1. Finance
(1) Although few financial institutions completely finished renovation of their all computer systems for the Year 2000 (Y2K) problem by the end of September 1998, their processes of preparation seem to be on track. Japanese financial institutions budgeted a certain level of funds to deal with the Y2K problem during the third major computerization boom of the early 1990's, totaling several tens of billions of Yen. This contributed to the preparation for Y2K.
(2) According to the September 1998 reports from financial institutions, 51% of banks, 53% of insurance companies, and 41% of securities companies had carried out simulation tests of their critical computer systems; such as accounting systems. Over 70% of banks, insurance companies, credit unions, credit associations, and small and medium-sized securities companies are expected to finish renovation by the end of 1998, and 70% of them are expected to complete testing by March 1999 (June 1999 for securities companies). An increasing number of institutions have clarified specific policies on the Y2K problem, including the appointment of responsible officials, allocation of necessary budgets, and the formulation of management plans.
(3) In order to check Y2K readiness at the whole industry level, joint industry-wide tests for banking and securities settlement systems, such as the Bank of Japan Network System, the Zengin system and the Tokyo Stock Exchange System were carried out in December 20, 1998, and are to be followed by tests in February, May, and June 1999. This will verify whether the end-to-end processes of banking services are completed without any Y2K troubles.
The industry-wide test held on December 20 proved that the financial data exchange was carried out without any major problems. It shows that Y2K preparations are proceeding satisfactorily. The test of the nationwide retail automated teller machine (ATM) network is planned in April 1999.
(4) The Financial Supervisory Agency is preparing a Banking Law Section 26 order (establish programs to comply, or to suspend part of the operations) over financial institutions in which preparation is behind and where there is concern for the financial markets' stability.
2. Energy
(Electricity)
(1) Global picture: the completed Y2K conversion levels are different among the companies, but all of them have systematic countermeasures in place and conversion as a whole is proceeding.
(2) More concretely, Y2K conversion is completed on 67% of the important computer control systems, including simulation testing. Before the end of June 1999, conversion will be completed on 95% of important computer control systems. Conversion on a few systems will not be completed by the end of June 1999, because some power stations are waiting for their regular inspections to carry out Y2K simulation. Since testing has already been carried out on similar power station types, such a delay is not a serious concern.
(3) The important computer control systems included are in nuclear power stations, thermal power plants, hydropower plant substations as well as dispatching and communication systems. However, it is confirmed that the systems controlling supply of real time electricity, such as the simultaneous control of generating plants, do not contain chronological information data and all the embedded chips used have also been identified as being unaffected by Y2K. Therefore, there will be no incidents resulting in supply failures, such as power outages or voltage abnormalities. It has also been noted that there will be no safety problems caused by abnormal voltage.
Y2K conversion is necessary for computer control systems which monitor equipment or record operator conditions and will be completed according to the above-mentioned schedule. Comprehensive Y2K conversion is expected to be achieved in this sector.
(4) Each company provides detailed information such as the Y2K conversion situation for all power stations through the Internet.
(City Gas supply)
(1) Global picture: the completed Y2K conversion levels are different among companies, but all of them are working based on a fixed plan.
(2) More concretely, Y2K conversion was completed on 50% of important computer control systems including simulation tests at the end of October 1998. Every company will complete Y2K conversion before the end of June 1999, except a portion of some systems which require hardware replacements. They are planned to be completed in September 1999.
(3) It is confirmed that there will not be any problems in gas supply or security because the control systems for gas production and supply do not use chronological information data and do not influence any other sectors by chronological information data operation .
Y2K conversion is necessary for the computer control systems of monitoring and recording, but it will also be completed based on the above-mentioned schedule. It is expected to achieve comprehensive Y2K conversion in this sector.
(Petroleum refining and marketing)
(1) Global picture: the completed Y2K conversion levels are different among petroleum (refining and marketing) companies because of a different schedule of maintenance for their refineries. All of them are working hard on a fixed planning basis and the general situation is improving.
(2) More concretely, Y2K conversion, including simulation testing, was completed on 56% of the important computer systems that control refineries and oil distribution systems at the end of October 1998. More than 90% of the companies will complete Y2K conversion before the end of September 1999.
(3) It is expected that comprehensive Y2K conversion in this sector will be achieved.
3. Info-communications
(Telecommunication)
(1) Global picture: the completed Y2K compliance levels are different among companies, but the general situation is improving. Generally speaking, connection control systems or equipment in telecommunication networks do not operate on year related data, however as billing systems or related equipment such as those that automatically account for telecommunications fees are included, more survey or conversion is required in order to evaluate those systems that might influence functions or performances of telecommunications services.
(2) More concretely, simulation testing was completed on 46% of critical-missioned telecommunications systems as of October 1998. 70% of the companies concerned will fulfill the simulation testing before the end of June and 86% of them will do so before the end of September 1999. It is necessary to accelerate the Y2K conversion works in this sector.
(3) In order to follow up on the surveys made in October 1998, a similar survey was conducted at the end of December 1998 among major telecommunication service providers which showed that the average level of simulation testing completion for criticalmissioned telecommunications systems was 71%, a large improvement in comparison with the previous number of 35%, which was recorded at the October's survey. Concerning telephone service, the biggest provider, NTT, has already constructed or converted all telephone systems of switching or customer service with/to a 4 digit date format.
