Risk Management and BCM – Implementing Learning from the Japan Disaster

Osaka - Sunday, August 21, 2011




Nikkei, the leading Japanese newspaper specialized in economy and business, reported today that the Japanese government is to set up a back-up system in which western Japan can complement government function when a disaster should occur such as a huge earthquake that directly hits Tokyo, the capital of Japan.



This is because from the Japan disaster that occurred in March this year it became prominent that a system in which regions outside Tokyo can complement government and administrative functions in an emergency is critical for as business continuity and risk management.



1. What kind of functions are planned to be backed-up outside Tokyo for an emergency?



They are administrative including foreign diplomacy, defense, police and central government offices that are responsible for economic policies. Each function will set up complementary offices in western Japan so that the newly set-up offices will be able to replace the administrative functions should an emergency occur in Japan.



2. Where will such new complementary offices be established?



Locations of the new complementary offices will be decided based on disaster risk analysis including strength of the ground, possibility of landslides and earthquakes, and transportation convenience. Candidate prefectures include Osaka, Nagoya and Fukuoka.



3. How will new complementary offices be equipped?



New offices in western Japan will be equipped with video conference rooms and satellite phones that are less unlikely to fall into communication failure should a disaster such as earthquake occur. Data centre and IT systems will be established so that information and data necessary for each ministry to continue operating in emergencies will be stored. Also staff members required to manage the offices will be allocated.



4. Why the Japanese government made such a decision?



Simply put, it is a Business Continuity Management (BCM) of Japan by minimizing risk of government/administrative functions becoming paralyzed and economic activities falling into a chaos even if a disaster should strike Tokyo.



Currently the Japanese administrative organizations have no back-up organization/system(s) based on an assumption that a disaster covering a large area occurs and whole of Shutoken (Tokyo and its neighbours such as Yokohama, Chiba and Saitama) becomes paralyzed, which is almost equivalent to the country becoming paralyzed.



Complementary offices of central government offices are mostly located in Tokyo. Aligning with such a situation, over 60% of head quarters of large companies are currently located in Tokyo, and over 25% of GDP and population are concentrated in Tokyo. Thus, Japan is often said as “a country heavily concentrated in Tokyo, its capital”.



From the March 11 Japan disaster, it became clear that if a disaster should occur in Shutoken area it is quite possible that the economic activities throughout Japan will be in a chaos and the country will become paralyzed. Therefore, the Japanese government concluded that they would need to strengthen risk management by strengthening back-up organization/system of administrative functions by setting up complementary offices in western Japan.



5. Has there been any discussion of changing “Tokyo centralized country” before?



Yes, there has been such a discussion, such as relocating the Diet and administrative functions outside Tokyo. However, the discussion has cooled down because such a plan would require more than 10 trillion yen. Long lasting economic stagnation is a negative factor as well.



In comparison, establishment of back-up organization/system of government and administrative functions would require less cost, which is the reason why the Japanese government decided to study and discuss in earnest to put into action.



6. How the Japanese government is to proceed?



Ministry of Land, Infrastructure, Transport and Tourism (MLIT) that is responsible of mid- and long-term land and infrastructure planning is to request budget for the study (tens of million yen) in the upcoming 2011 budgeting revision in autumn. Committee constituting from experts from various fields will be established by the end of September, which is to create a report by the end of the fiscal year (March 2012) about the topic.



MLIT, Ministry of Finance, Ministry of Internal Affairs and Communications etc. are to set up cross-ministry meetings in 2012 to start discussing concrete issues of the topic, including review and improvement of legislation if necessary.





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Japanese government/administrative functions have long been concentrated in Tokyo, the capital of Japan but the government decided to establish a back-up system in western Japan by setting up complementary offices of central government offices etc. This is because from the March 11 Japan disaster, it became prominent that business continuity and risk management is necessary to avoid paralysis of administrative function and economic activity chaos should a disaster covering large area occur, hitting Tokyo.