10 January, 2016
In August 2015, a violent explosion in a hazardous chemical warehouse in Tianjin Binhai New Area, China caused tremendous personal injuries and property losses. This tragedy once more shows that administration of hazardous chemicals is a matter of life and death, and that it is of great significance to know and strictly comply with the laws and regulations on hazardous chemicals. This article will briefly discuss the definition of hazardous chemicals, major permits or licenses required for their production, operation, usage, storage and waste disposal and regulatory requirements therefor.
Definition of Hazardous Chemicals
1. Catalogue Management plus Identification
According to the Regulations on Safety Administration of Hazardous Chemicals (《危险化学 品安全管理条例》 2013), “hazardous chemicals” refer to extremely toxic chemicals or other chemicals that are toxic, corrosive, explosive, flammable or of accelerant nature, which may cause damages to human health, facilities or environment.
PRC law adopts a “catalogue management supplemented by identification” method when determining whether or not certain product is hazardous chemical. Specifically, any product falling into the Catalogue of Hazardous Chemicals (《危险化学品目录》2015) is considered a hazardous chemical, while any product not falling into this catalogue but being identified to be in hazardous nature after physical and chemical tests is also administered as a hazardous chemical.
There are certain issues worth noting in terms of the Catalogue of Hazardous Chemicals (2015):
- First of all, items under the catalogue are listed by “names (chemical names)” along with “aliases”. Thus, one may need to have a firm understanding of chemicals to ascertain whether or not certain product is a hazardous chemical under the catalogue. For example, when defining if a certain daily-used chemical product is a hazardous chemical, one would need to firstly verify the chemical components of the product, and then check those components item by item in the catalogue.
- Secondly, the Catalogue of Hazardous Chemicals (2015) not only applies to pure substances but also to mixtures. If there’s no concentration requirement under an item, then such item refers to chemicals with industrial grade purity or higher purity. If there are concentration requirements under an item, then only when certain component of a mixture satisfies the requirements (concentration, density, flash point, etc.), will the mixture be deemed as a hazardous chemical. There are some exceptions under certain concentration requirements1. One thus needs to take the relevant requirements and exceptions into consideration when analyzing the compounds.
- Thirdly, the Catalogue of Hazardous Chemicals (2015) is an open list. Products not listed are not necessarily non-hazardous chemicals. If a product is not listed in the catalogue and its hazardousness is yet to be determined, the producer/importer has an obligation to engage an identification institution recognized by the Authority of Work Safety (“AWS”) to identify the product in accordance with the Measures for the Administration of Identification and Classification of Physical Hazards of Chemicals (《化学品物理危险性鉴定与分类管理办法》 2013). If after identification, the product is deemed as a hazardous chemical, the producer/importer will have an obligation to register the product with AWS in accordance with the Measures for the Administration of Hazardous Chemicals Registration (《危险化学品登记管理办法》 2012), and the AWS, together with other authorities, will incorporate such product into the Catalogue of Hazardous Chemicals someday.
To sum up, identification of hazardous chemicals is a very professional and complicated matter. First of all, one needs to know the chemical components of the product. Then, one has to check the individual components (including the concentration requirements) with the Catalogue of Hazardous Chemicals (2015) to determine whether any component meets the hazardous chemical threshold. And if any product’s hazardousness is not clear, the producer or importer is obligated to engage a qualified institution for identification.
2. Label Reliance Exemption
Many household items are in hazardous nature (for example, pesticide, ant killer, bleaching power, camphor ball, oily nail polish, glue, flint, etc.). Often, one or more components fall into the Catalogue of Hazardous Chemicals (2015), thus such products might be considered hazardous chemicals. According to the Measures for Administration of Identification and Classification of Physical Hazards of Chemicals (2013), the producer/importer has an obligation to conduct identification on the product whose hazardousness is uncertain (whose one or more components fall into the Catalogue of Hazardous Chemicals) and to ascertain whether or not such product is a hazardous chemical. However, in practice, a producer/importer usually is reluctant to entrust identification.
