Companies ignore bug dangers

By CLAIRE HARVEY

The Australian, 11aug 98

 

AN ALARMING number of businesses were still ignoring the dangers of the Year 2000 bug, the man leading the Federal Government's campaign against the problem has warned.

 

Maurice Newman said governments had a duty to reveal which essential services might shut down on January 1, 2000 because of computer failure.

 

"We have an absolute right to know whether we will have power, water, sewerage, telecommunications and other public services when we enter the new century," said Mr Newman, who is also chairman of the Australian Stock Exchange, told an Insurance Council of Australia conference in Canberra.

 

"I am alarmed at how many organisations there still are which are in virtual denial."

 

West Australian research indicated nearly three-quarters of businesses had done nothing to ward off the bug, which threatened to shut down computer systems that did not recognise the change of date in the new millennium, he said.

 

"They believe Bill Gates will provide the answers – but Microsoft's official line is it's the user's responsibility," he said.

 

Mr Newman said a recent demand by the Stock Exchange for companies to disclose how they planned to combat the bug had met with a mixed response.

 

"It is clear many of the responses were legally sanitised, designed to protect the issuer rather than inform," he said. "The suppression of vital information may satisfy the parochial objective of legal protection but it is harmful to the national Y2K project."

 

Company directors who failed to reveal the true risk from the bug might face prosecution under the Corporations Law, he said.

 

"The reality is, of course, that all eventually will be revealed," he said. "Speculation has the cost of litigation and potential damages in the US at $US1 trillion [$1.65 trillion] which would exceed the total annual direct and indirect costs of all civil litigation.

 

"Potentially, insurance companies would be most at risk."

 

Companies should expect a shortage of computer equipment capable of coping with the date change, Mr Newman said.