ACRC Compensates for All Litigation Expenditure Due to Reporting to Enhance Reporter Protection

- Grounds for monetary rewards and awards made inclusive
to promote public interest reporting -

- Revised Act on the Protection of Public Interest Reporter
came into force on October 21 -

(20th Oct. 2021, ACRC)

Korean citizens will now be able to seek relief funds for expenses incurred in filing a lawsuit involving public interest reporting. Additionally, in case such a report leads to recovery of the State or local government’s fund, the administrative agency’s disposition for the fund recovery will make the reporter eligible for a monetary reward instead of a court’s decision.

The Anti-Corruption and Civil Rights Commission (Chairperson Jeon Hyun-Heui, ACRC) began implementing the revised Enforcement Decree of the Act on the Protection of Public Interest reporters on October 21, which will enable the compensation for expenses incurred for public interest reporting.

A reporter who has economically affected, such as a reduction in income, or has spent expenditure for a relocation, medical treatment, litigation, among others due to the public interest reporting can now seek a relief fund with the ACRC. Compensation used to be only applicable for litigation expenses to abolish unfair measures taken against the reporter, for example, dismissal and disciplinary punishments.

However, now all expenses for lawsuits filed due to public interest reporting are subject to relief funds. For instance, a reporter who would spend an attorney’s fee to defend himself in civil or criminal case against which he is filed for defamation after his reporting can be compensated for his litigation expenditure.

Importantly, the revised Decree is expected to significantly help public interest reporters as the compensation is retroactive for the expenses incurred before October 21 on which the updated Decree came into force. Previously, in case a public interest report resulted in a confirmation of the legal relationship regarding a recovery or increase of the State or local government’s revenue, the inside reporter was able to claim the Commission a monetary reward within two years from when he is informed of the decision.

However, monetary rewards will no longer require a court decision on compensation for damage or recovery of illicit gains, but an administrative agency’s measure for a fund recovery after reporting. Additionally, the application period is extended from two years to three.

For example, if a public interest report reveals a hospital’s illegitimate receipt of public fund for medical checkups, and the local government elects to retrieve the subsidy, the reporter is entitled to a monetary reward. Updated rules for the reward, however, will be applicable for public interest reports made after October 21, the effective date of the revised Decree.

The grounds for monetary awards for reporting was also made more inclusive. Formerly, only a public interest report that results in fines or penalties was subject to a monetary award, but now additional charges and levies are included.

In addition, a legal basis was formed to enable an administrative agency to voluntarily lessen or invalidate disciplinary actions taken against a reporter, if necessary, even through the ACRC does not demand the reduction or exemption, which has made the protection of reporters more timely and preemptive.

The ACRC Chairperson Jeon Hyun-Heui said “the revision of the Act has made the reporter protection and support system that the ACRC supervises more advanced and powerful. We will continue to work on updating the law to leave no one behind in protecting reporters.”

Major Amendments to Act on the Protection of Public Interest Reporters

- Promulgated on 20 Apr ’21 and effective on 21 Oct ’21 -

Reporter Support

○ To expand the grounds for relief funds, which were limited to litigation expenses for abolishing unfair measures, such as dismissal and disciplinary actions, to include all expenses for lawsuits filed due to public interest reporting

※ The compensation also applies to the litigation expenses incurred before the effective date of the updated Act.

○ To extend the application period for monetary rewards for Reporters from two years to three

- Formerly, the application period was within two years since the applicant is informed that a confirmation is made on the legal relationship regarding a recovery or increase of the State or local government’s revenues. However, the period has been extended to three years since the applicant is informed of a decision, or five years from a decision is made.

※ This clause is applicable to public interest reporting made after effective date of the revised Act.

○ To create a provision for restoring reward, and revise the provision for preventing overlapping payment of monetary rewards and awards, and relief funds

- A ground has been laid to retrieve a reward when the Reporter has received the payment with a false or illicit way.

- A revision has been made to prevent the case where the Reporter receives overlapping payments of a monetary reward or award, or relief fund according to this law and other laws at the same time.

※ This clause is applicable to restoration of monetary awards for public interest reporting made after the effective date of the amended Act.

Reporter protection

○ To build a ground for each administrative agency to voluntarily lessen or invalidate the responsibility of a Reporter

- An administrative agency has been made possible to lessen or invalidate disciplinary actions or disadvantageous administrative measures against the Reporter at its discretion, if deemed to be required, without ACRC’s call for the reduction or exemption of such measures.

※ This clause applies to disciplinary actions or administrative measures taken after the effective date of the revised Act.

※ (Before the revision) ACRC’s request was required to reduce or invalidate disciplinary actions or administrative measures.

(After the revision) The reduction or exemption of disciplinary actions or administrative measures can be made when the ACRC demands it or the administrative agency in charge recognizes a need for a reduction or exemption.

