Concerning unauthorized work—nonconformity to the High-Pressure Gas Safety Law—and offenses against other laws relating to the Chiba Oil Refinery, including Yokkaichi, Sakai, and Sakaide Oil Refineries, Cosmo Oil Co., Ltd. (Headquarters: Minato-ku, Tokyo; Capital: 62.4 billion yen; President: Yaichi Kimura) has received administrative penalties from the Nuclear and Industry Safety Agency, METI, and the authorities concerned (Chiba Labor Standards Supervision Office, Fire Unions in Sakai-shi and Takaishi-shi, and Fire Headquarters in Sakaide-shi). The details of those penalties are described in this report. For more information about the administrative penalties handed down by the Nuclear and Industry Safety Agency, METI, see our report issued on September 19.
We also report that we have today resubmitted an investigation report on the April 2006 accident at the Chiba Oil Refinery to Chiba Prefecture and Ichihara-shi.
To clarify the management's liability for the series of problems, we have today determined in-house penalties as described below.
We would like to deeply apologize for these oversights. We will do our utmost to recover our credibility and to improve the awareness of compliance from a company-wide point of view to ensure that such problems are never repeated.
Details
1.Administrative penalties based on the Industrial Safety and Health Law
| Punished site | Chiba Oil Refinery |
|---|---|
| Penalty notice | We received it from the Chiba Labor Standards Supervision Office on September 27, 2006. |
| Penalty | The refinery has lost the certification of the continuous operation of boilers and Type 1 pressure containers. |
| Reason | Hydrogen gas leaked from the gas-liquid separation tank of the hydrogen producing unit No.1 and a fire broke out on April 16, 2006. We also ignored legal procedures to update the waste heat boiler of the hydrogen producing unit No.1 in 1996. |
Note that we found that the same illegal action had been taken for the waste heat boiler of the hydrogen producing unit at Sakai Oil Refinery, so we reported it to the Osaka Labor Bureau and the Sakai Labor Standards Supervision Office and have stopped the hydrogen producing unit until completing legal procedures according to directions given by the authorities concerned.
2.Administrative penalties based on the Fire Defense Law
| Punished site | Sakai Oil Refinery and Sakaide Oil Refinery |
|---|---|
| Penalty notice | Sakai Oil Refinery received it from the Fire Unions in Sakai-shi and Takaishi-shi on September 13, 2006. Sakaide Oil Refinery received it from the Fire Headquarters in Sakaide-shi on September 20, 2006. |
| Penalty | The refineries have lost the certification as an authorized factory due to inadequate procedures for changes. |
| Reason | Procedures for changes in the hazardous substance treatment facilities were defective, that is, they did not meet requirements for authorized factories. |
3. Investigation report on the April 2006 accident at Chiba Oil Refinery
The investigation report on the April 2006 accident at Chiba Oil Refinery submitted on June 20, 2006 had no description of an accident that occurred in the same equipment in 1995. The report presented fictitious data on fixed measurement points that was created when we replaced the equipment in 1996. Accordingly, we reviewed the causes of the April 2006 accident without such false data, worked on preventive measures, made a new report, and today submitted it.
| Main revision |
|
|---|---|
| Cause of accident | There is no revision in our review stating that erosion and corrosion reduced the thickness of the shell plate, resulting in the opening as mentioned before. |
| Preventive action | We deleted the fictitious thickness data of fixed measurement points and reviewed preventive measures. As a result, we came to the same conclusion presented by the previous report. Namely, we will increase the diameter of the fluid inlet, decrease the flow rate, and change the internal structure to a baffle type. |
4. In-house penalties against the series of oversights
To clarify our management liability for the series of problems, the chairman Keiichiro Okabe and the president Yaichi Kimura will pay back a part of their salaries (50 percent of their monthly salaries for 3 months) at their own discretion. Masahide Furuzono, a managing director, will have his pay cut (by 50 percent of his monthly salary for 3 months).
To clarify our erroneous loss of social credibility and our liability for the great deal of trouble caused for the internal and external parties concerned due to the false report made by the accident analysis committee in the Chiba Oil Refinery, we have punished Masahide Furuzono (as mentioned above) as well as Masatoshi Sawada, a senior executive officer, and Takashi Yashima, an executive officer (both will have their pay cut by 30 percent of their monthly salaries for 3 months). We have also handed down penalties to the remaining four internal committee members.
To clarify our administrative liability for the illegal action after 1997, we have punished Seizo Suga and Masatoshi Sawada, senior executive officers, and Takashi Yashima, Hajime Marukawa, and Hideto Matsumura, executive officers (Sawada and Yashima as mentioned above, and Suga, Marukawa, and Matsumura will have their pay cut by 30 percent of their monthly salaries for 3 months). We have also handed down penalties to the former seven refinery directors (reclaiming a part of their salaries or cutting pay).
A total of 19 people have been punished.
Moreover, Takashi Yashima, an executive officer and the director of the Chiba Oil Refinery submitted a notice to indicate his desire to resign the latter position at his own discretion.
