EHS Compliance Attentions Following COVID-19 Epidemic

Environmental Protection Series No. 12

the Environmental and Safety Production Compliance Procedures Enterprises need to Pay Special Attention to for the Resumption of Work and Production during the Epidemic

Foreword

Since the start of the coronavirus epidemic  (“COVID-19”), central and local governments have undertaken various and necessary measures for the resumption of business operations. These measures have included the temporary exemption or extension of the valid terms for certain qualifications and licenses as well as the governmental formalities necessary for the resumption of production and operations of certain enterprises. These measures have been undertaken to ensure the supply of anti-epidemic materials and to promote the resumption of work and production, including those in respect to environmental protection and safety production. Enterprises should promptly educate themselves about these regulatory requirements, and complete the statutory procedures upon the resumption of work and manufacturing in order to avoid any compliance risk.

Ⅰ

Government Formalities Have Been Simplified, Temporarily Exempted or Suspended during the Epidemic

During COVID-19, the central government and local governments have issued regulations to simplify, temporarily exempt or suspend some qualifications/licenses or governmental procedures in respect to environmental protection and safety. We have noticed some key issues as follows (please consider whether an enterprise will have any other matters to note, based on its operations and unique qualifications/license status):

Environment: on March 3, 2020, the Ministry of Ecological Environment issued the "Positive List of Environmental Impact Assessment Approval" (the “List”), exempting some construction projects from environmental impact assessment procedures. These included temporary constructions, renovations, expansion or conversion of medical, sanitary and materials production as well as experimental research projects necessary for the prevention and control of COVID-19. It also included industries that are crucial to people’s livelihoods and are covered in the "Catalogue of the Classified Management of Pollution Discharge Permits from Fixed Pollution Sources (2019 Edition)". This information is relevant to pollution discharge permit registration management, as well as social undertakings and service industries, storage, logistics and distribution industries that do not involve toxins, or hazardous and dangerous goods. Some industries relating to people's livelihoods (including project construction, social undertakings and services, manufacturing, animal husbandry, transport, etc.), and whose environmental impact is generally controllable and has been hugely affected by the epidemic, were also included in this list for the pilot reform of the approval of the notification and commitment system for environmental impact assessment (no substantive review of the environmental impact assessment documents is required). This list is valid until the end of September 2020, and may be extended as the situation requires.

Work Safety: the Circular on Taking Eight Measures to Promote Enterprises' Safety Prevention and the Resumption of Work and Production (the "Eight Measures") was issued by the Ministry of Emergency Management on February 26, 2020. It highlights that, where formalities for the "Three Simultaneities" of work safety are required for a new project under construction, reconstruction or expansion, or a change in production, the examination and approval process shall be optimized and the formalities for applying for approval shall be handled quickly online.  On-site inspections should be conducted after the end of the time frame of the epidemic’s prevention and control. If the formalities for the extension of the relevant certificates (including an enterprise's work safety license, qualification certificates for safety evaluation, testing and inspection agencies, and safety certificates of the enterprise's major responsible persons, safety management and special operation personnel) fail to be submitted due to the epidemic, the expiration date of the  work safety certificate of the enterprise shall be automatically extended to the end of the epidemic’s prevention and control. In practice, various regions have detailed the provisions of the Eight Measures to different extents, and some regions have also allowed for the extension of the valid period of their hazardous chemical registration certificates and work safety standardization certificates until the end of the epidemic’s prevention and control.

Occupational Health: the Circular on Strengthening the Guidance on the Prevention and Control of the Epidemic Situation during Enterprises' Resumption of Work and Production issued by the General Office of the National Health Commission on March 6, 2020 points out that enterprises in areas with a medium or high epidemic risk may postpone their occupational health examination. However, after regions with a high or medium risk of epidemics are transformed to regions with a low risk, the health administrative departments shall make an overall plan and coordinate with the occupational health examination institutions to arrange the occupational health examination for employees in a reasonable and orderly manner. Some authorities of certain regions also require that for construction projects under commissioning, the assessment and review of occupational disease hazard control effects and the acceptance of protective devices for occupational diseases that must be conducted on-site shall be postponed for the greatest extent to the time when high and medium-risk areas turn into low-risk areas. 

