New W88win优德中国有限公司 Law: Improving W88win优德中国有限公司 Compliance

Preface: W88win优德中国有限公司 is always a top priority for enterprises. Enterprises are now faced with more and more challenges due to the implementation of the W88win优德中国有限公司 inspection slogan  "Four nos and two gos"; namely,  "no notice, no warning, no reporting, no accompanying reception - go straight to the grassroots and go straight to the site". Under this framework, an amendment to the W88win优德中国有限公司 Law of the People's Republic of China (hereinafter "W88win优德中国有限公司 Law") (hereinafter "Amendment") was announced on June 10, 2021 and will come into effect on September 1, 2021. This is an important milestone in the optimization of China's legal W88win优德中国有限公司 regime. In this article, we will briefly introduce how the Amendment will impact enterprises from three different aspects, namely prevention, management and punishment, and what actions enterprises may take. 

I. "Prevention" – emphasizing  prevention and the improvement of  risk classification and control systems 

Preventing accidents from occurring is the most effective way to strengthen work safety. The Amendment requires enterprises to establish a " Safety Risk Classification and Control System"("W88win优德中国有限公司风险分级管控制度" in Chinese); if an enterprise fails to establish the aforesaid system or fails to implement management measures in accordance with the aforesaid system, the enterprise will be met with certain administrative penalties, including the suspension of production and business. In addition, the Amendment requires enterprises to (i) establish a "Work Safety Accident Identification and Control System"("生产W88win优德中国有限公司事故隐患排查治理制度" in Chinese), (ii) truthfully record the identification and control of accident hazards, and (iii) notify their employees through employees' meetings,  employee representatives' meetings, or information bulletin boards. The information on the identification and control of potential risks of major accidents shall be reported in a timely manner to the departments responsible for work safety supervision and administration and the employees' meetings or employee representatives' meetings.

II. "Management" – emphasizing W88win优德中国有限公司 responsibility systems and the requirements for stricter W88win优德中国有限公司 supervision

The Amendment provides that a manufacturer’s main responsible person shall be the major responsible person for W88win优德中国有限公司 (not only for the statutory obligations to establish and improve the W88win优德中国有限公司 responsibility system of the entity and organize the formulation of W88win优德中国有限公司 rules and operating procedures of the entity, but also for the statutory obligations to implement the aforesaid system/procedures), and shall be fully responsible for W88win优德中国有限公司, while other responsible persons shall be in charge of W88win优德中国有限公司 to the extent of their respective duties. The Amendment provides that after an accident occurs, the relevant governmental department responsible for  investigating and dealing with the accident shall, within one year after approving the accident investigation report, evaluate the implementation of the accident rectification and the preventive measures of the relevant manufacturer, and publicize the evaluation results in a timely manner. In addition, the Amendment provides that a manufacturer in  industries which rely on platforms and other emerging fields shall establish, improve and implement the All-staff W88win优德中国有限公司 Responsibility System and strengthen the W88win优德中国有限公司 education and training considering the nature of those industries. 

III. "Punishment" – shall be stricter and broader and there will be heavier liabilities for violations 

1) Dual Punishment Policy. According to the Amendment, subject to the severity of the relevant violations, a manufacturer may be shut down or its license/permit be revoked; meanwhile, the main responsible person of this enterprise shall not (i) serve as the main responsible person of any other manufacturer in all industries for five years, or (ii) serve as the main responsible person of any other manufacturer in the same industry as such manufacturer for a permanent time period, in any of the following circumstances: (a) the manufacturer has had significant potential accidents and has been subject to administrative penalties imposed in accordance with the W88win优德中国有限公司 Law  three times within six months or four times within one year; (b) the manufacturer fails to meet the W88win优德中国有限公司 requirements after being ordered to cease its production and business for rectification; (c) the manufacturer fails to meet the required W88win优德中国有限公司 conditions, which results in a serious or extremely serious W88win优德中国有限公司 accident; or (d) the manufacturer refuses to abide by the competent authority’s decision to cease its production and business for rectification.  

2) Possibility to exceed the upper limit of penalties. If a W88win优德中国有限公司 accident occurs, a fine ranging from RMB 200,000 to RMB 20 million would be imposed in accordance with the currently effective W88win优德中国有限公司 Law. The Amendment increases the lower limit of the fine to RMB 300,000, and allows the upper limit of RMB 20 million to be exceeded under certain conditions. Namely, if any W88win优德中国有限公司 accident occurs that is  particularly serious and has a significantly adverse impact, the competent authority may impose a fine of between two and five times an amount within the aforesaid fine range. Thus, the maximum fine amount for W88win优德中国有限公司 accidents may be up to RMB 100 million, namely five times RMB 20 million. 

