23/07/2025
In 2023 ASIC commenced proceedings against TerraCom and some of its officers for, amongst other things, contraventions of the whistleblower protection scheme in relation to whistleblower disclosures made by a previous employee.
The proceedings against TerraCom were the first commenced by ASIC under the expanded corporate whistleblower protection scheme contained in the Corporations Act 2001 (Cth) (Corporations Act), which was expanded in 2019.
The proceedings against the officers were dismissed by ASIC on 4 July 2025. However, ASIC separately settled the proceedings against TerraCom in May 2025 on the following terms (subject to the Federal Court’s approval):
- TerraCom pay a civil penalty of $7.5 million in relation to one admitted contravention of the prohibition on victimisation of whistleblowers (under section 1317AC(1) of the Corporations Act);
- an agreed statement of facts and admissions to be filed with the Federal Court – these are not yet available; and
- TerraCom pay ASIC’s legal costs of $1 million.
These proceedings demonstrate the importance of having robust whistleblower processes in place that ensure your organisation does not breach their obligations and is not subject to significant penalties – in excess of $8 million.
What whistleblower protections were breached?
Under the Corporations Act whistleblowers are afforded protections and rights – including a protection from detrimental acts or omissions being taken against them because they have made, or may make, an eligible whistleblower disclosure. This protection is contained in section 1317AC of the Corporations Act.
What were the circumstances in this case?
Mr Williams made a number of allegations that TerraCom had falsified its coal quality certificates, which had commercial implications. These comments were made while Mr Williams was no longer employed because he had been made redundant. However, Mr Williams remained protected by the whistleblower protections contained in the Corporations Act because he was a previous employee.
Mr Williams had also commenced proceedings relating to his dismissal in the Fair Work Commission and then the Federal Court.
Following the allegations being made and the proceedings being commenced, TerraCom published a number of statements both to the Australian Securities Exchange (ASX) and within the Australian Financial Review (AFR) about the allegations made by Mr Williams.
Broadly, in the statements published between February 2020 and April 2020, TerraCom denied Mr Williams’s claims, outlined the employment related proceedings that had been brought by Mr Williams and stated that Mr Williams made the allegations after TerraCom did not meet his demands with respect to his employment.
What proceedings were commenced by ASIC?
ASIC alleged that by making the ASX and AFR statements TerraCom contravened section 1317AC(1) of the Corporations Act – being the prohibition on victimising whistleblowers.
ASIC alleged that on each occasion TerraCom published one of these statements, the content of that statement made to ASX or the AFR was false, misleading or otherwise harmful to Mr Williams – who was protected under section 1317AC(1) from being subject to detrimental treatment because they have made a protected whistleblower disclosure.
Unfortunately, the agreed facts and admissions are not yet available. However, it is clear from the agreed settlement statement that TerraCom have admitted to one contravention of the victimisation protections and consequently they have paid $8.5 million in penalties and ASIC’s legal costs.
Please contact us at enquiries@griffinlegal.com.au if you would more fully like to understand whistleblower obligations and protections.