By Xu Xiaodan Zhang Jingjing, King & Wood Mallesons’ Labor Group
The newly amended Safe Production Law has come into effect as of December 1, 2014. In general, the new legislation elaborated management personnel’s administration responsibilities towards safe production. In the meantime, it also increased penalties on violations of the law. This article will introduce management personnel’s obligations and possible liabilities under the new legislation.
1. Management Personnel’s Obligations
The Safe Production Law specifies management personnel’s statutory obligations, including:
（1）The major person in charge: he/she takes overall charge of the company’s safe production. Article 18 of the Safe Production Law lists the responsibilities of the major person in charge, including:
- Establish and perfect the responsibility system of safe production;
- Organize and establish internal policies and operational procedures relating to safe production;
- Organize and establish safe production education and training plan;
- Guarantee the effective implementation of the resources invested into the safe production;
- Supervise and urge safe production work and eliminate accident hazards in a timely manner;
- Organize and establish emergency plans regarding production accidents and make sure the implementation of the plan; and
- Report production accidents timely and truthfully.
It is worth noting that the third item of the above obligations, i.e. organize and establish safe production education and training plan, is a newly added obligation in this amendment. Actually, most of the production accidents that emerge endlessly in practice are related to employee’s operation against rules. Supervision authorities normally consider that one of the major reasons of the accidents is lack of effective training and implementation of operational procedures. Therefore, it is not difficult to understand the new legislation requires strengthening safe production education and training.
Unfortunately, the Safe Production Law does not specify who an enterprise’s major person in charge is. In practice, the person who is actually in charge of daily operations and has the decision making power, such as the chairman of the board, the general manager, is normally considered as the major person in charge. The authority normally identifies the major person in charge according to the management system, actual decision making process, etc.
（2）Safe production managerial staff: Article22 specifies managerial staff’s obligations, including:
- Organize or participate in establishing internal policies, operational procedures and emergency plans for production accidents;
- Organize or participate in safe production education and training, record the education and training truthfully;
- Supervise and implement the administration measures regarding major hazard sources;
- Organize or participate in drills for emergency;
- Examine safe production status, identify accident hazards in a timely manner and put forward suggestions on how to improve safe production management;
- Stop and correct command against rules, compelling to work at risk and operations against rules; and
- Urge the implementation of corrective measures regarding safe production.
In practice, the scope of safe production managerial staff may be quite wide. Generally speaking, enterprises with sophisticated management will establish its own safe production management system or even establish a special safe production department, such as Environment, Health and Safety. Under this system or in this department, safe production managerial staff may include senior management, such as the vice general manager in charge of safe production, middle level management personnel, such as department manager or supervisor, and the direct managerial staff of the production department, such as workshop supervisor.
2. Possible Legal Liabilities that Management Personnel might Undertake
Management personnel may undertake administrative and criminal liabilities.
（1）Major person in charge: According to the Safe Production Law, the possible liabilities that a major person in charge may take include:
- Removal from position;
- Criminal liability.
Depending on the severity of the violations and the accident, the major person in charge may be imposed a fine as high as 80% of his/her annual income during the previous year. If the violation constitutes a crime, depending on the actual situation, the major person in charge may be charged with the crime of negligently causing a serious accident, the crime of major accident, etc. The major person in charge may face a maximum of 7 years or even longer in prison.
In addition to the above legal liabilities, the major person in charge may be prevented from serving certain posts in the future. Specifically, the major person in charge is prohibited from serving as any enterprise’s major person in charge within 5 years, provided a production accident occurs due to his/her failure to perform duties and he/she is removed from position or is imposed criminal penalties. Furthermore, if the accident is classified as a Serious Accident or Especially Serious Accident, the major person in charge will face a lifetime ban, i.e. he/she will be prohibited from serving as a major person in charge in the industry for a lifetime.
（2）Safe production managerial staff: According to the Safe Production Law, safe production managerial staff may be ordered to undertake the following liabilities:
- Suspension or revocation of licenses relating to safe production;
- Criminal liability.
Safe production managerial staff may be imposed a fine as high as RMB 50,000. If the violation constitutes a criminal crime, he/she may be charged with the crime of negligently causing a serious accident, the crime of major accident, etc. and may face a maximum of 7 years or even longer in prison.
It is worth noting that in addition to the above legal liabilities as provided by the Safe Production Law, supervision authorities may refer to other rules and regulations when deciding penalties on relevant liable persons, such as Rules on Administrative Penalties on Violations relating to Safe Production. In practice, safe production managerial staff may also be imposed warning, removal from position, etc.
Safe production is one of the major aspects in the operation of an enterprise. In order to guarantee safe production, management personnel need to understand and fulfill their statutory obligations and guarantee the perfection and implementation of internal policies relating to safe production. As such, management staff can make sure the entity’s production is safe and mitigate the legal risks they may be exposed to.
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