(Broadcasting)
(1) Global picture: as of October 1998, the general situation was improving. More concretely, 32% of the related companies have completed Y2K conversion on important computer control systems, including simulation testing.
At the next stage, 61% of them foresee completing their conversion before June 1999, and 79% before September 1999. It is necessary to accelerate the Y2K conversion works in this field.
(2) In order to follow up the survey made in October 1998, a similar survey was conducted on December 1998 for NHK and five other major urban broadcasting service providers. It showed that NHK had already completed necessary renovations and would make a final verification. Among the five private providers, two had already completed their conversion when they changed their headquarters buildings and the others also had already been completed or were under renovation. Since February 1999, they had consecutively executed simulation testings.
4. Transportation
(Aviation)
(1) Y2K compliance on air traffic control systems will be completed by the end of March 1999, including validation testings. In the context of international interoperability testing, a joint operation was conducted between the civil aviation authorities of Japan and the United States and it was confirmed that no problem had occurred.
(2) The system for all air carriers operating scheduled flights is under renovation. More than 45% of them foresee completing their compliance on critical systems after June 1999, but coordination efforts are being given to finalize as much as possible by June 1999.
(3) According to the surveys made by the major passenger aircraft manufacturers, BOEING and AIRBUS, there are very few systems on the aircrafts which will be affected by Y2K problems, and every air carrier has already been informed of the measures to be taken. The air carriers are now working to include adequate measures, such as software rectification.
(Railway)
(1) Works to complete Y2K conversion are generally proceeding smoothly, but as a few companies had not started renovating some important systems, some delay was observed among these companies. It is necessary for them to accelerate works to complete Y2K conversion on the important systems.
(2) More concretely, as of December 1998, 18% of them had completed conversion on their important control systems, 69% of them were under renovation, and 11% of them were conducting surveys. 49% of them will complete their conversion before June 1999, and 100% of them before December 1999.
5. Health Care
(1) Global picture: in October, many companies providing medical equipment had started Y2K conversion works in various ways and they seemed to be sufficiently aware of this problem. In some cases, individual conversion works were difficult to be evaluated. To promote Y2K conversion, the competent authorities instructed related companies to accelerate Y2K conversion works and to complete the simulation tests before December 1998 for the priority medical equipment, especially those like artificial aspiration machines or life keeping equipment that might directly affect patients' lives, and before June 1998 for the other equipment.
(2) More concretely, according to the sampling survey made in October 1998, about 60% of medical equipment makers had finalized checking their products, and the remaining 20% were still checking them. At that time, they had not found any elements that might create a Y2K problem. At present, all the medical equipment makers are required to report on their conversion situation by the end of 1998 and the authorities will take accurate measures by giving guidance to the companies for which conversion results are not sufficient and by obtaining quarterly information on their updated situation.
(3) Concerning the situation of Y2K conversion on equipment used in medical institutions, according to the sampling survey made in October 1998, more than 70% of them were taking measures, by requesting information from makers, but 26% of them had just started.
Currently, all the medical institutions are instructed to carry out self-examination, such as verification on medical equipment and information security or establishment of contingency planning. Especially, the hospitals which are under the responsibility of the Ministry of Health and Welfare put special labels on related equipment to describe whether Y2K simulation testings have been already accomplished on these products, and, to prepare for eventual Y2K accidents. They also are setting contingency planning which includes the setting up of a permanent staff standby system for 0:00 a.m. January 1, 2000.
6. Water Supply
(1) Main water purification facilities such as water treatment or distribution systems use computers to automatically control the quality of treated water in response to row water quality and to evaluate the input level of chlorine or output level of water according to the volume of water consumption. However, as these computers do not use date related information data, main water purification facilities will not stop at Y2K and problems should not occur. Besides, even if a part of these facilities stop their functions, as manual methods are replaced, there will be no disruption.
(2) According to the sampling survey among waterworks, all of them replied that Y2K will not influence them and even if it does, it will be temporary. They could recover by manual method and none of them foresee stopping the water supply.
(3) Nevertheless, the Ministry of Health and Welfare continue to carefully promote prevention measures in order to not create any serious accidents in the water supply by Y2K.
7. Small and Medium sized Enterprises (SMEs)
(1) The Y2K conversion situation of SMEs is improving every year and is following the survey carried out from October to December 1998 by directly dispatching to companies agents of SMEs associations. 30% of them had not yet started conversion works or were under recent study, and a remarkable number of SMEs were delayed on conversion.
(2) Not only by conducting public awareness activities, tax preferential measures or soft loans with low interest, in order to minimize the number of SMEs which have not commenced Y2K conversion, it is also necessary to strengthen supporting measures, such as direct guidance of SMEs associations to individual companies, to set up local help desks, to dispatch free system engineers to SMEs or to provide low price lease service of equipment, etc.
8. other
In the above-mentioned priority sectors, contingency plans have not been sufficiently elaborated yet. Therefore, in order to promote contingency planning in each of these sectors, the Working Group of the Y2K Advisors' Conference will develop a manual to elaborate on the contingency plans, then, after discussion at the Advisory Conference, publish it before the end of March 1999.