China imposes harsher punishment to ensure workplace safety

China's top legislature on Sunday adopted a revision to the Workplace Safety Law which imposes harsher punishment on offenders.

Members of the Standing Committee of the National People's Congress adopted the revision through a vote at the bi-monthly legislative session held from Monday to Sunday.

The amendment further increased fines for enterprises involved in serious workplace accidents from the maximum of 5 million yuan (810,000 U.S. dollars) proposed in its original draft to 20 million yuan.

The quadrupled fine cap is stated in an added article which stipulates fines ranging from 200,000 yuan to 20 million yuan, depending on the losses incurred in the accident.

Under the old Workplace Safety Law, fines for enterprises violating the law were no more than 100,000 yuan or below five times the income earned from illegal operation.

Managers in charge of such enterprises who are found to have failed in their duty to ensure safety will also now be fined between 30 and 80 percent of their annual income corresponding to losses in the accidents.

This is a massive raise compared with the former law, under which managers faced fines between 20,000 yuan and 200,000 yuan.

The revised law states that managers responsible for "serious" and "extremely serious" accidents will be banned from serving as principals in enterprises in the same industry.

The regulation on work safety issued by the State Council in 2007 defines "serious accidents" as those causing 10 to 30 deaths, 50 to 100 serious injuries, or direct economic losses of between 50 and 100 million yuan.

It identifies "extremely serious accidents" as those that kill more than 30 people, seriously injure 100, or result in over 100 million yuan in direct economic losses.

According to the revised law, enterprises responsible for accidents which lead to even greater losses than "extremely serious accidents" will face fines between 10 million yuan and 20 million yuan.

Liu Tiemin, a researcher at the China Academy of Safety Science and Technology, said punishment used to fall mainly on offending enterprises, whereas under the revised law managers in such enterprises will also be held personally accountable. This will force them to face up to their legal duties.

The Workplace Safety Law, which took effect in 2002, has helped reduce malpractice, but many problems still need to be addressed, said Yang Dongliang, director of the State Administration of Work Safety, at an NPC session during the first reading of the bill in February.

Light punishment and lack of supervision are widely believed to be among the major reasons for the negligence behind frequent accidents.

The amendment adopted on Sunday also added articles that enhance the supervisory power of work safety watchdogs and local governments, especially those at township level. Most work safety accidents occur in small enterprises located in rural towns instead of large cities.

The law requires the State Council and local governments above the township level to strengthen their leadership on work safety.

Also, it allows regulators to force factories to suspend operation by cutting off their power supply, if their workplace is considered highly unsafe and likely to cause accidents.

Information on serious offenders will be published and shared with regulators of investment, land use and securities as well as banks.

The revised law will come into effect on Dec. 1 this year.