Based on the Y2K Action Plan, adopted by the Advanced Information and Telecommunication Society Promotion Headquarters on September 11, 1998, the central and local governments as well as the private sector are implementing measures in response to the Y2K problem.
(1) Raising Awareness
The government is conducting an intensive campaign to publicize the Y2K problem through various media, including newspapers, magazines, television, and radio. In addition, government ministries and agencies are raising awareness of Y2K preparedness through such means as publishing documents, distributing pamphlets, and holding seminars for public corporations and industry organizations under their jurisdiction.
[For the general public]
[For small and medium-sized enterprises]
[APEC Y2K Week]
(2) Establishment of Information Dissemination Systems
Information regarding the public and private sector's Y2K preparedness is being provided through the Y2K home page, which was set up on the Web site of the Prime Minister's Official Residence and is connected to 22 central ministries and agencies and other concerned entities via the Internet. Additionally, 26 concerned ministries and agencies have established a system through which measures are taken against Y2K under the supervision of a chief secretary or higher ranking official. These ministries and agencies have also established their own Y2K liaisons.
1. Financial Sector
(1) Current State of Y2K Conversion
Since June 1998 the Financial Supervisory Agency has required financial institutions (banks, insurance companies, securities firms, etc.) to report quarterly on their Y2K conversion situation pursuant to Article 24 of the Banking Law. As of March 31, 1999, the financial institutions had reported the following:
(a) 793.5 billion yen is estimated as total cost necessary for Y2K conversion of whole financial institutions and the average costs are 12.9 billion yen for a major bank, 5.0 billion yen for a major insurance company and 1.3 billion yen for a major securities company (average cost for biggest three companies is 5.9 billion yen). Since the mid-1980s banks have been converting their core systems to four-digit year format as part of the third wave of online infrastructure installation. In the process, banks have collectively spent tens of billions of yen not included in the above figure for expenditures.
(b) With respect to critical systems, as of June 30, 1999, remediation work was 99% complete. Eighty-eight percent of financial institutions have completed remediation, and 77% have completed simulation testing. Simulation testing was projected to be 98% complete by June 30, 1999. Of all financial institutions, major banks, regional banks, and second-tier regional banks had all completed simulation testing by June 30, 1999.
Note: "Critical systems" are all systems that would directly impede operations if not fully Y2K compliant. They include systems connected to external systems and core accounting systems that directly affect settlement systems.
| Upper number = remediation, lower number = simulation testing | |||
| 99/3 (actual), | 99/6 (projected), | 99/9 (projected) | |
| Banks | 85% 72% | 100% 100% | 100% 100% |
| Insurance companies | 85% 72% | 97% 96% | 100% 100% |
| Securities companies | 86% 73% | 99% 99% | 100% 100% |
(2) Joint Connection Testing
For settlement-related systems, the most important of the critical systems, joint connection tests (industry-wide tests) were conducted in December 1998 and February, April, May, June, and July 1999 by the Bank of Japan (BOJ), the Tokyo Stock Exchange (TSE), and bankers associations throughout Japan, among others. Conducted on an unprecedentedly large scale even by global standards, the tests tested the BOJ Net, the Federation of Bankers Associations of Japan (FBAJ) system, and the TSE's trading and settlement systems. Test participants included major banks, regional banks, second-tier regional banks, and TSE-member securities firms. On the basis of the results of these tests, the BOJ concluded that data dated 2000 were basically sent and received normally via the test participants' various settlement systems.
(3) Contingency Planning
All financial institutions have been preparing contingency plans toward a scheduled completion date of June 30, 1999, as a precaution against emergencies. As of June 30, 1999, all major banks, regional banks, and second-tier regional banks had prepared a contingency.
Additionally, on April 6 the BOJ announced an outline of a contingency plan for the Y2K problem. On July 13 the BOJ announced the plan's priorities (e.g. conducting an external connection test of the BOJ Net on January 2). The Tokyo Bankers Association (FBAJ system, Tokyo Clearinghouse) and the TSE also have prepared their own contingency plans.
(4) The Financial Supervisory Agency's Y2K Efforts
(a) In addition to collecting the aforementioned reports, the Financial Supervisory Agency since October 1998 has been conducting inspections of financial institutions, mainly major banks, placing priority on the Y2K problem. These inspections are being conducted under the supervision of an inspection staff that includes four individuals recently hired from the private sector who have specialized knowledge of and actual experience related to the Y2K problem.
