Financial Crime World

Businesses Must Prove They’re Not Retaliating Against Whistleblowers

Strengthening whistleblower protection laws is crucial to ensuring that individuals are not intimidated from reporting wrongdoing in the workplace. Currently, whistleblowers must prove that they were retaliated against due to their reporting activities, which can be a daunting task.

The Problem with Burden of Proof

Businesses often have more evidence and information about the reasons behind adverse treatment such as dismissal, demotion, or reduction in pay. This makes it difficult for whistleblowers to provide sufficient proof of retaliation. In contrast, businesses are rarely held accountable for their actions.

A Shift in the Burden of Proof

To address this issue, experts are calling for a shift in the burden of proof. The European Union has introduced a directive that requires businesses to prove they are not treating whistleblowers adversely because of their reporting activities. This approach can help level the playing field and ensure that whistleblowers are protected.

Strengthening Whistleblower Protection in Japan

Japan’s Whistleblower Protection Act is in need of revision to strengthen whistleblower protection. Currently, if a business retaliates against a whistleblower, it only needs to restore the whistleblower to their previous position and is not subject to administrative or criminal penalties. Experts argue that this is not enough to deter businesses from committing wrongdoing.

Imposing Serious Sanctions

The US Sarbanes-Oxley Act and Japan’s Whistleblower Protection Act are examples of laws that impose criminal penalties for retaliation against whistleblowers. However, Japan’s law is considered weak compared to international standards. To strengthen whistleblower protection, it is recommended that serious sanctions such as administrative orders and criminal penalties be imposed on businesses that retaliate against whistleblowers.

Additional Measures

Strengthening whistleblower protection can also be achieved by:

  • Reducing the burden of proof on whistleblowers
  • Introducing a monetary reward system for whistleblowers to promote whistleblowing
  • Improving whistleblower protection in all industries, not just supply chains

Conclusion

By shifting the burden of proof and imposing serious sanctions on businesses that retaliate against whistleblowers, we can create a safer and more accountable environment. The Japanese government has already taken steps to strengthen whistleblower protection, but more needs to be done to protect whistleblowers in all industries. It is time for businesses to prove they are not retaliating against whistleblowers.