TRANSCRIPT: KOSKINEN REMARKS TO APEC Y2K SYMPOSIUM
(Stresses need for cross-border contingency plans)Washington -- John Koskinen, chair of the President's Council on Year 2000 Conversion, says there is a need to develop Y2K action plans as 1999 progresses -- bringing participants together on a regional and global basis.
Koskinen spoke to delegations attending the APEC Y2K Symposium that opened on April 22 in Singapore to discuss key Y2K issues facing the Asia-Pacific region. Koskinen delivered his remarks via digital videoconference from the U.S. Information Agency in Washington, D.C.
APEC member countries sent representatives to discuss Y2K initiatives and to help set the agenda of issues for the APEC Minister's Conference and the 2nd United Nations National Y2K Coordinators Conference in June.
In his remarks, Koskinen also stressed the need to transform Y2k commitments into deadlines, to move toward focused goals, and to share as much technical information and as many strategies as possible for dealing with specific problems.
He said cross border contingency plans are necessary to prepare for and handle possible failures in information technology in sectors such as customs, telecommunications and electric power grids. Communications networks that are already in existence need to be seen as a resource for instant communication to facilitate information sharing as the actual transition follows the clock around the world on January 1, 2000.
Following is a transcript of Koskinen's remarks and the question-and-answer session that followed.
(begin transcript)
MODERATOR: John Koskinen is Chairman of the President's Council on Year 2000 Conversion. He will speak on the trans-border impacts of Y2K and critical economic infrastructure. Afterward, we will take questions from the floor.
MR. KOSKINEN: Good morning. I'm delighted to be able to use technology to speak with all of you this morning as you gather at a very important symposium. And like Mr. Shiina, I would like to extend my congratulations and thanks to the organizers of this symposium, the governments of Singapore, Canada and Japan.
This meeting is part of a series of regional meetings being held around the world. Next will be the week of May 9 in Ghana for all African countries, and these meetings are being supported by the new International Y2K Cooperation Center, which was developed under the auspices of the United Nations with the support of the World Bank. The Director of the Center, Mr. Bruce McConnell is with you for this symposium, and the center is supporting meetings such as this around the world by providing speakers, as well as assisting in the development of programs, and with the World Bank providing assistance for our national coordinators to be able to attend the meeting. The Center is also focused on sharing what we call promising practices that countries have found effective for dealing with various aspects of the Year 2000 problem.
And the Center will also work with the steering committee of 11 countries in preparing for the next meeting, which will take place in June at the United Nations of all national Year 2000 coordinators. The meeting in June at the United Nations will build on the work of meetings such as this regional meeting, and reflects across the board the growing recognition internationally of the sweep and seriousness of the Year 2000 problem.
But we are in a stage now where we need to go beyond awareness and focus on action, which is why I think the APEC Y2K Week is an appropriate focus for all of the APEC countries to begin to take additional steps and actions to deal with the Y2K problems. We only have 254 or 253 days to go, depending on which way you count the last day, but even with that short period of time, much work can still be done. Because even if a country cannot finish all of its work in one of the critical sectors that you're going to be discussing, the work has to be done sometime, so it's important not only to start now, but to continue that work through the rest of this year.
I recently got a memorandum from a developing country noting that they had now held a series of meetings, and they were ready to begin with their assessments. And my first response was, it obviously is a little late to start. But my second response was, it's wonderful that that country is ready to start, and is beginning to take the actions that will lead it down the road toward making the transition to the Year 2000 successfully.
At the same time, particularly for those starting late, it's obviously important for every organization in the public sector and in the private sector to focus on contingency planning and business continuity. In the United States, for example, we reported recently that 93 percent of the mission critical systems of the federal government are now Year 2000 compliant. Nonetheless, we have asked every federal agency to produce a contingency plan in case there's a failure in any of its basic systems, because even with the best of work, and the most thorough testing, no one can guarantee that every system is going to work. In fact, it might be easier to guarantee that some systems we know, even with the best of efforts, will not work.
