Whistleblower Protection Act Falls Short in Japan: Businesses Must Do More to Protect Whistleblowers

Insufficient Protections Undermine Whistleblower Culture

A recent analysis of Japan’s Whistleblower Protection Act has revealed significant shortcomings in the country’s whistleblower protection laws. While the Act, revised in 2022, requires businesses to establish internal reporting systems and provides some protections for whistleblowers, critics argue that it does too little to deter retaliation against whistleblowers and fails to provide sufficient incentives for employees to come forward.

Key Flaws in the Act

• Excessive Burden of Proof: Whistleblowers often lack access to evidence and information about the reasons behind adverse treatment, while businesses typically have more resources at their disposal. Experts are calling for a shift in the burden of proof, requiring businesses to legally claim and prove that they are not treating whistleblowers adversely due to their whistleblowing activities.
• Lenient Penalties: The current law only requires businesses to restore the whistleblower to their previous status without facing administrative or criminal penalties. In contrast, the EU’s Whistleblower Directive and the US Sarbanes-Oxley Act impose criminal penalties on businesses that retaliate against whistleblowers.

Consequences of Ineffective Protection

The lack of effective whistleblower protection in Japan can create a culture of fear and silence, discouraging employees from reporting misconduct and allowing it to continue unchecked. This can have serious consequences for employees who dare to speak out against wrongdoing.

Reforms Needed

Experts are calling for a range of reforms, including:

• Severe Sanctions: Introduce severe sanctions for retaliation against whistleblowers.
• Broad Interpretation: Broadly interpret the definitions of whistleblowers and reportable facts of abuses.
• Reduced Burden of Proof: Reduce the burden of proof on whistleblowers.
• Strengthening Supply Chain Protection: Strengthen whistleblower protection in supply chains.
• Monetary Reward System: Introduce a monetary reward system to incentivize employees to come forward.

Government Response

While the Japanese government has taken some steps, including releasing guidelines for respecting human rights in responsible supply chains, more needs to be done to ensure that whistleblowers are protected from retaliation and wrongdoing is held accountable.

Call to Action

We demand that the Japanese government take immediate action to strengthen whistleblower protection laws and ensure that businesses are held accountable for retaliating against employees who report wrongdoing. We call on the government to shift the burden of proof, impose severe sanctions for retaliation, and introduce a monetary reward system to incentivize whistleblowing. The time for change is now.