HSE University Anti-Corruption Portal
Japan Amends Its Whistleblower Legislation

Japan has introduced the obligation for organisations to implement a whistleblowing response system and enhance whistleblower protection measures.

Amended Whistleblower Protection Act of 12 June 2020 No. 51 (公益通報者保護法の一部を改正する法律, hereinafter referred to as the Act), which entered into force on 1 June 2022 provides for the following amendments:

1. Establishment of corporate whistleblowing response systems.

The Act introduces the obligation for legal persons who hire over 300 regular employees to establish whistleblowing response systems. This requires, in particular:

  • to establish internal reporting channels in the organisation, its subsidiaries and other affiliated companies and ensure their proper functioning;
  • to designate the personnel responsible for receiving and processing tips, investigate alleged violations and take corrective measures, while preserving the confidentiality of whistleblowers;
  • to ensure proper conduct of the internal investigation of violations also by taking measures for preventing conflict-of-interest situations;
  • to ensure that the whistleblower protection requirements are met, including the prohibition of retaliation and prevention of personal data leaks;
  • to provide personnel with adequate training etc.

Under the Act, the organisations that hire less that 300 regular employees should “make every effort” to meet these requirements.

The requirements to the whistleblowing response systems are explained in further detail in the Guidelines for Appropriate and Effective Implementation of the Requirements of the Whistleblower Protection Act by Organisations (公益通報者保護法第 11 条第1項及び第2項の規定に基づき事業者がとるべき措置に関し て、その適切かつ有効な実施を図るために必要な指針) issued by the Consumer Affairs Agency (消費者庁, hereinafter referred to as the CAA) and the Commentary on the Guidelines containing specific examples.

2. Status of whistleblower and reporting procedure.

The Act expands the list of persons entitled to have the status of whistleblower and relevant protection. From now on, the following persons can be considered as whistleblowers:

  • an employee of the organisation, of a subcontracting company or another counterparty retired or resigned within one year after resignation before reporting a violation;
  • an executive of the organisation, of a subcontracting company or another counterparty.

Additionally, the Act expands the categories of information whose reporting entitles whistleblowers to protection: the relevant legislation is now applied to the reports that concern not only crimes but also administrative offences whose list is provided in the Whistleblower Protection Act and other legal acts whose list is published by the CAA.

The Act also modifies the requirements for the external (to the competent authorities) and public (to the media) reporting.

In particular, whistleblowers are entitled to report violations to the authorised public bodies in the event that:

  • there are good grounds to believe that the reported violations have been or will be shortly committed, or
  • the whistleblower believes that a violation that should be reported has been or will be shortly committed and provides a document indicating his/her name and address (location) and containing information about the violation, including the reasons for reporting.

Reporting to the media is now possible provided that the whistleblower:

  • is certain of the veracity of its report and
  • has good grounds to believe that the organisation has made public the information allowing for his/her identification without a valid reason, or
  • has suffered from an irreparable or serious material damage because of his/her report.

3. Protection of whistleblowers.

The Act expands the list of measures aimed at protecting whistleblowers by supplementing it with the possibility:

  • to pay the damages inflicted on the whistleblower if he/she is dismissed because of his/her reporting;
  • to release the whistleblower from liability in the event that his/her reporting has damaged the organisation.

4. Sanctions.

The Act also introduces the liability measures for organisations and their officials for the following infringements:

  • the lack of a whistleblowing response system or a failure to adopt measures to enhance the effectiveness of its functioning, as well as the lack of the designated personnel responsible for receiving and processing reports, investigating alleged violations and taking corrective measures; the sanctions for these infringements imply that the company follows the mandatory instructions or recommendations of the CAA and/or that information about the company that does not comply with the requirements of the Whistleblower Protection Act is made publicly available;
  • a failure to provide the CAA, at its request, with the information concerning the functioning of the whistleblowing response system or a provision of knowingly false information; in this case a fine of up to 200,000 of JPY (roughly 1,500 USD) can be imposed on the organisation;
  • a failure of the personnel responsible for receiving and processing reports, investigating alleged violations and taking corrective measures to ensure the confidentiality of a whistleblower (name and number of the employee) without a valid reason; a fine of up to 300,000 JPY (around 2,200 USD) can be imposed on the relevant person.
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