China Update. Ambient Air Quality Standards (GB ), promulgated January 1, 2012 JUNE 2012 ISSUE NEWS FROM ENVIRON CHINA

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1 China Update NEWS FROM ENVIRON CHINA ISSUE Ambient Air Quality Standards (GB ), promulgated January 1, 2012 The newly revised Ambient Air Quality Standards prioritize the protection of human health, with adjustments made to pollutants and limits, and an average concentration limit for PM2.5 added. Although the pollutant controls of the newly promulgated standards are in accordance with international standards overall, with China still being a developing country, and with levels of economic and technological development determining pollutant limits (such as PM10 and PM2.5), China can currently only meet the World Health Organization's first-stage target values commonly employed for the air quality standards of developing countries. In this regard, the new standards are only in line with lower-grade international standards. China still has a long road to travel before it truly conforms with guideline values proposed by the World Health Organization. In order to implement these new standards, the Ministry of Environmental Protection simultaneously published a Notice on the Implementation of Ambient Air Quality Standards. This notice clearly stipulates requirements for the phased implementation of the new standards in key regions such as the Beijing-Tianjin region of Hebei, the Yangtze River Delta and Pearl River Delta, as well as in municipalities directly under the central government and provincial capitals in 2012; in 113 key environmental protection cities and model cities for environmental protection in 2013; in all cities at the prefecture level and above in 2015; and nationwide by January 1, Currently, two-thirds of the nation's cities do not meet the air quality requirements introduced by these standards. However, this does not signify a decline in ambient air quality in these cities; rather, it is due to China's more rigorous, heightened standards. The implementation of new standards is a process, requiring that roughly 1,500 monitoring sites be set up throughout the country. Additionally, PM2.5 monitoring device models will need to be approved, and personnel training on their use carried out. JUNE 2012 Ambient Air Quality Standards (GB ) Measures for the On-Site Supervision and Inspection of Automated Pollution Source Monitoring Facilities Technical Policies for Pollution Control in the Lead and Zinc Smelting Industries, Petroleum and Natural Gas Extraction, and the Pharmaceutical Industry Regulations of Guangdong Province on the Prevention and Control of Environmental Pollution by Solid Waste (2012 Revision) Seven standards, including Technical Specifications for Wastewater Treatment in Pulp and Paper Making Regulations of Guangdong Province on the Management of Water Resources in the Dongjiang, Xijiang, Beijiang and Hanjiang Watersheds (2012 Revision) Provisions on the Supervision and Administration of Occupational Health in the Workplace Measures for the Reporting of Occupational Disease Hazards Measures for the Supervision and Administration of Employer Occupational Health Surveillance Provisional Measures for Occupational Health Technical Service Institutions Provisional Measures for the Supervision and Administration of Three Simultaneities in Construction Project Occupational Health Shanghai City s 12 th Five-Year Program for Environmental Protection and Ecological Construction Liaoning Province Fire Safety Regulations Note: The regulatory information contained herein is current as of June The next issue of China Update will be published in the fall.