(b) Henceforth, the Financial Supervisory Agency intends to further intensify its monitoring of individual financial institutions to verify the completion of Y2K compliance measures, the content of contingency plans, and other such matters. The Agency also intends to conduct inspections placing priority on these matters and to implement necessary measures pursuant to the Banking Law based on the inspections' findings.
2. Energy Sector
(Electric Power)
(1) Current State of Y2K Conversion
As of June 30, 1999, the simulation testing completion ratio (the average percentage of simulation testing completed by all power companies) for critical control systems was 98.8%. The power companies plan to be 99.4% completed with their Y2K conversion work on these systems by September 30 and 100% completed by November 30. Because power companies will conduct simulation testing concurrently with periodic inspections at certain power plants, the testing had yet to be completed by June 30. However, the power companies actually have a proven track record of compliance, having already conducted simulation testing at similar power plants. Hence, they have verified that there will be no problems at the plants yet to be tested.
| 99/6 | 99/9 | 99/11 |
| 98.8% | 99.4% | 100% |
(2) The power companies have investigated all critical control systems, including their microchip design and programming. The results of the investigation are as follows:
(3) Contingency Planning
In terms of emergency management, power companies are routinely prepared to respond to natural disasters and other emergencies. To ensure thorough preparedness for Y2K problems, each power company has already formulated a contingency plan that includes provisions for establishment of a Y2K Task Force, development of communication arrangements, deployment of additional standby personnel, preparation for manual operation of power plants, preparation for startup of standby power plants, and action to be taken in response to large users' load fluctuations. The power companies intend to continually revise these plans as necessary.
(Gas)
(1) Current State of Y2K Conversion
As of June 30, 1999, the major gas companies had completed all Y2K compliance work on their critical control systems, with the exception of a system undergoing a hardware upgrade (simulation testing completion ratio: 98.9%). For this remaining system, upgrading and simulation testing is scheduled to be completed by September.
(2) The gas companies have investigated all critical control systems, including their microchip design and programming. The results of the investigation are as follows:
(3) Contingency Planning
In terms of emergency management, gas companies are routinely prepared to respond to natural disasters and other emergencies. To ensure thorough preparedness for Y2K problems, each gas company has already formulated a contingency plan that provides for establishment of a Y2K Task Force, development of a communication scheme, augmentation of standby personnel, and verification of and training in emergency procedures, including preparation for manual operation of gas production and supply equipment. The gas companies intend to continually revise these plans as necessary.
(Oil)
(1) Current State of Conversion
As of June 30, 1999, the simulation testing completion ratio (the average percentage of simulation testing completed by all oil companies) for critical control systems was 91%. Oil companies plan to verify that no problems will occur, using actual equipment to conduct simulation testing of critical control systems concurrently with periodic maintenance checks. For refining plants, however, most of the periodic checks are scheduled during this autumn. Hence, the oil companies plan to complete the entire Y2K compliance process for all systems by October.
(2) Oil refiners and distributors, in cooperation with hardware and software manufacturers, are investigating their critical control systems, including all systems' constituent hardware equipped with a micro-computer, and rectifying any problems that exist. They plan to complete this process per the above schedule.
(3) Contingency Planning
In terms of emergency management, oil companies are routinely prepared to respond to natural disasters and other emergencies. To ensure thorough preparedness for Y2K problems, oil companies are formulating contingency plans based on the crisis management manual prepared by the Petroleum Association of Japan in February 1999. These plans include provisions for establishment of organizations and systems, augmentation of standby personnel, and schemes for cooperation with external entities. As of June 30, 1999, 16 of 27 companies had already formulated a contingency plan. The remaining companies plan to do so by September 30, 1999.
(The Ministry of International Trade and Industry's Y2K Efforts)
(1) The Ministry of International Trade and Industry's Agency of Natural Resources and Energy has formed a third-party committee of outside experts and has been cross-checking the electric power, gas, and oil industries since April 1999 from the standpoint of a neutral specialist. The committee has concluded that each company's Y2K compliance methods are appropriate.
(2) Since Y2K compliance is especially critical in the case of nuclear power plants, they were separately cross-checked ahead of other power plants by a committee of experts. The committee concluded that the Y2K problem will not adversely affect nuclear power plants' safe and stable operation because the critical measurement and control equipment in all Japan's operational nuclear power plants is being adequately checked and rectified to ensure Y2K compliance. On June 21 the Agency of Natural Resources and Energy reported regarding this matter to the Nuclear Safety Commission.
