State Council of China Announces Revised Regulation on Control Over Safety of Dangerous Chemicals

State Council of China Announces Revised Regulation on Control Over Safety of Dangerous Chemicals

The State Council of the People's Republic of China announced the revised Regulation on the Control over Safety of Dangerous Chemicals[1], hereafter referred to as "the revised Regulation") on March 02, 2011. It will become effective on December 1, 2011 and replace the current version, which took effect in 2002 (hereafter referred to as "the current Regulation").

The revised Regulation has 8 chapters and 102 articles, stipulating the manufacture, use, operation, transportation and registration of dangerous chemicals. Compared with the current version and the draft published in 2008, the revised Regulation has some significant changes.

Moreover, the revised Regulation will serve as the umbrella regulation for various implementing rules to be published by various government agencies, including GHS implementation in China. These rules will be announced by responsible agencies individually in the future. We will provide more details once they become available.

1. General Rules

Article 3 of the revised Regulation provides a refined definition for dangerous chemicals. Dangerous chemicals are toxic chemicals and other chemicals that have properties of hazardous, corrosive, explosive, flammable, combustion-supporting and etc., and are hazardous to human, facility and environment. A consolidated list of dangerous chemicals will be jointly announced by governing agencies under the State Council in accordance with the Chinese hazard classification standards of chemicals which were developed based on the UN Globally Harmonized System of Classification and Labeling of Chemicals (GHS). The standards include GB 13690, General rules for classification and hazard communication of chemicals, and 26 technical standards[2] (GB20576 to GB20599, GB 20601 and GB 20602) issued in 2006. A significant change is that the Ministry of Agriculture (MOA), which regulates pesticides, will be involved in generating the consolidated list of dangerous chemicals as well as establishing rules for handling pesticides that are categorized as dangerous chemicals.

The scheme of regulating dangerous chemicals has been a complicated and fragmented one. Unfortunately, the revised Regulation does not seem to make it more streamlined. Ten government agencies are authorized to regulate dangerous chemicals by imposing different responsibilities prescribed in Article 5. These agencies include State Administration of Work Safety (SAWS), Ministry of Industry and Information Technology (MIIT), General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), Ministry of Public Security (MPS), Ministry of Environment Protection (MEP), Ministry of Health (MOH), Ministry of Transport, Ministry of Railways, Civil Aviation Administration of China (CAAC), and Ministry of Agriculture (MOA). The overall responsibility of policy coordination is transferred from the State Economic and Trade Commission (SETC) of the State Council to SAWS according to this revised Regulation. As mentioned above, detailed implementing rules will be prepared by these agencies to stipulate the activities within their own jurisdiction.

2. Manufacture

According to Article 14, any company that produces dangerous chemicals must obtain the Safety Production License of Dangerous Chemicals from the local work safety agency (i.e., the local authority exercising the delegated authority of the SAWS) before manufacture. SAWS published a draft revision of the current rules on issuing production licenses for dangerous chemicals[3] in November 2010, which would impose more rigorous requirements, but the final rules have not yet been announced.

Article 15 mandates that the manufacturers of dangerous chemicals provide the Material Safety Data Sheet (MSDS) and affix precautionary labels on the package. The MSDS and safety labels must comply with relevant national standards (GHS-type GBs, such as GB 15258 General rules for preparation of precautionary label for chemicals and GB 16483 Safety data sheet for chemical products - Content and order of sections). When new dangerous characteristics are identified, the producer must notify the public and update the MSDS accordingly.

3. Use

Article 29 specifies that any chemical company that uses dangerous chemicals during production must obtain the Safety Use License of Dangerous Chemicals from the local work safety agency unless: 1) the amount of dangerous chemicals is below the threshold; or 2) its use is covered by a Safety Production License of Dangerous Chemicals issued to a manufacturer of dangerous chemicals. The threshold of exemption will be determined later and announced by SAWS along with MPS and MOA. Under the current Regulation, use or handling of dangerous chemicals is not subject to license so long as the facility design has appropriately addressed the concerns of waste emission and fire prevention. The new requirement may impose additional burdens on the chemical companies that do not produce, but only use dangerous chemicals. According to Article 101, these companies must obtain the Safety Use License of Dangerous Chemicals from the local work safety department within the period to be determined by SAWS in the future.