According to the Regulations on the Safety Administration of Hazardous Chemicals (2013), the hazardous chemical producer/importer shall provide the material safety data sheet (“MSDS”) corresponding to the hazardous chemical it produces/imports to operators, and shall affix chemical safety labels correspondingly on the packaging of such hazardous chemical (including the outer packaging).
Therefore, if a product is a hazardous chemical, there will be chemical safety labels affixed on its packaging. As an operator does not have any legal obligation to engage in identification of a product that has one or more components falling into the Catalogue of Hazardous Chemicals (thus whose hazardousness is uncertain), the operator may reasonably rely on the label of the product and presume that a product whose label has no hazardousness manifestation is not a hazardous chemical (“Label Reliance Exemption”)
3. Hazardous Chemicals vs Hazardous Materials
There’s no uniform definition for “hazmat” under PRC law. Rather, there are three different regulatory catalogues on “hazardous chemicals”, “hazardous goods” and “hazardous wastes”. The catalogues are: the Catalogue of Hazardous Chemicals (2015), the Catalogue of Hazardous Goods (G12268-2012) and the Catalogue of National Hazardous Waste (2008). Some items listed in those three catalogues may overlap, yet the catalogues are not entirely identical. Each catalogue applies to different regulatory processes: the Catalogue of Hazardous Chemicals (2015) applies to the production, operation and storage process of hazardous chemicals; the Catalogue of Hazardous Goods (G12268-2012) applies to the transportation process of hazardous goods, and the Catalogue of National Hazardous Waste (2008) applies to the waste disposal process of hazardous waste.
Please note that the conclusion whether or not certain chemical product is “hazardous” may vary, subject to the different regulatory processes where it lies. For example, “a perfume product with flammable solvent” is “hazardous goods”, but not “hazardous chemical”. Thus, transportation of perfume shall comply with the special rules regulating the transportation of hazardous goods. But its operation and storage need only to comply with the general rules for inflammables and explosives, and not the rules for hazardous chemicals.
Generally speaking, “hazardous chemicals” are considered “hazardous goods”, and a “discarded hazardous chemical” is definitely “hazardous waste”. However, the scope of “hazardous goods” or “hazardous waste”, respectively, is broader than that of hazardous chemical. Therefore, in determining whether or not a certain product is hazmat and what laws are applicable, one needs to analyze on a case by case basis, depending on the specific underlying regulatory processes.
Please note that this article is not intended to discuss the transportation of “hazardous goods”.
Production, Operation and Usage of Hazardous Chemicals
Chinese laws applicable to the production, operation and usage of hazardous chemicals mainly include the following:
- Work Safety Law (《安全生产法》 2014)
- Regulations on Work Safety Permit (《安全生产 许可证条例》2014)
- Regulations on Safety Administration of Hazardous Chemicals (2013),
- Measures for the Implementation of Work Safety Permit for Hazardous Chemical Production Enterprises (《危险化学品生产企业安全生产 许可证实施办法》2015)
- Administrative Measures for Hazardous Chemical Operation Permit (《危险化学品经营 许可证管理办法》2015)
- Measures for the Implementation of Hazardous ChemicalSafetyUsagePermit《( 危险化学品安 全使用许可证实施办法》2015)
- Measures for Hazardous Chemical Environmental Management Registration (Trial Implementation)(《危险化学品环境管理登记 办法(试行)》2013)
1. Production of Hazardous Chemicals
According to the Measures for the Implementation of Work Safety Permit for Hazardous Chemical Production Enterprises (2015), a production enterprise whose finished product or intermediate product falls into the Catalogue of Hazardous Chemicals (2015) shall obtain a Hazardous Chemical Safety Production Permit.
