Coming Out of the Cold; A new acceptance of whistle-blowers is bringing much-needed corporate accountability to Asia's biggest economy.

Byline: Christian Caryl and Kay Itoi

For the past 30 years Hiroaki Kushioka has languished in corporate Japan's equivalent of Siberian exile. In 1974 he put his own conscience above company loyalty by going public with revelations about his employer's involvement in a price-fixing cartel. But because of the cozy relationship between government watchdogs and the industries they regulated at that time, the firm escaped punishment. Its managers were quick to take action against Kushioka. They derailed his sales career by transferring him to a provincial training center, where he spent most of the next three decades tending the flower beds.

Yet these days, in an odd twist of fate, Japan's veteran whistle-blower is coming in from the cold. His book about his experiences, published two years ago, has earned him nationwide prominence. He filed a lawsuit against his company, which he claims is close to being resolved in his favor. And in perhaps the most striking sign of his new status, the onetime outcast now finds himself mentoring a new generation of people who are trying to follow in his footsteps. "I get phone calls or visits from people who are thinking about whistle-blowing," he says. "I tell them, 'There's nothing to be ashamed about. Just follow your conscience. You might feel powerless now, but you'll be powerful in the future'."

Surprisingly, he just might be right. Japan is beginning to discard its long tradition of shady backroom dealmaking and unconditional company loyalty in favor of a new cultural model of public accountability and transparency. As the country slowly and painfully comes to terms with the pressures of globalization and the legacy of 14 years of economic stagnation, whistle-blowing--or naibu kokuhatsu , "reporting from the inside," as it's known in Japanese--is mushrooming like never before. Look behind the recent spate of corporate scandals in Japan and there is often a whistle-blower involved. The investigation into whether there has been a vast financial fraud at megabank UFJ, for instance, was triggered by an insider who tipped off prosecutors that company managers were allegedly hiding compromising documents in a headquarters office. (The Tokyo Public Prosecutors Office has filed a criminal complaint against the firm and three former executives.)

Not all that long ago, the courageous few who dared to expose company cover-ups could count on being derided as mikkokusha --"snitches"--with no regard for collective harmony. Now they're being lauded as fighters for truth. "It goes without saying that whistle-blowing is effective in protecting the people's safety and health and the rights of consumers," Kyoto's leading newspaper recently wrote. "We need a law to inspire brave whistle-blowers."

Even the government of Prime Minister Junichiro Koizumi has seen the light. In June of this year Koizumi's cabinet pushed an unprecedented law through Parliament designed to enshrine new protections for those brave enough to speak their minds. It protects whistle-blowers from being fired so long as they go to company officials or regulators with their complaint, rather than the media. Though the law is under attack from reformist critics, who point out that among other things its provisions don't extend to the public sector--it's still a sign of a fundamental shift in Japanese attitudes.

There are no statistics on the number of corporate cases brought to public light by whistle-blowers, but there is plenty of anecdotal evidence. The fracas over Mitsubishi Motors' failure to recall cars ...