Electrostatic discharge induced degradation is one of the serious reliability problems of GaInAsP/InP laser diode. The authors have conducted an analysis on electrostatic discharge induced degradation, and clarified the principal degradation mechanism. Main cause of degradation is heating by light absorption at the active layer facet. This phenomenon is similar to the catastrophic optical damage that occurs in a GaAs-based high power laser diode. This problem is more serious in recent tendency to high power demand. Therefore degradation suppression technology is extremely important. We focused on facet coating that is one of key process to suppress facet degradation. And we demonstrated that the facet degradation is successfully suppressed by inserting an aluminum ultra-thin layer between the semiconductor and dielectric coating films. This effect is caused by reduction in surface recombination. This degradation suppression technology has potential to be applied to not only GaInAsP/InP laser diode but arbitrary InP-based laser diode.