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| Kobe Steel reports findings on air emission problems |
|
June 22, 2006
As reported on May 22, 2006, Kobe Steel, Ltd. discovered at its Kakogawa Works
and Kobe Works that air emissions had deviated from emission standards, data had
been handled improperly, and boiler accidents had not been reported. Kobe Steel
expresses its deep regret and sincerely apologizes for these incidents, which
caused a loss of trust among the community, relevant agencies and other stakeholders.
Kobe Steel compiled a report on the results of an internal investigation and submitted
it today to the Chubu Kinki Industrial Safety and Inspection Department in the
Nuclear and Industrial Safety Agency, which is under the Ministry of Economic
Trade and Industry (METI); to Hyogo Prefecture; and to Kakogawa and Kobe cities.
To determine the causes of the problems, Kobe Steel investigated its business
processes as far back as it could, conducting interviews and surveys with approximately
350 individuals to collect pertinent information. In 25 meetings involving the
entire task force members and small-group meetings, the contents of the findings
were confirmed, and measures were planned and discussed. Following deliberation
by the Compliance Committee and Kobe Steel's Board of Directors, the following
conclusions were reached.
|
| 1. Fact finding |
|
Although there were a variety of reasons for the problems, it was found that the
inappropriate handling of environmental data had continued for many years due
to the under awareness of some managers.
The company's top executives regret that upper management failed to grasp the
situation, and as a result, the unlawful conditions were allowed to continue for
many years. Despite environmental protection and compliance being top priorities
at Kobe Steel, the Company focused on production and did not follow emission standards,
a breach of its own compliance rules. Furthermore, Kobe Steel could not audit
these incidents adequately and could not make the necessary corrections. Kobe
Steel recognized that these conditions were not due to individual employees, but
were the fault of its internal control system.
|
| 2. Measures concerning company organization and administration |
|
| 2.1. |
|
Throughout the company, Kobe Steel will thoroughly implement policies
that place top priority on environmental protection and compliance. Kobe
Steel will execute expanded education based on these priority areas relevant
to its operations and business activities. |
| 2.2. |
|
Kobe Steel will increase the number of people in environmental administration
in the head office. The executives responsible for environmental administration
in Kobe Steel will have the authority to stop production at manufacturing
facilities. The current staff of eight will be increased to 15. In addition,
environmental auditing will be conducted under a system that includes Kobe
Steel's Audit Department and outside consultants (e.g. auditing firms). |
| 2.3. |
|
Kobe Steel will set up the Environmental Control Committee to be headed
by the President of the company. The committee will include the participation
of outside experts. Reports on the environmental control situation will
be made and third-party opinions will be obtained. |
| 2.4. |
|
To ensure the transparency of the environmental measurement data, a system
will be implemented that will enable environmental administration in the
head office to always have access to the measurement data. The environmental
control data of Kakogawa and Kobe works will be made available to the government
and local community. |
| 2.5. |
|
The environmental control departments at Kakogawa and Kobe works will
have the authority to stop production at their respective facilities. Employees
for the departments will be increased and environmental patrols will be
implemented. A system will also be created to monitor environmental control
data 24 hours a day. |
At Kakogawa Works, the current Environmental Control & Plant Safety Section
will be upgraded to the Environmental Control & Plant Safety Department. The
current eight members will be increased to 23.
