While the People’s Republic of China has experienced a prosperous period of economic growth over several decades, it has also had workforce production accidents that caught the public’s interest regarding workplace safety. One of those accidents was the Qingdao Oil Pipeline explosion of 2013, which killed 62 people. This prompted the passage of legislation on 31 August 2014 to amend the Production Safety Law, which took effect 1 December.
The original Workplace Safety Law was implemented in 2002 to reduce malpractice in the workplace. The new amendment is aimed at addressing problems regarding government regulations and standards that are not implemented properly at the local level, according to Yang Dongliang, the director of the Chinese State Administration of Work Safety. Lack of tough penalties is believed to be the reason for frequent workplace incidents.
The revised Workplace Safety Law places its focus on employers rather than employees, primarily by imposing harsher punishment for offenders. Seventeen new articles make up the amendment, and can be categorized in four areas: increased responsibility for companies and management, increased penalties for those companies who break the law, increased penalties for persons in charge, and increased powers of the State Administration of Work Safety.
There are three new articles in the Work Safety Law that provide for increased responsibilities for employers doing business in China. Article 19 increases accountability; defining responsible persons and their scope of responsibilities. Organisations are required to establish and maintain systems of accountability within the company. Article 22 is also new, requiring organisations to draft rules, regulations and procedures surrounding work safety and emergency response. Companies must train employees and implement drills as part of their safety management system. Finally, risk management is addressed in Article 38; ensuring that organisations practice accident prevention by identifying hazards and acting upon them.
Fines have been notably increased for all types of incidents, with maximum potential fine now 20,000,000 yuan ($3.25 million USD). Fines are determined based on number of deaths, number of severe injuries, and amount of economic loss due to the incident. Previously, fines were capped at 100,000 yuan or less than five times the amount earned by the business from the illegal operations.
Persons in Charge
Under the existing law, the persons in charge when an accident occurred could be held accountable and a fine imposed ranging from 20,000 – 200,000 yuan ($32,500 USD). The amended law takes this a step further. Now, persons in charge of operations who have failed to ensure company safety can also be fined, between 30-80% of their annual income, in conjunction with business losses. In addition, persons in charge found responsible for “serious” and “extremely serious” incidents can be banned from holding positions in their industry. Serious accidents are defined as those causing economic losses of 50 – 100 million yuan, 50 to 100 serious injuries, or 10 to 30 deaths. Extremely serious accidents are those causing the deaths of over 30 people, the injuries of over 100 people, and over 100 million yuan in economic losses ($16 million USD). Finally, if a person in charge fails to arrange for immediate rescue operations when an accident occurs, they can be held liable for fines of 60-100% of their previous year’s annual income.
The amended law enhances supervisory powers of watchdog agencies for occupational safety and local governments, particularly those at the township level. Most of China’s workplace incidents occur in rural areas in small businesses. The law also increases fines for employers who fail to provide safety training and ignore hazards after being notified. It allows government regulators to blacklist companies and to suspend operations when necessary by cutting off their power supply if a company is considered unsafe under Article 67.
Companies doing business in China should revisit their policies regarding compliance and accountability, review their safety and health management systems and practices, and update them as needed. myosh is a global leader in safety management software. Find more information at www.myosh.com
By Stacey Wagner