Laws of the People's Republic of China

National Development and Reform Commission

Circular of the National Development and Reform Commission on Strengthening the Administration of Access of Production Enterprises to the Ferroalloy Industry

Fa Gai Chan Ye [2005] No. 1214

To development and reform commissions and economic commissions (economic & trade commissions) of various provinces, autonomous regions, municipalities directly under the Central Government, cities specifically designated in the state plan and the Xinjiang Production and Construction Corps:

Subject to the Circular of the National Development and Reform Commission on Pertinent Opinions Concerning Further Consolidating Achievements from Sorting out and Rectifying Carbide Industry, Ferroalloy Industry and Coke Industry as well as Regulating the Sound Development of These Industries (Fa Gai Chan Ye [2004] No.2930), and in order to further deepen the sorting-out and rectification of ferroalloy industry, implement the Conditions for Entry into the Ferroalloy Industry (Announcement No.76 [2004] of the National Development and Reform Commission), curb the blindness of investment made into the ferroalloy industry and promote the upgrading of the ferroalloy industry structure, after discussion, pertinent matters on strengthening the administration of access of production enterprises to the ferroalloy industry are hereby released by the State Environmental Protection Administration as follows:

1.

System of examination, determination and announcement to be carried out for access of ferroalloy production enterprises to the industry

Ferroalloy production enterprises must comply with the Conditions for Entry into the Ferroalloy Industry. It shall be required to carry out a system of examination, determination and announcement for access of ferroalloy production enterprises into the industry, so as to strengthen the administration of the said access. Development and reform commissions or economic commissions (economic & trade commissions) of various provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state plan shall be mainly responsible for examining and determining the implementation of access of ferroalloy production enterprises to the industry. Development and reform commissions, or economic commissions (economic & trade commissions) of all localities shall report the examination and determination circumstances to this Commission, and this Commission will, in conjunction with pertinent departments, such as the State Environmental Protection Administration and so on, conduct supervision over and random inspection of the examination and determination conducted by all localities, and shall also regularly announce to the public the name list of ferroalloy production enterprises which meet conditions for access to the industry.

2.

Procedures for examining, determining and announcing the access of ferroalloy production enterprises to the industry

Development and reform commissions or economic commission (economic & trade commissions) of various localities shall examine and determine the implementation of conditions for access to the industry by all the local ferroalloy production enterprises (including existing enterprises and newly-established enterprises). Procedures for the said examination and determination are stipulated below:

(1)

Ferroalloy production enterprises shall conduct self-inspection according to access conditions and report self-inspection assessment materials to development and reform commissions or economic commissions (economic & trade commissions) of various localities, which shall mainly cover the following contents: basic information of enterprise (including name and location of enterprise, nature of enterprise, number of staff and workers, total assets, sales income, gross profits, technology and equipment, how the discharge of pollutants is up to standards, production capacity of sub-categories, output of sub-categories and so on) and the Assessment Form for Access of Ferroalloy Production Enterprises into the Industry (See Appendix).

(2)

Development and reform commissions or economic commissions (economic & trade commissions) of various localities shall, in conjunction with pertinent departments, organize expert verification teams at provincial level, in order to carry out on-site verification of the implementation of conditions for access to the industry by enterprises, subject to requirements of the Assessment Form for Access of Ferroalloy Production Enterprises into the Industry. Based on the self-inspection of enterprises and verification of any expert team, development and reform commissions or economic commissions (economic & trade commissions) of various localities shall give examination and determination opinions, and report to our Commission the examination and determination circumstances as well as the name list of ferroalloy enterprises which meet conditions for access to the industry. Materials submitted to our Commission by the said Development and reform commissions or economic commissions (economic & trade commissions) shall mainly cover the following contents: basic information of enterprise (including name and location of enterprise, nature of enterprise, number of staff and workers, total assets, sales income, gross profits, technology and equipment, how discharge of pollutants is up to standards, production capacity of sub-categories, output of sub-categories and so on) and the Assessment Form for Access of Ferroalloy Production Enterprises into the Industry (See Appendix), enterprise's discharge of pollutants up to standards as approved by environmental protection departments at provincial level, examination and approval opinions on environmental impact assessment documents and supporting materials of a valid discharge permit (These supporting materials are not applicable to areas where no discharge permit system is implemented),as well as the name list of ferroalloy production enterprises which satisfy conditions for industry access.

(3)

Our Commission will, according to examination and determination materials reported by various provinces and in conjunction with the Statement Environmental Protection Administration and other departments concerned, organize the Ferroalloy Industry Association of China and expert teams, in order to conduct a random inspection of the implementation of entry of ferroalloy production enterprises into the industry. Our Commission shall not announce to the public the name list of ferroalloy production enterprises which meet conditions for industry access, after having examined the name list.

