On January 12, 2022, China’s Ministry of Emergency Management released the “Regulations for Control of Major Illegal Loss of Trust in Safe Production” (draft opinion solicitation) on its website, and began soliciting opinions. The solicitation period is until February 11, 2022.
Scope of Application
The Act applies to companies and their affiliates in industries such as mining, chemicals (including petrochemicals), medicine, hazardous chemicals, fireworks, petroleum extraction, metallurgy, non-ferrous metals, building materials, machinery, light industry, and textiles.
If the target company causes an industrial accident (production safety accident) or violates laws and regulations related to production safety, and is subject to administrative sanctions mainly due to the following acts, and the violation is serious, the company and its related parties will be listed on the “List of Serious Illegal Loss of Trust.”
- The company that caused the serious industrial accident, the responsible person, and any other person who is found to be responsible for the accident as a result of the investigation.
- Companies and their responsible persons who have had two or more relatively large-scale industrial accidents within the last 12 months.
- Companies and their responsible persons who have been fined more than twice and less than five times the fine under Article 114 of the Production Safety Law.
- Persons who conceal or make a false report regarding an industrial accident.
- When, after an industrial accident occurs, the main responsible person of the company immediately leaves without permission without attempting to rescue people affected, and escapes during the investigation and processing of the accident.
- Companies and their responsible persons that were engaged in related production and business activities during the period that have not obtained an administrative license in accordance with the law or whose administrative license has been temporarily revoked.
- Companies and persons responsible that obtained administrative licenses related to production safety through fraud, bribery or other inappropriate means or lent related administrative licenses to other companies or individuals .
- Persons responsible who refuse to execute an administrative action after an emergency management organization has imposed the administrative action despite the person’s ability to do so.
- Other acts that violate production safety laws and regulations and that are subject to administrative sanctions.
Companies included in the list will be suspended from project screening, penalized by increasing the number of on-site inspections and increasing the insurance premium rate, and those involved will be punished by restrictions and bans on employment.
The list is valid for 3 years. After the expiration of the period, the emergency management organization that has decided to list the companies will remove the listed companies and individuals from the list and make the list public. Companies and individuals can also apply to be removed from the list 12 months after they were added by making an application.
The original text of the “Act for Control of Major Illegal Loss of Trust in Safe Production” (draft opinion solicitation) can be viewed at the following URL (in Simplified Chinese):