Many schools and Universities have an "Honor" Code wherein students give a pledge to turn in any other student who they see or suspect to be cheating or breaking the rules.
This system effectively creates two types of students at these schools: the liar who says they agree with the Honor Code and the Snitch who breaks any type of loyalty only to protect themselves.
These groups do not breed the right atmosphere for a healthy environment of work and/or play.
Of course, there are certain times when reporting criminal and/or unethical behavoir is the right decision to make, but more often than not it is better to allow people to discover their own ethical code and leave the judging up to God.