Meeting of Compliance Managers and Practitioners for FY2025
The JPMA Code Compliance Committee held the "2025 Meeting of Compliance Managers and Practitioners" in an online format on March 26, 2026. The meeting was attended by 244 persons/68 companies from member companies, including compliance managers and compliance practitioners, and was conducted in accordance with the following program. A summary of the meeting is reported below.
Program of the "FY2025 Meeting of Compliance Managers and Practitioners
Chairperson: Masato Wakai, Chairperson of JPMA Code Compliance Committee
(1) Opening Remarks: Kaoru Ouchi, Chairperson of JPMA Code Compliance Committee
(2) Special Lecture: "Important Points of the Torihiko Law that JPMA Companies Should Keep in Mind
-Practical Points in Light of the Revised Law
Takaki Tanaka, Attorney at Law, Ikeda Someya Law Office
(3) Acknowledgement: Yoshiyuki Ishida, Executive Director, JPMA
(4) Special Lecture: "Outline of the Amended Whistleblower Protection Act and Practical Points to Consider"
Takaaki Kanayama, Attorney at Law, Mori Hamada & Matsumoto
(5) Acknowledgement: Yoshiyuki Ishida, Executive Director, JPMA
Opening remarks
JPMA Code Compliance Committee Chairperson: Kaoru Ouchi
Ms. Kaoru Ouchi, Chairperson of the JPMA Code Compliance Committee, opened the meeting by stating that the JPMA industry is positioned as the core of the pharmaceutical and biopharmaceutical fields in the government's growth strategy and bears an extremely heavy social responsibility to support the lives and health of the public, and that despite the rising expectations, a single inappropriate act can lead to a loss of trust in the entire industry. Despite the rising expectations, a single act of N-row impropriety could lead to a loss of trust in the industry as a whole.
Since this year coincided with two important amendments to laws and regulations that have a significant impact on compliance activities, special lectures were planned by two lawyers who are active on the front lines of the industry and were structured to respond to practical questions received from member companies in advance.
He stated that compliance is not an obstacle to business activities, but is positioned as a guidepost and an engine in the name of trust to build trust from the perspective of patients and society, and that it is important to foster companies through clear communication by management and field-led practice.
Special Lecture
Important Points of the Whistleblower Protection Act that Pharmaceutical Companies Should Keep in Mind - Practical Points in Light of the Revised Act
Dr. Takaki Tanaka, Attorney at Law, Ikeda Someya Law Office
In this lecture, he reorganized the former Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors (Subcontract Act) as the "Act on the Appropriate Treatment of Contract Transactions with Small and Medium-sized Entities (Torihiki Hou)" and explained the amendment of the Act, which aims to ensure appropriate price pass-on and wage increase resources for the entire supply chain including small and medium-sized businesses against a background of rapid increases in labor, raw material and energy costs in recent years. The amendment is aimed at improving the fairness of transactions by correcting business practices that have long been regarded as problematic, such as unilateral price fixing without consultation.
Characteristics and Basic Structure of the Whistleblower Protection Act
The Law is a supplement to the Antimonopoly Law's "Abuse of Superior Bargaining Power" and is characterized by its more limited and clear scope of application, obligations and prohibited acts, and the limited measures that can be taken by the authorities. It is characterized by the fact that it is more limited and clear-cut in its application and in the limited measures that can be taken by the authorities. It imposes on contractors the obligation to (1) clearly state the details of the order, (2) prepare and preserve documents, etc., and (3) set payment due dates. It also stipulates prohibitions on refusal to accept, reduction of price, purchase, unilateral determination of price, and other prohibited acts. If a company is found to be in violation, a recommendation will be issued and the name of the company will be made public, which will have a significant impact on the company's social credibility.
2. review of applicable standards (capitalization standards and employee standards)
The amendments significantly revised the applicable standards and introduced a new "employee standard. The employee standard is used as a supplement to the capital standard when the capital standard is not met. This is due to the existence of inappropriate practices, such as companies with small capital but large business scale, or companies that request capital increase from the contractor in order to avoid the application of the Subcontracting Law.
The employee standard is based on the "number of employees regularly employed," which is determined by the number of workers for whom a wage ledger is prepared. With regard to manufacturing outsourcing, outsourcing to companies that employ less than 300 full-time employees is subject to practical attention. It is important to note that the judgment is made "at the time of consignment," and the applicable relationship to the relevant transaction is maintained even if the number of employees changes after the transaction.
