Kawasaki Heavy Industries uncovers decades of misconduct in shipyards

Kawasaki Heavy Industries (KHI) has disclosed findings from additional investigations into misconduct within its submarine repair and marine engine businesses. The investigations uncovered extensive work hour misallocations at the Kobe Shipyard, involving the shifting of commercial ship work hours to repair submarines and the use of repair submarine hours for new submarine construction, dating back as far as 1985. Additionally, the probe revealed widespread falsification of fuel efficiency data for submarine diesel engines, occurring from 1988 to 2021.

KHI attributes these issues to a long-standing organizational culture characterized by a lack of transparency, prioritization of internal targets over compliance, and weak internal controls. In response, KHI is implementing a three-pillar reform strategy: establishing systems to prevent misconduct, strengthening detection capabilities, and transforming its organizational culture. Measures include automating inspection processes, revising estimation methods for repair contracts to reflect actual costs, and reinforcing internal audit functions.