At Kobe Works, the current six members will be increased to eight.
|
| 3. Measures covering technology and facilities |
|
| 3.1. |
|
So that emissions do not deviate from the statutory limits, operational
methods will be standardized and facilities will be upgraded and maintained.
|
| 3.2. |
|
To improve and maintain the environment at Kakogawa and Kobe works, environmental
work already under consideration in the Medium-Term Business Plan will be
implemented ahead of schedule. At the same time, new capital investments
will be made. A total of approximately 27 billion yen will be invested in
planned and new investments. |
Capital investments will include:
|
Measures to reduce emissions |
| |
* |
Automatic combustion control at boilers |
| |
* |
Low NOx burners at boilers and annealing furnace |
| |
* |
Desulfurizer at Kakogawa's No. 6 boiler |
| |
* |
Upgrading of desulfurizer at sintering plant |
|
Measures to reduce dust |
| |
* |
Build dust-control fence at raw materials yard. Increase the
number of dust collectors. |
| |
* |
Increase and upgrade environment measuring devices. |
| |
* |
Upgrade environmental control systems. |
| 3.3. |
|
To prevent further facility accidents at Kakogawa's in-house power plant,
Kobe Steel will upgrade the condensers and boiler tubes. Existing boilers
will be replaced successively with low-pollution models. |
| 3.4. |
|
Placing top priority on complying with emission standards, work standards
will be revised (i.e. reducing production levels and in some cases ceasing
operations), and education programs will be thoroughly implemented. |
|
| Disciplinary actions |
|
Due to the emission problem, the Board of Directors on June 20 decided on the
following disciplinary actions.
| Title |
Name |
Disciplinary Action |
| Chairman |
Koshi Mizukoshi |
50% reduction in pay for 3 months beginning
in July |
| President & CEO |
Yasuo Inubushi |
50% reduction in pay for 3 months beginning
in July |
| Executive Vice President |
Toshio Kimura
(Head of Iron & Steel Sector) |
40% reduction in pay for 3 months beginning
in July |
| Executive Officer |
Tsuyoshi Tanaka
(General Manager, Kakogawa Works) |
Demoted to Senior Officer effective June 20 |
| Executive Officer |
Masaaki Nakazono |
Demoted to Senior Officer effective June 20 |
| Officer |
Takanori Kominami
(General Manager, Kobe Works) |
30% reduction in pay for 3 months beginning
in July |
In addition, four managers who were involved will be reprimanded and transferred
elsewhere.
As a member of society, Kobe Steel recognizes the gravity of its responsibilities.
Kobe Steel is placing its full efforts into implementing measures to prevent further
occurrences throughout the company.
Further details on the causes and measures to correct the deviation from the air
emission standards and improper handling of data are outlined below. This information
has been submitted to the Chubu Kinki Industrial Safety and Inspection Department
in the Nuclear and Industrial Safety Agency, which is under the Ministry of Economic
Trade and Industry (METI); to Hyogo Prefecture; and to Kakogawa and Kobe cities.
|
| Kakogawa Works |
|
 |
1. Air emissions exceeded the statutory limits stipulated under the Air
Pollution Control Law. |
|
1.1. The Facts
Data on the boilers for in-house power generation covering the past five years
was examined. Records for steel production facilities covering the past three
years were also inspected. The inspections on the boilers and steel production
facilities represent a cumulative total of 1.3 million hours of operation.
As a result of the inspection, it was discovered that nitrogen oxide (NOx) and
sulfur oxide (SOx) emissions had at times deviated from established emission standards.
In cases where data was missing, it was feared that emissions had also deviated
during the unaccounted periods.
Statutory limits have been stipulated for NOx and SOx emissions under the Air
Pollution Control Law (i.e. emission standards for each equipment) and under the
pollution control agreements set forth with Hyogo Prefecture and Kobe City (i.e.
total emission volume per hour). With regard to the number of hours the emissions
had deviated from the emission standards and the improper handling of records
had occurred, the figures were recalculated. (In cases where records were unavailable,
the amount of fuel supplied and past operation records were collated, and the
highest assumptions were used in the calculations.) The findings concluded that
emission figures on a total volume basis were found to be lower than the agreed-upon
levels.
| |
Actual Emission |
Agreed limits |
| Sulfur oxide (SOx) |
525.1 |
|
| Nitrogen oxide (NOx) |
566.9 |
|
| Table 1. Air emission data |
(Unit: m³N/h) |
| Equipment |
Hrs |
Item |
Limit |
Max. value |
Cause |
| No. 4 boiler |
13 |
NOx |
180ppm |
-- |
To prevent black
smoke, excessive air was used.