3. prohibition of unilateral determination of price without consultation
One of the core points of this amendment is the new prohibition of "unilateral determination of the amount of payment without consultation. In the event of circumstances that affect the price, such as an increase in labor or raw material costs, a shortened delivery date, a change in the order quantity, or a request for a price reduction from the consignor, a unilateral decision on the price without consultation or without providing sufficient explanation or information, despite a request for price consultation by the small- and medium-sized contracting business operator, is prohibited. Acts are prohibited if they unreasonably prejudice the interests of the small and medium-sized fiduciary enterprises.
This regulation differs from the "buyout" regulation, which simply looks at the resulting price level, in that it focuses on the appropriateness of the negotiation process. Even in cases where a company refuses to comply with a request for a price increase, it is necessary to present a rational basis, and cannot be justified merely on the grounds that the company's profits will be worsened.
4. expansion of regulation of transportation consignment
Under the recent amendment, "specified consignment of transportation" was newly added to the scope of regulation. Previously, only transportation as a re-consignment was subject to regulation as a service provision consignment, but from now on, transportation of goods incidental to product sales or manufacturing contracts will also be subject to regulation when all or part of the transportation is consigned to other businesses. This includes not only finished products, but also transportation associated with the paid supply of raw materials, transportation to customers or customer-designated destinations, and partial outsourcing of routes.
On the other hand, transportation between bases within the same corporation, free samples, and free supplies are, in principle, exempted. However, there are many cases where it is difficult to judge from a practical standpoint, such as when a company uses its own bases as part of the route for sales purposes, so manufacturers should be particularly careful.
5. method of payment and other important revisions
Payment of bills is now prohibited. Even electronically recorded receivables and factoring are not allowed if it is difficult to cash out the equivalent amount of payment by the due date. In addition, having small and medium-sized fiduciary businesses bear bank transfer fees is no longer allowed, even with a written agreement.
The flexibility of practice has been enhanced, as it is now possible to clearly state the terms and conditions of the transaction by electromagnetic means such as e-mail, EDI, and SNS, even without the consent of the counterparty. On the other hand, violations of the obligation to clearly state transaction terms may result in penalties, so it is essential to periodically review whether transactions are subject to the new requirements.
6. points to keep in mind in practical business correspondence 2.
For companies, it is essential to identify transactions that are newly subject to the TOCOM Act, check the number of employees and transportation consignment, and develop a price negotiation process. It would be effective to include an obligation to report the number of employees in the basic contract, and to periodically check publicly available information. In addition, it is important to cooperate not only with the legal and compliance departments, but also with the procurement, logistics, and SCM departments to ensure that the pressure to reduce costs does not become an undue burden on small- and medium-sized businesses, and that it permeates throughout the company.
Acknowledgements
JPMA Managing Director Yoshiyuki Ishida
Dr. Tanaka thanked the lecturer for his careful explanation of the background and purpose of the amendment to the Act on Promoting Proper Trade Practices and practical points to keep in mind, and stated that he had learned a lot from this lecture. In particular, the lecture provided an opportunity to reaffirm that words and senses used in the past as a matter of course may not be appropriate in light of the current system and social environment, and to break away from the "ordering attitude that prioritizes cost reduction" formed during the deflationary period, and to encourage small and medium-sized contractors to secure appropriate profits and pay their employees in the era of rising prices. In this era of rising prices, it is important for small and medium-sized contractors to secure appropriate profits and build business relationships that enable them to pay their employees. Compliance officers are expected to play a role in correctly disseminating new rules and ideas to business divisions and preventing inappropriate transactional behavior for the convenience of the division. He expressed his determination to continue to reflect the content of the lecture in his internal responses and strive to achieve appropriate transactions.
Special Lecture
Outline of the Amended Whistleblower Protection Act and Practical Points to Keep in Mind
Mori Hamada & Matsumoto, Attorney at Law Dr. Takaaki Kanayama
The purpose of this lecture was to understand the content and background of the revised Whistleblower Protection Act, to summarize how it will affect the practical operation of whistleblower systems in companies, and to present the direction of future responses.
Background and History of the Amendment
The Whistleblower Protection Act was enacted in 2004, and was substantially revised in 2020 (to take effect in 2022), including the introduction of an obligation to establish a system and the expansion of the scope of informants. The amendment also doubled the number of articles from 10 to approximately 22. The Diet Supplementary Provisions mandated that the effectiveness of the system be verified and reviewed as necessary approximately three years after the enforcement of the amendment. This revision is based on this "three-year review provision," and was realized after less than one year of discussion, with the Consumer Affairs Agency taking the lead in examining and surveying the actual situation starting in 2024.
