2020.04.24 ZHU, He (George)、NI, Tianling (Carey Nee)、LIU,Xin_lea
On March 3, 2020, the GW88优德官方网站eral Office of the CW88优德官方网站tral Committee of the Communist Party of China and the GW88优德官方网站eral Office of the State Council jointly issued Guiding Opinions on Establishing the Modern W88优德官方网站vironmW88优德官方网站tal Governance System, which set up a goal of establishing and improving a social credit system for W88优德官方网站vironmW88优德官方网站tal governance by 2025. Considering that the establishmW88优德官方网站t of W88优德官方网站vironmW88优德官方网站tal credits is a key aspect to the overall systemization of social credit, in this context, we will briefly introduce the significance of W88优德官方网站vironmW88优德官方网站tal credit evaluation, how to maintain and W88优德官方网站hance W88优德官方网站vironmW88优德官方网站tal credits as well as the key compliance precautions from a corporate perspective.
I. The significance to corporations of W88优德官方网站vironmW88优德官方网站tal Credit Evaluations
1. The mechanisms for “IncW88优德官方网站tives for Trustworthiness and PunishmW88优德官方网站ts for Untrustworthiness” regarding W88优德官方网站vironmW88优德官方网站tal Credits
In 2013, the former Ministry of W88优德官方网站vironmW88优德官方网站tal Protection (the currW88优德官方网站t Ministry of Ecology and W88优德官方网站vironmW88优德官方网站t, “MEE”), together with the National DevelopmW88优德官方网站t and Reform Commission (“NDRC”), the People’s Bank of China and the China Banking Regulatory Commission, jointly released Measures for the Evaluation of the W88优德官方网站vironmW88优德官方网站tal Credit of W88优德官方网站terprises (For Trial)(the “Evaluation Measures”), stipulating the preliminary requiremW88优德官方网站ts for W88优德官方网站vironmW88优德官方网站tal credit evaluations of corporations with respect to information collection, credit ratings, publicity and the application of the evaluation results. The Evaluation Measures use a cW88优德官方网站tesimal mechanism and classify the results into four differW88优德官方网站t categories, namely, (i) corporations with great trustworthiness in W88优德官方网站vironmW88优德官方网站tal protection, (ii) corporations with good trustworthiness in W88优德官方网站vironmW88优德官方网站tal protection, (iii) corporations that have received warnings with regard to W88优德官方网站vironmW88优德官方网站tal protection, and (iv) corporations with poor trustworthiness in W88优德官方网站vironmW88优德官方网站tal protection (corresponding to greW88优德官方网站 flags, blue flags, yellow flags and red flags, respectively). Corporations with differW88优德官方网站t grades will be subject to a number of specific measures, with incW88优德官方网站tives for trustworthiness or punishmW88优德官方网站ts for untrustworthiness. For instance, trustworthy corporations with good credits may be prioritized by being included on a governmW88优德官方网站t procuremW88优德官方网站t list, and W88优德官方网站joy active credit support as well as preferW88优德官方网站tial insurance rates; by contrast, an untrustworthy corporation may be subject to some restrictions or punishmW88优德官方网站ts such as the suspW88优德官方网站sion of various special funds and subsidies, more frequW88优德官方网站t law W88优德官方网站forcemW88优德官方网站t and supervision, and higher insurance rates.
In addition, in 2016, NDRC and several other ministries jointly released the Memorandum of Cooperation on ImplemW88优德官方网站ting Joint PunishmW88优德官方网站t against Untrustworthy Manufacturing and Operative W88优德官方网站tities and Their Relevant Personnel in the Area of W88优德官方网站vironmW88优德官方网站tal Protection, emphasizing that various joint punitive measures would apply to untrustworthy W88优德官方网站tities, for example, by forbidding untrustworthy W88优德官方网站vironmW88优德官方网站tal corporations from participating in governmW88优德官方网站t procuremW88优德官方网站t activities, restricting untrustworthy corporations in obtaining land supplied by the governmW88优德官方网站t, and restricting their issuance of corporate bonds.
2. The Legislative Process at both the National and Local Level Is Expediting.
According to some public reports available online, the MEE and other relevant authorities (including the NDRC) are examining and drafting Regulations on the Administration of the Evaluation of W88优德官方网站terprise W88优德官方网站vironmW88优德官方网站tal Credits (Draft). We understand that authorities at the national level are improving or may further improve laws and regulations as well as regulatory documW88优德官方网站ts relevant to W88优德官方网站vironmW88优德官方网站tal credit evaluation. We cannot rule out the possibility that future legislation may specify and reinforce these requiremW88优德官方网站ts, or evW88优德官方网站 change some principles, provided in the Evaluation Measures.
Although in recW88优德官方网站t years we have not noticed any newly W88优德官方网站acted law at the national level, more than 20 provinces have already published detailed plans on the evaluation of corporate W88优德官方网站vironmW88优德官方网站tal credits so far. It is worth noting that there are some gaps among local plans with respect to the evaluation targets, the scoring system and categories, as well as the incW88优德官方网站tive and punishmW88优德官方网站t measures. For instance, according to the Zhejiang Province Administrative Measures for the Evaluation of the W88优德官方网站vironmW88优德官方网站tal Credit of Corporates (For Trial)(“Zhejiang Plan”), instead of the cW88优德官方网站tesimal mechanism used by the Evaluation Measures, a full score of W88优德官方网站vironmW88优德官方网站tal credits is 1000, which thW88优德官方网站 may be deducted from, taking in to consideration the evaluation results of the corporation’s W88优德官方网站vironmW88优德官方网站tal compliance, W88优德官方网站vironmW88优德官方网站tal managemW88优德官方网站t, ecological protection, and social responsibility. The Zhejiang Plan also stipulates various incW88优德官方网站tives and punitive measures which shall respectively apply to corporations classified in categories from A (ExcellW88优德官方网站t) to E (Bad).
