- Most penalties are imposed for production safety violations. The highest number among them are administrative penalties based on the fire prevention law, followed by penalties for violations of the production safety law.
- China’s Ministry of Emergency Management, being in charge of production safety regulations, has significantly ramped up its compliance enforcement measures: Nationwide, over 100 inspections on production safety and fire prevention have been published in 2022 alone.
- In June 2021, the production safety law has been revised and took effect starting September 2021. A new production safety blacklisting mechanism under the Corporate Social Credit System (CSCS) has been drafted at the beginning of 2022 to further bolster the enforcement of the production safety law and swiftly identify companies that violate the law’s provisions.
- Among the selected areas, environmental protection is the area with the second-largest number of administrative penalties. This reflects the political importance of this topic and the government’s efforts to curb environmental pollution from industry.
- On environmental protection, enforcement instruments have been sharpened as well: real-time monitoring systems are a powerful digital tool to replace on-site inspections. The amount and accuracy of environmental data transferred from companies automatically to government authorities have become a key building block of compliance enforcement.
- In addition, many location-specific environmental protection ratings under the CSCS have been expanded recently. Extra indicators including expanded requirements on environmental information disclosure or solid waste management have been added to the calculation of companies’ environmental protection ratings by local authorities.
Sinolytics is a European consulting and analysis company specializing in China. It advises European companies on their strategic orientation and concrete business activities in the People’s Republic.