Observations on Fires and Other Accidents at Industrial Facilities in Japan

Although damage caused by natural disasters has attracted most attention in recent years, fires and other accidents at industrial facilities also occur more regularly. In many cases, these also result in large-scale damage. While each individual incident has its own distinctive causes, we conducted interviews with experts and studied relevant documents to see whether there is any kind of common root cause behind these accidents.

According to statistics from the Fire and Disaster Management Agency, the number of accidents in recent years started to increase in 1994, and it has levelled off since 2007. If we compare 1994 (the year with the fewest accidents since 1989) with 2020, the number of accidents has approximately doubled even though the number of hazardous facilities decreased by around 29%. The number of accidents has also decreased from the record high in 2018, but remains at a high level. (Fig. 1)

^{Source: Fire and Disaster Management Agency, Dangerous Goods Safety Office, “Summary of Accidents Relating to Hazardous Items in 2020”}

The Fire and Disaster Management Agency has also compiled and reported on the factors causing these accidents. According to their report, 57% of fire accidents in 2020 were attributable to human causes, exceeding the 28% attributable to physical causes and 15% to other causes. Moreover, ever since the Fire and Disaster Management Agency started publishing data on cause ratios, the number of human-attributable causes has always exceeded the number of physical causes.

According to our interviews with experts in the field, trends over time can be split broadly into four periods since the mid-1960s based on trends in the number of incidents. The social context and manufacturing industry environment made a significant impact on the data. (Fig. 1 and Fig. 2)

• First period - 1965 to 1980 - Increase in accidents
  This is a period of stable growth following the Second Oil Crisis which became part of the trigger to the collapse of Bubble Economy. The number of industrial facilities (hazardous facilities) also increased along with mass consumption. Due to severe operational conditions, a lot of accidents were caused by unexpected technical defects.
• Second period - 1980 to 1994 - Decrease in accidents
  This is a period of stable growth following the Second Oil Crisis that continued up to the collapse of the bubble economy. The number of accidents at industrial facilities (hazardous facilities) decreased. One of the conceivable factors behind this was the penetration of safety measures based on 'Genba-ryoku' (practical worksite skills) which is underpinned by a strong sense of company belonging influenced by the Japanese-style employment environment.
   
• Third period - 1995 to 2006 - Increase in accidents
  Alongside the decrease in number of accidents in the second period, there was also a decrease in sharing and exchanging organizational knowledge and experience. This period was followed by the collapse of the Bubble Economy, and it was likely that the cost cutbacks impacted the deployment of safety measures as well as employment, dampening workers’ sense of belonging to their companies. This period followed the collapse of the bubble economy, and it is likely that cost cutbacks also impacted safety measures and employment, dampening workers’ sense of belonging to their companies.
• Fourth period - 2007 to the present - Increase in accidents
  The problems have not fundamentally changed since the third period, and in fact may have worsened and become more consolidated. The concerns include aging of hazardous facilities making them more prone to accidents; the lack of passing down safety know-how due to retirement of the baby-boomers; and the rapid increase in the number of non-regular employees.
  
  As if to support this, there were 4 large accidents occurred in the petrochemical industry around 2010. For each of the accidents, the focus was not only on the direct causes, but also on causes linked to safety culture.

^{Source: Safety & Tomorrow No.121 “Study of the dramatic increase in accidents with hazardous materials - Kyoichi Kobayashi”}

Soft factors and hard factors were identified when closely looking at the recent accidents:

• Soft factors 
  • Decline in 'Genba-ryoku' (practical worksite skills) 
    'Genba-ryoku' was initiated by the baby-boomers, which was also the source of the competitiveness of the Japanese manufacturing industry, continued to decline with the retirement of this generation. While the economic stagnation impacted the Japanese management style to be less advantageous and put further pressure on costs, a new work environment emerged where the passing down of technical skills was hindered due to the worsening labour shortage as well as diversification of employment into non-regular, temporary, and other forms such as outsourcing.
• Hard factors
  • The attitude of Japanese companies toward risk evaluation
    For example, regulations such as the Fire Service Act and the Building Standards Act represent a minimum standard. While the government’s expectation is that necessary measures should be determined based on the company’s own evaluations of risks, many companies likely think that it is enough to simply satisfy the regulations. One example that illustrates this is that many factories do not have sprinklers installed since it is not required by regulations. 
     
  • Aging
    The available statistics suggested that companies do not actively pursue capital investment into their aged facilities and machines. The sense of crisis is wide-reaching, with the government-initiated Smart Industrial Safety and Super Certified Plant System initiatives being promoted to address the problem of aging equipment.

 Industry and the government are pursuing various initiatives to foster a safety culture. The petrochemical industry that experienced large accidents formulated an action plan in 2013 relating to industrial safety, which was also based on a proposal by the Ministry of Economy, Trade and Industry. And the industry continues to follow this plan.

Government initiatives to prevent accidents include the Fire and Disaster Management Agency setting up widespread liaison conferences with industry groups. Also, as mentioned above, the Ministry of Economy, Trade and Industry has also been promoting the improvement of capabilities for industrial safety through the initiative of Smart Industrial Safety and Super Certified Plant System.

The aforementioned approach taken by the petrochemical industry, which experienced major accidents around 2010, seems to have worked well so far as there have been no major accidents since then. But in other industries, large-scale accidents still occur. When asked whether initiatives to foster a safety culture could take root in all industries and whether we could return to an era of stability as in the past, the experts we met for discussions were not optimistic at all.

We once had the highest level of safety in the world thanks to our 'Genba-ryoku' (practical worksite skills), but these mechanisms have deteriorated. Given this, we believe it is time to consider adopting Western-style approach towards safety. In other words, we should carry out thorough risk assessments on hardware (facilities and machines) to reduce these risks as much as possible. There will still be risks that could not be eliminated or mitigated, but it is important for us to have a better understanding around these areas and make informed decisions on how to address them properly. On the other hand, despite the decline in 'Genba-ryoku' (practical worksite skills), there are still many workplaces where company culture emphasises cooperation and diligence. Japan’s strength can still be found in daily health and safety activities, such as KYT (kiken yochi training or hazard prediction training) and 5S (seiri, seiton, seiso, seiketsu, and shitsuke, or organizing, tidying, cleaning, cleanliness and discipline). A hybrid model combining Japan's strength with Western-style safety measures focused on hardware would be one of the best strategies at present. 

However, when proceeding with the core initiative of making machines and equipment safer, companies naturally cannot ignore the issue of cost. Under the circumstance where it is hard to imagine a period of mid-to-long-term growth for the Japanese economy, companies are strengthening their tendency to accumulate internal reserves, which in FY2020 reached a record high for the ninth year in a row of approximately 484 trillion yen. Unfortunately, it is said that keeping down capital investment and labour costs have contributed heavily to this.

Some experts we met for discussions expressed that they also have high expectations for the non-life insurance industry as a way of breaking out of this difficult situation. In other words, we need to strongly encourage the deployment of safety measures when underwriting risks. We truly hope that the re/insurance industry re-looks at these issues and actively explores how we can contribute further to wider industries in Japan.