Date: 1999/03/16Forum: comp.software.year-
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Forgive me if this is old news to the group. I don't recall seeing it but
error is not uncommon for me. Cheers, AGF
Report: A Canadian delegation led by Guy McKenzie, Assistant Secretary,
Treasury Board
Secretariat, and including Nancy Stiles, Director General, Y2K
Coordination Secretariat, DFAIT, Jim Harlick, Executive Director, Y2K
Planning and Coordination, PCO, Evelyn Levine, Executive Director, Policy
Coordination and Communications Division, National Contingency Planning
Group, Connie Edlund, Director General, Task Force Y2K Secretariat,
Industry Canada, Major General Alain Forand, Executive Director, Strategic
Assessment and Contingency Planning Division, National Contingency
Planning Group, and Lynn Morris, Principal Analyst, Treasury Board
Secretariat, met in Washington on February 22nd, 1999, with John Koskinen,
Chair of the President's Council on Y2K Conversion, his staff, the US Y2K
Sector Leaders and other US officials for the 3rd Canada-US bilateral Y2K
meeting............
3. Koskinen opened the meeting by noting the "impressive" Canadian
progress in remediation and public outreach and said that the US would be
"delighted" to follow Canada's example of Y2K preparedness. He described
the aim of the meeting as to review areas of concern and identify where
additional work might be required. McKenzie responded that the bilateral
cooperation was going "extremely well" and that the meeting would provide
a first assessment of our progress. He noted that the sector reports on
bilateral cooperation were either already completed, under discussion, or,
in some cases, still being compiled. The response to Y2K encompasses risk
assessment, remediation, and contingency planning but as the year
progresses the work will move more and more towards contingency planning.
McKenzie suggested that contingency planning coordination should be a
focus of the next bilateral meeting. Koskinen agreed that the next meeting
in the summer should consider contingency planning, emergency response
coordination and the creation of coordinated federal emergency response
cells.
4. The US side provided a sector-by-sector report on the progress of US
national Y2K preparations:
Defence: The number one US priority is ensuring that the US military can
respond effectively to national security challenges and Secretary Cohen
has made Y2K a warfighting readiness issue which senior US military
commanders are responsible for fixing. 81 % of US Department of Defense
(DoD) mission critical systems have been tested and contingency plans and
workarounds are being prepared. Koskinen is confident that DoD will be
ready by December.
Finance: The US financial sector is heavily regulated and supervised which
allows greater federal intervention and the Federal Reserve Board (FRB) is
receiving very "positive news" about US Y2K preparations. Internal testing
is completed and external testing of information systems is under way.
Full implementation is expected by June 30th. The FRB is limiting changes
to its own computer systems for the rest of the year. The US program is
risk-based and focused on key players to ensure their readiness with
contingency planning and event management for any failures. A few hundred
smaller, isolated, financial institutions are lagging behind and may not
be ready in time. One third of them are waiting to see what fails and then
fix it. Some minor disruptions are expected as a result but Koskinen is
increasingly confident that there will be no nationwide systems failures.
There are concerns about consumer reactions in December, massive cash
withdrawals and demands for hard copy bank and other financial statements.
250 billion additional dollars will be available in cash and the US
government may insist upon standardized electronic backups through the
Federal Deposit Insurance Corporation (FDIC), although that may pose an
excessive administrative burden. In any event, it is up to the banks and
other financial institutions to comfort their customers, although Koskinen
will advise the public to keep all bank, credit card and other financial
statements around year end.
Electricity: Based on currently available information, the US electrical
power industry will be prepared for Y2K rollover. These preparations are
an industry responsibility with government supervision. The North American
Energy Research Council (NERC) is coordinating this effort and 98 % of US
industry is involved. There will be an industry-wide communications drill
in April and a full dress rehearsal on September 8th and 9th. No
"show-stoppers" have been identified but it is expected that 2 % of the US
industry will not be prepared. It is not yet possible to identify which 2
% or where in the US. The industry expects Y2K interruptions to last
minutes or hours but not days or weeks and it is working on contingency
plans at the NERC, region and interconnection level. The contingency
planners are concerned that, December 31 - January 1 being a weekend,
there might be an excess of electricity generated. It will be important
for the utilities to reassure their customers but the US government would
like to supplement this information with a "credible second opinion".
Koskinen suggested that a joint Canada-US statement to this effect could
have a very positive impact and he proposed that both countries think
about this in the fall.
