Data scandal rocks Japanese marine engine market

Japanese engine maker IHI Corp. has admitted that a subsidiary has falsified fuel efficiency data for 4,215 marine engines, spanning 58 models. 2,621 have been shipped overseas. And 1,594 are in use in the Japanese domestic market. The company is firmly in the centre of a data scandal.

Customers for the engines, in production since 2003, include government ships, fishing vessels, domestic vessels, tugboats and work boats. IHI also supplies gas turbines for naval vessels and high-speed ships, large, medium and compact diesel engines for high, medium and low speed applications.

‘We have confirmed that there are cases that are at risk of deviating from the standards for marine products in the NOx regulations established according to the Act on Prevention of Marine Pollution and Maritime Disaster and the International Maritime Organization,’ says a statement. ‘In addition, regarding the fuel consumption rates prescribed by the Fishing Boat Inspection Regulations, we have confirmed that there are cases that are at risk of deviating from the standards.’

The statement sets out that consolidated subsidiary, IHI Power Systems Co., was found to have made ‘improper alterations’ in the test operation records for marine engines and land-use engines.

IHI Corp apologises for data scandal

IHI Corp says it sincerely apologises to all of its stakeholders ‘for this betrayal of their trust and for causing considerable inconvenience and concern.’

IHI Corp is now reviewing the impact on financial results and, if any impact is expected, will announce it immediately. It has not commented on the impact to the wider environment.

The matter came to light in late February 2024, when an employee of IHI Power Systems reported that the “fuel consumption rates” provided to customers when engine products are shipped were altered using values different from those actually measured during test operations.

Upon receiving the report, IHI and IHI Power Systems initiated an internal investigation in order to
verify whether the actual measurement values from test operations stored at IHI Power Systems matched the values actually provided to customers, as well as to conduct interviews with the relevant persons. It was confirmed that the values were inappropriately altered at the Niigata Engine Plant (Niigata City, Niigata) and Ohta Plant (Ota City, Gunma).

IHI Corp says the subject workplaces were immediately instructed to record the actual measurement values, and this has now been corrected.

‘At this point in time, there have been no confirmed cases that may raise questions about the safety of the engines during test operations and actual use,’ the statement continues.

Values altered to make the fuel consumption data look better

That said, in interviews that the company conducted, it found that in addition to testimony stating that the values were altered to make the fuel consumption data look better or to adjust the variations in the data, some interviewees testified that they were carrying on the procedures of their predecessors. As a result, it is believed that underlying causes of the situation include a lack of compliance awareness and issues in the workplace culture.

Customers who were delivered affected products will be contacted individually, by IHI and IHI Power Systems. The IHI Group says it ‘takes very seriously the fact that a situation like this has occurred again despite the corrective actions that were taken in response to misconduct in the past.’

IHI senior executive officer Hideo Morita told Kyodo News: “It is a betrayal of our customers’ trust. We are in a grave situation in which the foundation of our manufacturing has been shaken.”

In 2019, IHI admitted to misconduct in the manufacturing process of its aircraft engine parts, which prompted the transport ministry to order the company to improve operations.

Japan’s transport ministry conducted on-site inspections of the plants, on 25 April, to ascertain how far the data scandal has spread.

Five officials from the ministry entered the Niigata Engine Plant at around 09:35, according to local reports.