A colleague in the same team spends most of his time (if not all) conducting private business activities through company’s electronic communication systems or his own cell phone during regular working hours dedicated to company. Usually he comes in office at 9am and leaves at 10am for hours then show up again in the afternoon around 2pm or 3pm. Not mention sometimes doesn't appear for the whole day at all (there is no need for us to work outside the office). Even when he is in the office at his desk, it doesn't seem he is doing company's job - surfing internet about his own business and making/receiving a lot of phone calls which are not work related. It has been like that for almost 3 months. This is definitely against company's policy and I think it's unfair to other team members because we are in the same team and have to share more workload on the projects. However, it seems that our direct team manager knows what he is doing as I overheard they were talking about his private business sometimes - I sit just next to him, but the manager doesn't do anything and even covers him by assigning him less jobs. They are in very good personal relationship though as what I know.
Should I report to higher level management or HR in this case? If yes, what and how should I do? Should I only report my colleague's misbehavior or together with my manager's irresponsibility? Would people think I am a snitch if I do so?