Customs, Immigration, International Trade: US Customs' Y2K preparations
are well-advanced and US government systems should be Y2K-ready by June. A
Y2K emergency response center will be up and running by August 1st and the
US intends to resolve any remaining Y2K problems as they occur. The US is
not establishing a special Y2K interface with Canada but will depend upon
long-established collaboration at the border.
Telecommunications:The Federal Communications Commission (FCC) is leading
US efforts and assessing overall industry readiness which is complicated
by the diverse and competitive nature of the industry. Larger companies
are well-prepared and 98 % of US access lines belong to large carriers.
The remaining 1.5 to 2 % belong to small carriers that are lagging
seriously behind in some cases. These small carriers are very important in
certain states and only 50 % of them have formalized Y2K plans. There is
some concern about wireless carriers as well, mostly because little
information is currently available on their readiness. Broadcast and cable
providers are doing well but, again, with big differences between the
preparedness of large and small companies. The US is happy with the
efforts of the Stentor Group and GE. International testing is set for
June.
Transportation: The US government is focusing initially on issues of
safety and convenience to the travelling public and dealing with its
internal systems. The Federal Aviation Administration (FAA) air traffic
control system should be ready by June. Focus is now shifting to industry
and 83 trade associations, covering all modes of transportation, are being
canvassed. Companies and industries report their readiness as "pretty
good" but there is "great concern" about the state of small and medium
sized companies and in small and rural communities. Aviation and maritime
transport has received the most attention. Major air carriers and large
airports have made "excellent progress". The US Coast Guard has organized
a meeting in London with the International Maritime Organization (IMO) for
a selection of global marine associations in the first week of March. The
railroad industry will also be generally prepared. With regard to foreign
airlines and travel in other countries, the US State Department will issue
travel advisories with specific information about countries and carriers
in October. US, Canadian, British and Australian consular officials will
meet April 25th - 26th and the US hopes that national coordinators will
share information on national preparedness at the next UN Y2K meeting in
New York on June 16th - 18th.
Oil and Gas: The highly diverse, disaggregated and competitive nature of
the oil and gas industry has made US Y2K preparations more challenging. 13
% of US natural gas supplies come from Canada. 6 federal agencies and 25
industry associations (some including British and Canadian companies) have
met and the situation is looking "better and better". 60 % of industry is
remediating and testing. Two industry-wide surveys have been conducted:
another will be in April and the results should be announced in May or
June. The main problem remains smaller companies at the distribution end
of the pipeline. US emphasis is on contingency planning and supply chain
issues. A tri-industry (oil and gas, electricity, telecommunications)
working group has been established.
An international oil and gas forum is being set up. It has met once and
will meet again in March.
Water: The water and waste industries are diffuse and widespread,
generally at the local level. The US Environmental Protection Agency
(EPA) - the sector lead - is 100 % Y2K compliant but so what. More than
15,000 sewer system agencies and 55,000 water supply systems need to be
prepared. According to the Association of Metropolitan Sewer Agencies, 90
% of their members have assessed the Y2K problem, 95 % are working on it,
but only 20 % have completed their remediation. 51,000 medium and small
water systems supply 20 % of the US population and only 77 % of them
expect to be compliant, compared to 90 % for the larger urban water
suppliers. Koskinen admitted that water is more problematic and offers
less scope for federal control or intervention. On the positive side, most
water supplies can be managed manually if necessary. Rumours abound about
potential difficulties with chlorination, fluoridation and other chemical
treatment but there is no evidence of it. The EPA will provide
confirmation of this to Canadian officials, Koskinen said.
5. Overall, Koskinen concluded US preparations are proceeding well
although there is a clear and worrisome distinction between the levels of
preparedness of large companies and industries on one hand and small and
medium businesses on the other. There is a similar distinction between the
readiness of federal, state and local governments. Larger businesses and
larger governments are better prepared but many essential services are
provided by smaller companies and local governments. This could be a
problem.
6. In contrast to the US presentations on their own national preparedness,
McKenzie provided an overview of the state of Canada-US cooperation within
the various bilateral working groups. He noted that work on air, rail,
road and marine transportation was mostly completed. Work on electrical
power, oil and gas, water and waste, defence and telecommunications is in
progress. More work needs to be done between the two countries on
financial services.
