Study under way to legalize the protection of corporate whistle-blowers

A study is under way to establish rules to protect consumers and to prevent employees who have blown the whistle on their companies with the aim of halting corporate wrongdoing, from being dismissed or suffering other disadvantageous treatment.

A study committee set up inside the Cabinet Office has compiled a report in May entitled "Specific contents of the system for protecting public-interest informants." The contents were revised and modified following internal discussions, and the report was sent to the Social Policy Council's Consumer Policy Subcommittee, which is the Committee's parent group. As soon as a conclusion for legalization has been reached at this subcommittee, the Cabinet Office plans to begin formulating a bill.

The report has restricted the target of "tip-offs" to "violation of laws and ordinances" that threaten consumer interests (life, physical safety, property/assets, etc.). It also limited the scope of individuals subject to protection to "employees." As for the content of informant protection, the report stated that dismissals because of tip-offs that fulfill a set requirement should be annulled.

In order for the informant to be eligible for protection, (1) if a tip-off was sent to inside the business entity, he or she must be judged to have acted for reasons of need or conscience, or, in other words, that the tip-off was not made to carry out blackmail, injury or other offenses, or other negative purposes, and that it was not done to gain personal gain; (2) if a tip-off was sent to administrative organizations, the informant must be judged to have acted for reasons of conscience and have "credibility/truthfulness," and (3) if a tip-off was sent to outside the business entity, such as to the mass media, the informant must be judged to meet all the above requirements, and, in addition, there should be a "risk of destruction of evidence," or that no appropriate measures had been carried out for a substantial period of time after a tip-off was sent to inside the company or to administrative organizations.

Scandals in recent years involving major food companies and power companies (that operate nuclear power plants) have made headlines in Japan. Many of these cases came to light because of whistle-blowing.

These incidents show that the function of checking illegal corporate management activities--a role labor unions should play--had failed to work properly. If it were not for these whistle-blowers, companies could not implement their own internal safety and ethical procedures. Some people point out that this in itself is a crucial problem.

The government aims to enact the law during an Extraordinary Diet Session this fall. It remains to be seen just how effective this law will be.