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Japan’s Whistleblower Protection Act: A Major Step Towards Transparency and Accountability

TOKYO, JAPAN - In a significant move towards promoting transparency and accountability, Japan’s Cabinet Office has issued Notification No.118 of 2021, introducing the Whistleblower Protection Act to safeguard individuals who report wrongdoing or misconduct within their organizations.

Introduction

The new law aims to prevent retaliation against whistleblowers and ensure that they are protected from any adverse consequences, including dismissal, harassment, or other forms of detrimental treatment. Under the Act, business operators are required to establish internal reporting systems and procedures for handling whistleblower reports, and to take prompt and appropriate measures in response to such reports.

Protection Measures

The Whistleblower Protection Act introduces several key protection measures, including:

  • Prevention of Disadvantageous Treatment: Business operators must educate all employees that whistleblowing reports are intended to improve the company’s operations, and prohibit any detrimental treatment against whistleblowers.
  • Internal Investigations: Companies must conduct thorough internal investigations into whistleblower reports and take corrective and preventive measures as necessary.
  • Confidentiality Obligation: Investigators must keep the identities of whistleblowers confidential, with criminal penalties imposed for breaches of this obligation.

Enhanced Protection for Whistleblowers

The Act also provides enhanced protection for whistleblowers who report wrongdoing to administrative organs or news media. Specifically:

  • Relaxation of Requirements: The Amended Act has relaxed the requirements for protection of whistleblowers who report wrongdoing to administrative organs, allowing for a broader range of cases to be covered.
  • Expansion of Scope of Protection: Whistleblowers who are retirees or assume positions as officers (including directors, executive officers, and auditors) are now also subject to protection.

Impact on Businesses

The Whistleblower Protection Act is expected to have a significant impact on businesses in Japan, requiring them to establish robust internal reporting systems and procedures for handling whistleblower reports. The Act will also encourage companies to prioritize transparency and accountability, which can lead to improved corporate governance and increased public trust.

Conclusion

Japan’s Whistleblower Protection Act marks an important milestone in the country’s efforts to promote transparency and accountability. By providing enhanced protection for whistleblowers and encouraging businesses to prioritize internal reporting systems, the Act will help to create a more ethical and responsible business environment.