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Resilient Industries in Japan

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Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized ©2020 The World Bank International Bank for Reconstruction and Development The World Bank Group 1818 H Street NW, Washington, DC 20433 USA October 2020 RIGHTS AND PERMISSIONS The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; e-mail: [email protected]. CITATION Please cite this report as follows: World Bank. 2020. “Resilient Industries in Japan: Lessons Learned in Japan on Enhancing Competitive Industries in the Face of Disasters Caused by Natural Hazards.” World Bank, Washington, D.C. ii Resilient Industries in Japan Resilient Industries in Japan iii DISCLAIMER This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The report reflects information available up to August 31, 2020. iv Resilient Industries in Japan Resilient Industries in Japan v ACKNOWLEDGEMENTS Resilient Industries in Japan: Lessons Learned in Japan on Enhancing Competitive Industries in the Face of Disasters Caused by Natural Hazards was prepared by a team led by Etienne Kechichian, Shoko Takemoto, and Nah-yoon Shin, and comprising Alexander Keeley, Elizabeth Yarina, and Richard Tourtellotte. Primary and secondary data gathering, research, and analysis was conducted by Hajime Watanabe, Junji Yokokura, Takashi Toyoda, and Taku Oyama of Yachiyo Engineering. The report also includes additional research and contributions from Masahiko Haraguchi, Shinji Ayuha, Yusaku Kawashima, and Yuzuka Kashiwagi. As World Bank Group peer reviewers, Ayse Erkan, Ko Takeuchi, and Sinem Demir provided invaluable comments and suggestions. The team is also grateful for the support of Mika Iwasaki, Jonathan Coony, Luis Tineo, Reiko Udagawa, and Haruko Nakamatsu. The report benefited from the guidance and contributions of the following Japanese experts and professionals who kindly provided primary data, information, analysis, and their invaluable perspectives and time. These include (in alphabetical order): Akira Doi, Japan Bosai Platform; Akira Katagiri, Suzuki Kogyo Co. Ltd.; Genma Yada, Ministry of Land, Infrastructure, Transport and Tourism; Hamura Plant Administration Division, Hino Motors, Ltd.; Hitoshi Baba, Japan International Cooperation Agency; Professor Kenji Watanabe, Nagoya Institute of Technology; Kinya Tagawa, Takram; Kyoko Kondo, Asian Disaster Reduction Center (Ex-Executive Director); Masahiro Yamaga, Ministry of Economy, Trade and Industry (METI); Professor Satoru Nishikawa, Nagoya University; Setsuko Saya, Cabinet Office (Former Director); Shinya Kitamura, Teikoku Databank Ltd.; Shiro Nonaka, Crisis & Environment Management Policy Institute; Shoji Arai, METI; Takahiro Ono, Mitsubishi Corp Insurance Ltd.; Yoshiki Hiruma, Development Bank of Japan; Yuko Kusano, Miyagi Jo-net; and Professor Yumiko Tanaka, Josai International University. Editorial services were provided by Fayre Makeig. The report was designed by Saengkeo Touttavong and Linker Creative. The report was developed with support from the Japan-World Bank Program for Mainstreaming DRM in Developing Countries, which is financed by the Government of Japan and managed by the Global Facility for Disaster Reduction and Recovery (GFDRR) through the Tokyo Disaster Risk Management Hub. vi Resilient Industries in Japan TABLE OF CONTENTS xi Acronyms and Abbreviations 1 ES Executive Summary 2 Context of Resilient Industry in Japan 2 Solutions for Resilient Industry in Japan 6 Key Lessons and Next Steps 8 References 9 1. Introduction 10 1.1 Report Objective 11 1.2 Importance of Resilient Industries 12 1.3 Defining Resilient Industries 14 1.4 Case Study Methodology 15 References 16 2. Industries and Disasters in Japan 17 2.1 Industries in Japan 32 2.2 Impacts of Disasters on Industries 44 References 49 3. Enhancing Resilient industry in Japan 50 3.1 How: Resilience Process and Steps 65 3.2 Who and Why: Stakeholders and Incentives 72 3.3 What: Tools and Approaches 89 3.4 Areas of Further Work to Promote Resilient Industry in Japan 89 References 93 4. Key Lessons and Next Steps 94 4.1 Key Lessons 98 4.2 Next Steps: The Future of Resilient Industry 101 References 103 Appendix A Case Studies of Resilient Industry Solutions from Japan 104 I. Developing a National Framework for Resilient Industries 104 A1 Taking a Multisectoral