The regulatory authority for Hazardous Chemical Safety Production Permit is AWS. Before applying for the Hazardous Chemical Safety Production Permit, such hazardous chemical production and construction projects shall undergo certain procedures, including the safety condition review, review of the design of safety facilities, trial production, and inspection and acceptance of the completion of safety facilities.
Please note that, if a hazardous chemical falls into the Catalogue of Industrial Products Requiring Production Permit and its Implementation Rules (《实行生产许可证制度管理的工业产品及其细则 目录》2012), the production enterprise shall obtain an Industrial Product Production Permit. The regulatory authority for the Industrial Product Production Permit is the Quality Supervision Bureau. As far as industrial products are concerned, there are 22 sub-categories of the applicable Implementation Rules on Hazardous Chemical Products Production Permit 《( 危险化学品 产品生产许可证实施细则》2012) (for example, the rules for chemical reagent products, synthetic resin products, ink products, etc.) and one Implementation Rules on Hazardous Chemical Packaging Products and Container Products Production Permit (《危险化学品包装物、容器产 品生产许可证实施细则》2012). To produce different types of hazardous chemicals (if as industrial products), a production enterprise is required to apply for different sub-categorized Industrial Product Production Permits in accordance with different implementation rules.
2. Operation of Hazardous Chemicals
According to the Administrative Measures for Hazardous Chemical Operation Permit (2015), an enterprise engaging in business operation (including storage operation) of any hazardous chemical listed in the Catalogue of Hazardous Chemicals (2015) shall obtain
a Hazardous Chemical Operation Permit. i.e., an enterprise
which sells hazardous chemical or manages a Hazardous Chemical Special Purpose Warehouse shall obtain a Hazardous Chemical Operation Permit.
Despite the above, there are two exemptions where there’s no need for the business operator to obtain a Hazardous Chemical Operation Permit: (a) a hazardous chemical production enterprise which has lawfully obtained a Hazardous Chemical Safety Production Permit sells the hazardous chemicals produced by itself within its factory area, and (b) a port operator which has lawfully obtained a port operation permit engages in the storage of hazardous chemicals within the port area.
3 Environment Management Registration for Hazardous Chemicals
3.1 Current Rules
According to the Measures for Hazardous Chemical Environmental Management Registration (Trial Implementation) (2013), for any newly constructed, reconstructed or expanded projects producing and using hazardous chemicals, an owner shall conduct environmental management registration for hazardous chemicals before the completion and acceptance of the project. However, this Measures merely generally requires that hazardous chemical production enterprises or enterprises using hazardous chemicals conduct environmental management registration for hazardous chemicals, without specifying what specific amount will trigger the registration requirement.
3.2 Law Developments
The Ministry of Environment of China is currently seeking comments from local environmental bureaus for the revisions to the Measures for Hazardous Chemicals Environmental Management Registration (Trial Implementation) (2013) (“Draft for Comments”).
According to the Draft for Comments, a newly constructed hazardous chemical production enterprise or usage enterprise shall conduct environmental management registration for hazardous chemicals within 6 months following the official operation of such enterprise. Only when the annual production volume (or annual usage volume) of a hazardous chemical under key management produced (or used) by it reaches 100kg or above, or when the annual production volume (or annual usage volume) of other hazardous chemicals produced (or used) by it reaches 1.0 ton or more, there’s a need for such production enterprise (or usage enterprise) to conduct environmental management registration for hazardous chemicals2.
In addition, the Draft for Comments requires the registered enterprise engaged in hazardous chemical production or usage to conduct annual filing with the local (at the county-level) environmental protection bureaus (“EPB”) in January every year. We will keep you updated of any development in this connection.
4 Usage of Hazardous Chemicals by Enterprises Not Producing Hazardous Chemicals
According to the Measures for Implementation of Hazardous Chemical Safety Usage Permit (2015), chemical enterprises (other than hazardous chemical production enterprises) which are in certain industrial sectors that use hazardous chemicals for production in certain quantity, shall obtain the Hazardous Chemical Safety Usage Permit. However, an enterprise using hazardous chemical as fuel, standing alone, is not required to obtain the Hazardous Chemical Safety Usage Permit.
