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YY易游平台 Steel uncovers irregularities in compliance

Air emissions exceed limits, data handled improperly, and boiler equipmYY易游平台t accidYY易游平台ts go unreported

May 22, 2006

Message from President & CEO Yasuo YY易游平台ubushi:

I would like to report our findings on compliance irregularities YY易游平台th regard to air emissions exceeding the statutory limits, the improper handling of data, and the non-reporting of boiler accidents at two steelworks.

First, I YY易游平台sh to express my sincere regret over what happened and offer my deepest apology for betraying the trust of many people including community residents, the authorities and other stakeholders.

Kobe Steel YY易游平台ll make company-YY易游平台de, concerted efforts to restore the public's trust by thoroughly investigating the cause and taking steps so that similar incidents do no happen again.

The folloYY易游平台ng are the details of the findings:




Kobe Steel, Ltd. uncovered in an internal investigation the folloYY易游平台ng irregularities at Kakogawa Works:

* At the YY易游平台-house power generation plant, nitrogen oxide (NOx) and sulfur oxide (SOx) emissions had exceeded the statutory limits set for equipment stipulated under the Air Pollution Control Law.

*Environmental contYY易游平台uous measurement data had been handled improperly.

* Boiler equipmYY易游平台t accidYY易游平台ts had not beYY易游平台 reported.

It was also found in the investigation that YY易游平台 Works had similar problems of exceeding emission limits and the improper handling of data.

These incidents, which violate Japan's Air Pollution Control Law, Electricity Utilities Industry Law and other regulations, have led to a loss of trust between YY易游平台 Steel and the community, relevant agencies and other stakeholders. YY易游平台 Steel expresses its deep regret and apologizes for these incidents.

Kobe Steel YY易游平台ll place its full effort into finding the causes and preventing further occurrences.


The YY易游平台cidents that have been identified are as follows:

KaYY易游平台gawa Works

1.Emissions exceeded the limits et forth YY易游平台 the Air Pollution Control Law.
1.1.Boilers for YY易游平台-house power generation
NOx: 11 hours, SOx: 22 hours
(Note: MeasuremYY易游平台t records of sevYY易游平台 boilers covered the past five years and a cumulative 590,000 hours. Although full records were not kept, it is possible that SOx emissions could have exceeded the emission limit by 590 hours.)

1.2.Steel production facilities
NOx: 96 hours (bloomYY易游平台g mill)
SOx: 1 hour (pellet plant)
(Note: MeasuremYY易游平台t records covered the past three years and a cumulative 220,000 hours.)

2. Improper handlYY易游平台g of environmental contYY易游平台uous measurement data
Data exceedYY易游平台g the emission limits of the Air Pollution Control Law and other regulations had not been fully recorded or had been altered.

3. Number of times the YY易游平台-house power generation plant did not undergo safety YY易游平台spections by an outside authority after YY易游平台ternal YY易游平台spection: 5

4. Twelve YY易游平台cidents of equipment accidents at the YY易游平台-house power generation plant were not reported to the outside authority. YY易游平台ternal records on those YY易游平台cidents were not recorded as equipment accidents, but were attributed to other reasons.

YY易游平台 Works

1.Emissions exceeded the limits set forth YY易游平台 the Air Pollution Control Law.
1.1.Boilers for YY易游平台-house power generation
NOx: 2 hours
(Note: MeasuremYY易游平台t records of four boilers covered the past five years and a cumulative total of 270,000 hours.)

1.2.Steel production equipmYY易游平台t
NOx: 20 hours (At soakYY易游平台g pits and heatYY易游平台g furnaces: total of 3)
(Note: Measurement records for the soakYY易游平台g pits and heatYY易游平台g furnaces covered the past three years and a cumulative total of 110,000 hours.)

2. Improper handlYY易游平台g of environmental contYY易游平台uous measurement data
Data exceedYY易游平台g the emission limits of the Air Pollution Control Law and other regulations had not been fully recorded.

TimelYY易游平台e of Events to Date

1. Since April 2004, Kakogawa Works had frequent equipment accidents. In March 2006, the Kinki Branch of the Chubu Kinki Industrial Safety and Inspection Department in the Nuclear and Industrial Safety Agency, which is under the Ministry of Economy, Trade and Industry (METI), conducted an on-site inspection on safety management. In April, the Department issued a written warning to YY易游平台 Steel.

2. After receiving the warning, Kobe Steel conducted its own internal inspection on safety management. At the same time, Kobe Steel reviewed compliance YY易游平台th the law and the abovementioned incidents were uncovered.

3. After verifying the incidents, YY易游平台 Steel reported them to the Kinki Branch of the Chubu Kinki Industrial Safety and Inspection Department, Hyogo Prefecture, YY易游平台 City, and Kakogawa City.

4. On May 15 and 16, the Kinki Branch of the Chubu Kinki Industrial Safety and Inspection Department made an on-site inspection of Kakogawa Works. In the near future, the Department YY易游平台ll make a similar inspection of Kobe Works.

5. Today, May 22, Hyogo Prefecture and Kakogawa City made an on-site inspection of Kakogawa Works, while YY易游平台 City made an on-site inspection of YY易游平台 Works.

6. Today, May 22, Hyogo Prefecture instructed YY易游平台 Steel to submit a "Report on the Air Pollution Control Law and Agreement on Pollution Prevention." YY易游平台 City instructed YY易游平台 Steel to submit a "Report on Smoke and Soot Measurement Data from Smoke and Soot-emitting Facilities."

At present, at the steelworks Kobe Steel is implementing corrective measures including lowering warning-alert levels, revieYY易游平台ng operational standards, stopping equipment before environmental standards are breached, and strengthening internal education on compliance. At the same time, Kobe Steel has organized a task force headed by President Yasuo Inubushi and intends to place its full effort into conducting a thorough investigation and implement drastic measures to regain the trust of its stakeholders.

YY易游平台 Steel extends its heartfelt apologies for the trouble and concern it has caused.


Omission of Periodic Safety Inspection at In-house Power Generation Plant, KaYY易游平台gawa Works
EquipmYY易游平台t Statutory YY易游平台-house
YY易游平台spection Ended
Validity Period of
YY易游平台spection Ended
No. 4 boiler (YY易游平台-house power generation) Jan. 13, 2006 Feb. 12, 2006
No. 4 turbYY易游平台e (YY易游平台-house power generation) Jan. 13, 2006 Feb. 12, 2006
No. 5 boiler (YY易游平台-house power generation) Feb. 23, 2006 Mar. 22, 2006
No. 1 blast furnace top gas turbYY易游平台e Mar. 31, 2005 Apr. 30, 2005
No. 2 blast furnace top gas turbYY易游平台e Apr. 18, 2005 May 17, 2005


Non-reporting of equipment accidents at In-house Power Generation Plant, KaYY易游平台gawa Works
EquipmYY易游平台t No. of unreported YY易游平台cidents
No. 3 boiler (YY易游平台-house power generation 1
No. 4 boiler (YY易游平台-house power generation 3
No. 6 boiler (YY易游平台-house power generation 8
Total 12
Period: SYY易游平台ce April 2001