2 CHINA UPDATE ISSUE Measures for the On-Site Supervision and Inspection of Automated Pollution Source Monitoring Facilities Effective April 1, 2012 The measures ensure normal operation for automated pollution source monitoring facilities operated by pollutant discharging entities, wherein the entity shall coordinate with and supervise the normal operation of the facility. When an automated pollution source monitoring facility experiences a failure and cannot be normally utilized, the pollutant discharging entity shall report it to the jurisdictional supervision and inspection authority within 12 hours of the failure, provide prompt service to the facility and ensure that normal operations are resumed within five business days. During the suspension of operations, the pollutant discharging entity shall employ measures to closely monitor the discharge of pollutants, and submit monitoring data. When an automated pollution source monitoring facility needs to be dismantled or cease operations, the pollutant discharging entity shall report this beforehand to the jurisdictional supervision and inspection authority, and action may only be taken after receiving their approval. Technical Policies for Pollution Control in the Lead and Zinc Smelting Industries, Natural Gas Extraction, and the Pharmaceutical Industry Promulgated March 7, 2012 Per the objectives of the Technical Policy for Pollution Control in the Lead and Zinc Smelting Industries, new construction and expansion projects in these industries must meet Class I (or above) clean production standards, and renovation projects must meet Class II (or above) clean production standards. By meeting and maintaining these standards, companies should see a decrease in heavy metal content, such as lead, arsenic and cadmium, as well as of gas emissions and wastewater discharged in key regions. By 2015, the rate of comprehensive utilization (or non-hazardous disposal) of solid waste utilization should reach 100%. Per the objectives of the Technical Policy for Pollution Control in Petroleum and Natural Gas Extraction, by the end of 2015, all new construction, renovation and expansion projects within the industry will employ clean production processes and techniques; the industrial wastewater recycling rate will reach 90% or higher; and industrial solid waste resource recovery and non-hazardous treatment and disposal rates will reach 100%. Regarding accidents involving environmental pollution and ecological damage, the goal of this policy is to curb any minor incidents and, ultimately, to eliminate major incidents. The policy is also designed to gradually implement more control of the total amount of petroleum pollutants discharged by the industry. The Technical Policy for Pollution Control in the Pharmaceutical Industry clarifies the basic guidelines for the three wastes wastewater, waste gas, solid waste biosafety, and secondary pollution prevention and control in the pharmaceutical industry. Currently, the development of China s pharmaceutical industry focuses on bulk, low-value-added raw pharmaceutical materials, such as antibiotics and vitamins. Large amounts of the three wastes are produced, and treatment is difficult. This policy contains item-by-item provisions regarding the prevention and control of water pollution and atmospheric pollution and encourages waste disposal and comprehensive utilization. The policy proposes that wastewater should be collected (by type) and undergo segregated treatment; that high concentration wastewater and wastewater containing active pharmaceutical ingredients should be pretreated; and that companies should treat the wastewater they discharge to public sewage treatment plants of industrial parks or urban drainage systems. Treatment must meet nationally or locally stipulated discharge standards, in accordance with legal regulations. The policy also stipulates that highly toxic refractory wastewater should be collected and treated separately before being combined with other wastewater and treated again. Laboratory wastewater and wastewater from animal pens should be collected separately and introduced to the sewage treatment system after undergoing sterilization and inactivation. Regulations of Guangdong Province on the Prevention and Control of Environmental Pollution by Solid Waste (2012 Revision) Effective January 9, 2012 In the Regulations of Guangdong Province on the Prevention and Control of Environmental Pollution by Solid Waste (2012 Revision), Article 33 has been deleted. For more information, visit: rd.gd. cn/lfzw/zxfg/cwffg/201202/ t _ html

3 CHINA UPDATE ISSUE Seven National Environmental Protection Standards including Technical Specifications for Wastewater Treatment in Pulp and Paper Making The names and codes of these standards are as follows: I. Technical Specifications for Wastewater Treatment in Pulp and Paper Making (HJ ) II. Technical Specifications for Bag Filters of Municipal Solid Waste Incineration (HJ ) III. Technical Specifications for Upflow Anaerobic Sludge Bed (UASB) Reactor Sewage Treatment Projects (HJ ) IV. Technical Specifications for Biofilter Sewage Treatment Projects (HJ ) V. Technical Guidelines for Water Pollution Treatment Projects (HJ ) VI. Terminology of Environmental Engineering (HJ ) VII. Technical Specifications for Dry Detoxification Treatment and Disposal of Chromium Residue (HJ ) Regulations of Guangdong Province on the Management of Water Resources in the Dongjiang, Xijiang, Beijiang and Hanjiang Watersheds (2012 Revision) Effective January 9, 2012 For the Regulations of Guangdong Province on the Management of Water Resources in the Dongjiang, Xijiang, Beijiang and Hanjiang Watersheds (2012 Revision): 1. Article 26 has been revised to read: For those violating the provisions of Article 11 of these regulations and conducting the unauthorized construction of water works without the review and agreement of a watershed administration agency, the watershed administration agency shall order them to cease their illegal conduct and allow a prescribed period of time within which the relevant procedures may be conducted. Those failing to carry out the relevant procedures within the time limit or who do carry out the procedures but do not receive approval will be given a period of time within which to dismantle the illegal buildings and structures. In the event that the structures are not dismantled within the time period, an application shall be submitted according to law to a people s court for compulsory execution, and a fine of 20,000 to 100,000 yuan shall be levied. 