2. international trends and drivers of revision
A major factor driving the revision is the international trend toward strengthening whistleblower protection: the EU adopted a whistleblower protection directive in 2019, and national legislation and institutional strengthening has been underway across member states. In addition, the UN Working Group on Business and Human Rights pointed out that Japan's whistleblower protection system is "insufficiently effective," and considered the weak deterrent effect and remedies against unfair treatment to be problematic. Based on these international evaluations and comparisons between Japan and other countries, the need to strengthen the system in light of global standards was shared, and momentum for revision grew.
3. Four Pillars of Amendment
The first pillar of the revision is to ensure that businesses have a whistleblower system and improve its effectiveness. Administrative authority over violations of the obligation to designate whistleblower service providers has been strengthened, and orders, on-site inspections, and criminal penalties for violation of orders have been newly established. In addition, the obligation to inform employees of the content of the whistleblower system has been clearly stipulated in the law, and a shift to a "system that actually functions" is required, rather than merely establishing a formal system.
The second pillar is to clearly address factors that discourage reporting. Actions to discourage reporting by asking a person not to report or by suggesting a disadvantage are prohibited as "obstruction of reporting," and any agreement to the contrary is considered invalid. In addition, the law clearly prohibits search activities for the purpose of identifying whistleblowers, and emphasizes that inadvertent interviews or access checks within a company can be a violation of the law.
The third pillar is the expansion of the scope of whistleblowers. Previously, the focus was on workers, dispatched workers, and executives, but with this revision, freelancers (including those who have been out of work for one year or less) have been newly added to the scope of protection. As a result, reports from subcontractors must also be accepted by the in-house contact, and termination of contracts or reduction of order quantities due to reports will be prohibited as disadvantageous treatment. Since lack of awareness in the workplace can lead to violations of the law, it is important to raise awareness of the law at the practical level.
The fourth pillar is to strengthen deterrence and remedies against disadvantageous treatment. If a company dismisses a whistleblower or takes disciplinary action against him or her within one year of his or her whistleblowing, it is presumed that the dismissal or disciplinary action was due to the whistleblowing, and the company bears the burden of proof. Furthermore, criminal penalties have been introduced for dismissal or disciplinary action on the grounds of whistleblowing, and not only the individual substantive decision-maker but also the corporation may be fined up to 30 million yen. This further increases the importance of keeping records of how personnel actions are considered.
4. Types of reporting and protection requirements
Under the reporting system, reporting is classified into three categories: (1) reporting within the business unit (No. 1), (2) reporting to administrative agencies (No. 2), and (3) reporting to media, labor unions, and other parties outside the business unit (No. 3). In particular, the first category is less stringent, and even a "suspicion" of a violation is easily protected. On the other hand, because No. 2 and No. 3 reports are external reports, they are subject to additional requirements for protection compared to No. 1 reports, such as the requirement of truthfulness and reasonableness. In particular, the third type of reporting, such as reporting to the media, has even stricter protection requirements than the second type of reporting.
5. Major Issues in Practice
One of the practical issues is how to deal with "harassment reporting" and "abusive reporting. Since harassment cases may fall under criminal law, careful investigation is required on the premise that they fall under whistleblowing. In addition, there is no clear concept of "abusive reporting" under the current law, and it is difficult to easily reject an investigation. Therefore, for example, in the case of repeated reports, if the repeated reports do not contain any new facts and are about the same case, there is a justifiable reason not to investigate and no additional investigation is conducted, which is a realistic operational judgment.
6. Enforcement Schedule and Future Responses
The amendment was promulgated on June 11, 2025 and is scheduled to take effect on December 1, 2026. During the period leading up to the enforcement, the Consumer Affairs Agency is expected to revise its guidelines and publish Explanations, and businesses will be required to develop a system and review their operations in light of these revisions. The protection of whistleblowers requires not only the development of a system, but also the understanding and implementation of the system throughout the entire organization, and a company-wide response that includes not only compliance managers but also management and front-line workers is essential.
Acknowledgements
JPMA Managing Director Yoshiyuki Ishida
As an acknowledgment to Dr. Kanayama's lecture on the revised Whistleblower Protection Act, he emphasized that there were many suggestions directly related to practical business. The whistleblower reporting system has developed in response to harassment and other issues, but in practice, there are still many cases of "abusive" reporting, and the possibility that serious problems may be contained in such reports cannot be denied. In addition, he indicated the need to instill a common understanding and appropriate mindset throughout the entire company, including managers, rather than leaving compliance to specialized departments alone. He concluded by saying that it is an important issue for the future to make sure that compliance is not merely a response to rules, but takes root throughout the entire organization as a system that is actually understood and practiced in the field.
(Daisuke Ishii, Practice Committee Member, Code Compliance Committee)