Firm has detailed internal breach and incident reporting procedures and these procedures are to be followed in the event of a disclosure, while care is to be taken to ensure all reporting maintains confidentiality and anonymity as required.

While the discloser will be provided regular updates regarding the investigation, in some instances due to Firm sensitivities it may not be appropriate to share all details of the outcome with the discloser.

Should the discloser not be satisfied with the results of the investigation, they are able to communicate this to the firm and this will be documented and dealt with according to the Firms internal breach and incident reporting procedures.

Disclosers also have the right to seek external legal advice as referenced in Section 10 of this policy.

Public interest disclosures and emergency disclosures

Under specific circumstances disclosures can be made to a journalist or parliamentarian and qualify for protection.

Circumstances where this could apply:

  • At least 90 days have passed since disclosure was made to ASIC, APRA or another Commonwealth body
  • The discloser does not have reasonable grounds to believe that appropriate action is being taken, or has been taken in relation to their disclosure
  • The discloser has reasonable grounds to believe that making further disclosure of this information is in the public interest
  • Before making the public interest disclosure, the discloser has given written notice to the Firm (to which the initial disclosure was made). This written notice by the discloser must include sufficient information to identify the original disclosure and state that they intend to make an emergency disclosure
  • The extent of the information disclosed in an emergency disclosure can be no greater than is necessary to inform the journalist or parliamentarian of the substantial and imminent danger

10. Ensuring Fair Treatment of Individuals Mentioned in a Disclosure

Protection from retaliation following disclosure is available to all current staff, former Firm officers, employees, contractors, suppliers and those respective associates and specified family members.

A person may not engage in any conduct that causes detriment to a discloser (or another person) in relation to a disclosure, if:

  • The person believes or suspects that the disclosure (or another person) made, may have made, proposes to make or could make a disclosure that qualifies for protection; and
  • The belief or suspicion is the reason, or part of the reason, for the conduct

Examples of potential detrimental behaviors/retaliation towards a discloser

  • Dismissal of an employee based on suspected whistleblowing disclosure
  • Harassment or intimidation
  • Damage to a person’s property

Examples of actions that are not detrimental for a discloser

  • Based on reasonable grounds and for the purpose of protecting a discloser, moving their workstation to another location
  • Managing a discloser’s unsatisfactory work performance if the action is in line with the Firms performance management program

As noted above, should a discloser feel that they have suffered loss, damage or injury as a result of disclosure it is encouraged that they seek independent legal advice or contact regulatory bodies such as ASIC, APRA or the ATO. Compensation and other remedies can be sought through the courts.

11. Training

All new employees are provided with introductory training and annually thereafter. Specialist training will be provided to staff members who have specific responsibilities and those that are determined to be eligible recipients.

Training provides an opportunity for all employees to gain awareness of their firm-wide compliance obligations, as well as with their obligations in relation to local regulatory requirements.

12. Policy Accessibility and Review

This policy is accessible to all staff via the Employee Handbook, received at the time of hire and accessible at all times via Compass. This policy is also referenced within the Firm’s Compliance Manual and available on the Firm’s website.

This policy will be reviewed on a regular basis to ensure it remains relevant and in accordance with legislation.