Beyond contingency plans for individual systems, we are also asking all federal agencies to prepare business continuity plans, which will focus on how the agency will be able to provide basic services and meet its responsibilities even if systems that the agency depends upon, managed by others, fail. And you are going to spend some time in this meeting talking about contingency planning and business continuity planning. And, as Mr. Shiina noted, it's critical that we all begin to spend time on this subject. But we also need to remember and remind all of our government organizations as well as the private sector companies that no matter how important it becomes for us, as the year moves on, to focus on contingency plans, we must continue to do remediation work at the same time. They are not inconsistent with each other. It is not a question that once you start doing contingency planning, you stop doing remediation.
What we need to have people understand is that you need to keep working, you need to keep testing, but at the same time, you need to be planning for difficulties that may occur, and particularly those who have started late will at least be able to determine where they know the risks are greatest that they will not complete their work and, therefore, what contingency and business continuity plans are appropriate.
We also need to focus on our emergency response process. It's clear that as noted earlier, the interesting thing about the Year 2000 problem is, it affects everyone everywhere. And, therefore, it is very likely that we will have a series of challenges that will likely occur all at one time. So, in the United States, for example, we expect that our basic infrastructure will hold, that our electric power grids will function, that our telecommunications systems will work effectively, and that our banking systems will not have major difficulties. But at the same time, we expect, as many countries have experienced, that there were risks of failures at the local level, where smaller companies working in the critical infrastructure areas or some of our local governments, will either take no action, or not successful action and, therefore, are at risk of failure as we move into the Year 2000. And, therefore, we've told our local governments and our state governments that they need to be prepared to handle emergencies on their own, since the federal government can't be everywhere dealing with every problem in light of the large number of problems that we are likely to have.
In the U.S., we are dealing with the fact that we are also going to see interesting challenges internationally as well as domestically in response to the Year 2000 transition. So, what we are doing is, at the federal level for the national government, we are surveying all of the existing emergency response centers in our government, which include our local domestic emergency response activities, the emergency response capacity at the Defense Department, at the State Department, in our Energy Department, our Transportation Department, all of them have their own emergency centers, and it's important for us to make sure first that they're prepared to handle the wide number of challenges that they may face.
Each of these emergency centers is very good at dealing with the standard emergency, which is usually very localized. But what they do not have significant experience in is dealing with a number of otherwise manageable events taken by themselves, which create a major challenge when they occur all at once. We are also, therefore, ensuring that beyond each emergency center being able to respond to the range of issues it may have to deal with, that as part of our overall emergency response process, we, in fact, are coordinating the responses of those individual emergency centers. So, we will be creating in the United States an information coordination center, which will pull together on a regular basis all of the information that each of our emergency centers collect about the status of activities in all of the critical infrastructure sectors of the economy, as well as whatever we learn from our State Department from other countries about the status internationally, and all of that will be pulled together in the information coordination center so that we can create a clear picture of what the status of every place in the world is. We'll be interested not only in what's happening domestically, we need to know what's happening internationally. And we will collect that information and publish it to all of those who provide information to us regularly, but we will also condense it and provide it on a regular basis to the public.
And similarly, at the international level, we should also obviously expect that we will have a large number, possibly, of what would be manageable failures taken one at a time, which will overwhelm the normal emergency response processes when they happen all at once. So, in contingency planning and emergency response planning, we need to be planning on an individual country basis and on a regional basis for how the country and region will respond without necessarily relying upon the normal international emergency response agencies being available in light of all the possible demands that those agencies may have.
So, thinking about this conference and the other regional conferences going on around the world, it occurred to me that we might think about what can we expect or hope will come out of this meeting. It's clear that I think we must move beyond simply discussing the nature of the problem and its importance or its sweep, because we understand that, I think, at this stage. And we also need to move beyond simply sharing information, although it's very important, about how each country is doing in each sector as a general matter. What we need to do now is I think what this conference is geared up to do, which is to focus in-depth on specific sectors of concern, such as power, telecommunications, transportation, financial services, customs and border issues, and begin to determine what are the common issues that we face in the regions that we're dealing with, and what are the possible solutions that we can arrive at working together?