7. According to the Canadian Electricity Association, the Canadian
electrical power industry will likely rollover successfully. There is good
cross-border cooperation established. There is strong Canada-US
cooperation on oil and gas and the report of the working group is being
prepared. There was a telecommunications interoperability test in December
1998 and the system will be Y2K compliant by June. Stentor has been very
active. Contact in the financial sector was only established recently. The
Canadian system is in very good shape and the Canadian Banking Association
is eager to work with the federal government on messages to the public.
McKenzie suggested that the US and Canada might coordinate their
communications on these issues. A lot of time in the second and third
quarters of 1999 will be spent squelching rumours, Koskinen said.
8. The Y2K defence cooperation group, including Canada, the US, the United
Kingdom and Australia, met in February and Canada-US contingency planning
is going on service-to-service. The working group on water and waste has
not met yet but the experts have agreed on a process. Canada remains
concerned about the management of shared water courses, including flood
control, and McKenzie urged the US to get going on this with Canada.
Canada and the US are working together closely on air and rail
transportation. More needs to be done on the marine side and Transport
Canada is planning to host a marine transport meeting in March. 9 bridges
and 1 tunnel along the border are of concern to road transportation and
McKenzie provided details on these sites of concern to Canada. McKenzie
noted that better Canadian coordination on the customs and immigration
side is still required.
9. Like the US, Canada has concluded that its big players should be
alright but continues to have concerns about the prospects for medium and
smaller enterprises. What can the Canadian and US governments do for these
smaller entities, McKenzie asked? Koskinen advised that US federal
attention would soon shift to the state and local level and the
international situation.
10. Following the sector status overviews, discussion turned to the
question of public communications. McKenzie explained the integrated
Canadian approach coordinated at the federal level to monitor and influence
public Y2K
expectations. The Canadian government is being pro-active in getting its
messages out and using polling and research to verify that these messages
are being received and understood. Statistics Canada is conducting a
nation-wide Y2K survey of industry the results of which should be released
in April. Special efforts are being made for small and medium enterprises,
through tax breaks and the provision of coop students to help with
remediation. Industry associations are also being employed to spread the
word. McKenzie suggested that a coordinated Canada-US approach to
communications would offer benefits.
Part Two follows separately.
11. Koskinen agreed that there was much to be gained from sharing
information and promised to share major US announcements and assessments
with Canada. He also offered to share US survey information, survey and
media plans. The US Senior Advisory Group (SAG), that includes CEOs of
major US firms, met for the first time at the end of January and concluded
that public reaction and communications was a significant cross-industry
issue. The SAG will meet again in March. Koskinen said that he is making
a major effort to get individual companies to advise their customers of
their Y2K situation. He hopes to localize Y2K non-compliance. The first US
Y2K action workshop was held in October 1998 and another one, for small
business, is being organized for the last week of March. Koskinen intends
to run seminars across the country to provide technical information on
fixing Y2K problems but lamented that it is difficult getting people to
turn out for them. However, remaining Y2K exposure is increasingly
concentrated in rural areas where these events are better attended,
Koskinen said. He is planning a series of town hall meetings by the end of
May where local public officials can talk about Y2K readiness. Hopefully,
these meetings will help to "energize" people at the local level.
12. McKenzie noted that health, nuclear issues, and the international
ramifications of Y2K are all rising in Canadian public consciousness.
Koskinen replied that, on the basis of calls to the Commission's 1-888
number, people in the US seemed most concerned about banking, power,
government systems and, more recently, the food supply. By May or June,
they will begin to notice the international ramifications. Money has not
been an issue for small business compliance. Koskinen asked for
information on use by Canadians of tax breaks offered for Y2K remediation.
He also asked for information on the Canadian experience with town hall
meetings and info fairs. The US is "delighted" to share information with
Canada, Koskinen said. It was agreed to share contact lists of officials
in the President's Commission, Treasury Board Secretariat, other
government departments and agencies and in US and Canadian industry.
13. Major General Forand provided a briefing on the role and establishment
of the National
Contingency Planning Group. He noted that a risk assessment of Canada's
national infrastructure would be ready by the end of March and that
recommendations to Ministers would be ready by September 20th. Koskinen
remarked that there is clearly benefit from sharing perspectives,
particularly risk assessments. In the US the intention is to build upon
existing federal capacity, especially the Federal Emergency Management
Agency (FEMA). Regional meetings with state emergency management agencies
will also be held. The Departments of State and Defense co-chair an
inter-agency working group on international crisis response to Y2K. A US
government-wide Y2K tabletop exercise will be held on June 19th - 26th.
