CRITICAL INFRASTRUCTURE AND EMERGENCY RESPONSE IN

C O N F I D E N T I A L SECTION 01 OF 03 TOKYO 000727 SIPDIS SENSITIVE SIPDIS STATE FOR S/CT ROBERTSON, EEB, EAP/J WEBSTER E.O. 12958: DECL: 03/17/2018 TAGS: ASEC ECON ETTC JA PGOV PREL PTER SUBJECT: CRITICAL INFRASTRUCTURE AND EMERGENCY RESPONSE IN JAPAN REF: STATE 6461 Classified By: Ambassador JTSCHIEFFER for reasons 1.4(b/d). ¶1. (SBU) Summary: Japan has faced a variety of natural disasters and other historical challenges to its critical infrastructure and systems. As a result, the country has developed preparations and capacity for responding to known threats, such as earthquakes, and has a record of willingness to share this information with others to help develop their abilities to prepare for and cope with disasters. Compartmentalization and risk aversion within the bureaucracy, however, could increase Japan,s vulnerability to threats for which it is less prepared, such as a pandemic. Given the integration of the U.S. and Japanese economies as well as Japan,s status as the world's second largest economy, the potential consequences of a catastrophic event in Japan could be major. It would be useful to develop further bilateral exchanges on the subject of critical infrastructure and its protection and to include Japan in any work on critical infrastructure and emergency response. End Summary. Introduction -------------- ¶2. (SBU) Japan and the U.S. are the world's two largest economies, closely linked to each other and to other major world economies. A catastrophic event or major infrastructure failure in Japan, therefore, would negatively affect the U.S., the rest of Asia, and the global economy as well. ¶3. (SBU) The infrastructure and systems that most directly connect the U.S. and Japan include information and communications, transportation and distribution, and financial systems. Japan's industrial and R&D establishments, some of which have become sole providers for extremely specialized high-tech equipment or technologies, mean Japanese inputs are valuable, and sometimes essential, to numerous U.S. industries. Information and Communications Systems -------------- ¶4. (SBU) A failure of information and communications systems would have an immediate impact. These systems are connected globally in real time. A major failure could affect transportation, energy, defense, financial, health care, and other critical industries and services. ¶5. (SBU) The greatest risk to such systems seems to be virtual, from cyber-warfare or cyber-crime. Such attacks are regarded as easier and could have a wider potential impact than attacks on physical infrastructure. Attacks could also be launched against system infrastructure, content or operations on networks, or against individuals or commerce active over such networks. Cyber-security threats seem an inescapable part of life on the Internet and the capabilities of potential attackers and those administering networks are already advanced and growing continually. ¶6. (SBU) Still, physical damage to global information networks remains a threat, particularly involving trans-oceanic cables or remote infrastructure. Given the redundancy and ability to reroute signals over networks, however, such an incident might have less severe impact on the U.S, although the time and cost of repairing a transpacific cable could be substantial. ¶7. (SBU) Japan is pursuing policies to address risks and improve its cyber-security profile. Japan has both public and private sector entities focused on cyber-security in an effort coordinated by the National Information Security Council (NISC),a cabinet office, and the Japan Computer Emergency Response Team/Coordination Center (CERT/CC). The country is currently in the second year of its Secure Japan three year plan. ¶8. (SBU) The U.S.-Japan Cyber-Security Dialogue, lead by DHS and NISC, also continues to share information and explore areas of cooperation. One example is participation by Japanese observers in the March 2008 CyberStorm II exercise. These efforts should improve international coordination of planning and cyber-security response capabilities, demonstrate best practices and refine national programs. TOKYO 00000727 002 OF 003 Aviation and Maritime Ports -------------- ¶9. (U) Transportation links between Japan and the U.S. too are critical to global as well as bilateral commerce. Two-way merchandise trade in 2006 between the two countries equaled USD 207.7 billion. On average, USD 569 million worth of goods passed through Japanese ports every day on their way to or from the U.S. ¶10. (U) Japan's three largest airports with traffic to the U.S. are Narita (Tokyo-Yokohama),Kansai (Osaka-Kobe),and Chubu (Nagoya). In addition to serving passengers to both countries, they are vital hubs for trans-pacific passenger traffic. In terms of passenger traffic to the U.S., 50 flights and 13,000 passengers per day arrive in the United States from Narita (second only to London Heathrow). Disruption of these airports, therefore, would have serious consequences for the U.S. and Asia. ¶11. (U) Cargo traffic through these airports is also a vital economic link. In 2007, roughly USD 20 billion of shipments, or almost 13 percent by value of all Japanese exports to the U.S., went as air cargo out of Narita airport. By value, more trade passes through this airport than through any other port in Japan. Narita handles roughly twice the value of global two-way trade as the port of Tokyo. Narita handles 72 percent more than Nagoya port, which processes the most trade by value of any Japanese maritime port. ¶12. (U) Japan's maritime ports are also vital economic links. Japan's five largest maritime ports are Tokyo, Yokohama, Nagoya, Osaka and Kobe. In 2006, they processed over one million containers (1.43 