We also need to share perspectives on how to deal with more general problems that I think all of us face. A growing problem confronting every country is the risk of overreaction by the public, as Mr. Shiina mentioned. It's clear that in the absence of information, people will assume the worst. It's also clear in any country if millions of people change their normal economic activities all at once, we'll have significant problems, even if all of the systems work just fine. No country can afford a lack of confidence that leads to runs on their financial institutions, hoarding of basic supplies, and increased fear. Therefore, it's important for all of us to share as much information as we can with the public about the state of our preparedness, and it's also very important for all of us to share advice and experiences as to how we're dealing with this problem, because no one has the magic solution.
We also need to deal with the general problem, as Mr. Shiina mentions, and I think it is true in every country, which is how to deal with small and medium-sized enterprises. It's a global problem. I think APEC Y2K Action Week is an important step to give us more focus on it. We are running events in the United States focusing on small businesses, trying to provide them technical information, trying to encourage them to take action in the face of what we find increasingly is a position where many of them are saying they're simply going to wait, see what breaks, and then they will fix it once it's broken. We are trying to tell them that that's a very high risk roll of the dice, because when they go to get the fix, whether it's an upgrade in their software or a replacement for the software or the hardware, it will be obvious what the fix is, everyone will know how to do it, but the risk is, they will be at the end of a very long line of other people who waited to see what broke and then decided to fix it. And the fix will work just fine when it arrives, but it may not arrive until March, April or May of the year 2000, and these companies and governments and those who decided to wait and see may find that they're going to be severely challenged in continuing their operations while they're waiting for that fix to arrive.
So, in all of these areas, we need to develop action plans working together. We need to have commitments that we've made, deadlines. We need to have goals as we move forward. We need to share as much as we can technical information and strategies for dealing with very specific problems. And as noted also, I think we need to begin to focus not only on individual contingency plans, but what are our across border contingency plans, how will we deal with the failure of information technology in customs, in telecommunications, in electric power grids. And I think as we move forward to begin to deal with the transition into the year 2000, we need to begin to setup effective communication networks that are in existence, that we have tested to ensure that on a regional basis, on a bilateral basis with those we share borders with, that we can immediately stay in constant contact if there are difficulties to be able to respond to them.
One of the advantages we have with the Year 2000 problem as opposed to most natural disasters is that we know what the problem is, we know when it's going to occur, so we can plan accordingly and be prepared, and being prepared means not only working on fixing our system, not only on having adequate contingency plans, but having appropriate emergency response plans so that we know how to work together through that transition time to deal with whatever problems we all confront.
As you move through this meeting, we also hope and think that you working together could help set the agenda of issues to be considered at the upcoming APEC Ministers' Conference. But also, and I think equally important and a benefit to countries around the world, you can help us in your considerations over the next few days set the agenda for the meeting of all national coordinators at the United Nations in June.
Ultimately what's clear, and it's now become axiomatic, is that we're all in this together, and we will all benefit from the common effort that's being made around the world. And our goal in the United States, and I'm sure it's a goal everywhere, was put by President Clinton in his State of the Union message, in which he said that if we all work together, the Year 2000 problem can be the last headache of the 20th Century rather than the first crisis of the 21st Century.
So, good luck to all of us. Thank you.
(Applause.)
QUESTION: What might the impact of Y2K be on the Internet?
MR. KOSKINEN: Well, it's an important question, because all of us increasingly are relying on the Internet for the exchange of information and data. The Internet was originally created by our Defense Department and the National Science Foundation. And I asked them early on, over a year ago, to study the impact of the Year 2000 on the Internet. And their analysis is that the basic structure of the network is sound. That it will be able to respond and deal accordingly with any difficulties that are had across the telecommunications network generally. But the risk is that everyone who runs part of the network with a router or a server, needs to make sure that their part of the net works. Otherwise, what will happen is, the Internet will work fine. You will simply, though, not be able to reach that party, and those who rely on that connection point will not be able to have access to the net. It's as if you closed off a highway that had access to the superhighway.
