Association gauges opposition to Japan software quality proposal

Electronic News, June 12, 1995

WASHINGTON, D.C. --In drumming up awareness of a proposed Japanese quality standard called JIS Z9901 which several U.S. companies and groups say may become a significant trade barrier to U.S. software exports (EN, May 29 and June 5), the American Electronics Association (AEA), working with the Information Technology Industry Council (ITIC), has widely circulated a letter to the U.S. industry to gauge the level of opposition.

In a recent letter obtained by Electronic News, the AEA maintained that under the Japanese proposal, companies seeking to sell products which contain software of any kind in Japan might have to seek third party registration of their quality system to a new and unique requirement. The group said it appears that any and all software would be covered, including contract software, packaged software, embedded system software, game software, and even software embedded in semiconductors.

The requirement is an extension of the existing ISO 9000 standards. But unlike the existing ISO 9000 standards which are globally recognized and universally accepted, the proposed standard would be unique to Japan. Japan's Accreditation Board for Quality System Registration (JAB) would certify registrars in Japan, which in turn would register companies to the new standard.

"The JAB argues that this registration scheme would not be a barrier to a foreign firm even though similar schemes in Japan traditionally have resulted in discrimination against foreign firms," the AEA states. "The JAB argues their proposal would be voluntary. However, even if the proposal started as voluntary, the risk is substantial that the Japanese government would adopt it as a requirement for doing business in Japan."

Additionally, according to the AEA even the JAB admits that this system would improve quality "at best marginally."

AEA, along with a number of interested U.S. companies and other organizations, met with the JAB in April to raise concerns with this proposal. The group said other countries, including the U.S., have considered and rejected such proposals, and "the AEA played an important role in opposing a similar proposal" by the American National Standards Institute - Registrars Accreditation Board (ANSI-RAB) in the U.S. last year. "This (JAB) proposal will affect manufacturers and systems integrators of any product containing software, from shrink wrap to games, from semiconductors to aircraft."

The AEA said it is working with its members and ITIC as well as the U.S. government to oppose the JAB proposal, the letter states, asking parties to sign a fax-back statement (which was attached to the letter) to express concern and confirm opposition. The AEA made the following points:

* AEA strongly opposes the JAB proposal and requests that the U.S. Government and industry work together to prevent the JAB from implementing the proposal;

* As the global leader in software design and development, U.S. companies will bear the burden of this requirement and potentially could be deterred in their entrance or introduction of their product into the Japanese market;

* The proposal could drive up the cost of software development by 20 percent due to audit and monitoring requirements;

* Currently, only Japanese companies are accredited by JAB, which could pose problems for non-Japanese organizations (several registrars, with global experience and resources, have applied for accreditation), and

* In effect, the proposal constitutes a non-tariff trade barrier and poses significant constraints on companies, especially those not resident in Japan.

The AEA said although the JAB has indicated for the time being that the program is voluntary, "in time, the government may require that all software sold in Japan must originate" from a registered supplier. "If so, it will be the only required national 'sectoral' program in the world."

The association also said there is no demonstrated demand for such a program from industry, scientists or engineers, adding that the Japan Union of Scientists and Engineers does not support the proposal.

"While Japan claims the proposal is designed to improve the quality of Japanese software, JAB experts have publicly stated that they do not believe the registration process will improve the quality of the software. There is no evidence, anywhere in the world, that quality system registration improves the quality of products or services.

There is significant risk that auditors could obtain proprietary information and know-how information during the auditing process. Software design and development typically involves sensitive proprietary technology. Approximately 30 percent of the U.S. exports to Japan include some software content and could be effected by this action. This registration scheme, dependent upon Japanese auditors and registrars, has the potential to expose sensitive technology and know-how to external organizations. Japanese auditors would have access to confidential design and process information."

The AEA pointed out the existing ISO 9000 International Standard for Quality Systems is designed to be used voluntarily by organizations producing hardware, processed materials, sevices and software in response to customer needs. ISO 9000 registration is required of organizations that produce products within the regulated sectors of the European Union, but the European Commission Director General has indicated that the standards have not necessarily improved competitiveness of European producers.