EDITORIAL : THE DAILY YOMIURI, JAPAN

   

 

Disaster aftermath clouds business outlook

The Yomiuri Shimbun

The corporate sector's account settlement season is reaching its peak. A large number of corporations listed on the First Section of the Tokyo Stock Exchange have revealed their results for the fiscal year that ended March 31.

On the whole, the corporate sector is expected to report increased profits for a second consecutive business term.

In fact, a number of companies have reported record profits during the settlement term, exceeding the levels attained prior to the global financial crisis that struck in the autumn of 2008. This can be largely attributed to their success in thorough cost-cutting, combined with their accelerated export drive targeting other Asian markets.

However, the catastrophic March 11 earthquake drastically changed the business environment. This was evident in a profit decrease suffered by many corporations during the January-March period after enjoying an increase in their profits during the April-December period last year.

The damage suffered by many corporations due to the earthquake-tsunami disaster is bound to hurt their profitability during the accounting term ending in March 2012. Their business will likely be dealt additional blows by such negative factors as a sharp rise in the yen's value and high crude oil prices.

All corporations must change their way of thinking and adopt a new business strategy, a task essential for overcoming their financial difficulties.

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Supply chain rattled

The Great East Japan Earthquake has exposed the fragility of production systems used by domestic companies. Parts manufacturers and other corporations in the eastern part of the nation were severely damaged by the recent calamity. The March 11 event forced many major manufacturers to significantly scale down their production. An important factor behind this was their sustained efforts to make their production as efficient as possible by, for example, ensuring they have no excess inventory and buying parts from only a few suppliers.

A perfect example of this can be seen in the situation facing automakers and electronics manufacturers. The earthquake-tsunami disaster has caused Toyota Motor Corp. to take a 110 billion yen reduction in operating profits. Honda Motor Co.--which had a research laboratory greatly damaged by the earthquake--saw about 46 billion yen swept from its books in this respect.

Meanwhile, Hitachi, Ltd. has gained record profits in the latest accounting term, a far cry from its massive losses a year earlier. Nonetheless, the electronics maker has said its revenue in the settlement term for March 31 dropped by a sizable 130 billion yen due to the disaster, which damaged the firm's main factory.

In announcing their accounting results for the fiscal year ending in March, many corporations, including Hitachi and car manufacturers, refused to come out with profit forecasts for the new fiscal year ending in March 2012. This apparently reflected their difficulty in correctly weighing the recent disaster's impact on their business performance in the year ahead.

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A slow healing process

Major manufacturers are expected to suffer delays in bringing their production back to normal. Their return to business as usual is unlikely to take place earlier than autumn. Will they be able to put their assembly lines fully back on track earlier than initially predicted? The answer could determine their business performance results in the next accounting period.

It is also feared that the corporate sector may be adversely affected by an anticipated power shortage this summer. The ongoing crisis at Tokyo Electric Power Co.'s disabled Fukushima No. 1 nuclear power plant has combined with a total suspension of reactor operations at Chubu Electric Power Co.'s Hamaoka nuclear power station to cause an expected electricity shortage. This comes with serious concerns about the stability of a power supply in areas served by Tohoku Electric Power Co. in the summer.

All corporations must take thorough power-saving measures this summer, thus minimizing the impact of the feared power shortage on their production.

If the strong yen continues to hover around 80 yen, it will inevitably erode the profitability of domestic export companies. Their survival--or demise--will hinge on whether they will be able to cultivate new growth markets.

Meanwhile, it will supply a nice tailwind for manufacturers and other companies if post-quake rehabilitation efforts go into full swing.

All corporations must try hard to advance ideas that would help with disaster reconstruction, including projects to build environmentally friendly towns that can better resist natural and other disasters and devising energy-saving products. We hope that next spring they will be able to report a third consecutive yearly increase in their profits, an achievement that would enable them to lead the Japanese economy.

Blocking child porn sites a significant first step

The Yomiuri Shimbun

Major Internet service providers now block access to Web sites that offer child pornography.

This began in late April after the Cabinet's crime countermeasures conference concluded that "blocking access to child pornography can be done under the current law if certain conditions are met."

Blocking sites, which is effective in preventing the proliferation of child pornography, also is carried out in Europe and the United States. Blocking access to online child pornography should be legally authorized from the viewpoint of preventing harm to children and protecting public welfare.

Heinous images of the sexual abuse of children are shown on many Web sites. The law for punishing acts related to child prostitution and child pornography bans the provision of child pornography regardless of whether compensation is received. But only a small number of violators have been punished.

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A special panel in place

A private body consisting of experts and Internet service providers has been established to implement this measure. Meetings of the panel, specializing in the implementation of measures to prevent the distribution of child pornography, are also attended by government observers.

Under the panel's supervision, a task force including Net service providers compiles a list of IP addresses subject to restriction based on its own information and other data provided by police. Blocking access to Web sites offering child pornography is conducted by the Net service providers themselves.

Nine major Net service providers have joined the special task force. Their customers reportedly account for about 70 percent of Internet service users. The remaining 500 small and midsize providers do not belong to the organization, so it is necessary to ensure participation and cooperation by these providers.

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Balance protection, freedom

It is feared that blocking sites could infringe on freedom of expression depending on what is targeted and how it is applied.

Ideally, access to illegal images would be blocked on an individual basis without unduly obstructing communications of general Net users. But for now, a system to block access to entire Web sites has been adopted to save costs.

But blocking is limited in principle to sites aimed mainly at displaying child pornography, a measure to prevent access to a site from being blocked in its entirety on the grounds of a single illegal image.

Judicious and highly transparent operation of the system is required to obtain the understanding of the people. Verification of the effect of blocking is also important to enhance the functions of the system.

Beyond the use of Web sites, illegal images have also been transmitted between personal computers via e-mail or file-sharing software. In these cases, it is technically difficult to block access.

Despite such problems, the introduction of the blocking system is a significant first step toward eliminating child pornography from the Internet.