(3) The contingency plans formulated by energy companies will likewise be studied in detail, taking into consideration outside experts' opinions, with the aim of ensuring highly effective crisis management.
(4) In the event that such a committee deems that an energy company's Y2K compliance efforts are inadequate and the stability of Japan's energy supply may consequently be affected, the regulatory authorities will collect reports or conduct inspections pursuant to the applicable industry law and take action as necessary (e.g. issuance of a business improvement order) based on their findings.
3. Communication Sector
(Telecommunications)
(1) In the telecom sector, communication connection, transmission, and switching does not entail processing of information that includes the year. Hence, there is no specific problem with respect to the flow of communication itself. However, there is concern about malfunctions in data support systems that process data that include the year (e.g. data storage services, billing systems).
(2) Current State of Conversion
According to the results of a survey of telecom carriers, as of June 30, 1999, simulation testing had been completed on 99.7% of critical communication systems, such as telephone lines and leased lines (97.8% for mobile telephones). This testing is expected to be 100% complete by September 30, 1999.
| Upper number = remediation, lower number = simulation testing | |||
| 99/3 | 99/6 | 99/9 (scheduled) | |
| Telephone/leased lines, etc. | 91% 69% | 99.7% 99.7% | 100% 100% |
| Mobile telephones | 80% 74% | 97.8% 97.8% | 100% 100% |
(Broadcasting)
(1) In the broadcasting sector, there are concerns that malfunctions of automatic transmission systems for broadcast programming may affect program transmission.
Broadcasters are actively addressing Y2K issues and striving to provide information to the public through broadcast programs.
(2) Current State of Conversion
According to survey results, as of June 30, 1999, simulation testing for critical control systems was 80% complete. By September 30, the Y2K compliance process is scheduled to be nearly 100% complete, with the exception of work unable to be completed due to system upgrades or other unavoidable circumstances. The minority of broadcasters that are lagging behind in the Y2K compliance process will be consulted with individually and asked to expedite the compliance process with the aim of early completion.
(3) Contingency Planning
By September 30, 1999, 78% of broadcasters plan to formulate a contingency plan. Henceforth, the Tokyo-based key stations of nationwide networks will provide guidance to their local affiliates to expedite the process of formulating contingency plans.
(Other)
In July 1999 the Ministry of Posts and Telecommunications established the Year 2000 Computer Problem Task Force to fully address the Y2K problem in the communication sector. The Task Force intends to collect and disseminate information both domestically and internationally and to comprehensively coordinate Y2K conversion efforts, including communication with concerned entities.
4. Transportation Sector
(Aviation)
(1) Air Traffic Control System
In March 1999 the air traffic control system was simulation-tested and verified to be problem-free. International simulation tests were conducted in conjunction with the U.S. in October 1998 and Hong Kong in December 1998. In July 1999 joint tests were successfully completed with Russia, Singapore, China, and Taiwan. Additional joint simulation tests are scheduled to be conducted with other neighboring countries.
(2) Airlines
According to the results of a survey of 11 airlines, as of June 30, 1999, the simulation testing completion ratio for critical control systems (e.g. flight planning systems) was 97%, with nine of the airlines having completed their tests. Of the two remaining airlines, one plans to complete its testing by July 31, 1999 the other by September 30, 1999.
Critical administrative systems (e.g. reservation and boarding systems) were all completely Y2K compliant by June 30, 1999.
(3) Passenger Aircraft
Airlines are implementing appropriate measures (e.g. updating of software) based on the results of Y2K studies by Boeing and Airbus, the major manufacturers of passenger aircraft. Boeing and Airbus have conducted demonstration flights with actual aircraft, thereby verifying that Y2K problems will have no effect on flight safety.
(4) Contingency Planning
A contingency plan for the air traffic control system had been formulated by June 30, 1999. Seven airlines, including the three major ones, had likewise formulated their contingency plans by June 30, 1999. All the remaining airlines are scheduled to have their plans formulated by August. Contingency plans pertaining to the operation of domestic and international flights on December 31, 1999, and January 1, 2000, are scheduled to be formulated by July 31, 1999. Those pertaining to international flights are scheduled to be approved by the International Civil Aviation Organization (ICAO) by August 30, 1999.
