Crisis Management

The Kawasaki Group’s Risk Management Regulations contain crisis management provisions set out in readiness for the emergence of a risk situation. These regulations set forth behavioral guidelines and response systems that serve to protect lives and preserve assets, minimize damage and loss, and expedite the resumption of business activities in the event of unplanned interruption. To prepare for crisis situations, we rely on the Crisis Management Organization, a horizontally integrated Group structure for crisis management, and have a structure in place to expedite the establishment of command centers at the Head Office and local works or offices, as necessary, to ensure a quick response in the event of a crisis.

In readiness for the event of a crisis, we have put in place a Crisis Management Organization to operate as a crisis management system integrated horizontally across the Group structure. The company president is the Chief Crisis Management Officer, while the head of each operating site or organizational unit acts as its Crisis Management Officer and supervises the setting up of a Crisis Management Office. The Crisis Management Office has the role of assisting the Crisis Management Officer and undertakes the task of putting in place and maintaining a mobilization system that operates routinely in the event of an emergency. Meanwhile, the heads of the various Head Office divisions and other staff members whom they designate form a dedicated support team for the Crisis Management Office.

If an accident or natural disaster occurs, information is sent where it is needed through a predetermined reporting route for use in times of emergency. This route is made known clearly to employees and executives through the Crisis Management Organization, which in normal circumstances underpins the Group’s crisis management structure. In cooperation with the emergency-activated reporting route, we have introduced contact networks in all business divisions and at all operating sites to ensure quick updates on the status of personnel and facilities throughout the Group.

In addition, we introduced an emergency communication system applicable to all companies under the Group umbrella that immediately confirms the safety of employees when a disaster occurs; tests are repeated every year to ensure that employees are familiar with the system and know how to use it.

In addition to the establishment of the aforementioned crisis management structure, the Kawasaki Group has formulated a business continuity plan (BCP) in preparation for a major earthquake centered on Tokyo or a similar major seismic event, or a pandemic caused, for example, by a new strain of influenza.
The plan was formulated with attention to the following basic principles:

1. Protecting the health and the life of employees and their families (including non-employees working on site and visitors)
2. Performing of duties essential to the fulfillment of our social responsibilities (commissions from customers, business partners, and government offices, and maintenance and restoration of mission-critical systems such as public infrastructure and civil defense)
3. Normalizing the business operations of the Kawasaki Group
4. Fulfilling responsibilities and contributing to local communities

Review of Business Continuity Plan

A business continuity plan (BCP) is itself a management strategy. It requires more than just typical preparations, such as setting up disaster-prevention equipment and running evacuation drills, to expedite emergency responses in the wake of a disaster. It must also detail approaches to ensure that business continues without interruption and that the corporate mission is fulfilled. The lessons learned in the Great Hanshin Earthquake, which hit the Kobe area in January 1995, formed the basis of the Group’s disaster-prevention measures, and the outbreak of a new influenza virus in 2009 prompted the establishment of a BCP. However, with the Great East Japan Earthquake of March 2011, the BCP was revised to enhance the Group’s ability to deal with the consequences of a large-scale earthquake.

1. Basic Corporate Policy

Basic corporate policy has been set for the KHI Group that clarifies courses of action to be taken in an emergency.
Naturally, human life is the highest priority, and once again we documented our commitment to fulfilling the social responsibilities incumbent upon an enterprise that plays such an essential role in the creation of social infrastructure. When a large-scale earthquake strikes, our focus must be on operational support for equipment, including aircraft and naval vessels, used in rescue activities, and efforts to restore and repair infrastructure systems or components thereof, such as rolling stock, power generation facilities and waste-processing facilities, as quickly as possible and to assist our clients and business partners in returning operations back to normal.

2. Head Office and Internal Company Priorities

We have identified priorities for the head office and internal companies in line with our basic corporate policy and have designated certain functions that must be maintained even in the event of disaster with due consideration given to the different business content of each internal company and the features inherent in products and services.

3. Response in Time of Disaster and Preparation during Normal Time

Many disaster scenarios indicate the possibility of a massive earthquake centered directly under Tokyo as well as a cascadelike triple megaquake event along the Tokai–Tonankai–Nankai segment of the Pacific Ocean coastline. Bearing these potential events in mind, we considered the responses necessary should such catastrophes occur and activities that could be undertaken during normal times to prepare for such eventualities.
We formulated a plan that designated specific divisions with a specific task, and outlined preparations necessary to achieve the desired objectives. Preparations are moving ahead in line with this plan.

4. Drills and Revisions

We are constantly running BCP drills and revising BCP content based on how the drills were performed.

What is a BCP?

The diagram below illustrates the concept of a business continuity plan (BCP). Showing operating efficiency on the vertical axis and elapsed time on the horizontal axis, it demonstrates the flow of recovery after a crisis. As indicated, operating efficiency drops suddenly just when disaster strikes, and then gradually recovers over time. With a BCP and preparations put in place during normal times, the following results can be expected.

• The impact on business, mainly the drop in operating rate that coincides with the disaster event, is held within the allowable range. That is, we realize a diminished impact on operations directly after the disaster event.
• The recovery period is shorter. That is, recovery is achieved more quickly.

When a disaster, such as a large­scale earthquake, occurs, the Company implements special business activities different from usual and requiring urgent action, such as confirming the safety of employees and initiating recovery operations.
To address emergencies quickly as circumstances demand, we have set up the following command centers.