Koyo to pay $2M state penalty for alleged water bottling violation

Koyo USA Corp. will pay $2 million in two installments to settle an alleged violation involving use of an unapproved manufacturing process for its bottled water, known as Mahalo Hawaii Deep Sea.

The settlement with the state Department of Health resolves an enforcement action case against Koyo, a 10-year tenant at the Natural Energy Laboratory of Hawaii Authority. The first $1 million payment to the Department of Health was received May 2. The second and final payment is due no later than Aug. 31, 2013.

“The Koyo company staff and leadership have been cooperative in correcting the unpermitted drinking water filtration process,” said Gary Gill, deputy director for Environmental Health. “The settlement payments are being dedicated to support the department’s drinking water, food safety and laboratory programs.”

The settlement money may be used to support laboratory “surge capacity” of operations, such as equipment, supplies and staff overtime needed to respond to potential threats to public health or emergency situations that occur during non-business hours. The funds may also be used to support continued food safety education programs that work with businesses on best practices to prevent illness and to support ongoing operations in the Safe Drinking Water Branch to guarantee purity of Hawaii’s drinking water systems, said Janice Okubo, Department of Health spokeswoman.

Koyo harvests water from 3,000 feet below the ocean’s surface, processes it into drinking water through its filtration plant and bottles the finished product for sale worldwide. Its Kailua-Kona plant produces 600 bottles per minute and has the capability to produce 1 million bottles daily, according to the company’s website.

The Department of Health issued a violation notice, as well as a cease and desist order, against Koyo for diverting concentrated ocean water that had been rejected by its reverse osmosis system and, through bypass piping, blending it into the final bottle water product. The alleged violation, discovered May 19, 2011, had been occurring since July 7, 2006. Koyo is required to adhere to a specific process in making bottled water from the ocean, the state agency said.

The Department of Health did not recall or embargo the bottled water product, which is marketed to consumers in Japan, Hawaii and elsewhere. Test results from independent laboratories and the state laboratory confirmed consumption of the affected bottled water product did not pose an immediate or substantial risk to human health. Koyo performed a disinfection process prior to its water product being sold, the state agency said.

Koyo was pleased the Department of Health confirmed its bottled water was safe for consumption at all times, said Mitchell Thompson, the company’s communications manager.

“The fine was for an alleged technical violation involving Koyo’s filtration process. There is no admission of wrongdoing by Koyo USA in the consent order. Instead, the Department of Health and Koyo USA agreed to settle because Koyo USA immediately made changes to its filtration process to satisfy any Department of Health concerns,” Thompson said. “Instead of expending time and incurring additional costs to dispute the alleged technical violation, Koyo USA agreed to a settlement and we are pleased to know the funds will be put to good use.”

Koyo remains permitted by the Department of Health to filter ocean water at its Kailua-Kona facility and produce a bottled drinking water product.

“As a tenant of the Natural Energy Laboratory of Hawaii Authority and a major employer in Kailua-Kona since 2002, Koyo USA has enjoyed being a part of the local community for the past decade,” Thompson said. “We are proud to be a Hawaii-based organization with strong ties to Japan. We look forward to continuing to be a major exporter of Kona deep sea water to Japan and a supplier to manufacturers and other businesses in the islands.”