Japan's Scandals Force New Look At Company Loyalty

The Telegraph (UK) ^ | 1-2-2004 | Colin Joyce

[blam]

Japan's scandals force new look at company loyalty

By Colin Joyce in Tokyo
(Filed: 02/01/2004)

Japan's "corporate samurai", the ultra-loyal employees prepared to fall on their swords rather than betray their masters, will become an endangered species under a new law that will protect workers who expose wrongdoing in their companies.

The Japanese workers' famed loyalty to his company has faded in the past decade as the country's system of lifetime employment collapsed amid its economic woes.

Legislation due to be presented to the Tokyo parliament will provide immunity from prosecution for whistleblowers and ensure that they cannot be fired, demoted or suffer pay cuts if they betray their companies in the public interest.

Japan has suffered from a spate of corporate scandals, in which companies are found to have broken laws, ignored safety procedures and fixed prices with rivals. Managers have covered up abuses and "loyal" employees are found to have kept quiet, often with disastrous consequences.

In 1999, the world's second worst nuclear accident occurred when workers at the Tokaimura nuclear reprocessing plant mixed nuclear fuel in buckets. This and other unsafe practices were mandated in a secret company operating manual.

A year later, Snow Brand, once Japan's most famous dairy, caused 15,000 Japanese to develop food poisoning after sloppy procedures and unhygienic conditions allowed bacteria to spread.

Such scandals have not only hurt Japan's economy but have damaged the country's self-esteem and trust in its companies and government. But Japan's traditionally strong emphasis on loyalty to the company and co-workers has meant that whistleblowers have been criticised as much as thanked.

A senior insider at the Japan Highway Corporation last year leaked an internal memo showing that the public corporation was deep in debt.

The document proved that the official figures were a sham designed to exaggerate the company's worth and derail privatisation plans. The company chairman, Haruho Fujii, who has since been sacked, was accused of lying to parliament.

Nevertheless, the then construction minister Chikage Ogi said: "What surprised me the most was that an executive of a public body would release an internal document. An executive should be more responsible."

In the past, the few individuals who went against their employers suffered more than just unkind words from officials.

Hiroaki Kushioka, who in 1974 exposed bid-rigging in the transport industry, never again won promotion at the firm that had once considered him a rising star. His colleagues cold-shouldered him and his mother urged his wife to divorce him.

But as uncertainty has grown in the employment market, more Japanese are willing to expose wrongdoing.

Last year, an employee of Snow Brand Foods disclosed that the company had claimed public subsidies to which it knew it was not entitled. In 2000, after a whistleblower's evidence, Mitsubishi Motors was forced to recall more than a million vehicles because of defects it had concealed for 30 years.

Last year, Tokyo Electric's nuclear reactors were closed down for safety checks after a whistleblower disclosed that faked safety reports failed to mention cracks in equipment and secret repairs.

The continuing recession and recurring scandals have caused Japan to reassess its concept of loyalty.

"The loyalty of the samurai was not about blind obedience but about taking responsibility. It was a duty to speak out about wrong decisions," said Prof Kazuhiko Kasaya of the International Research Centre for Japanese Studies.

[Kepitalizm]

Isn't it a bit much to suggest that the only way to be loyal to your company is to conspire with it to break the law?

[drlevy88]

when workers at the Tokaimura nuclear reprocessing plant mixed nuclear fuel in buckets

yikes