3.

Method for examining and determining the access of ferroalloy production enterprises into the industry

It shall be required to adopt a quantitative evaluation method to examine and determine the access of ferroalloy production enterprises into the industry, subdivide the Conditions for Access to the Ferroalloy Industry into specific requirements of five aspects respectively concerning the technology and equipment, environmental protection, energy consumption, resource consumption, environmental protection and safe production facilities, and quantify and score each aspect on the basis of 100 scores per aspect, 500 scores in all. The first two aspects shall be used to decide whether enterprises can satisfy conditions for industry access, more specifically, if either of the two aspects is not up to standards, the overall evaluation of an enterprise shall be unacceptable.

Requirements that ferroalloy production enterprises have to meet for the purpose of the access to the industry shall be stipulated as follows: On the premise that the two aspects of technology and equipment as well as environmental protection meet requirements, the other three aspects, namely the energy consumption, resource consumption, environmental protection and safe production facilities shall be respectively given 60 scores or more. For a detailed scoring method, please refer to the Assessment Form for Access of Ferroalloy Production Enterprises into the Industry and the Instructions for Filling the Assessment Form for Access to the Ferroalloy Industry (See Appendix).

4.

Public announcement of the name list of ferroalloy production enterprises which meet entry conditions

(1)

The name list of enterprises satisfying conditions for industry access shall be announced to the public by the National Development and Reform Commission under the supervision of all sectors of society, and shall be subject to the dynamic management. Development and reform commissions or economic commissions (economic & trade commissions) of various localities shall regularly organize examination or random inspection of enterprises meeting conditions for industry access. Where objections are raised by related units or persons to the said name list, development and reform commissions or economic commissions (economic & trade commissions) of various localities shall organize reexaminations. If necessary, a random inspection shall be conducted by our Commission. Enterprises which practice frauds and are found inconsistent with the entry conditions, shall be crossed out from the announcement, and pertinent persons shall be investigated for liabilities thereby.

(2)

Ferroalloy production enterprises which fail to meet conditions for access to the industry through examination and determination shall be ordered to make rectification within a specified period (not longer than one year). Any of such production enterprises, if still failing to meet conditions for industry access after rectification, shall exit the ferroalloy industry, and financial institutions may not offer any credit support , electric power enterprises shall suspend the power supply and the environmental protection departments shall cancel pollutant discharge license . Such enterprises shall be canceled or closed by local people's governments, and be ordered by departments for industry and commerce according to law to handle formalities of changing or revoking registration.

(3)

For any newly built or expanded ferroalloy industry program, the access conditions must be met. The investment management, lease approval, loan and financing and so on of ferroalloy industry programs must conform to the conditions for access to the ferroalloy industry. Programs after their construction is completed shall undergo industry access inspection and acceptance, and shall not be put into operation formally until conditions for industry access are met.

5.

Arrangements and requirements for examining and determining the access to the ferroalloy Industry

(1)

Examining and determining the access to the ferroalloy industry is a policy-related task which requires a strong professional background and a high degree of responsibility, is not only an important measure to consolidate achievements from sorting out and rectifying ferroalloy industry, regulate ferroalloy industry development, and promote the upgrading of ferroalloy industry structure, but also one of the important contents in respect of boosting of shifts in mode of economic growth. Therefore, all localities must attach vital importance to and be carefully responsible for such task, never lost time in carrying out such task, do solid work and well concentrate on such task.

(2)

Development and reform commissions or economic commissions (economic & trade commissions) of various localities shall, in conjunction with pertinent departments, such as the environmental protection department, meticulously organize the examination and determination. An expert team at provincial level, which is composed of peoples from industry associations, enterprises, research units and so on, shall be set up, so as to conduct an on-site verification of ferroalloy production enterprises. The expert team shall be authoritative and representative to some extent, and shall be composed of environmental protection experts.

(3)

The examination and determination of access to the ferroalloy industry is a long-term task. By the end of 2005, our Commission had announced the name list of the first batch ferroalloy enterprises which meet access conditions, and by the end of 2006, any existing ferroalloy production enterprise must undergo the industry access examination and determination for one time. It shall be also required to regularly organize the examination or random inspection of enterprises meeting conditions for industry access.

(4)

The Ferroalloy Industry Association of China shall investigate and learn about the implementation of the access of ferroalloy production enterprises into the industry, strengthen the information guidance and the industry self-regulation.

Appendices:

Assessment Form for Access of Ferroalloy Production Enterprises into the Industry and Instructions for Filling the Assessment Form for Access to the Ferroalloy Industry (omitted)

National Development and Reform Commission of the People's Republic of China

July 5, 2005