Approach to Advance Resilient Industries at the National Level 110 II. Enhancing Business Continuity Planning and Management 110 A2. Developing Business Continuity Guidelines and Manuals for Private Companies: Cabinet Office and METI 112 A3. Developing Areawide Business Continuity Plans at the Prefectural Level: Kyoto Prefecture 115 A4. Nonprofit Organizations’ Role in Promoting Resilient Industry: The Business Continuity Advancement Organization Resilient Industries in Japan vii 117 A5. Establishing a Prearranged Agreement for Quick Rehabilitation of Critical Infrastructure: Sendai City Government and Sendai General Construction Association 119 A6. Establishing a Prearranged Agreement for Quick Rehabilitation of the Expressway: East Nippon Expressway Co. Ltd and Japan Federation of Construction Contractors 122 A7. Establishing Prearranged Agreements between Companies within the Same Industry Sector: Suzuki Kogyo (Waste Disposal) 125 A8. Securing Cost-Efficient Backup Water Supply Using a Decentralized Groundwater Treatment System: Mitsubishi Chemical Aqua Solutions Co., Ltd.’s System in Hino Motors’ Hamura Plant 127 A9. Establishing Technical Standards for Resilient Port Infrastructure: Ministry of Land, Infrastructure, Transport and Tourism 131 A10. Developing Guidelines for Storm Surge Risk Reduction Measures to Lower Storm Surge Risk in Harbor Land Not Protected by Levees 134 A11. Establishing Industrial Parks in Flood-Vulnerable Locations: Fujishiro Industrial Park 136 A12. Developing Flood Protection Levees to Build Back Better: Rojana Ayutthaya Industrial Park 139 A13. Development and Utilization of the Automatic River Flood Gate and Land Lock Closing System 142 A14. Big Data Analysis and Visualization Tools for Evidence-Based Regional Economic Assessment and Policy Making: Regional Economy Society Analyzing System (RESAS) 145 A15. Promoting Disaster Preparedness through Providing Preferential Loans to Firms with High Business Continuity Management Ratings: Development Bank of Japan 148 A16. Promoting Disaster Preparedness through Establishment of a Disaster-Triggered Credit Guarantee Program: Shizuoka Prefecture 150 A17. Promoting Areawide Business Continuity Planning in Industrial Parks: Akemi Industrial Park, Aichi 153 A18. Enhancing Energy Security and Efficiency through the Industrial Smart Community “Factory Grid (F-grid)” Project: Ohira Industrial Park, Miyagi 157 A19. Establishing Strategy and Guidelines to Maintain the Liquidity of Local Banks during Disasters: Bank of Japan 160 A20. Providing Emergency Guarantees to Small and Medium Enterprises for Quick Recovery from Disasters: Credit Guarantee Corporations 163 A21. Offering Small and Medium Enterprises Long-Term Low-Interest Loans for Investment and Financing after a Disaster: Japan Financial Corporation 166 A22. Empowering Women’s Participation in Industries through Supporting Programs for Female Entrepreneurs: Aomori Prefecture 168 A23. Providing Postdisaster Training and Consultation Services to Empower Women: Miyagi Jo-net 170 Appendix B Glossary of Key Terms viii Resilient Industries in Japan LIST OF TABLES 3 Table ES.1 Topics Covered in this Report 14 Table 1.1 Topics Covered in this Report 29 Table 2.1 Historical Development of Policies and Institutions Related to the Manufacturing Industry in Japan 35 Table 2.2 The Costs of Disaster: Frequency of Disaster Types and Total Costs between 1995 and 2018 35 Table 2.3 Mega Disasters Expected to Occur in Japan 38 Table 2.4 Overview of Impacts on Industries from Four Recent Major Disasters in Japan 40 Table 2.5 Cost of Disasters to a Manufacturing Firm: The Renesas Electronic Corporation after the GEJE 60 Table 3.1 Examples of Structural and Nonstructural Measures for Mitigation and Preparedness 87 Table 3.2 Gender Challenges Related to Disasters in Japan 108 Table A1.1 Resilience Measures for Industries Outlined within the Fundamental Plan for National Resilience 146 Table A15.1 Criteria for DBJ’s BCM Ratings 149 Table A16.1 Overview of the Disaster Triggered Credit Guarantee Program 158 Table A19.1 The Bank of Japan’s (BoJ’s) Actions after the GEJE 161 Table A20.1 Overview of the Emergency Guarantee Program for Recovery from the GEJE 164 Table A21.1 Overview of Great East Japan Earthquake Special Loan for Reconstruction Program 165 Table A21.2 Ongoing
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