No. 5 boiler has no NOx gas reduction equipment. |
| No. 5 boiler |
22 |
NOx |
100ppm |
115ppm |
| No. 6 boiler |
22 |
SOx |
K value 1.75 |
K value 2.37 |
Fuel blockage due to use of wood
chips. Insufficient supply of low-sulfur coal. |
| Blooming mill |
96 |
NOx |
170ppm |
-- |
Low sealability |
| No. 1 pellet sintering
furnace |
2 |
SOx |
K value 3.5 |
K value 4.62 |
Insufficient treatment
of high-sulfur iron ore |
| Alloy sintering |
5 |
NOx |
260ppm |
415ppm |
Operating with excessive
amount of oxygen |
| Annealing furnace |
2 |
NOx |
150ppm |
176ppm |
| Total |
162 |
|
|
|
|
Table 2. Operations exceeding statutory
limits by equipment and speculated major causes
(In the case where deviations were known or where deviations could be determined
from estimations of the operating conditions) |
| Notes: |
|
NOx concentration is equivalent to NOx value.
In the maximum value category, no figures mean clear values could not be
determine. |
| Equipment |
Hrs |
Item |
Limit |
| Boilers 1 to 5 |
357 |
NOx |
100 to 190 ppm |
| No. 6 boiler |
626 |
SOx |
K value 1.75 |
| Total |
983 |
|
|
Table 3. Equipment operating outside emission
standards
(In the case where data was unavailable, and emissions could have gone beyond
limits) |
The inappropriate handling of data is as follows:
| 1. |
Record charts discontinued at
times |
993 hours |
| 2. |
Data omission at environmental
control system when emissions were beyond the standards (lack of measurement
values) |
101 hours |
| 3. |
Handwritten alteration of data |
209hours |
| 4. |
Automatic alteration of data
at environmental control system |
389 hours |
| 5. |
Handwritten chart
records |
237
hours |
| 6. |
Inappropriate use of sampling
method for reanalysis during periodic measurements (batch analysis) |
21 hours |
The total hours of operation amounted to 1,950 hours.
In addition, it was found that record charts were not kept at times for the steel
production facilities.
1.2. Findings of the internal Investigation
After conducting the internal investigation, the Company came to the following
conclusions.
Boilers
In 1977, the No. 5 boiler went into operation. The discontinuance of the record
charts took place some time during the first two to three yeas of operation, because
in the initial years operational skill was not established and it was difficult
to meet the emission levels set forth under the Electricity Utilities Industry
Law. With the awareness of the staff, record-keeping was stopped for short periods
of time. After the operational skills were fully established, the No. 5 boiler
began operating well, and stable operations continued for a 10-year period.
In 1990, the No. 6 boiler went into operation and various types of coal were tested.
The same practice of not keeping records, as occurred at the No. 5 boiler, went
on for two years.
In addition, the No. 6 boiler started to use recycled fuel in 1999 and operators
found it difficult to maintain emission levels within the standards set forth
in the Electricity Utilities Industry Law. Until May 2005, when the use of wood
chips, a type of recycled fuel, was terminated, the same practices as previously
mentioned were continued.
The operating condition of the boilers, which supply energy to all manufacturing
facilities in the steelworks, has a substantial influence on the manufacturing
facilities. Stopping the boilers disrupts the byproduct-gas balance and affects
costs at the steelworks.
The power plant operators were strongly aware that violating the Electricity Utilities
Industry Law would invite scrutiny by the government. To avoid scrutiny, records
were not kept for certain periods of time or were altered. While boiler operators
understood the significance of compliance, they placed a higher priority on the
continuous operation of the facilities. This was the fundamental cause of the
problem.
