In Shift for Japan, Salarymen Blow the Whistle
TOKYO — A car company that hid dangerous flaws to avoid embarrassing recalls. A meat processor that sold ground pig hearts as beef. A fancy restaurant chain that served customers leftover sashimi from other diners.
In recent years, Japan’s faith in its corporate establishment has been shaken by a series of scandals in which companies of all sizes have been caught in frauds ranging from the merely nauseating to the patently dangerous. More shocking than the misdeeds is the fact that employees are blowing the whistle.
A decade ago, corporate whistle-blowing was almost unheard-of in Japan. A person’s place of employment was part of his identity, and unflinching company loyalty was the highest of virtues. But the unquestioningly obedient salaryman is becoming a relic, the result of a broader transformation of Japan and the global economy.
When this country had Asia’s hottest economy, fast-growing companies could afford to buy employee loyalty with guarantees of lifetime jobs, and a sense of belonging at a company that treated workers like extended family. But that social contract began disintegrating in the economic stagnation of the 1990s, the “lost decade,” characterized by declining job security and falling wages.
Now, lawyers and economists say Japanese workers are beginning to speak out — despite a still potent risk of ostracism because of the widely held view that such disclosure constitutes an act of betrayal.
Some employees act to defend the public interest, others to protect themselves from possible prosecution for their part in wrongdoing.
“The company is losing its place at the center of the employee’s universe,” said Naoki Yanagida, an employment lawyer.
The first high-profile instance of a corporate whistle-blower was in 2000, when an employee at Mitsubishi Motors exposed the company’s cover-up of accident-causing defects, including failing brakes and leaking fluids, generating investigations that led to arrests of executives and near bankruptcy for the automaker.
Now, Japan routinely sees several scandals a year caused by employees airing dirty corporate laundry, though the exact number is hard to count because Japanese authorities and media often do not always reveal the sources of information.
In fact, the scandals seem to be having a snowball effect, as each revelation of wrongdoing prompts more whistle-blowers to come forward, say whistle-blowers and experts.
This happened in one of the biggest recent scandals, in which a meat processor called Meat Hope collapsed in July after revelations that it had mixed pork, mutton and chicken into products falsely labeled as pure ground beef. The employee who blew the whistle was Kiroku Akahane, 72, a sales executive at the company, which was based in the northern town of Tomakomai.
Mr. Akahane said he knew of the company’s subterfuges for more than a decade, and had long felt torn between guilt toward customers and loyalty toward his company that he described as Japan’s “samurai spirit.” What finally moved him to take his story to a newspaper last year was the growing media attention on whistle-blowers. This made him afraid that if he did not act first, another employee would eventually expose the company, possibly implicating him.
“Defending the public good is noble, but in the end, I just wanted to avoid arrest,” said Mr. Akahane, who said his wife opposed his decision while his daughter supported him. Since exposing his company, Mr. Akahane says he is treated like an outcast in Tomakomai, barred from joining an annual neighborhood religious festival and even shunned by relatives. He now goes to a psychiatric hospital to deal with depression, he said.
Mr. Akahane’s difficulties underscore the high personal costs of blowing the whistle in a group-oriented society that still frowns on individuals who stand out. Japan itself appears torn between its traditional ethic of group loyalty, and a recognition that it needs greater transparency and stronger checks and balances to function as a modern economy. As a result, Japan has so far greeted whistle-blowers with an ambivalent mixture of praise and ostracism.
Indeed, one of the most disturbing revelations for the Japanese has been just how rampant these swindles and frauds are, particularly in protected domestic industries like food services and agriculture.
“Whistle-blowers are exposing problems that have probably existed for a long time, but were just hidden from sight,” said Koji Morioka, an economics professor at Kansai University who has researched the whistle-blowing phenomenon.
Mr. Morioka and others say the scandals are the product of an outdated economic system in which these tight-knit industries are shielded from outside oversight by regulators who collude with companies instead of protecting consumers.
Mr. Akahane said that he went to the media out of desperation after regulators refused to act. He said he was ignored after visiting several government agencies, including the Ministry of Agriculture, to whom he brought samples of ground meat that Meat Hope sold as beef but that actually contained pork hearts.
Yoichi Mizutani ran into similar problems. Mr. Mizutani, 54, owned a refrigerated warehouse in the western city of Nishinomiya that did a booming business with local meat companies. Then one day in December 2001, an employee saw workers from one of his biggest customers, the meat processor Snow Brand, using his warehouse to put frozen slabs of Australian beef into boxes for sale as domestic meat.
He said such fraud is common in the meat industry, whose members are expected to observe a code of silence. He said his outrage boiled over when he called Snow Brand to ask about the incident, and was told to shut up. He eventually told two Japanese newspapers, generating a scandal that resulted in suspended prison terms for five executives.
“I thought of how many small company owners in this industry, like me, lie awake at night, tormented by guilt over what they are doing,” Mr. Mizutani said. “The industry talks of itself as one big family, which protects its own. But injustice is injustice.”
After he went public, Mr. Mizutani said all meat companies shunned him, driving his warehouse out of business. For a year, Mr. Mizutani, who is divorced, supported himself and his three children by working day jobs, and at one point even sold books on a blanket in front of a train station. Things took a turn for the better when his plight was reported by a local television news station. With donations from viewers, including a Buddhist temple, he restarted his warehouse business, this time dealing in frozen vegetables and seafood. He also became a minor folk hero, starring in a comic strip that celebrates whistle-blowers. He now defiantly revels in his rebel status, shedding his gray suit for flip-flops, a T-shirt and dyed blond hair with a black streak.
He said he has received several phone calls from people asking whether they should blow the whistle on misdeeds by their employers. “I ask them, ‘Are you prepared to lose your own arm and a leg? Because that is how hard it will be,’ ” he said.
Still, the Snow Brand case became a milestone in Japan, helping open the floodgates for a series of similar scandals. Recent high-profile cases exposed by whistle-blowers include the cookie maker Ishiya Trading, which admitted to selling expired products, and luxury restaurant chain Senba Kitcho, which closed its four outlets after admitting it served leftover sashimi and expired food to customers.
As concern has risen, the government responded by passing a law that went into effect two years ago aimed at protecting whistle-blowers by making it illegal for employers to punish them. Some large companies have also set up internal phone lines, allowing employees to report problems anonymously.
Even supposedly anonymous whistle-blowers face risks. Masakatsu Yamada was a used car salesman who called such an internal line at Toyota two years ago to report problems, including falsified sales records at the Toyota dealership where he worked in Osaka. But the person who took the call, an outside lawyer hired by Toyota, told the company Mr. Yamada’s name.
After that, Mr. Yamada said he become a pariah among colleagues and eventually left his job. Unable to make mortgage payments, he lost his house, and now lives in a small apartment, surviving on his wife’s salary as a part-time postal worker. While bitter, he says he does not regret what he did.
“My life is all messed up,” said Mr. Yamada, 47. “But society won’t change unless average people like me stand up.”