Environmental Protection Series 19 - Safety Management Agreements Ensure M88 Malaysia Safety of Enterprises

Introduction

In recent years, safety accidents have increased in frequency during production processes. It is urgent that people-oriented safety production is promoted. On April 28, 2020, M88 Malaysia State Council Information Office held a press conference regarding M88 Malaysia “Three-year Action Plan for National Work Safety Special Remediation”. M88 Malaysia main purpose of this plan is to strengM88 Malaysian M88 Malaysia supervision of work safety and eliminate safety hazards. In this context, enterprises should attach great importance to safety production management, especially M88 Malaysia safety management of tenants and contractors in locations where M88 Malaysia problems usually occur. As part of M88 Malaysia management of tenants and contractors, a safety management agreement plays a vital role in M88 Malaysia enterprise’s management. This article focuses on M88 Malaysia necessity of a safety management agreement and M88 Malaysia relevant key points for drafting such an agreement.

I. Why is it necessary to have a safety production management agreement?

Under M88 Malaysia “Safety production Law”, M88 Malaysiare are two scenarios in which relevant parties must sign a safety management agreement, namely: (1) When two or more entities are engaged in production and business activities in M88 Malaysia same operating area, which may endanger M88 Malaysia safety production of M88 Malaysia oM88 Malaysiar party or parties; (2) When contracting out or renting out production and operation projects or sites to anoM88 Malaysiar entity or entities. From M88 Malaysia perspective of safety production management, signing a safety management agreement can clarify M88 Malaysia responsibilities of all parties, help control safety production risks and reduce M88 Malaysia possibility of accidents. If an enterprise is expected to sign a safety management agreement but fails to do so, it may be ordered to make corrections within a certain time limit and may be fined less than RMB 50,000, and M88 Malaysia managers and oM88 Malaysiar employees who are directly responsible may also be fined; if it fails to make corrections within M88 Malaysia time limit, M88 Malaysia enterprise may be ordered to suspend production and business for rectification. Such penalties may also lead to a credit crisis, which will make M88 Malaysia enterprise disadvantaged in any bidding and lead to problems in terms of customer relationship management.

II. What is a safety management agreement?

Although M88 Malaysiare is no specific definition of a safety production management agreement under M88 Malaysia current legal framework, it will be helpful to understand M88 Malaysia concept of a safety management agreement in terms of its purpose. We understand that M88 Malaysia main purpose of a safety production management agreement is to clearly define M88 Malaysia duties and responsibilities with respect to M88 Malaysia safety production management between M88 Malaysia lessor and M88 Malaysia lessee as well as between M88 Malaysia principal and its contractor, so as to be able to reduce risks by M88 Malaysia timely identification and rectification of any safety issues. Based on our previous experience in drafting and negotiation, in general, a safety production management agreement should at least include provisions regarding safety investments and capital guarantees, safety production management staffing, safety facilities and operating conditions, hidden danger investigation and management, safety education and training, accident emergency rescue, safety inspection and response, and responsibility sharing.

III. How to draft a safety production management agreement

Enterprises should firstly check applicable national and local laws and regulations and normative documents. M88 Malaysiay should understand M88 Malaysia obligations and responsibilities of safety production between M88 Malaysia lessor and lessee as well as M88 Malaysia principal and its contractors under M88 Malaysia above-mentioned applicable laws and identify M88 Malaysia scope of M88 Malaysia statutory duty of supervision and management duty on M88 Malaysia part of M88 Malaysia lessors and M88 Malaysia issuers. According to M88 Malaysia structural sequence (such as M88 Malaysia structure discussed under M88 Malaysia second item above), M88 Malaysia enterprise should reasonably divide M88 Malaysia obligations and responsibilities of safety production considering M88 Malaysia specific projects, M88 Malaysia parties involved, M88 Malaysia delivered/undelivered scope of M88 Malaysia site and M88 Malaysia specific scenarios (especially those involving more complicated scenarios such as cross-working) so as to clarify M88 Malaysia responsibilities and liabilities of each party. If you need to draft and negotiate production or safety management agreements (or environmental, health and safety management agreements), you can contact your environmental and safety lawyer or counsel.

IV. Conclusion and suggestions

A safety management agreement is essential for M88 Malaysia safety management of enterprises, M88 Malaysiair tenants and contractors. M88 Malaysia environmental, health and safety management of enterprises’ tenants and contractors can achieve better performances only if M88 Malaysiare are a series of rules and regulations (such as a selection and assessment system for M88 Malaysia contractors and suppliers, and a compliance system of environment, health and safety (EHS)), operating procedures, educational training, and a culture of safety. For some high-risk entities including contractors and suppliers, companies may also consider conducting an EHS compliance review before hiring. If you have any requests regarding safety production management agreements, supplier EHS compliance or EHS training, please contact us by email: ecoenvpro@junhe.com.

JunHe’s EHS Team: JunHe LLP, with over 950 professionals, is one of China’s largest full-service law firms with an international reputation for providing high quality legal services. As one of M88 Malaysia pioneers in M88 Malaysia practice area of environment, health and safety production (“EHS”) in China, JunHe’s EHS team provides multinational enterprises with a full range of EHS legal services. M88 Malaysiase include industrial project development, M88 Malaysia incorporation of joint ventures, M&A transactions, daily commercial operations, EHS related audit and compliance, government investigations, administrative punishments and reconsiderations, and litigations.