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Whistleblower Protection Policies in Japan: New Obligations and Guidelines Emerge

In an effort to strengthen whistleblower protection, Japan has introduced significant changes to its laws governing whistleblowing systems. The Amended Whistleblowers Protection Act (WPA) mandates that companies establish internal systems to receive and investigate whistleblower reports, as well as take corrective measures.

Key Requirements

• Companies must designate personnel responsible for receiving whistleblower reports, investigating allegations, and taking corrective action.
• Designated individuals are required to maintain confidentiality regarding information obtained from whistleblowing reports, and any breach of this obligation may result in a criminal fine of up to ¥300,000.
• Companies must establish internal systems to receive and investigate whistleblower reports.

Regulatory Authority

• The Consumer Affairs Agency (CAA) has been granted authority to take administrative measures to ensure compliance with the new regulations, including:
  • Making inquiries
  • Providing guidance
  • Publishing the names of non-compliant companies
• Failure to report or provide false information may also result in an administrative fine of up to ¥200,000.

Guidelines and Commentary

• The CAA has released guidelines and commentary outlining key considerations for companies, including:
  • Designating personnel
  • Establishing internal systems
  • Protecting whistleblowers
  • Ensuring the effectiveness of the system
• The guidelines acknowledge that each company’s whistleblowing system may differ depending on factors such as company size, organizational structure, industry, and societal expectations.

Personal Data Protection

• Companies must comply with the Act on Protect of Personal Information (APPI), which includes requirements for:
  • Notification of purpose
  • Security measures
  • Restrictions on data transfer to third parties
• In cases involving international transfers of personal data, companies must exercise particular care, as transferring sensitive information across borders may raise compliance concerns.

Conclusion

Japanese businesses would be wise to review their existing whistleblowing systems and ensure they comply with the new regulations. Those without a system in place should consider establishing one to protect employees who report misconduct and to maintain transparency and accountability within their organizations.