Regulation on Import and Export of Hazardous Chemicals
According to the Regulations on Environmental Management for Initial Import of Chemicals and Import and Export of Toxic Chemicals 《( 化学品首次 进口及有毒化学品进出口环境管理规定》1994), the Implementation Measures on Environmental Management Registration for First Import of Chemicals and Import and Export of Toxic Chemicals《( 化学品首次进口及有毒化学品进出口 环境管理登记实施细则》1995), the Notice to Enhance Environmental Management Registration Works for Import and Export of Toxic Chemicals (《关于加强有毒化学品进出口环境管理登记工作 的 通 知 》 2009), the Measures for Hazardous Chemicals Environmental Management Registration (Trial Implementation) (2013), the importer or exporter shall conduct environment management registration for toxic chemicals with relevant EPB for importing or exporting chemicals listed on the Catalogue of Toxic Chemicals Strictly Restricted by China for Import and Export (《中国严格限制进出口的有毒化学品 目录》).
Storage of Hazardous Chemicals
The main laws, regulations and national standards applicable for storage of hazardous chemicals include the following:
- Fire Control Law (《消防法》2009)
- Administrative Rules on the Safety of Warehouse Fire Control 《( 仓库防火安全管理规则》1990)
- General Rules on the Storage of Ordinary Hazardous Chemicals (《常用化学危险贮存通 则》 GB15603-1995)
- Operation Commencement Conditions and Technological Requirements for Hazardous Chemical Enterprises (《危险化学品及经营企 业开业条件和技术要求》GB18265-2000)
- Technical Conditions for the Storage and Maintenance of Flammable and Explosive Commodities 《( 易燃易爆性商品储存养护技术 条件》GB17914-2013)
- Technical Conditions for the Storage and Maintenance of Corrosive Commodities (《腐蚀 性商品储存养护技术条件》GB17915-2013)
- Technical Conditions for the Storage and Maintenance of Toxic Commodities (《毒害性商 品储存养护技术条件》GB17916-2013)
In brief, storage of hazardous chemicals must satisfy the fire control, loading and unloading and stacking requirements.
As the Operation Commencement Conditions and Technological Requirements for Hazardous Chemical Enterprises (GB18265-2000) distinguishes hazardous chemical operators by “wholesale enterprises” and “retail stores”, we will discuss below the storage requirements for those two types of business operators.
1 Storage Requirements for Hazardous Chemical Wholesale Enterprises
According to the Regulations on the Safety Administration of Hazardous Chemicals (2013), hazardous chemicals shall be stored in special purpose warehouses, places or storage rooms (the “Special Purpose Warehouse”) and managed by specially assigned personnel.
1.1 Hazardous Chemical Operation Permit Required
One may wish to make clear what a Special Purpose Warehouse is and whether a separate storeroom specifically allocated by an enterprise for purpose of storing hazardous chemicals serves the purpose. Based on our telephone consultations with certain competent officials, a Special Purpose Warehouse does not refer to a separate warehouse/storeroom specifically allocated for purpose of storing hazardous chemicals, but rather means a warehouse that has obtained the approval from the zoning authority, AWS and fire bureau, thus holding a qualification certificate. Specifically, there are two types of Special Purpose Warehouses for hazardous chemicals: one type of such warehouse is owned and operated by the hazardous chemical producer or operator itself, the other type is owned by hazardous chemicals storage service provider; in either circumstances, an owner of the Special Purpose Warehouse shall have obtained the Hazardous Chemical Operation Permit.
