The WSL, of which the first version came into effect in 2002, with two amendments in 2009 and 2014, respectively, has laid a foundation for supervising and regulating work safety in China. Specifically, the WSL plays an important role in preventing and reducing industrial accidents, as well as punishing companies and responsible persons for their illegal acts.

However, before the latest amended WSL (the “WSL 2021") took effect, there were some problems in the WSL’s implementation. For example, some persons who should have assumed liability for accidents were able to escape from punishments; punishments for some illegal acts were too lenient; and there was no rule in certain areas. 

Against this backdrop, China unveiled the WSL 2021 to solve such problems.

(1) Entire Personnel Responsibility System

The WSL 2021 requires Manufacturers to establish an “Entire Personnel Responsibility System (全员安全生产责任制)" to replace the original “Principal Person(s) in Charge Responsibility System (主要负责人责任制)".  Under the new system, all employees in a Manufacturer, including not only the principal person(s) in charge of the Manufacturer, but also all its other employees, will assume work safety responsibilities together.

The responsible persons under the WSL 2021 can be roughly divided into four categories that may overlap each other, i.e., principal person(s) in charge (主要负责人), other responsible persons (其他负责人), work safety manager(s) (安全生产管理人员), and employees.

The new requirements regarding the responsibilities of the abovementioned four categories are summarized as follows:

Furthermore, the WSL 2021 stipulates that employees have the right to obtain necessary protective gears to safeguard themselves against harm and danger during the manufacturing process.

(2) Dual Prevention Mechanism

The WSL 2021 requires Manufacturers to set up a “Dual Prevention Mechanism (安全风险分级管控和隐患排查治理双重预防机制)", which includes a “Risk Level System" and a “Potential Risk Identification System".

Under the “Risk Level System", Manufacturers are required to control and manage different safety risks by different risk levels. Manufacturers should identify, assess, and classify safety risks, and take measures against a safety risk according to its corresponding risk level.

Also, with the implementation of the “Potential Risk Identification System", a Manufacturer should inform both the enforcement agency and the employees of any assessment/investigation results of potential risks.

(3) Public Interest Litigation System

Some local governments used to show tolerance to Manufacturers’ safety accidents, or even turn a blind eye to such accidents. To end this situation, the WSL 2021 grants procuratorates the right to initiate public interest litigation.

Procuratorates have the right to (1) pursue civil lawsuits against companies for the sake of public interest, and (2) bring administrative proceedings against enforcement authorities in cases where they are negligent in supervising or punishing violators.

(4) Compulsory Safety Liability Insurance System

According to Article 51 of the WSL 2021, companies in high-risk industries shall obtain safety liability insurance.  This is a new statutory requirement.

(5) Heavier Punishment

Last but not least, the WSL 2021 governs some new categories of illegal acts (see items (i) and (ii) below) and imposes harsher punishment on illegal acts (see items (iii) to (v) below) mainly in the following aspects:

• (i) Article 49 of the WSL 2021 stipulates new requirements for companies that produce or store dangerous substances in respect of management of qualifications.

• (ii) Article 99, Article102, and Article 103 of the WSL 2021 newly identify three categories of illegal acts as “dangerous work (危险作业)".

• (iii) The amounts of penalties have increased. For example, the maximum amount of a penalty for a particularly serious accident reaches 100 million yuan.

• (iv) Penalties will be calculated in more diverse methods. For example, “continuously calculating penalty by the number of days (按日连续处罚)"[2], and “calculating penalty by a proportion of the company’s revenue or illegal income".

• (v) There will be more types of punishment for violations, such as suspension of operation, revocation of business license, restriction on engaging in safety-related assessment, certification, testing, or inspection within five years and permanent ban on re-entering an industry or occupation.

Based on the above major changes, we analyze the possible impact on Manufacturers and make suggestions as following: