On March 11, 2011 the Chinese government officially published the revised Regulation on the Safe Management of Dangerous Chemicals. The regulation will go into effect on December 1, 2011. The update is regarded as the legal basis for China’s official implementation of the United Nations’ Globally Harmonized System for Classification and Labeling of Chemicals and Mixtures (GHS), which will cover labeling and safety data sheet (SDS)/master safety data sheet (MSDS) requirements for businesses in China.

China’s implementation of the GHS generally follows the European regulatory structure. However, China has implemented stringent requirements on the way that chemicals and mixtures can be tested for human and health effects. Under the previous regulation there was no obligation for non-China-based companies to register hazardous substances. However, under the revised regulations, exporters of hazardous chemical substances to China face registration requirements as well.

Under China’s GHS, companies are required to:

  • Reclassify and relabel hazardous chemicals;
  • Update their SDS for hazardous chemicals; and
  • Register hazardous chemicals with the National Registration Centre for Chemicals (NRCC) of the State Administration for Work Safety (SAWS).

Major Changes in Regulations

China’s State Council has highlighted a few major areas of improvement in the revised regulations as listed below:

  • Manufacturers must apply for a Hazardous Chemicals Safe Use Permit prior to producing hazardous chemical substances. Enterprises that use hazardous chemicals in their production processes, and whose usage quantities meet the stipulated limit, are also required to apply for a permit.
  • The application procedure for Hazardous Chemical Business Licenses has been streamlined for distributors of hazardous chemicals. The license can now be approved by the municipal- and country-level security department. The speed of the process has also been improved, with permits expected to be granted or rejected within seven days.
  • The sale and storage of hazardous chemicals will be governed by a new hazardous chemicals licensing system that the state will implement.
  • The transportation of hazardous chemicals by inland waterway will be permitted if the relevant departments can manage the risk and control potential exposure. Those chemicals that are perceived to represent amajor risk will not be permitted and must be transported by road.
  • The locations where companies can apply for licenses for road transportation of extremely toxic chemicals have changed. Shippers should apply to the public security authorities of the origination or destination area for a license.
  • Enforcement of the regulations has been enhanced, with punishment for violations becoming more severe.

Enforcement

Companies that fail to classify, package and label hazardous chemicals in line with these new standards when the new regulation goes into effect could be liable for a fine of up to RMB 50,000 (US$7,700) and/or a ban on importing or manufacturing such chemicals. The new regulation also requires the registration of existing hazardous chemicals with the NRCC. A catalogue of affected hazardous chemicals (estimated to include more than 4,000 chemicals) will be published separately by the SAWS in conjunction with other relevant government departments in due course. The new regulation increases the penalty for failure to comply with requirements related to construction projects that involve hazardous chemicals (including new construction, modification and expansion of hazardous chemicals production and/or storage facilities) to a maximum of RMB 1 million (US$150,000) and the potential for an investigation into criminal liabilities.