Shandong Province announces the first 60 chemical enterprises under strict supervision 06-07-2019

In Mid-May, 2019, Shandong Province made the first announcement regarding 60 chemical enterprises subjected to strict supervision. The result will be examined and approved during the coming executive meeting of the provincial government. The approval will lead to an acceleration of rectification of the local chemical industry.

Since November 2017, the government of Shandong Province has been conducting a special action in terms of upgrading the production safety of the local chemical industry in order to improve the efficiency and development of the chemical enterprises in Shandong. Hence, for the sake of better administration, the standard of chemical industrial areas is divided into three levels, consisting of “chemical industrial parks”, “fine chemical industrial areas”, as well as “areas under strict supervision”.

An “area under strict supervision” is a large-scaled chemical enterprise with high level technology that is located outside of chemical industrial parks and fine chemical industrial areas on the list, and that meets standards of the industrial policy in China. Further requirements are great contributions to taxation and the allocation of perfect measures of safety and environmental protection.

It has to be clear that an “area under strict supervision” does not mean an enterprise with lower standard of management. Instead, the enterprise must meet all the same requirements as in a chemical industrial park in the aspects of approval of projects, construction and administration. This is true especially when it comes to safety and environmental protection. Considering the actual situation and development of the chemical industry in Shandong, this supervision is a powerful supplement to the local chemical enterprises.

A qualified chemical industrial park determines an enterprise as an “area under strict supervision”

The identification of chemical enterprises under strict supervision follows that of chemical industrial parks, for which there are two reasons. First of all, a chemical enterprise is confirmed as an “area under strict supervision” based on whether the chemical industrial park where it is located has successfully met all the standards. If yes, there is no need for the enterprise to be identified as such. In other words, the enterprise can start to arrange construction of rectification. Only when an enterprise is located in an area that fails to meet the requirements of declaration, will the enterprise be under strict supervision.

In addition, due to the fact that is it the first time in the history for the government in Shangdong Province to take this action, the whole process is involved with 12 relevant departments, such as safety department, environmental protection department, land department, planning authority, and others. With the substantial workload, the progress of identification has been affected to a certain extent. It was not until April 29 that the government completed verifying the first 60 chemical enterprises under strict supervision.

Areas under strict supervision include listed companies and listed subsidiaries

According to the list of 60 enterprises, some listed companies and subsidiaries are included, such as Shandong Heda, Shida Shenghua, Linglong Tire, Binhua, Wanrun, Xinhua Pharmaceutical, Nikko Chemical, Guangwei Composite Materials, Sanjiao Tire, and Yanggu Huatai.

It is reported that these 60 enterprises are characterized by relatively perfect conditions. However, they have experienced some rectification during a period of time, especially in the aspects of enterprise planning and regional environmental assessment. For example, in terms of regional environmental assessment, the companies only pay more attention to the environmental assessment of their own projects, instead of the regional carrying capacity of environment in 5 to 10 years. After another inspection of environmental assessment, some enterprises meet the standards as an “area under strict supervision”, but others are eliminated during this process. This also brings concerns to the following process regarding the identification of such areas.

For more information about China’s chemical market, please have a look at our resources at Chemicals.

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