The charitable interpretation of for the reason why companies ask things to be reported internally is that espousing a stance where people have to report things

The charitable interpretation of for the reason why companies ask things to be reported internally is that espousing a stance where people have to report things externally could itself be treated as being equivalent to turning a blind eye to malpractices. Legal stuff is weird like that; this is also why airlines will refuse to apologize for accidents, because such a statement could be equated to mean that only the airline was to blame for the accident without consideration of other factors that may have been out of their control, such as faulty designs on the part of the airplane manufacturer that would have been difficult to verify for the airline.