In the investigation, although it was uncertain whether the staff gave clear instructions,
the keeping of incomplete record charts and other practices went on for such a
long time that the operators believed the staff naturally had the same understanding.
Although a number of staff members did not know the frequency and other details
of the incidents, they suspected misconduct had been going on.
Environmental Control System
In 1977, a system went into operation that corrected measurement devices and eliminated
abnormal readings that resulted from system malfunctions. Shortly thereafter,
emission standards were registered within the steelworks to prevent deviations
from the statutory limits and a warning function was added for this purpose.
Deviating from the emission standards is rare in practice. When emissions go over
the limits, Kobe Steel is required to inform Kakogawa City of the fact. At the
same time, it must conduct an investigation on the cause and implement corrective
measures. The internal investigation discovered that judging from the computer
functions and capabilities at that time, it was impossible for computers to register
emission levels outside the standards.
In 2001, the environmental telemeter system, which brings together environmental
data in the steelworks, was upgraded. At that time, the systems staff incorporated
a program that deleted abnormal readings, as well as deleted deviations of emission
standards. This practice was passed down from predecessors.
In the process of transferring figures on "abnormal values" and "values
over the standard," abnormal values were supposed to be deleted while values
over the standard were to be retained for the purpose of internal warning. However,
both ended up being deleted.
On the other hand, when the computer was upgraded, managers should have known.
However, workers said it was not a new function, but an existing one. After this
explanation, the matter was not pursued and was overlooked.
In upgrading the environmental telemeter system, the most important system of
trust between the Company and the local area and government, the work was left
to only one person. Management at that time had the chance to check on the work,
but did not. This situation should have been recognized, but no corrections were
made. This was an even bigger problem.
|
2.Non-reporting of equipment accidents at in-house power plant and failure
to undertake safety control review
|
|
Of the equipment accidents at the in-house power plant that occurred between 2001
and 2004, 12 incidents went unreported to the Chubu Kinki Industrial Safety and
Inspection Department in the Nuclear and Industrial Safety Agency under the Ministry
of Economic Trade and Industry. In the safety control reviews for the authorities,
internal records in most cases falsely reported the incidents as "stoppage
for power adjustment."
The internal investigation uncovered that work pertaining to the Electricity Utilities
Industry Law was concentrated to the boiler and turbine technical managers. As
a result, the incidents were left unreported to the authorities, and furthermore
there was no awareness that accident reports were subject to submission. In other
words, Kobe Steel, as an organization, did not properly understand the law and
act accordingly.
From 2005 to 2006, Kobe Steel discovered five incidents in which periodic reviews
were not carried out. These periodic reviews should have taken place after mandatory
periodic inspections of the power generation equipment. In May 2005, Kakogawa
Works' in-house power plant suffered from a major accident. In overcoming this
accident, boiler and turbine technical managers missed the chance to apply for
the inspection.
To counter this problem, Kobe Steel will decentralize tasks by changing the organization
and transfer work to other departments. It will also implement multiple checking
systems.
|
3.Dust measures |
|
Ever since Kakogawa Works went into operation, Kobe Steel has undertaken improvements
in dust reduction. Unfortunately, the improvement in dust reduction in the surrounding
area did not decrease complaints from people living in the vicinity of the Works.
This was also pointed out by Hyogo Prefecture and Kakogawa City in their on-site
inspections.
Dust reduction is regarded as a pressing issue. Kobe Steel will examine all aspects
of the problem and implement strong measures to reduce the amount of dust.
| (1) |
In the coal and iron ore yards, a dust reduction fence will be constructed.
