China China’s State Council approves bill to amend Production Safety Law, to send it to National People’s Congress

On November 25, 2020, the Standing Committee of the State Council of China approved the bill to amend the Production Safety Law, and decided to request the National People’s Congress, the legislature, to deliberate on it. The bill puts greater emphasis on the responsibilities of production and business operation entities. It proposes establishing two systems for safety risk classification and management, and potential risk assessment, respectively, and developing a mechanism to get rid of safety risks by coordinating these two systems. It also clarifies the responsibilities of local governments, emergency management bodies and industry management bodies, as well as setting out tougher penalties for violations of the Production Safety Law.

The bill makes changes to 48 articles of the current law: wording changes to 32 articles and more substantial changes to 16. Here is an overview of the important points of the amendment relevant to companies.

Greater production safety responsibilities of companies (Article 6 and 14)

Companies must regularly report on the assessment of and measures against the potential risk of major accidents to the competent safety supervision body. The supervision body records this information in the national emergency management information system. In addition, companies that produce, handle, store or transport dangerous goods, including inflammable/explosive goods and hazardous chemicals; and companies responsible for the management of places with a higher risk of accidents leading to many casualties, including mines and smelters, must develop measures for safety accident emergency response. Other types of production and business operation entities must develop an emergency rescue plan.

Protection of employees (Article 8)

The amendment bill introduces provisions on the protection of employees. When a production safety accident (industrial accident) happens, the production and business operation entity must provide a first aid to the involved employees immediately. Employees harmed in a production safety accident have the legal right to Industrial Accident Compensation and Production Safety Responsibility Compensation.

Tougher penalties for companies (Article 91, 93, 94, 95 and 99)

A new provision added to Article 91, 93, 94, 95 and 99 of the law, which set administrative penalties for companies, states that when an illegal act is found for the first time, an accident fine will be imposed on the person in charge of production safety management as well as the company. Another provision added in relation to paragraph 8 to 12 of Article 21 stipulates that production and business operation entities will be forced to shut down if they don’t meet the production safety standards and cause a relatively serious production safety accident.