(Railways)
(1) Current State of Conversion
According to the results of a survey of 37 major railway companies, as of June 30, 1999, the simulation testing completion ratio for critical control systems (e.g. operation control systems, power control systems) was 98%. Eighty-nine percent of the railway companies have already completed simulation testing. All the remaining companies plan to do so by September.
For critical administrative systems (e.g. reservation systems, ticket vending machines, automated turnstiles), the simulation testing completion ratio was 96% as of June 30, 1999, with 86% of railway companies having already finished testing these systems. By September, all railway companies except one (which is scheduled to test a telephone reservation system in November) are scheduled to complete their testing.
(2) Contingency Planning
Fourteen percent of companies have already formulated a contingency plan. All the remaining companies plan to do so by August 30.
(The Ministry of Transport's Y2K Efforts)
(1) The Ministry of Transport (MOT) intends to individually consult with transport carriers that have not yet completed system remediation and ask them to expedite the Y2K compliance process. In addition, if there is a risk that failure to complete the Y2K compliance process in a timely manner may jeopardize people's safety or markedly disrupt the public's daily life, the MOT intends to forcefully direct the concerned carriers to implement requisite measures.
The MOT has requested that all transport carriers formulate a crisis management plan and submit it to the MOT by August 30, 1999. The MOT intends to check the plans and dispense advice as necessary.
(2) In July 1999 the MOT established a Y2K Task Force to comprehensively coordinate Y2K compliance efforts, including communication with other concerned entities.
5. Health Care Sector
(Medical Equipment)
(1) Current State of Conversion
(Medical Facilities)
(1) Current State of Y2K Conversion
Of the medical facilities throughout Japan, the MHW is providing guidance on a priority basis to those 2,038 facilities where patients' life or health would be greatly jeopardized if Y2K problems occurred (e.g. urgent care centers, key disaster response hospitals, medical facilities with ICUs (including CCUs and NICUs)) and that have been designated as a key medical facility by the prefectural government.
According to the results of a survey, as of June 30, 1999:
6. Water Supply Sector
(1) Core water supply facilities (e.g. water purification plants, water distribution systems) use computers to automatically adjust such variables as water supply volume and the amount of chlorine added to the water, based on water demand and raw water quality. In most cases, computer operation is not date-controlled, and systems can be operated manually in the unlikely event that a computer does shut down. Hence, water supply would be unaffected.
(2) As of June 30, 1999, the simulation testing completion ratio for all water utilities' critical control systems was approximately 90%. The same ratio for other critical systems is 100%. Simulation testing has largely been completed. The systems for which testing has yet to be completed are those unable to be tested yet due to a scheduled hardware replacement or other unavoidable circumstances. In addition, water utilities are proceeding to formulate contingency plans as a precaution against emergencies.
7. Small and Medium-Sized Enterprises
(1) According to survey results, as of June 1999:
| 97/7 | 98/9 | 99/6 | |
| Compliance work underway/completed | 38% | 67% | 79% |
| Under consideration/yet to be considered | 62% | 33% | 21% |
| 98/9 | 99/3 | 99/6 | |
| Compliance work underway/completed | 51% | 59% | 66% |
| Under consideration/yet to be considered | 49% | 41% | 34% |
(2) Future Course
Since the formulation of the government's action plan, small and medium-sized enterprises' Y2K compliance efforts have been steadily progressing, partly as a result of various assistance programs. The government intends to continue comprehensively implementing various measures, diligently carrying out activities to promote widespread recognition of the importance of addressing Y2K issues. Such activities include augmentation of consultative services and formulation of crisis management plans.
Government ministries and agencies have sent questionnaires to 74,193 private companies (companies sent questionnaires by more than one ministry/agency are counted more than once) in a total of 87 industry classifications. As of June 30, 1999, 42,662 questionnaires had been returned (58% response rate).
(1) In comparison to survey results of March 1999, the Y2K compliance process in all industry classifications had progressed for both administrative processing and control systems. In terms of the simulation testing completion ratio, simulation testing of administrative processing and control systems was generally over 70% complete. In every industry classification, the simulation testing completion ratio had increased since the March survey by at least 10 percentage points for administrative processing systems and at least 20 percentage points for control systems. The numbers of companies that had completed simulation testing and remediation, respectively, had also increased considerably.
(2) The percentage of companies that had formulated a contingency plan had increased substantially across the board between March and June. In addition, in the majority of industry classifications, most companies plan to formulate a contingency plan by September 30, 1999.