million TEU) to/from the U.S. ¶13. (SBU) Japan has established agencies and policies providing for port security, both infrastructure protection and border controls, consistent with international standards, such as the International Ship and Port Facility Security Code. Operational U.S. agencies such as Customs and Border Protection, the Federal Aviation Administration and the U.S. Coast Guard have ongoing dialogue and information sharing programs with Japanese counterparts. Other examples of specific initiatives to strengthen the security of ports and shipping include the Megaport program. Japan looks to launch a Megaports pilot project in Yokohama and is working with DHS and DOE on plans. Financial Market Infrastructure -------------- ¶14. (SBU) Financial markets are a clear example of other infrastructures that closely connect the two economies. A failure in Japan's financial system infrastructure, or the interruption of financial transaction clearing, would have serious repercussions for the U.S. and the rest of the world. ¶15. (U) Establishment, maintenance, and protection of financial system infrastructure have been left to the private sector, under the supervision of the financial services regulator, the Financial Services Agency, and the Bank of Japan, which is responsible for the payments system. Disasters and Threats in Japan -------------- ¶16. (U) Japan's has a history of catastrophic natural disasters. Historically, the greatest natural threats were earthquakes and volcanoes, storms, and fires. The great Kanto (Tokyo) earthquake of 1923 was of magnitude 7.9 and killed roughly 105,000 people; the Hanshin (Kobe) earthquake of 1995 was magnitude 7.3 and killed 6,437. Between 1996 and 2005, 20.8 percent of the world's earthquakes of 6.0 or greater occurred in Japan. Seven percent of the world's active volcanoes are located in Japan and Mt. Fuji, although it last erupted in 1707-08, is still active and a threat to the greater Tokyo area with its 30 million inhabitants. Storms are another problem, with the 1959 Ise Bay Typhoon taking 5,098 lives. There is a clear downward trend in the numbers of lives lost in disasters in Japan, however. Factors contributing to this development include improved technology and engineering, stronger safety standards, and better emergency preparations and response. ¶17. (SBU) Japan faces other types of threats, with pandemics TOKYO 00000727 003 OF 003 one of the most serious. The SARS and Avian Influenza did not greatly affect Japan, but the country is potentially vulnerable to a pandemic. In addition, Japan has also experienced terrorism, for example, with the taking of hostages at the Japanese Embassy in Peru and the Sarin gas attack in the Tokyo subway system. The 1995 Sarin attack killed 12, injured 1,034, and undermined public confidence in the safety of Japan's mass transit system. ¶18. (SBU) Japan relies heavily on nuclear power for roughly 30 percent of its electricity needs. While Japan has never had an attack on a nuclear facility, several Japanese facilities have experienced safety incidents, some resulting in fatalities and prolonged shutdowns. In the most recent case, the Kashiwazaki-Kariwa nuclear power plant located in Niigata Prefecture and the world's largest in terms of electrical generating capacity, remains off line following a July 2007 earthquake. Also during summer 2007, the Hokkaido Electric Power Company was criticized for failing to prevent suspected arson at a reactor construction site at its Tomari nuclear power plant. ¶19. (SBU) Japan's political leaders and public profess concern about the country's continued dependence on imported food as well as on imported oil. Some Japanese still recall post-war shortages. However, as Japan is less than 40 percent self-sufficient in food production, despite concerns about food security, Japan's only practical resource security will come from stable and reliable flows. Emergency Preparedness and Response -------------- ¶20. (SBU) The GOJ has taken steps to prepare for such threats. Japan has established legislative and organizational frameworks for disaster management and emergency response. The GOJ has developed response capabilities at the national, regional, and local levels as well. A Minister of State for Disaster Management oversees disaster management efforts, coordinated by the Cabinet Office, and involving 23 government entities and 63 public and private corporations. The legal basis for Japan's Disaster Management System were set out in 1961 by the Disaster Countermeasures Basic Act. ¶21. (SBU) Japanese bureaucracy and planning can be inflexible, with the result that Japan may be still vulnerable to threats that are less well understood, or which require different sorts of preparation. A pandemic or a major cyber attack would require different responses from those appropriate to an earthquake, and could catch both the GOJ and private sector unprepared. Such a situation in turn could result in prolonged loss of critical systems or services. ¶22. (C) Comment: Highly advanced technology and its application for industrial and consumer use has long been a key factor in Japan's economic growth and a reality for leading U.S. and other companies. Disruption in the supply lines would have significant consequences. Likewise, Japan's role as an international financial services and a communications/transportation hub would mean an attack or other serious development that disrupted these activities here, would likely seriously affect the U.S. and other allies. As the U.S. proceeds with the effort described in ref, it may be useful to consider reaching out to Japan to discuss steps we can take to prevent a possible disruption or to mitigate the negative effects should one occur. End Comment. SCHIEFFER