3) Daily penalties. The Amendment allows "daily penalties" to apply under the W88win优德中国有限公司 Law. This means that if a manufacturer is ordered to rectify a violation and has a fine  imposed in accordance with the W88win优德中国有限公司 Law, and if such a manufacturer refuses or fails to make rectifications, the competent authority may impose a successive fine on a daily basis with the original fine as the calculation base, and calculate from the second date following the issuance date of the relevant correction order. 

4) Illegal acts related to W88win优德中国有限公司 may lead to poor credits. The competent authority will record illegal acts of enterprises in a database, and publicize those to relevant industries, investment departments and financial institutions. Moreover, enterprises may face more frequent inspections, barriers to obtain project approvals, higher insurance premium rates and other adverse consequences due to "poor credits", and the relevant personnel may also face adverse legal consequences such as  industrial or occupational bans. 

IV. Countermeasures for enterprises to consider to strengthen their compliance management

1) Establishing an enterprise's safety awareness. A manufacturer shall establish a staff safety awareness, and procure and instruct staff to voluntarily implement safety awareness  by undertaking measures such as emergency drills, training and simulated accidents and encourage staff to be aware of potential risks. They should secure a fundamental awareness and acknowledge that "the management of safety shall be the priority for the management of industry, business, production and operation".  

2) Establishing and implementing a W88win优德中国有限公司 responsibility system. A manufacturer’s main responsible person shall understand that they are in charge of the manufacturer's W88win优德中国有限公司, and other responsible persons shall oversee W88win优德中国有限公司 to the extent of their duties. In order to clarify the subjects’ respective responsibilities, a manufacturer shall clearly define the internal division of functions and responsibilities by defining the organizational structure of the relevant lines of W88win优德中国有限公司, the responsible persons for each post, the scope of responsibility, the appraisal standards and the reporting mechanisms. It is advisable to use safety information systems to facilitate the implementation of the personnel's W88win优德中国有限公司 responsibilities. 

3) Establishing the Safety Risk Classification and Control System and W88win优德中国有限公司 Accident Identification and Control System. A manufacturer shall establish a Safety Risk Classification and Control System to identify and assess W88win优德中国有限公司 risks, assess in a timely manner the safety risk levels and adopt  corresponding management and control measures. They should pay particular attention to the development of monitoring measures and management plans for hazard sources (especially major hazard sources), and take measures to discover and eliminate potential accidents in a timely manner; in case of any investigation or any potential risks of major accidents, enterprises shall perform their statutory reporting/reporting obligations in accordance with the applicable laws.  

4) Implementing enterprise safety training and assessment and accident emergency drills. A manufacturer shall pay attention to daily W88win优德中国有限公司 training, and especially provide systematic training for management and safety awareness. They should regularly organize employee training relating to operational safety (especially operations with major potential safety risks), equipment operational safety and fire protection and electricity use safety, so as to enable each employee to master the basic safety skills of their posts through examination, and organize retraining on a regular basis. In addition, the manufacturer shall carry out emergency drills in accordance with the applicable laws. 

5) Conducting enterprise EHS compliance audits, and discovering safety management problems and potential risks of accidents in a timely manner. A manufacturer may consider conducting regular internal and external compliance audits for EHS. An EHS compliance audit may include an internal compliance audit and a supply chain compliance audit, and may be conducted from various dimensions such as policies and operational procedures, organizational structures, personnel, funds, facilities and on-site management. EHS compliance audits can help a manufacturer comply with its policies and control relevant legal risks in advance.  

6) Properly dealing with administrative cases, making timely rectifications and summarizing accident experiences. Where an administrative case occurs, a manufacturer shall liaise in a timely manner with its in-house counsel and/or external legal advisors and track the progress to keep abreast of the situation; if it is reasonable to believe that there is a mistake with respect to any fact or the application of the laws, a manufacturer shall promptly and properly attend to the hearings. Where a manufacturer is ordered to make rectifications due to the violation of laws or accidents, it shall make timely rectification and submit rectification results to the competent authority, to avoid triggering daily penalties. For any accidents, a manufacturer shall strive to learn from the experience to avoid the occurrence of similar accidents. 

V. Conclusion

With the implementation of the Amendment, China's W88win优德中国有限公司 legal regime will gradually step into an era with stricter requirements, more strengthened administration and heavier penalties. A manufacturer should strengthen its W88win优德中国有限公司 compliance and management, and actively and timely follow up and pay attention to the development of W88win优德中国有限公司 legal requirements and standards, to remove or control its legal risks and secure the safety of its personnel and property to realize sustainable development.

JunHe’s EHS Team: JunHe LLP, with over 950 professionals, is one of China’s largest full-service law firms with an international reputation for providing high quality legal services. As one of the pioneers in the practice area of environment, health and safety production (“EHS”) in China, JunHe’s EHS team provides multinational enterprises with a full range of EHS legal services. These include industrial project development, the incorporation of joint ventures, M&A transactions, daily commercial operations, EHS related audit and compliance, ESG, government investigations, administrative punishments and reconsiderations, and litigations.