Measures to Expand Scope and Application
of Whistleblower Protection Act
The Whistleblower Protection Act of 2011 provides for whistleblower protection and rewards in connection with enforcement cases. The actual amounts of rewards paid under the Act have increased over time, with the ACRC reporting a total of KRW 5.5 billion in rewards paid out in 2020. However, the Act is limited to a defined scope of “covered statutes,” such that the Act applies only to whistleblower reports relating to violations of such covered statutes. Due to the increased demand for a stronger, more robust public whistleblowing environment and protection for an expanded scope of whistleblowers, the Whistleblower Protection Act was amended on May 19, 2020 and became effective on November 20, 2020 (the “Amended WPA”).

The Amended WPA increases the number of “covered statutes” from 284 to 467. This is the single largest expansion of the Act since it first came into effect on September 30, 2011. The notable additions include laws that directly affect companies, such as the “Anti-Discrimination and Disabilities Act,” “Gender Equality Employment Act,” “Fairness in Distributor Transactions Act,” “Protection of Communications Secrets Act,” the “Copyright Act,” and “Act on Special Cases Concerning the Punishment of Sexual Crimes.”

With a considerably expanded scope of “covered statutes” under the Amended WPA, we understand that a wider range of governmental agencies is becoming more proactive in implementing measures to promote whistleblowing activity. This will likely result in greater public awareness of whistleblowing, which often in turn leads to an uptick in not only public whistleblower reports (i.e., to government entities) but also in internal corporate whistleblower reports as well. The Whistleblower Protection Act obligates companies to take reasonable measures, such as protection of whistleblowers and an appropriate level of internal investigation, so companies will be well-advised to use this as an opportunity to closely review their whistleblowing report procedures, including whistleblowing protection compliance, as well as internal processes for receiving and handling whistleblower reports.

Based on the reforms and changes to the anti-corruption and compliance environment outlined above, 2021 may become a year where changes to the local applicable laws and enforcement methods of anti-corruption and compliance will affect companies in a way that had not been foreseen before. These various changes have given government regulators and authorities more power to exercise its enforcement powers and therefore, we recommend companies to check and reinforce its compliance systems in the near future.

Kim & Chang   39, Sajik-ro 8-gil, Jongno-gu, Seoul 03170, Korea
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