4. Operation

"Operation" is defined as sales and distribution. Any company that "operates" (sells, distributes or provides storage service) dangerous chemicals must apply for the Safety Operation License of Dangerous Chemicals from the local work safety department unless: 1) a manufacturer of dangerous chemical sells its product within its plant site; or 2) the operator of a harbor who holds the Harbor Operation License provides storage service of dangerous chemicals in the harbor (Article 33). A slight difference between the current and revised Regulation is the level within each government agency that is authorized to issue licenses. Generally, authorities that can issue such licenses are one step down the administrative hierarchy according to the revised Regulation. More specifically, the city-level work safety department is responsible for issuing license to the companies that operate toxic or explosive chemicals or provide storage service of any dangerous chemicals, while the county-level work safety department is responsible for other dangerous chemicals (Article 35).

Article 37 also states that companies must not purchase dangerous chemicals from unlicensed manufacturers or operate dangerous chemicals without MSDS or precautionary labels.

5. Transportation

Chapter 5 (Article 43 to 65) specifies detailed requirements for the transportation of dangerous chemicals. Only licensed service providers may be used to transport dangerous chemicals via any route: road, railway, air or water. The major changes in the transportation of dangerous chemicals are the issuance of a Road Transportation Permit and the expansion of inland water transportation.

Under the current Regulation, the consigner must obtain a Road Transportation Permit from the police department of the destination before shipping the toxic chemicals via road transport. The revised Regulation allows the consigner to apply for the permit from the police department of either origination or destination place. It remains a preclearance procedure of road transport for toxic chemicals, but the modification will make the process far more efficient.

Inland water transportation will be allowed for certain dangerous chemicals. The current Regulation prohibits the transport of toxic chemicals and other prohibited chemicals via inland rivers and other closed waters. The revised Regulation narrows the prohibition to inland closed waters. Other inland waters may be used to transport dangerous chemicals other than those toxic chemicals and other chemicals explicitly prohibited.

6. Registration

Article 66 and Article 67 specify the registration system of dangerous chemicals. According to these two articles, all manufacturers and importers must go through a company/substance-specific registration by submitting information about hazard characteristics and safe handling. China has already implemented a registration system, under which MEP is in charge of registering imported dangerous/toxic chemicals, and the SAWS is handling the manufacture registration of dangerous chemicals. It is still unclear how the current system is going to be modified and administered by SAWS collectively.

7. Penalties

Penalties are specified in Chapter 7 (Article 75 to 96), including the new provision regarding the contravention against the MSDS-related and labeling requirements. Paragraphs 3, 4, 5 and 6 of Article 78 state that a fine up to RMB 100,000 will be imposed, if: 1) the manufacturer fails to provide MSDS or affix the precautionary label; 2) MSDS or precautionary label does not match the content in the package or meet relevant national standards; 3) the manufacturer does not notify the public or update the MSDS and precautionary label when new dangerous characteristics are identified; or 4) the company "operates" dangerous chemicals lacking MSDS or precautionary labeling. The violators may also be ordered to cease production or operation. Industry must ensure that the MSDS and precautionary labeling meet the Chinese national standards.

Nonetheless, the revised Regulation is an umbrella regulation that does not provide much detail in terms of the implementation. We will continue providing updates when the implementation rules are published by respective agencies.

Should you have any questions regarding the memo, please do not hesitate to contact Wilfred Feng (feng@khlaw.com), Chen Hu (hu@khlaw.com), or Jenny Li (li@khlaw.com) at Keller and Heckman LLP, Shanghai Representative Office.


[1] Available at http://www.gov.cn/zwgk/2011-03/11/content_1822783.htm

[2] These 26 standards set the criteria to determine the hazard classification of dangerous chemicals, such as "Explosives", "Flammable gases", "Flammable aerosols", "Oxidizing gases", etc. They are being revised in accordance with the updated edition of the GHS.

[3] Available at http://www.chinasafety.gov.cn/newpage/Contents/Channel_5826/2010/1109/112879/content_112879.htm

 

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