2. Article 28 has been revised to read: "For those violating the provisions of Article 23 of these regulations and conducting the new construction, renovation, or expansion of sewage outlets without approval, the responsible water administration department of the people's government at the county level or above or a watershed administration agency shall use their authority to order the dismantling of the structures within a given period of time, and shall levy a fine of 20,000 to 100,000 yuan. In the event that the structures are not dismantled within the time limit, an application shall be submitted according to law to the people's court for compulsory execution, and a fine of 100,000 to 500,000 yuan shall be levied." Measures for the Reporting of Occupational Disease Hazards Compared to the Administrative Measures for the Reporting of Occupational Hazards in the Workplace of 2009, the primary revisions made by the new Measures for the Reporting of Occupational Disease Hazards follow. Based on the provisions of Article 16, Clause 1, of the revised Law on the Prevention and Control of Occupational Diseases, The state shall establish a reporting system for occupational disease hazards, and Clause 3, The specific measures for reporting of occupational disease hazards shall be formulated by the Department of Work Safety Supervision and Administration of the State Council, the name of the regulation has been changed to Measures for the Reporting of Occupational Disease Hazards. In keeping with the revisions of the reporting measures, the State Administration of Work Safety made corresponding revisions to the Occupational Disease Hazards Reporting Form, clarifying reporting content. In order to boost the efficiency of reporting, the State Administration of Work Safety organized, researched and developed an occupational disease hazards declaration and filing administration system ( After a safety supervision department receives a printed reporting form submitted by an employer, it should immediately issue an Acknowledgment of Receipt of the Occupational Disease Hazards Report for the employer, and enter the reporting form in the occupational health administration files.

4 CHINA UPDATE ISSUE Provisions on the Supervision and Administration of Occupational Health in the Workplace The Provisions on the Supervision and Administration of Occupational Health in the Workplace are a revision of the Temporary Provisions on the Supervision and Administration of Occupational Health in the Workplace (State Administration of Work Safety Order No. 23), based on Articles 6 and 9 of the Law on the Prevention and Control of Occupational Diseases. The new provisions refer to aspects of occupational health for which employers have primary responsibility, such as the establishment of employer occupational health administration institutions and personnel, the creation of a system of rules and regulations, administration of the working environment, management of employees, occupational health surveillance, file administration and the management of materials and equipment. The new provisions require that employers: Provide necessary protective installations (i.e. alarms), equipment and clear warning signs for dangerous areas. Allocate on-site first-aid services, washing facilities, emergency evacuation routes and buffer zones in toxic or hazardous workplaces. Offer complementary health facilities, including bathrooms equipped with changing stations and lounges for pregnant female employees, as well as various other items that ensure the physical and mental health of all employees. The new provisions require that employers dealing specifically with occupational disease hazards must commission a qualified occupational health technical service institution to conduct at least one test of occupational disease hazard factors each year. Employers dealing specifically with severe occupational disease hazards must conduct at least one occupational disease hazard evaluation every three years. Employers making their first application for an occupational health and safety license, employers applying for a renewal at the end of the valid period of an existing occupational health and safety license, and/or employers who have sustained occupational disease hazard incidents are required to conduct a prompt occupational disease hazard evaluation. The provisions emphasize that employers must provide occupational health training for employees, both before they begin a position, and at regular intervals throughout their employment. The newly revised Law on the Prevention and Control of Occupational Diseases does not include special provisions regarding the duties of coal mine safety supervisory institutions in executing coal mine occupational health supervision and administration. However, based on the "three determinations" provisions for the State Administration of Coal Mine Safety, issued by the General Office of the State Council, the Administration of Coal Mine Safety is responsible for the supervision and inspection of the occupational health of coal mine workplaces The administrations is also responsible for the issuance and administration of coal mine occupational health and safety licenses; for supervising and inspecting the state of occupational health in coal mines; and for organizing the investigation and punishment of accidents and violations of laws and regulations in coal mines. On these grounds, with respect to coal mine occupational health supervision and administration duties, coal mine safety supervision agencies must execute their supervision based on these new provisions. Measures for the Supervision and Administration of Employer Occupational Health Surveillance While the current Surveillance Measures were being formulated, some of the content of the Ministry of Health s original Administrative Measures for Occupational Health Surveillance was used as a reference. However, as a departmental regulation of the State Administration of Work Safety, the formulation of these Surveillance Supervision and Administration Measures focused closely on the state s division of departmental duties regarding occupational health supervision. Anything falling beyond the scope of duties of the State Administration of Work Safety is not stipulated in these Surveillance Measures, such as the accreditation, management and penalization of occupational health physical examination institutions. According to the provisions of Articles 21, 36 and 37 of the Law on the Prevention and Control of Occupational Diseases, there are