The US government will not move or expand the federal holiday but it is
issuing a government-wide leave policy. Koskinen asked to see the Canadian
government leave and holiday policy when it is decided upon.
14. The US is looking at industry-wide contingency planning. Everyone will
have experienced people working through the New Year. The industries
themselves should create inventories of these expert resources and contact
lists so that this expertise can be brought to bear, by phone, fax, or
email, where it may be needed. Koskinen admitted that the US federal
government may have to create and fund national help centers for some
sectors and industries. It will also create a small number of computer
emergency response teams to deal with software problems at rollover.
Koskinen's staff is now designing a reporting template, outlining what
information and how often it should be reported to Washington, for the
rollover period. North America will have 17 hours notice of Y2K rollover
problems starting in New Zealand and there will be full-time monitoring on
December 31st and January 1st. The collection and dissemination of this
information should be centrally coordinated. It was suggested that regular
updates and bulletins, similar to storm and other weather warnings, should
be broadcast over CNN and other TV and radio networks. A list of US Y2K
command centers will also be distributed to the relevant agencies, private
firms and organizations.
15. After lunch, Under Secretary of State Bonnie Cohen led discussion of
the international dimension of Y2K risk and contingency planning. She
noted that it is often "unnerving" to meet foreign Y2K coordinators who do
not have a clue. The State Department has spent a lot of time ensuring the
functioning of its internal systems. It has canvassed all US diplomatic
missions abroad on their Y2K preparedness, given local conditions in each
country. Each mission has been asked whether it can assure adequate
supplies of food, water and electrical power as well as uninterrupted
communications with Washington for up to 30 days. This information is
coming in post by post and Cohen agreed to share it with Canada. An
iridium satellite phone is being provided to every US post. US State
Department employees were advised in December 1998 that essential
personnel, designated as "emergency employees", will not be granted leave
from December 15th - January 30th. Because of the level of threat against
US diplomatic personnel, the State Department will consider authorized or
ordered departures for dependents and non-essential personnel from
countries where there is risk of civil disorder or government breakdown.
Decisions on this will not be made before November or December. The first
iteration of US country-by-country analysis will be ready by March 26th.
Individual country assessments will be shared with US posts and they will
be asked to follow-up locally.
16. Cohen noted that the US government is required by law to share its
information with the US public. The State Department has already issued a
Y2K travel advisory that the Gartner Group critiqued as a "gentle
warning". Drawing inspiration from Canada's consular lists, the State
Department has done an analysis of where abroad US citizens reside and
travel. A US task force will begin to consider contingency plans in April.
Cohen offered to share consular information and procedures with Canada.
17. Nancy Stiles provided the corresponding overview of Canadian
preparations. Mission contingency planning templates have been prepared
and are being sent to Canadian diplomatic posts. They contain two parts:
risk assessment and contingency plan. Risk assessments are to be completed
by April 15th and contingency plans should be ready by June. Signet 2000
will correct DFAIT information technology Y2K deficiencies and INMARSAT
phones will be provided to Canadian overseas missions as well. Ottawa has
issued guidance to posts on leave policy: essential employees as
designated by each embassy must be at post. It is very unlikely that
Canadian diplomatic personnel will be evacuated from anywhere since they
should remain in country to assist Canadians. A Y2K travel advisory is
being issued that should also serve as a "gentle warning" to Canadians.
Canada is focusing on 30 countries where Y2K failures could have the most
impact on Canada's trade. Foreign policy implications of Y2K preparedness,
humanitarian disaster, civil disorders, etc., is being followed for 39
countries, many of which are also on the list of 30. Stiles offered to
share whatever information we have but noted that it is still preliminary
at this point. Cohen offered to swap lists of missions that will or will
not have electrical power, standalone generators, and other essential
services at rollover. Stiles agreed, noting that cohabitation in secure,
sustainable quarters would be an option in countries where one or the
other mission's facilities were inadequate for the situation.
18. The State Department then provided an overview and state-by-state
description of Y2K preparedness in selected countries. The Us concludes
that key trading partners, Japan, China, Germany, Mexico, Brazil, are all
at medium to high risk. Eastern and central Europe, Russia, Latin America,
Africa and East Asia are the greatest problem areas. Y2K failures in
Russia and Ukraine could have a global impact and, given the climate,
trigger major humanitarian disasters. Foreign requests for Y2K assistance
have been limited so far but they are now beginning to appear. Questions
arise about how to organize assistance. Cohen introduced Bruce McConnell
from the US Y2K Commission staff who has recently become the head of the
International Y2K Coordination Center. McConnell suggested further
discussion of Canada's contribution to the Center.