So that the net result of that will be, and the risk to the Internet, is if there are enough failures by those operating various smaller parts of it, it will be like taking lanes of the highway out of service. You will have declining amounts of traffic, smaller areas for transmission and, therefore, the risk to the net ultimately is that it will take longer for messages to be transferred from place to place. So that I think the risk will not be that the net goes down, the risk will be loosing a connection to the access point they use to get to the net, and the risk that the net will run slower.
Now, I asked the National Science Foundation, which runs a set of servers, to put up on the net their experience with how they fixed their servers, so that others might begin to share in that information. And I would encourage everyone on the net, which is full of a lot of independent people, to discuss what their experiences have been with the hardware and software they're using at their access points, so that more and more of those who actually sustain the net will be ready to go.
But I think the bottom line is, the net is probably not going to go down no matter what happens.
QUESTION: Can you talk a bit about the role of the Federal Emergency Management Agency?
MR. KOSKINEN: Surely. It's a good question. For those who are not as familiar with it, the Federal Emergency Management Agency, or FEMA, has jurisdiction for domestic emergencies. When we have a major hurricane, or an earthquake, or a tornado that the local government cannot handle, FEMA then coordinates the various elements of the federal government that provide support. So, FEMA is the umbrella organization for people in our Defense Department, in our Small Business Administration which provides loan support, for our health agency which provides support if there are injuries or other things to be dealt with.
And so, what we are doing with FEMA is, first, we're having them work with all of the local government emergency managers to make sure that those systems are prepared for the year 2000. Like all of us, the first thing we need to do is make sure our own systems work. Then we have asked them to work with the state and local government emergency managers to ensure that they are working with their communities to assess the risks at the local level. Because we can deal with what the risks are nationally, but what happens at the local level is what really has the most direct impact on individual citizens.
And the third thing we've asked FEMA to do is make clear to the state and local emergency managers, as I noted in my presentation, that those local governments should not assume that the federal government and FEMA will be able to come to their assistance no matter what their problem is, because we may have so many problems in localities across the country that we can't be everywhere at once. So, we have been running workshops so that state and local governments will be more prepared to handle these problems on their own.
We are then concerned, though, because of the wide potential nature of the problems we'll deal with, that we need to have a more formal coordination mechanism in the federal government than we usually set up, which is why we're creating what I call our Year 2000 Emergency Response Process, which is bringing in everyone in the government who has an emergency response capacity or responsibility, and making sure that they together now start to plan for the challenges they are going to face, what kind of resources are likely to be in most demand. We have to start making choices about where to provide resources, what will our basis for those decisions be, and how can we make sure that we have the same information in the hands of all of our emergency responders as we go forward.
We told the President's Council that I established when I started that our process would be to start with what I call organizing and awareness raising, which we have basically now completed, and then we move into a monitoring and contingency planning phase, which is where we are now. Today we released our second quarterly assessment of the status of the infrastructure in the United States and the government. Then we would move into crisis management, and the Council and FEMA and the other emergency responders, as we move through the last quarter of this year, will begin to prepare themselves to be available and ready to monitor whatever the difficulties are internationally and domestically, and respond accordingly.
QUESTION: New Zealand and Australia will be the first to enter the year 2000. What will we learn from their experiences?
MR. KOSKINEN: Well, I'm glad you asked that question, because obviously the rest of us are going to be very interested in what's happening in New Zealand, in Australia, and then as the day moves we'll all be interested in knowing what's going on in Asia and China, and Japan, and then through Russia. And one of my concerns is that more or less now everyone has figured out you're 17 hours ahead of New York, and so if we can figure out what's happening there, we'd have 17 hours of advanced notice. And the concern I have is that if we don't organize that interest around the world, we're going to end up with 180 countries, and people in each of the different sectors in those countries all deciding to call New Zealand and find out how they're doing. And, as you know, you're going to have a lot of other things you'd rather be doing and think are a higher priority than sitting on the phone answering the same questions over and over.