four primary aspects of occupational health surveillance: 1. The health of the employee prior to employment 2. The health of the employee for the duration of employment 3. The health of the employee after employment ends 4. The health surveillance files maintained by the employer On this foundation of these aspects, the Surveillance Supervision and Administration Measures have added emergency occupational health inspections to their content, based on the provisions of Technical Specifications for Occupational Health (GBZ188). Based on the provisions of the Law on the Prevention and Control of Occupational Diseases, the Surveillance Measures contain specific provisions for the occupational health surveillance duties of employers, making laws and provisions more detailed and increasing operability. Annual occupational health inspection plans are imperative for examining the implementation of state occupational health standards, such as Technical Specifications for Occupational Health Surveillance by employers, and for ensuring the inspection of occupational disease hazards. The Surveillance Measures stipulate that an employer must formulate and implement an annual occupational health inspection plan for their employees, in keeping with the requirements of state occupational health standards. Further, the employer must ensure the availability of necessary funds for this implementation.

5 CHINA UPDATE ISSUE Provisional Supervision and Administration Measures for Occupational Health Technical Service Institutions Effective July 1, 2012 In keeping with the provisions of Articles 19 and 27 of the Law on the Prevention and Control of Occupational Diseases, the Institution Measures defer to the grassroots level when it comes to the establishment of occupational health technical service institutions. They have enhanced the construction of the grassroots occupational health technical service system, and have returned to the original two-tiered administrative system of health departments. The system delegates authority for the accreditation, supervision and administration of occupational health technical service institutions to the occupational safety supervision and administration departments of people s governments at the districted city level. The system also divides the qualifications of occupational health technical service institutions into three grades Grade A, Grade B and Grade C for which state-, province- and city-level safety supervision departments, respectively, give approval and issue certificates. The Institution Supervision and Administration Measures define different regional and work scopes based on the capabilities and levels of Grades A, B and C occupational health technical service institutions. This work scope refers only to construction projects. Based on differences in scope and recipients of technical services, as well as the differing technical capabilities required, the Institution Measures provides corresponding requirements that occupational health technical service institutions must meet to qualify for their respective grade. The Institution Supervision and Administration Measures contain clear provisions regarding the qualification applications, filing, technical appraisal and approval procedures, deadlines, modifications, extensions and cancellations for occupational health technical service institutions, in order to enhance transparency and efficiency of approval. To ensure legal administration, the measures include certain prohibitive provisions relating to occupational safety supervision and administration departments and their employees. Regarding legal liabilities, in addition to the provisions of the Law on the Prevention and Control of Occupational Diseases, these Institution Supervision and Administration Measures also add certain penalty clauses on the authority of departmental regulations. Administrative penalties levied against occupational health technical service institutions are determined by occupational safety supervision and administration departments at the municipal level and above. However, administrative penalties involving the revocation of qualification certificates can only be determined by the issuing agency. Provisional Measures for the of Three Simultaneities in Construction Project Occupational Health The Provisional Measures for the of Three Simultaneities in Construction Project Occupational Health are based on Articles 17 and 18 of the Law on the Prevention and Control of Occupational Diseases, refer to the Categorized Management Measures for Occupational Disease Hazards in Construction Projects (Ministry of Health Order No. 49) and were drafted based on the approaches and experiences of the Work Safety Administration, Ministry of Environmental Protection, and Ministry of Health regarding the categorized management of occupational health in construction projects. The measures focus on and present clear requirements for the safe construction, renovation and expansion of facilities, as well as projects involving technical renovations and introduced technologies in which occupational disease hazards are possible. Their scope covers all construction projects that could include any of the occupational disease hazard factors listed in the Occupational Disease Hazard Factors Categorization Catalogue. The measures involve the categorized management of construction projects, with different requirements for each of the three categories normal, high and severe based on potential occupational disease hazards. The measures stipulate that for all construction projects with occupational disease hazards, the construction company must first commission a design firm, with the appropriate qualifications issued by the Ministry of Housing and Urban- Rural Development, to compile a design document for the facility. Once the design is submitted, the construction company must enlist occupational health experts and internal personnel to conduct an appraisal of the document. After this review, the construction company is responsible for the accepted document s validity, legality and practical applicability. The construction company is also responsible for subsequent implementation of the design, as well as evaluations and reports of their project s potential occupational disease hazards. In addition to the current measures, a supporting construction project categorization guidance document will soon be released. This will further standardize and guide companies in carrying out the three simultaneities work of occupational health in construction projects.