Ⅱ

Enterprises shall promptly complete government formalities which have been temporarily exempted or deferred

The aforesaid simplification, temporary exemption or suspension measures in respect of qualifications and licenses applies only to the phase of the epidemic’s prevention and control or the period specified in the relevant documents. After the end of the epidemic, if an enterprise continues their relevant production and business activities, it shall complete the relevant formalities in due time. Some local authorities have issued documents requiring enterprises to complete environmental assessment procedures within a certain period after the end of the epidemic. Enterprises shall pay attention to the epidemic’s situation in the provinces and municipalities directly under the control of central government where they are located and take all initiatives to communicate with the corresponding safety supervision, environmental protection and health departments within the areas that they are in charge of and educate themselves about the requirements for making up the formalities and the specific time limits.

Although the regulations issued by the local regulatory authorities do not specify the legal consequences to an enterprise which fails to complete the aforementioned procedures in a timely manner after the end of the epidemic, it should be noted that the prompt completion of the relevant qualifications or procedures related to environmental assessment, work safety supervision, environmental protection and health is an important factor in ensuring the compliance of business operations. If an enterprise fails to complete the relevant qualifications or procedures in a timely manner, they may be deemed to be undertaking business operations without the corresponding qualifications or approvals, and shall bear the legal liability. For example, if an enterprise, after the epidemic ends, fails to apply for an extension of its work safety license in a timely manner and the license has expired, it may risk being ordered to suspend production, have its illegal gains confiscated, and be fined a sum up to an amount of CNY 500,000; if the work causes a serious accident or has serious consequences, which constitutes a criminal act (such as negligently causing a serious accident), it may also be investigated for criminal liability.

Ⅲ

Conclusion and Suggestions

The COVID-19 epidemic may have caused some enterprises to fail to apply for or complete certain qualifications/licenses or legal procedures in respect to environmental protection and safety production in accordance with past procedures. These enterprises should pay attention to the compliance requirements in respect to the  relevant supplementary applications and extensions and, if necessary, communicate promptly with local regulatory authorities (including environmental protection, safety supervision and sanitary and health authorities) to ensure compliance upon the resumption of construction and production. The epidemic is ongoing , and JunHe continues to support you. If you have further questions, or need JunHe’s assistance in handling any relevant government formalities or need further information, please contact us via email: ecoenvpro @ junhe.

The JunHe EHS Team: JunHe, with over 800 professionals, is one of China’s largest comprehensive law firms with an international reputation for providing high-quality legal services. As one of the pioneers in the legal area of  the environment and health and safety production (“EHS”) in China, JunHe’s EHS team provides multinational enterprises with a full range of EHS legal services that cover project development and the incorporation of joint ventures, M&A transactions, daily operations, EHS compliance, government investigations, administrative punishments, reconsiderations and litigations.

ZHU, He

[e-mail]

Practice Area

Corporate and M&A

Infrastructure and Project Finance

Environmental and Work Safety Compliance

NI, Tianling

Partner

[e-mail]

Practice Area

Corporate and M&A

Private Equity/Venture Capital

Environmental and Work Safety Compliance

SUN, Jiping

[e-mail]

Environmental Protection

Click "Views" to Visit JunHe Official Website

Disclaimer

Articles published on JUNHE Legal Updates represent only the opinions of the authors and should not in any way be considered as formal legal opinions or advice given by JunHe or its lawyers. If any part of these articles is reproduced or quoted, please indicate the source.Any picture or image contained in these articles MUST not be reproduced or used unless otherwise consented by us in writing. You are welcome to contact us for any further discussion or exchange of views on the relevant topic.