As reported in the Nikkei Asian Review, the Japanese government is looking “to bolster protections for corporate whistleblowers in an effort to create greater deterrence against the likes of systemic cheating and wrongdoings that have surfaced one after another in recent years.” The push for greater whistleblower protections is being made by the Consumer Affairs Agency, the consumer watchdog the government created in 2009 to protect and enhance consumer benefits across a wide spectrum of consumer-related activities. It has been more than a year since the agency has been looking into the issue with a panel of experts tasked with compiling a set of recommendations for improving the whistleblower system established in 2006. There appears to be broad support for such reform.
While some Japanese businesses have internal reporting systems through which whistleblowers can report wrongdoing, various surveys show the vast majority of employees fail to avail themselves of this channel for fear of retaliation. According to the Nikkei piece, it is the lack of adequate protections that discourages whistleblowers from stepping forward. Koichi Kozen, a lawyer familiar with the current whistleblower regime, says Japan’s protections “lack teeth,” so “employees hesitate to report things due to fear of retaliation.” The government is hoping to change this dynamic with, among other things, administrative penalties, such as official warnings or naming and shaming, in response to retaliatory firings, transfers or other mistreatment of whistleblowers. Even criminal penalties for the more egregious cases are being considered. The government is aiming to finalize its proposed whistleblower reforms for debate before the national legislature next year. Stay tuned.
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