So, my hope is that through regional meetings like this, and through the International Cooperation Center, we can figure out an orderly way for New Zealand and Australia and other countries to provide kind of one-stop shopping, where you will give a report on what has happened in your country in the various sectors, what problems you have found, what areas seem not to have problems. And then we can find a way for you to share that information with all the other countries in a very easy and efficient way.
Because otherwise, there's a concern, at least from the United States, that you'll hear from our Defense Department, you'll hear from our telecommunications industry, you'll hear from our power industry, you'll hear from everybody. And they'll all be calling you separately. We'd like to certainly have as a subject on the agenda at the June meeting at the UN different ways of trying to deal with that problem because, as I say, it will be important for us, not just in the 17 hours as we go into the Year 2000, but for the next day or two thereafter to be able to share information on a country to country basis around the world about what's happening, what the responses to the problems are, because, as noted, we're all interconnected, we all have our citizens living and traveling in countries around the world. We have businesses around the world. And so, we're going to need an effective and an efficient way to share the information. Otherwise, we'll all be suffering from information overload, and we'll take the phone off the hook, and then we won't have any information being shared.
QUESTION: Won't we know some of what is happening because of global television coverage?
MR. KOSKINEN: Well, that's a very important point, because it's not as if we have a choice of either sharing information and managing it or having no information, because if we don't effectively collect the information and provide a clear picture and an accurate picture, we're all going to live with whatever CNN is showing at the time that they decide is an interesting part of the story that unfolds, or other newspapers, or magazines, and media. So that, at a minimum, and I think you're exactly right about management, we all need to know as the clock turns what's going on in New Zealand, what that may or may not mean, and what New Zealand is doing in response, because it's going to be known on television. And as somebody noted to me recently, well, this is all well and good, but if New Zealand has a problem that may be unique to New Zealand, and it has some aspect of its infrastructure that fails, the risk is that the rest of the world is going to assume, here it comes, we're all going to be with power, telecommunications, or whatever difficulty New Zealand or Australia have.
But I think the other side of that coin is, if we can deal with that, I think if our citizens understand that we are monitoring this, that we are going to interpret this in terms of what the appropriate response is, we'll have an effective event management process. But, I think it is clear that the problem of public overreaction starts now in terms of people deciding that they're going to take their money out of the bank, or they're going to start to take money out of the markets, or they're going to start to stockpile or hoard supplies, but it will be an issue that will be extreme, not just in the week or two before we move to January 1, but as just noted as we move through the transition period, if we don't have an effective way of collecting the information, we'll just have people in the first few days after January 1 at risk of overreaction, panic and unnecessary concern.
So, I think it is a very important point, and it's not something that any one of us can solve by ourselves. I think we need to work together to figure out how can we collect information, how can we make sure that we have the most accurate information available. And if there are rumors out, which there will be, on the Internet or on television or in newspapers, we need to know what are the actual realities and what are the facts.
Our experience is, if people have the actual facts, they respond well and respond accordingly. Where you get into difficulty is where they have rumors or exaggerations or other things that are being reported to them, and if there isn't an authoritative response to those rumors, they react to the rumors only. So, I think we have an interesting challenge. Once we get through fixing all the systems we need to be figuring out how we're going to jointly cooperate as we move into the next year in a physical sense.
QUESTION: I have three questions. What Y2K problems have already been seen in the United States? What plans are there for sharing information as the transition actually happens? What are you going to be doing at the time of the transition?
MR. KOSKINEN: All right. Those are three for the price of one. We're having a bargain sale here today.
We have not had any significant Y2K problem reported in the United States. We monitored what everybody did, what happened with January 1, '99, the first use of the year '99. We monitored what happened on April 1st, '99. Actually we ran a very preliminary test of our information coordination center on April 9, '99, in which our electric power industry ran a test to see what would happen if the telephone system went down, and they had to run their power plants with backup communication operations, and we used that as an occasion to ask all the other emergency centers to monitor, as best they could, whether anything was happening on April 9, '99. And I think you know not only did nothing happen in the United States, but other than a set of ATM machines in Hong Kong that had difficulty, but they had had difficulty the day before, there was no April 9, '99 problem.