Major Amendments to Enforcement Decree of Act on the Protection of Public Interest Reporters

- Promulgated on 19 Oct ’21 and effective on 21 Oct ’21 -

Reporter Support

○ (Monetary rewards) To expand the grounds for monetary rewards regarding public interest reporting

- (Before the revision) A decision to receive compensation or restore illicit gains → (After the revision) A decision to provide compensation or restore illicit gains, or an administrative measure to receive compensation or to restore illicit gains

※ This clause applies to public interest reporting made after the effective date of the updated Act.

○ (Monetary awards) To expand the grounds for monetary awards on public interest Reporting in order to consider more diverse financial dispositions for the award

- (Before the revision) When Reporting results in fines or penalties → (After the revision) When Reporting results in fines, penalties, additional charges or levies

※ This clause is applicable to public interest reporting made before the effective date of the amended Act.

Reporter Protection and Reward

Cat.

Act on the Protection of Public Interest Reporters

What to report

◾ Acts detrimental to the public interest

- Acts detrimental to the health and safety of the people, the environment, the interests of consumers, fair competition, and public interest equivalent, and that are subject to a penalty or administrative measure according to 471 laws to which acts detrimental to the public interest is applicable.

Where to report

◾ The Anti-Corruption and Civil Rights Commission

◾ Administrative or supervisory bodies with authority in guidance, supervision, regulation, and investigation

◾ Investigative bodies

◾ Members of the National Assembly

◾ Public organizations, such as public enterprises,  established according to 471 laws to which acts detrimental to the public interest is applicable

◾ Managing Director or employer of the organization where an act detrimental to the public interest occurs

Proxy reporting through lawyers

◾ A Reporter can use the personal information of his lawyer as a proxy instead of his own when filing a report with the ACRC

☞ An inside Reporter may take advantage of ACRC’s advisory board (comprised of 100 lawyers) for free consulting and proxy reporting.

* Find the list of the lawyers on the board: Clean Portal (www.clean.go.kr) > Clean Portal menu > How to Report > Violation of Public interest > Advisory Board of Lawyers for Proxy Reporting (only available on the Korean website)

Protection of Reporters (including those who helped)

◾ Confidentiality

- Anyone shall not inform, disclose, or report the personal information or facts revealing the information of a Reporter without a consent of the Reporter

- Any violation may be subject to up to 5 years in prison or 50 million won (or 42,000 USD) in penalty

- The ACRC may request the disciplinary authority for a disciplinary action on the violator

☞ The Reporter to request the ACRC for investigating the account of the disclosure of his personal information.

◾ Protective measures

- Anyone shall not impose any disadvantageous measures against the Reporter for his reporting.

- Any violation (through disciplinary actions, pay cuts, etc.) may be subject to up to 2 years in prison or 20 million won (or 17,000 USD) in penalty.

- Any violation (through dismissal, release from office, etc.) may be subject to up to 3 years in prison or 30 million won (or 25,000 USD) in penalty.

- The Commission shall request the person who has taken disadvantageous actions for measures of reinstatement, payment of wages in arrears, etc.

☞

Disadvantageous measures

- Loss of social position (e.g. dismissal or release from office)

- Unfair personnel measures (e.g. disciplinary punishment or curtailment of salary)

- Personnel measures against the intention of the person himself (e.g. transference of position or withholding duties)

- Discrimination in performance evaluation or in payment of bonuses

- Discrimination that has a negative effect on the working conditions (e.g. cancellation of opportunities for education or training, or of qualifications for dealing with information)

- Acts that cause physical or mental harm (e.g. bullying, violence or threatening language)

- Unjust audit of duties

- Acts that give administrative disadvantage (e.g. cancellation of approval or permission) or measures that give economic disadvantage (e.g. cancellation of a contract)

To request the ACRC for protective measures

◾ Reduction of and exemption from responsibility

- Where an act of violation of a Reporter is found in connection with a Reporting, the Reporter may face reduced punishment or be exempt from the relevant punishment.

- Where an act of violation of a Reporter is found in connection with a Reporting, the Reporter may face reduced disciplinary actions or disadvantageous administrative measures, or be exempt from the relevant actions or measures.

☞ To request the ACRC for reduction of or exemption from responsibility

◾ Personal protection

- Where it is evident that a Reporter, his relative or cohabitant has suffered or is likely to suffer serious harm to his life or body due to a Reporting disclosure, he may request the Commission for personal protection

☞ To request the ACRC for personal protection

◾ Relief funds

- Where a Reporter pays expenses due to a Reporting disclosure, such the expenditure incurred in relocation, treatment, litigation procedures involving Reporting, etc., the equivalent amount may be paid.

☞ To request the ACRC for a relief fund

Monetary rewards for Reporters

◾ Grounds : Where a Reporting disclosure leads to a recovery of increase in revenues of the State or local government (the Reporter to make a request for a monetary reward)

◾ Eligibility: inside Reporters

◾ Amount: up to 3 billion won (or 2.5 million USD)

Monetary awards for Reporters

◾ Grounds: Where a Reporting disclosure brings property benefits to the State or local government, prevents loss, or promotes the public interest (ACRC to receive a recommendation from the institution in charge and grant the award at its discretion)

◾ Eligibility: all public interest Reporters

◾ Amount: up to 200 million won (or 170,000 USD)