China Enacts New Work Safety Law in Wake of Lethal Accident
China’s new Work Safety Law came into effect on December 1, 2014. The country has been struggling with maintaining work safety for a long time now, as shown by the frequent and often fatal mining accidents. The law comes in the wake of a major explosion at a car parts factory in Kunshan, a satellite city of Shanghai. Investigations later showed that one of the causes of the accident was that most factory staff was unaware of the safety procedures at the plant. This is one of the reasons the new Work Safety Law places strong emphasis on staff training and education.
Work Safety Supervisor
The law intends to sharpen up safety controls at production facilities in a number of ways. For starters, it requires companies with over 100 staff members to have a full-time work safety supervisor, or a dedicated work safety department. Dispatched employees are included in the count. Companies engaged in mining, metal smelting, construction and road transport need to have this, regardless of staff size. For production facilities with less than 100 staff members, a part-time work safety supervisor is sufficient.
The work safety supervisor is tasked with creating the work safety rules and procedures. If the company’s management intends to make a business decision affecting work safety, the work safety supervisor needs to be present at the meeting. Staff members of the local government’s safety regulator may attend the meeting as well. The work safety rules need to be placed on a sign or bulletin board at a clearly visible place. There need to be signs at the facility showing what areas are potentially dangerous, and where one would be safe.
The work safety supervisor also needs to conduct work safety training and education programs for all staff, including dispatched employees and interns. The time, content and attendants of the training sessions need to be logged, so government supervisors can check whether the staff is actually being trained. He also needs to create an emergency evacuation plan and conduct drills with the staff. The company evacuation plan needs to align with the local government evacuation plan.
Apart from conducting training and creating rules, the work safety supervisor needs to supervise the production plant, ensure the safety rules are being followed, look for latent safety risks and make rectifications where necessary. If a latent danger is found, the work safety supervisor needs to record the danger and inform the staff.
Trade Unions to Play Larger Role
The new law grants a larger role to trade unions in supervising work safety. Trade union representatives are allowed to participate in accident investigations, and may suggest the authorities to investigate people involved.
When the company intends to change work safety rules and procedures, it needs to hear the opinion of the trade union. During construction projects, the trade union has the right to give its opinion on the design, construction and operation of the safety facilities as well as the main structure itself.
The trade union may in certain cases advise the company to rectify dangerous situations. The union may do so if it finds out that the company violated work safety laws or ordered employees to engage in risky behavior. If union representatives discover latent dangers during an inspection, they may request rectification as well. The company needs to give a timely reply to the union’s advice.
Construction Companies Responsible for Safety
Construction companies that take on projects in the area of mining, metal smelting, or the manufacturing, storage and transport of dangerous goods need to carry out construction according to the design, and will be held responsible for the structural quality of the building. Before taking on a project, the construction company needs to check whether the design has appropriate safety facilities.
Increased Powers Granted to Regulators
The new law expands the powers that the regulators have. It also clarifies which entities are allowed to regulate work safety. The main government body involved is the State Administration of Work Safety. Where relevant, other government agencies are included, such as the Commission for Science, Technology and Industry for National Defense (CoSTIND), the Housing and Construction Bureau (or Commission of Housing and Urban-Rural Development, as it is known in some cities), the Environmental Protection Bureau and the Labor Bureau.
During inspection, the regulator is allowed to do the following:
- Enter the production facilities’ premises for inspection, receive access and view relevant materials and interview staff.
- If a violation of work safety rules in discovered on site: rectify the situation or demand rectification within a certain time frame.
- Impose administrative penalties.
- Eliminate latent dangers encountered during inspection.
- If a latent danger is especially serious, evacuate staff from the dangerous area and temporarily halt production.
- Close facilities and seize equipment, tools and goods if there is evidence to believe they do not meet national and industry safety standards.
If a production enterprise refuses to cease operations, the regulator may order other entities to cease the provision of electricity and other utilities or the delivery of dangerous goods. To do so, the regulator needs to give 24 hours’ notice, unless there is an emergency.
With the new law, the regulatory agencies are required to keep a database of work safety regulation infringements. In the case of a serious infringement, the regulatory body needs to inform other government agencies.
Finally, the new law greatly expands the possible penalties that may be imposed for breaking work safety laws. The fines have been raised to much higher levels, and criminal liability has been expanded.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email email@example.com or visit www.dezshira.com.
Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.
Industry Specific Licenses and Certifications in China
In this issue of China Briefing, we provide an overview of the licensing schemes for industrial products; food production, distribution and catering services; and advertising. We also introduce two important types of certification in China: the CCC and the China Energy Label (CEL). This issue will provide you with an understanding of the requirements for selling your products or services in China.
Annual Audit and Compliance in China
In this issue of China Briefing, we discuss annual compliance requirements for foreign-invested enterprises, including wholly-foreign owned enterprises, joint ventures and foreign-invested commercial enterprises, as well as the less demanding requirements for representative offices. We also highlight the most recent tax and legal changes that will significantly influence the way companies do business in China in 2014.
Social Insurance in China
In this issue of China Briefing Magazine, we introduce China’s current social insurance system and provide an update on the status of foreigners’ participation in the system. We also include a comprehensive chart of updated average wages across China, which is used to calculate social insurance contribution floors and ceilings. We hope this will give you a better understanding of the system in China.