In June 2022, amendments to the Whistleblower Protection Act (“Amended WPA“), a law that protects employees who have reported violations of certain laws specified in the WPA, are expected to come into force. Amongst other items, the Amended WPA includes a mandatory obligation for companies of a certain size to establish a whistleblowing system with the aim of ensuring the protection of whistleblowers. With the object of providing detailed guidance on how business operators should establish whistleblowing systems, the Consumer Affairs Agency (CAA) issued Guidelines for Appropriate and Effective Implementation of the Whistleblowing System (“Guidelines“) and commentary on the Guidelines (“Commentary“).

This client alert summarizes the Guidelines and Commentary, together with shedding light on key issues relevant to multinational companies with a subsidiary in Japan.

Background

1. Overview of the mandatory obligations when establishing a whistleblowing system under the Amended WPA

There are two obligations with respect to whistleblowing systems to be established under the Amended WPA.

• Companies must designate personnel who are to be engaged in receiving whistleblowing reports, investigating allegations and taking corrective measures (“Personnel Responding to Whistleblowing Reports“).
  Personnel Responding to Whistleblowing Reports: (i) shall be subject to a confidentiality obligation with respect to information obtained in dealing with whistleblowing reports that identifies...

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