1. Central Government and Public Corporations (Excluding Medical Facilities)
(as of June 30, 1999)
| (A-ranked systems) | 558 systems | |
| Remediation completed (including systems determined | ||
| not to require remediation; ditto below) | 529 systems (95%) | |
| Simulation testing completed | 487 systems (87%) | |
| Formulation of contingency plan completed | 364 systems (65%) | |
| (B-ranked systems) | 377 systems | |
| Remediation completed | 328 systems (87%) | |
2. Medical Facilities
(as of June 30, 1999)
| (A-ranked computer systems) | 1,245 systems | |
| Remediation completed | 953 systems (77%) | |
| Simulation testing completed | 816 systems (66%) | |
| Formulation of contingency plan completed | 627 systems (50%) | |
| (A-ranked medical equipment) | 176,946 machines | |
| Remediation completed | 170,728 machines (96%) | |
| Simulation testing completed | 153,067 machines (87%) | |
| Formulation of contingency plan completed | 111,168 machines (63%) | |
| (B-ranked computer systems) | 10 systems | |
| Remediation completed | 7 systems (70%) | |
Certain A-ranked systems are scheduled for remediation and/or simulation testing in July or thereafter due to such factors as the timing of hardware replacement or conversion to a new system. Y2K compliance work on all these systems is scheduled to be completed by December 31.
According to a survey, as of June 30, 1999, the status of systems ranked A or B by local government bodies was as follows;
| A-ranked | 4,668 systems |
| B-ranked | 898 systems |
| A-ranked | 42,112 systems |
| B-ranked | 9,263 systems |
(1) Current State of Y2K Preparedness
(Prefectures)
The prefectures have completed remediation work on 89% of A- and B-ranked systems and simulation testing on 82% of such systems. In addition, they have formulated contingency plans for 51% of the systems. By October 31, the prefectures plan to have completed 97% of remediation work, 96% of simulation testing, and 92% of contingency plan formulation.
(Municipalities)
The municipalities have completed remediation work on 76% of their A- and B-ranked systems. They have completed simulation testing on 48% of the systems. They have also completed formulating contingency plans for 13% of the systems.
By October 31, the municipalities plan to have completed 96% of their remediation work, 90% of their simulation testing, and 67% of their contingency planning.
(2) Ministry of Home Affairs' Y2K Compliance Efforts
Vendors (including manufacturers) of computers, software, and equipment equipped with microcomputers were surveyed as of June 30, 1999. Surveys were sent to a total of 3,017 companies in 28 industry classifications. A total of 1,604 responses were received (53% response rate). The survey results are summarized as follows:
1. State of Ascertainment of Necessity of Y2K Conversion for Own Products
(1) Nearly all of the respondent companies stated that they have ascertained the necessity of Y2K compliance measures for all or at least 3/4 of their products.
(2) In six industry classifications (1. consumer appliances, 2. wrapping and packaging equipment, 3. automobiles and automotive parts, 4. industrial vehicles/trucks and terrestrial internal combustion engines, 5. toys, and 6. gas and petroleum equipment), the respondents stated that none of their products require Y2K conversion.
2. Status of Dissemination of Information to Users Regarding Necessity of Y2K Conversion for Own Products
(1) In terms of dissemination of information (notification) to individual users of products that can be checked by the users themselves, in the 22 industry classifications in which respondents stated that they have products requiring Y2K conversion, 88% of the respondent companies reported that they have notified 75% - 100% of users individually.
(2) In terms of the status of information dissemination to many unidentified users via the Internet or other means, most of the respondent companies have set up a Web site and made considerable progress in disseminating information. In 13 industry classifications in particular (including computers and peripherals, computer software, electric control equipment, electronic measurement equipment, communication equipment, heavy electric machinery, consumer electronic equipment, and office equipment), over 80% of the respondent companies are disseminating information via the Internet.
3. User Support Arrangements for Period Around New Year's Day
Seventy-five percent of the respondent companies stated that they have already decided or are considering whether to make arrangements for providing user support (e.g. establishing a liaison for responding to inquiries) during the period around New Year's day
4. The Ministry of International Trade and Industry's Y2K Conversion Efforts
The Ministry of International Trade and Industry (MITI) is continuing to urge companies to disseminate information to individual users as expeditiously as possible. MITI is also proceeding with the formulation of contingency plans.