(The fence will be 15 to 20 meters high and 4 to 5 kilometers in length.) |
| (2) |
The recycle zone, where slag is held, will be enclosed by a confining
wall 3 to 5 meters high and 3 kilometers in length. |
| (3) |
The belt conveyor for raw materials handling and the holding area for
ash will be hermetically enclosed. |
| (4) |
Dust collection equipment and water-sprinkling equipment will be upgraded. |
|
4. Other Environmental Problems |
|
(1) Water Quality
In the on-site inspection conducted by Hyogo Prefecture and Kakogawa City, it
was pointed out that discrepancies were found in the handling of measurement data,
including the variance in the automatically recorded data and analyzed data. To
correct this problem, Kobe Steel will install new automatic measurement equipment,
revise work standards to confirm measurement accuracy, and clarify abnormal data
definition.
However, with regard to water quality control, no violation of the Water Pollution
Prevention Law was found.
(2) Waste Material
In the on-site inspection conducted by Hyogo Prefecture and Kakogawa City, it
was pointed out that Kobe Steel should improve the administration of the outsourcing
of its industrial waste and the operation and maintenance of its waste incinerator
within the steelworks. Kobe Steel will review the current outsourcing contract
of its industrial waste, strengthen the management of its industrial waste, and
improve the storage area for burnt residue.
|
| Kobe Works |
|
|
1. Boiler emissions deviate from standards,
Telemeter transmission discontinued |
|
When the No. 2 boiler was restarted after it had been stopped for a period of
time, it was found that the transmission of data had been discontinued at times.
This practice should have been limited to the beginning of the start-up phase
of the boiler, as boiler combustion was unstable. However, Kobe Steel speculates
that this practice could have started in 1978 when the telemeter system began.
The operators were under the mistaken understanding that "at any time during
the start-up and periods of unstable operation, it was acceptable to terminate
data transmission." The direct cause of the problem was that clear operational
standards were not determined for the starting and stopping of telemeter transmissions.
The fundamentals of the compliance system to prevent violations was deficient.
|
2. Inappropriate logic applied at rolling mills |
|
In the case when oxygen concentration is extremely high, the equivalent NOx value
is calculated at abnormal levels, so not recording the values was considered appropriate.
In addition to this logic, in the case when equivalent NOx values were outside
the emission standards, measurement devices were set to disregard such readings.
Consequently, those responsible for environmental control, who were looking only
at the data sent from the rolling mills, believed the devices were being corrected.
Operation of the above-mentioned measurement devices began in 1992 at a number
of plants. The investigation uncovered that over the next several years, all heating
furnaces and soaking pits were equipped with such functions.
Such practices at that time could have started from discussions among environmental
control staff, production workers and plant supervisors. The practices were passed
on through the years. Since these acts did not occur at the same time, it is therefore
believed that the practices did not originate from instruction by management.
The survey results indicated that the existence of this logic -- incorporated
in the manipulation of the measurement devices -- was known to approximately 60%
of the people working at the heating furnaces and soaking pits, including a number
of managers.
|
3. Measures |
|
| * |
Shortcomings in operational standards for boilers were corrected
immediately and the transmission timing of the telemeter system was clarified
and made known. |
| * |
The lack of compliance understanding will be remedied by continuous
education. |
| * |
Two additional employees will be added for environmental administration.
On-site inspection and other measures will be strengthened. |
| * |
Administration of the environmental measurement data transmission
system to Kobe City will be strengthened. |
|
| Other Plants |
|
On May 26, the Chubu Kinki Industrial Safety and Inspection Department in the
Nuclear and Industry Safety Agency under the Ministry of Economic Trade and Industry
instructed Kobe Steel to investigate and report on the legal compliance of all
of its thermal power plants. Outside of Kakogawa Works and Kobe Works, Kobe Corporate
Research Laboratories in Nishi-ku, Kobe City and the Daian Plant in Inabe City,
Mie Prefecture were subject to investigation. The results of the internal investigation
showed that these locations were not in violation of the law.
Kobe Steel deeply regrets causing these problems and is determined that such incidents
do no happen again. Once again, the company will place its full efforts into winning
the trust of its stakeholders as a company that places full priority on environmental
management.
Kobe Steel asks for your continued support and understanding.
|
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