Not enough Japanese companies are doing enough to fortify facilities against floods, even though they have contingency plans for such events, a Reuters poll has found. Most companies rely instead on insurance and securing alternative supply sources.
The monthly Corporate Survey found 77% of Japanese firms have prepared business continuity plans for disasters, but just 45% of companies have taken steps to protect their facilities from inundation. Some 80% have bought insurance and three-fourth diversified their supply chains, the survey showed.
Japan has increasingly been lashed by floods described as the worst in decades, and last year likely saw the fifth straight year of growing flood damage.
Typhoon Jebi, the strongest in 25 years, killed at least 13 people in western Japan in 2018 and inundated the region’s major airport. Last year, Typhoon Hagibis ripped across a wide swath of central and eastern Japan, including Tokyo, killing at least 56, injuring more than 200 and leaving towns, factories and farms under water.
The direct damage from floods last year is expected to exceed that of 2018, when it reached $12bn, a government official told Reuters. That puts 2019 on track for the most direct flood damage since 2004, when it hit $17.3bn.
The capital escaped the worst of the death and damage. But if a storm were to overwhelm the massive dikes and levees protecting the Arakawa river that runs through low-lying eastern Tokyo, the economic damage could exceed $800 billion, warns Yoshiaki Kawata, a Kansai University professor.
The Corporate Survey, conducted from 25 December 2019 to 10 January 2020 for Reuters by Nikkei Research, canvassed 502 big and midsize non-financial companies. Roughly half of them answered questions on disasters on condition of anonymity to express opinions freely.