1.2 Classification of Fire Hazardous Nature and Fire Resistance Capability Necessary for Storage
With respect to the storage rules for common goods, if classified by the fire hazardous nature of such goods, warehouses in China are categorized into five classes (Class A, B, C, D and E, in which Class A is the highest standard); and if classified by the combustion performance and fire endurance of the warehouse components (walls, pillars, beams, floors, roof bearing components, evacuation stairs, ceilings, etc.), warehouses in China are classified into four levels (Level I, II, III, and IV, in which Level I is the highest standard). Fire hazardous nature classification (火灾危险性分类) and fire resistance capability classification (耐火等级分 类 ) have certain correlativity. Usually, a warehouse with a higher fire hazardous nature has a higher level of fire resistance capability. There are 15 types of sub-category warehouses.
Hazardous chemicals shall, subject to their physical and chemical characteristics, be stored in a warehouse whose corresponding fire hazardous nature is not lower than that of such hazardous chemicals.
In addition, the Special Purpose Warehouse must also meet the requirements for fire resistance capability, depending on what hazardous chemicals are stored therein. For example, according to the Operation Commencement Conditions and Technological Requirements for Hazardous Chemical Enterprises (GB18265-2000), fire resistance capability for a warehouse storing toxic or corrosive hazardous chemicals shall be rated at least Level II. Fire resistance capability for a warehouse storing flammable and explosive hazardous chemicals shall be rated at least Level III. Explosive materials shall be stored in a Level I warehouse with a light roof. Liquid of low or medium flash point, level I flammable solid, self-igniting materials, compressed gas and liquefied gas shall be stored in a Level I warehouse.
1.3 Location Requirement for Special Purpose Warehouse
Special Purpose Warehouses with different areas and scales shall comply with different location requirements under the Operation Commencement Conditions and Technological Requirements for Hazardous Chemical Enterprises (GB18265-2000).
Despite the above, we understand that if a hazardous chemical operator leases a Special Purpose Warehouse from a lessor which has obtained the Hazardous Chemical Operation Permit (on which the business scope shall include “storage”), then the hazardous chemical operator may reasonably rely that such warehouse has satisfied the location requirement.
1.4 Keeping by Qualified Personnel
Staff working at a Hazardous Chemicals Special Purpose Warehouse shall have undergone pre-job trainings and periodic trainings thereafter, and shall hold relevant qualifications. For example, if special equipment is utilized in a warehouse (i.e., pressure containers, pressure bottles, pressure pipes, lifting machines, special vehicles, etc.), then the operator of special equipment shall obtain the Operator Certificate for Special Equipment. A qualified safety manager/principal must have a college degree with a major in chemical engineering, and have at least 2-year working experience in the chemical industry. Other personnel shall satisfy other qualification requirements.
1.5 Equipped with Fire Control Facilities
A Special Purpose Warehouse should be equipped with relevant fire control facilities. Depending on what goods will be stored, the warehouse may need to be equipped with water tanks, an automatic deluge system, automatic fire alarm system, smoke detectors, gas concentration detectors or other professional security facilities.
In sum, a Hazardous Chemicals Special Purpose Warehouse must satisfy the qualification requirement, fire hazardous nature classification and fire resistance capability classification, location requirement, personal qualification requirement, and facilities requirement. Given this, it is common to see hazardous chemicals operators to lease Special Purpose Warehouses directly to manage the receipt and delivery of hazardous chemicals.
2 Storage Requirements for Hazardous Chemicals Retail Stores
According to the Operation Commencement Conditions and Technological Requirements for Hazardous Chemical Enterprises (GB18265-2000), a hazardous chemical retail store may only keep family-use small packaging hazardous chemicals for a total amount not exceeding 1.0 ton. The retail store shall be separated by a solid wall from its storeroom (or storing tent). A single variety kept in the retail store shall not exceed 500kg, while the total amount shall not exceed 2.0 tons. Please note that, hazardous chemicals retail store operator must also obtain the
Hazardous Chemical Operation Permit.