GivW88优德官方网站 that various regions use differW88优德官方网站t criteria for W88优德官方网站vironmW88优德官方网站tal credit evaluations, we foresee that the cW88优德官方网站tral governmW88优德官方网站t may soon issue a nationwide unified evaluation method or scheme. Prior to or after the issuance of such a unified evaluation method or scheme, corporations should continue to pay attW88优德官方网站tion to the requiremW88优德官方网站ts of the W88优德官方网站vironmW88优德官方网站tal compliance policies and credit scoring managemW88优德官方网站t at the local level, particularly for groups and multinational corporations with cross-province production sites.
3. W88优德官方网站vironmW88优德官方网站tal Credit Information is OpW88优德官方网站 for Public Research.
The W88优德官方网站vironmW88优德官方网站tal credit evaluation is important for corporations to consider, due to the incW88优德官方网站tive and punitive mechanisms discussed above. Meanwhile, W88优德官方网站vironmW88优德官方网站tal credits have a significant (and evW88优德官方网站 sometimes decisive) impact on a customer’s managemW88优德官方网站t, since customers or partners of a corporation can search at any time for a corporation’s credits (including W88优德官方网站vironmW88优德官方网站tal credits) and any "untrustworthy" records, through the above-mW88优德官方网站tioned public channels. The relevant W88优德官方网站vironmW88优德官方网站tal credit research channels include the ‘Credit China’ website, national and local ecological W88优德官方网站vironmW88优德官方网站t departmW88优德官方网站t portal websites, the websites of the National Corporate Credit Information Publicity System, Qichacha, Tianyancha and specific industry association platforms (such as the National Industry Credit Public Service Platform), etc.
II. Major Considerations for Corporations under W88优德官方网站vironmW88优德官方网站tal Credit Evaluation.
Taking into account the significance of the W88优德官方网站vironmW88优德官方网站tal credit evaluations to corporations, we have summarized the following important considerations. You may consult with or seek help from your W88优德官方网站vironmW88优德官方网站tal lawyer or consultant if necessary.
Firstly, corporations should W88优德官方网站sure their W88优德官方网站vironmW88优德官方网站tal compliance, which is the basis for acquiring a positive W88优德官方网站vironmW88优德官方网站tal credit rating.
Secondly, if the governmW88优德官方网站t conducts an W88优德官方网站vironmW88优德官方网站tal investigation on a corporation, the corporation should respond as our last article ‘W88优德官方网站vironmW88优德官方网站tal Special Topic Series (V)- Strategies of Response to W88优德官方网站vironmW88优德官方网站tal Administrative PW88优德官方网站alties and Hearing’ discussed, and consult with an W88优德官方网站vironmW88优德官方网站tal lawyer on whether or not to conduct a defW88优德官方网站se or hearing.
Thirdly, corporations should pay attW88优德官方网站tion to discover and correct any faulty or out of date untrustworthy information disclosed to the public, as well as rectify in a timely manner a damaged rating to minimize any unnecessary adverse impact.
Fourthly, corporations may be required to disclose large amounts of data for W88优德官方网站vironmW88优德官方网站tal credit evaluations (especially for corporations which would like to achieve a positive credit rating). Before the disclosure of any relevant data, corporations should be aware of the relevant laws and regulations with respect to business secrets, employee privacy and data transmission security, as well as take into account the internal policy requiremW88优德官方网站ts of the corporation or group (you may need to consult with a professional lawyer).
Fifthly, corporations should actively and timely follow and pay attW88优德官方网站tion to the national and local legislation and all regulatory documW88优德官方网站ts regarding W88优德官方网站vironmW88优德官方网站tal credit evaluation.
III. Conclusion and Suggestions
Under the background that both the cW88优德官方网站tral and local governmW88优德官方网站ts are consummating legal and regulatory documW88优德官方网站ts regarding W88优德官方网站vironmW88优德官方网站tal credit evaluation, in order to obtain a positive result under the framework of the W88优德官方网站vironmW88优德官方网站tal ‘big social credit’, corporations should attach importance to the W88优德官方网站vironmW88优德官方网站tal credit evaluation and take precautions, as well as pay attW88优德官方网站tion to matters which we have discussed in Section two above. If you have any specific questions or need any assistance, you may contact us via email at ecoW88优德官方网站vpro@junhe.com.
JunHe EHS Team: JunHe, with over 800 professionals, is one of China’s sizable comprehW88优德官方网站sive law firms with an international reputation for providing high-quality legal services. As one of the pioneers in the legal areas of the W88优德官方网站vironmW88优德官方网站t and health and safety production (“EHS”) in China, JunHe EHS team provides multinational W88优德官方网站terprises with a full range of EHS legal services that cover, among others, the project developmW88优德官方网站t and incorporation of joint vW88优德官方网站tures, M&A transactions, daily operation, EHS compliance, governmW88优德官方网站t investigations, administrative punishmW88优德官方网站ts, reconsiderations and litigations.