19. Secretary Albright has written to her G-8 colleagues suggesting that
they agree to divvy up initial responsibility for providing assistance and
that they send representatives who can speak for their governments on
these matters to the next G-8 meeting. Stiles replied that it was
necessary to get the G-8 Y2K effort more connected with the Sherpa effort.
Cohen agreed that the issue demanded high-level G-8 attention so that we
can begin to prepare a plan for concrete outcomes.
20. The maritime transport sector is least-prepared globally for Y2K
rollover and the operation of shipping and port facilities is a "serious
concern". Navigation, ground transportation, facilities, and terminal
problems could all effectively close ports. Stiles suggested that Canada
and the US develop Y2K readiness assessments of key international ports.
US officials demurred objecting that it would be very difficult to do so.
They noted, however, that a March 2nd - 3rd meeting in London, organized
by the US Coast Guard and with the cooperation of the IMO, would provide a
first opportunity to begin to accumulate data on ports, companies and
shipping lines Y2K preparedness.
21. The US offered to discuss Japan, China, Germany, Mexico and Brazil.
Canada asked to look at Venezuela and Italy as well. Stiles also suggested
further consultations between US and Canadian Y2K country analysts in the
near future.
Japan's Y2K preparedness has been rated very low by the Gartner Group. In
response, the Japanese government has put a very aggressive plan in place
but the ongoing financial crisis will affect Tokyo's ability to implement
its plan. The US is working with Japan on finance, transportation, medical
services, energy, information technologies and communications. President
Clinton will discuss Y2K with Prime Minister Obuchi in early May. Y2K is
one focus of the bilateral relationship and the US remains concerned about
possible capital flight from Japan.
China was late in addressing Y2K issues and its telecommunications,
electricity and banking systems are all at risk. Computers are not
widespread in China but Chinese customs, police, aerospace and steel mills
could all suffer disruptions. There is also some concern about Y2K effects
on Chinese missiles. It was suggested that we need to be "rude" in
insisting that China address its Y2K responsibilities.
Germany is not apparently giving Y2K the priority attention that it
deserves. The German government's focus has been diffuse and no
information is available on key infrastructure preparedness. There is a
sense that German industry is very active but the government sector is
lagging behind. It was noted, however, that Germany may simply be
preparing itself in a typically thorough but German fashion. The Germans
are not particularly concerned about disruption of gas and oil supplies
from Russia because they routinely store a 90 day supply in Germany.
Mexico is at high risk for Y2K computer failures, even though it is less
computerized overall. The centralized use of computers by the government,
key industries and the central bank leave Mexico vulnerable. Key
conglomerates appear well-prepared and the public sector is well-organized
and moving ahead. Y2K preparations in the financial and telecommunications
sectors are well advanced but there is a low level of awareness in the
private sector overall. The state of the Mexican oil sector is of
particular interest.
Brazil's financial crisis is impinging on its ability to address Y2K
issues. Telecommunications are especially problematic, although the recent
purchase of Telebras by MCI may address that. Electrical power is also of
concern. Brazilian banks and airlines have made a lot of effort but their
success will depend upon telecommunications and electric power.
Venezuela is of concern because of its oil and because of limited
information on its Y2K efforts. The Venezuelan oil industry has had the
money to fix its own Y2K problems but remains dependent on
telecommunications and electric power in the hands of others. Venezuela is
looking at workarounds using private power companies if the public system
goes down and is preparing contingency plans for failures state power
company failure. Maritime shipping of Venezuelan oil is another concern
but there is almost no information available.
There is little evidence that the Italians have done much about Y2K at
all. The Gartner Group rates Italy as medium risk. This also raises
concern about Italy's ability to support NATO operations in Bosnia, Kosovo
and the Adriatic.
22. The meeting closed with a shared recognition of the value of ever
closer cooperation and coordination. The US offered to prepare official
working minutes of the bilateral meeting that will be shared and jointly
approved but not publicly disseminated. Koskinen and McKenzie tentatively
agreed to meet again in similar fashion in June, probably in New York in
connection with the next UN Y2K meeting.
Drafted: P.G.Bates
Approved: J.Allen
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