Welcome to the February 2019 issue of the Smart O&M newsletter! As the recent industrial accident in Zhangjiakou City resonates as another wake-up call for maintenance, we chose to focus on the topic of safety. We present a deeper analysis of the accident, our views on how to treat the root causes and how SOEs could actually take the lead in improving industrial safety. We also share our successful experience working together with chemical storage terminal LBC Shanghai Shipping. On the fun side, our latest news also include the movie of our annual dinner!
Another industrial disaster, another wake-up call for maintenance
At 0:41 on November 28, 2018, an explosion occurred near Shenghua Chemical in Zhangjiakou City, Hebei Province: 23 were killed and another 22 injured. Preliminary investigations showed that the blast was caused by a leak of highly flammable vinyl chloride gas. The fire subsequently engulfed 38 trucks and 12 cars on the adjacent road.
On December 9, 2018, according to a China Central Television, a safety expert from the Ministry of Emergency Management declared that this disaster was the result of "sloppy management, poor maintenance and the mishandling of the emergency". He added that "Such tanks should be inspected every 1-2 years and undergo major maintenance every 5-6 years. However, the company had done no inspection or maintenance at all on the storage tanks since 2012." The company was said to have a past record of deadly accidents in 2013 and 2014. In 2015, the local work safety bureau also identified 71 safety problems…
In this tragedy, as in countless others in the past, poor maintenance was shown to be the root cause. Yet, in spite of overwhelming evidence, many companies still do not see the link between safety (and more generally regulatory compliance) and maintenance. Regular audits, now consistently implemented throughout China, are insufficient to ensure safety. Superficial safety management, in the form of safety training, signage, personal protection equipment, emergency procedures, etc. is important but cannot address the technical root causes. All the talk about a "safety culture" is meaningless without a systematic approach to technical management.
Achieving Better Risk Prevention in Chinese Terminals
LBC Shanghai Shipping is making tangible progress towards better risk prevention with the use of a specialised risk prevention management system.
In recent years, accidents in storage terminals have made headlines in China, prompting local authorities to strengthen regulations and to very significantly step up law enforcement.
The same trend can be observed across industries, as the Chinese government priorities sustainable development under its "China Dream" campaign.
Numerous factory closures were reported in the second half of 2017. As plants were forcibly shut down after failing government inspections, many businesses, including multinationals, saw their supply chain impacted as a result. Strict regulations have actually been in place for years already, but authorities met difficulties enforcing them.
Today, better enforcement takes the form of more rigorous audits and by-the-book punishment if the company is found non-compliant. Considering the risk to get thrown in jail, general managers now treat these matters much more seriously than in the past. In the wake of the 19th Communist Party of China National Congress, this ultimately positive trend is set to continue.
On January 25, 2019, the entire Siveco China team got together at the Okura Garden Hotel Shanghai for our annual dinner. As the theme was the old Shanghai style, ladies dressed up in beautiful cheongsam and gentlemen put on their best suit. The night began with red carpet signatures and group photos.
"A European SME Success Story" according to EURObiz Magazine
EURObiz, the magazine of the European Union Chamber of Commerce in China published a "A European SME Success Story" article on Siveco China. The article, part of a special dossier on opportunities and challenges for European SMEs in China's Belt & Road Initiative (BRI), showcases Siveco's business with Chinese and Korean EPCs on the Belt & Road.