6 CHINA UPDATE ISSUE Shanghai City s 12 th Five-Year Program for Environmental Protection and Ecological Construction Promulgated March 15, 2012 Through the implementation of this program, the city of Shanghai hopes to have fully established itself as a resourceconserving, environmentally friendly city by As a guide for completion, the framework for these economical and environmental changes should be firmly in place by The city s goals include: Shanghai will cut COD, ammonia nitrogen, SO 2, and NO x by 10%, 12.9%, 13.7% and 17.5%, respectively, in conjunction with controlling total phosphorus, volatile organic compounds (VOCs) and particulate matter (PM2.5), which are closely tied to environmental quality in Shanghai. The air pollution index (API) for the entire city will be maintained at roughly 90%, groundwater environmental function zones will meet targets at a rate of 80% or above, combined pollution will begin to be curbed, and forest coverage will reach 15%. Drinking water safety will be fully guaranteed, the urban sewage and sludge treatment rate will reach 85% and above, and the non-hazardous disposal rate for household waste will reach 95% and above. A more comprehensive risk control system will take shape. The energy structure of the city will be further optimized, industrial structural adjustments and layout optimization will be enhanced, and the discharge of primary industrial pollutants will continue to drop. Liaoning Province Fire Safety Regulations Effective March 1, 2012 The newly revised Liaoning Province Fire Safety Regulations highlight the areas of fire safety accountability systems, fire prevention in high-rise buildings and underground construction, external wall insulation system fire prevention and concern for the safety of minors. These regulations have taken the lead nationwide in stipulating that high-rise buildings establish systems and measures prohibiting or limiting smoking indoors. They also address issues in high-rise buildings regarding fire escape and improperly allocated equipment, and stipulate that all high-rise buildings must be equipped with fire evacuation equipment and auxiliary evacuation facilities. Further, hotel rooms in high-rise buildings must be equipped with escape equipment such as flashlights and smoke masks and instructions for their use. The regulations require the province to implement a system of external wall insulation material checks and filing. The fire prevention agencies of public safety authorities will incorporate the external wall insulation materials of civil buildings into the scope of construction project s fire prevention design checks, fire safety inspections and filed spot checks. At the same time, the regulations contain clear provisions regarding external wall insulation material construction and utilization: Prior to construction, the construction unit or supervision unit shall examine the quality certificates for the external insulation materials of civil buildings; materials without quality certificates shall not be authorized for use. The building unit shall conduct on-site sampling under the supervision of the construction unit or supervision unit, and shall commission an inspection agency with the proper qualifications to conduct an inspection. Materials failing to pass the inspection may not be used. The regulations require operators to equip public transportation vehicles with fire prevention equipment and escape devices, to be installed or placed in clear and convenient locations to ensure their effectiveness. Public transportation vehicles will be inspected for fire safety, and those not meeting fire safety requirements promptly updated and refurbished. IN TOUCH For more information, please contact: Mr. Xiao-Jian Zhou, Managing Director ENVIRON China Tel: xiaojian_zhou@environcorp.com We prepare China Update to apprise clients of major EHS regulatory developments in China. It is not intended to constitute legal advice and should not be relied upon as such.