Photo/IllutrationKYB Corp. President Yasusuke Nakajima, center, and other executives apologize at a news conference in Tokyo on Oct. 16. (Shogo Koshida)

A major Japanese hydraulic equipment manufacturer made the shocking announcement that its employees for many years committed product quality fraud by falsifying inspection data for equipment used to protect buildings from earthquakes.

Executives of KYB Corp. on Oct. 16 confirmed the fake data concerning oil dampers used to control vibration and reduce shaking from earthquakes.

The company has found 499 base isolation dampers that fail to meet quality standards required for infrastructure ministry certification, as well as 1,914 units that do not measure up to the specs promised to customers.

An additional 5,137 units are currently under investigation, according to the firm. The total number represents more than 70 percent of all seismic dampers the company has shipped.

The confirmed or suspected cases of data falsification affect nearly 1,000 structures across the nation, including a number of public facilities with large daily visitor traffic, such as hospitals, government buildings and large commercial facilities, the company said.

They also include buildings that have been designated as key facilities for local communities in preventing and mitigating damage from natural disasters.

The recorded data fraud practices go back to 2003 with at least eight inspectors involved, according to the Tokyo-based manufacturer. The method for rewriting data was passed on verbally by employees who handled the inspection tests.

If a product fails to meet the standards set by the Ministry of Land, Infrastructure, Transport and Tourism or the specifications ordered by the client, it should be taken apart and readjusted for another inspection, according to the company’s rules.

The workers apparently doctored the inspection data to avoid this process, which takes about five hours to complete.

KYB says it will set up an independent investigative committee comprising outside experts to look into the cases, uncover the facts and identify the factors behind the fraud. The company has also promised to accept the panel’s proposals to prevent a recurrence.

What caused such a serious erosion of ethical standards within the company’s operations to manufacture products designed to protect the safety of buildings?

Finding an answer to this vital question requires an all-out, company-wide investigation.

In addition to the employees directly involved in the fraudulent practices, members of successive management teams that allowed such large-scale data falsification to continue for so long should be held severely responsible.

Third-party inspections of seven affected structures equipped with products sharply below the standards have found that they can sufficiently withstand quakes of an upper 6 to maximum 7 on the Japanese seismic scale, according to the company.

But the entire picture of the scandal has yet to be revealed. Nearly two years will likely be needed to replace all products shipped based on false data. That means quake safety inspections of affected buildings must be conducted swiftly.

The company should also give scrupulous, convincing responses to safety concerns among the owners and users of the affected buildings.

Japan’s manufacturing sector has been hit by a series of product quality fraud scandals in recent years. Many of them involve years of fraudulent practices.

Three years ago, for instance, Toyo Tire & Rubber Co. was found to have lied about the performances of its seismic isolation rubber products.

At the end of last year, Keidanren (Japan Business Federation), the nation’s largest business lobby, asked its member companies to carry out fresh in-house investigations to find if there are any fraudulent practices concerning product quality, such as data falsifications.

KYB said it failed to detect the problem at that time.

Japanese manufacturers’ products were once known for their “kajo hinshitsu” (excessive quality). The recent revelations about the data falsifications have raised suspicions that Japanese products were actually of “kaku hinshitsu” (fictitious quality).

These suspicions threaten to deliver a devastating blow to the credibility and reputation of Japanese manufacturing.

All Japanese companies need some rigorous realty checks of their own operations.

--The Asahi Shimbun, Oct. 19