OSAKA -- Recent years have seen more and more whistle-blowers come forward to expose corporate wrongdoing, often to their own personal career detriment.

Kabunushi (Shareholders) Ombudsman, a nonprofit organization working to promote corporate reforms, plans to create a center in October to support and protect people willing to speak up against their employers.

Japan has no laws to protect whistle-blowers from unfair treatment by their employers, except for a 1999 revision to a law regulating nuclear reactors, and thus many company workers, if they detect improper activities by superiors or coworkers, are believed reluctant to reveal wrongdoing.

Other nations have laws

Other major industrialized countries, including the United States, have legal provisions to ensure whistle-blowers are not subject to retaliation by their employers or superiors. Britain, for example, has the Public Interest Disclosure Act, which protects informers from dismissal and victimization.

"We don't have a law to protect whistle-blowers in Japan, or any independent body to support such people," said lawyer Tokuo Sakaguchi, a member of Kabunushi Ombudsman. "I hope the center prompts ethical-minded employees to raise concerns about wrongdoing at the workplace."

Using its wide network of lawyers specialized in different fields as well as other experts, the NPO-created center will investigate claims of illegal corporate acts, including those that pose a threat to public health or the environment.

If the center confirms serious wrongdoing, it will urge the perpetrator to take corrective action, and file a formal complaint with authorities if there is noncompliance. Throughout the process, it will protect the identity of whistle-blowers and defend their rights.

Kabunushi Ombudsman, which was created in January 1996 in Osaka by lawyers, accountants, individual shareholders and others, has been working to accelerate corporate reforms through the exercise of common shareholders' legal rights, including making proposals and filing shareholder suits. It also monitors corporate activities, using lawsuits when necessary to force disclosure of information.

But despite such efforts, the organization became aware that its activities alone were not enough to check or correct improper business practices.

"When whistle-blowers came forward to reveal a spate of corporate wrongdoing, that got our attention, as we were seeking effective ways to eliminate illegal corporate acts," Sakaguchi said.

Car coverup; beef snafu

Wrongdoings exposed by whistle-blowers include Mitsubishi Motors Corp.'s hiding of information on defective automobiles in 2000 and meat firms' passing off of imported beef as domestic to take advantage of the state-subsidized beef buyback scheme following last year's outbreak of mad cow disease in domestic cattle.

The revelations came at a time when both the government and politicians are working on steps to protect whistle-blowers.

The consumer policy division of an advisory panel to the Cabinet Office compiled an interim report in April, suggesting introduction of an informer-protection system.

In the last Diet session, the Democratic Party of Japan submitted a bill for protecting whistle-blowers in the public sector. Under it, civil servants who have detected but are powerless to correct misconduct can report it to a body to be created under the Cabinet Office, which would in turn launch an investigation and take action to end the wrongdoing.

The body would meanwhile try to protect whistle-blowers from unfair treatment, such as demotion.

Some DPJ members are also studying a similar bill to protect whistle-blowers in the private sector.

Sakaguchi said such moves are welcome, but predicted that it would take time before such a law is enacted, because whistle-blowers in Japan are still widely viewed as traitors. They face harassment and a hostile work environment for coming forward.

In January, an employee of Tonami Transportation Co. sued the company for allegedly treating him unfairly for 27 years after he reported to the Fair Trade Commission that the firm was engaged in an unauthorized cartel. He turned to the FTC after his allegations were snubbed by his superiors.

Sakaguchi said there are cases in which he and his fellow lawyers receive information about a company involved in illegal acts in which the informer refuses to give a full disclosure out of concerns about the consequences.

Some informers hold back

"In some cases, we find years later -- when authorities launch an official investigation -- that this was the case we got information on," Sakaguchi said. "Many informers seem to be in agony between their own conscience and their loyalty toward their company."

Sakaguchi emphasized that businesses do not acknowledge the merit of encouraging employees to raise concerns about illegal practices at the workplace.

"Encouraging workers to speak up would contribute to better business performance," Sakaguchi said. "In the case of Nippon Meat Packers Inc., if it had taken action quickly when an in-house probe confirmed the false labeling, it would not have lost as much consumer trust. That would have been better corporate risk management."

Nippon Meat Packers, Japan's largest ham and sausage maker, is under fire over the beef mislabeling perpetrated by its subsidiary and a suspected coverup involving its senior executives. When the scandal broke, the firm's sales reportedly declined more than 60 percent compared with a year ago.

Kabunushi Ombudsman is urging companies, especially Nippon Meat Packers, to set up an independent body consisting of outside directors, individuals recommended by lawyers or consumer organizations, and experts in corporate ethics who have no vested interests in the company.

Such a panel would field claims from whistle-blowing employees and advise management, while making sure those who stepped forward are protected.

If Nippon Meat does not introduce such a system, the organization is ready to file a lawsuit against the company with the help of individuals holding shares in the firm, according to Sakaguchi.

To mark the center's creation, the organization will hold a symposium in October.

"By drawing public attention, we hope to erase the negative image of whistle-blowers," Sakaguchi said.