MoEM rates dangerous chemical manufacturing and warehousing companies

Read on, if you are a company in China engaging in manufacturing and/or warehousing of dangerous chemicals.

The PRC Ministry of Emergency Management ("MoEM"), formerly known as the State Administration of Work Safety, issued a trial guidance on May 10, 2018 on Grading Dangerous Chemical Manufacturing and Warehousing Companies Based on Diagnosis and Assessment of Safety Risks ("Guidance"). It enhances governmental supervision on dangerous chemical ("DC") manufacturing and warehousing companies (“DC Companies”) with the aim to efficiently prevent significant work safety accidents.

100-point rating system

By the end of September 2018, the local departments of the MoEM shall have assessed and graded all DC Companies within their jurisdictions according to their safety risks in the following way, for record of the MoEM:

The more the points, the lower the safety risk of a DC Company is assessed. The Guidance lists a number of criteria. If fulfilled, this leads to point deductions. For instance:

• 1 major work safety accident (in Chinese: 较大安全事故) in the past 3 years leads to a 10 point deduction (a "major" case is given e.g. if it causes 3 – 9 deaths, or direct economic losses of more than (incl.) RMB 10 million but less than 50 million);
• existence of level 1 DC major hazard instalments also costs the company 10 points;
• a location outside of a chemical park costs 3 points.

There are particular cases in the Guidance which directly lead to a "Red" grading, e.g:

• if newly developed chemical processes are directly put into industrial production without certain required tests;
• unqualified "DC special operating staff" exist ("DC special operating staff" are those operating DC technical processes, or installing, repairing and maintaining chemical automation control instrument; they must fulfil special conditions like possessing safety technical knowledge and skills, having high school degree or above, etc., and they must be licensed);
• any significant work safety accident (in Chinese: 特大安全事故) has occurred in the past 3 years (a "significant" case is given e.g. if it causes 10 – 29 deaths, or direct economic losses of more than (incl.) RMB 50 million but less than 100 million).

The MoEM local departments will particularly strengthen the supervision of "Red" and "Orange" DC Companies and increase the frequency of daily inspections. Any discovered latent dangers of accidents in such companies are to be strictly punished.

Recommendation

DC Companies are recommended to carry out a self-check according to the Guidance, to assess its possible grade of safety risk, and as far as possible to take mitigation measures at the earliest convenience.