We have, in the United States, had a couple of other significant dates. Several organizations have an April 1 fiscal year, so their financial systems have been now successfully dealing with fiscal year 2000 this month. Also, in our country, airlines only book reservations ahead 330 days. So, in February, when the 330 day mark came, all of our airline reservation systems effectively were beginning to book reservations into the year 2000. So that system has worked.
You raise a very good question, kind of a sub-question, of how we're going to share information; what's our communication going to be with embassies, consulates, people in the United States interested in knowing what are we doing. And, until you asked that question, we hadn't formally thought about it, but I think it will be important for us, as we build our picture of what's going on domestically and internationally, to be able to share that, not only with the countries working with the International Cooperation Center, but provide that information in detail immediately to the embassies in Washington and in the United States.
Our present plan, in a preliminary way, is that we will provide every four hours, starting at noon on Friday, December 31st, public updates of all the information we have of what the status of the year 2000 transition is. So, even if we don't have a special line of communication with any particular embassy or consulate, that information will be in the public domain because, again, we think it's important for the public to know everything we know.
The third question is one that I continue to get asked in almost every interview. I originally thought that the right answer to where was I going to be was in my office trying to see if the country was still working. It turned out that's the wrong answer. The right answer is that on New Year's Eve, December 31st, I'm on the last plane from Washington to New York, turning around the next morning and taking the first plane back to Washington, to demonstrate my confidence that not only would the air traffic system work in the United States, but that you'll be able to get in and out of cities without difficulty.
Now, my wife thinks if the president finds out that the guy in charge of all of this is on an airplane to New York New Year's Eve that he's not necessarily going to think that was the greatest decision. But that is what I'm planning to do, because I do think it's important to demonstrate confidence in the system, and I've actually been saying that since last June when nobody in the United States but me thought our air traffic system would be fixed. But it's clear it's now going to be done by the end of June.
So, I'm going to be flying. Every once and a while, I get emails that China has decided to have its airline executives fly. I saw one email noting that British Airlines may have some of its executives flying. All of us trying to demonstrate that this is not going to be the end of the world.
QUESTION: What support is being provided to resolve Y2K problems?
MR. KOSKINEN: Well, that's an important question and a difficult one, obviously. We followed the lead of the British, who I think did a wonderful job with the contribution they made to the World Bank last year, at a time when the funds were critically needed, to provide support and planning support to countries around the world. We've provided funding to the World Bank to continue that work. Part of the funding is being used to support the International Cooperation Center. Our hope is, and the World Bank's hope is that other countries will join in that effort. I think Canada and other countries have already made contributions.
But the point you make is a good one, and that is that we're talking about a significant amount of need. To some extent, I've been concerned, actually, by the lack of requests from countries around the world, developed countries, for financial assistance, and I've been concerned because I've been worried that that means they're not paying attention to the problem, and are not focused on it. I think at this juncture, I know our Export-Import Bank is now planning on working with the International Cooperation Center to make available loans. The World Bank is and does have available loan facilities that they've made available. Some of the regional banks, the development banks regionally have loans available. And I think that we do need to work together. It's an appropriate subject for APEC countries, and for the G8 and others to consider in terms of investing now in preventing difficulties rather than having to pay significantly larger costs when there are all those failures.
But, as you can tell, there are kind of incremental things being done. I do not, at this point, see a major change yet in exactly how we're going to deal with this problem. And I think it's an appropriate subject for conversation.
MODERATOR: Well, that's the last question, John.
On behalf of the conference, and the co-chairman, I would like to thank you very much for staying up late in your office to address us today, and for being so frank in your responses to the questions raised. I think we've had a very productive and useful beginning to the conference.
MR. KOSKINEN: It's been my pleasure, and I really am delighted to continue the work that we've had with many of you in the meetings leading up to this meeting. I look forward to seeing all the national coordinators at the United Nations in June. And, I look forward to figuring out how we're all going to celebrate once we get through the year 2000, and look back on the impact of all of the work that we've done together.
So, as I've said before, good luck to all of you.
(end transcript)
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