Disposal of Hazardous Waste
The laws and regulations applicable to hazardous waste disposal mainly include the following:
- Law on the Prevention and Control of Environmental Pollution by Solid Waste (《固体 废物污染环境防治法》2015)
- NationalCatalogueofHazardousWaste(《国家 危险废物名录》2008)
- General Principles for Identification of Hazardous Waste (《危险废物鉴别标准通则》 2007)
- Measures for Administration of Hazardous Waste Operation Permit (《危险废物经营许可 证管理办法》2013)
- Measures on the Prevention and Control of Environmental Pollution of Hazardous Chemical Waste (《废弃危险化学品污染环境 防治办法》2005)
1 Definition of Hazardous Waste
According to the Law on the Prevention and Control of Environmental Pollution by Solid Waste (2015), “solid waste” refers to such matters and substances in solid, semi-solid, or gaseous state that are kept in containers, generated in the course of production, human's daily life and other activities that have lost their value in use, or are discarded or abandoned although they have not lost their value, and other matters and substances identified by national laws and administrative regulations as solid waste. “Hazardous waste” refers to solid waste that is included in the National Catalogue of Hazardous Waste (2008), and other hazardous solid waste identified by national standards and identification methods as hazardous waste.
By comparing the Catalogue of Hazardous Chemicals (2015) and the National Catalogue of Hazardous Waste (2008), we understand that all discarded hazardous chemicals are hazardous waste.
2 Qualification for Hazardous Waste Disposal
According to the Law on the Prevention and Control of Environmental Pollution by Solid Waste (2015), an enterprise generating hazardous waste shall entrust a qualified entity (i.e. holding the Certificate of Hazardous Waste Operation Permit) for collection, storage, utilization, disposal of its hazardous waste.
Please note that there are two types of the Certificate of Hazardous Waste Operation Permit under the Measures for the Administration of Hazardous Waste Operation Permit (2013): one is the Certificate of Comprehensive Operation Permit for Collection, Storage, and Disposal of Hazardous Waste, enabling the holder to engage in all kinds of activities in relation to the collection, storage and disposal of hazardous waste; and the other one is the Certificate of Operation Permit for Collection of Hazardous Waste, the holder of which may only conduct activities of collecting waste mineral oils derived from the maintenance of motor vehicles and of collecting Cd-Ni batteries abandoned in human’s daily life.
Based upon the above, a waste generator shall entrust an entity holding the Certificate of Comprehensive Operation Permit for Collection, Storage, and Disposal of Hazardous Waste for collection, storage and disposal of its hazardous waste.
3 Declaration of Hazardous Waste
According to the Measures on the Prevention and Control of Environmental Pollution of Hazardous Chemical Waste (2005), an enterprise generating hazardous chemicals waste shall formulate hazardous chemicals waste management measures, develop plans for control and file them with the local EPB. It should further provide the information on the types, names, components, characteristics, quantities, flow direction, storage, utilization, disposal and chemicals MASD sheet to the local EPB for waste declaration. In case of any major change to the above matters, the enterprise shall file for alteration in a timely manner.
Summary
Hazardous chemicals are strictly regulated in their production, usage, operation, storage and waste disposal processes. Failure to obtain the required permits or comply with the relevant requirements under the applicable law may lead to serious legal consequences for violators.
2 Environmental management registration for hazardous chemicals and Hazardous Chemical Safety Usage Permit are regulated in two different processes. First of all, the regulatory authority on the Hazardous Chemical Safety Usage Permit is the AWS, while the regulatory authority on the environmental management registration for hazardous chemicals is the EPB. Secondly, the Hazardous Chemical Safety Usage Permit applies to management of hazardous chemicals where all three conditions (specific industry, specific volume and specific types of hazardous chemicals) are satisfied. However, the environmental management registration for hazardous chemicals applies to the management of hazardous chemicals where as long as one condition (specific volume) is met in regardless of the industry and types requirement. Thirdly, the Hazardous Chemical Safety Usage Permit is a type of administrative approval, while environmental management registration for hazardous chemicals is administrative filing in nature.
For further information, please contact:
ZHANG Wei, Partner, Jun He
zhangw@junhe.com
