The Context
China’s State Council, alongside the Supreme People’s Court and the Procuratorate, launched a nationwide campaign on 7 July 2026. The target: workplace safety violations in manufacturing and fire safety. The weapon: a penalty framework codifying 233 separate violations, enforced through an automated “Internet + Law Enforcement” system. Falsify a safety record? The system triggers a fine. Force a worker into an unsafe hot-work operation? The system flags a criminal referral. This is not a warning. It is a statutory execution order for directors who treat Chinese factory fire risks as a compliance checkbox.
The Risk
Under China’s Work Safety Law, the “main person in charge” — typically the chairman or general manager — bears direct statutory duties to establish risk assessment systems, fund safety equipment, and rectify major hazards. The 2024 Penalty Standards now tie monetary penalties and administrative measures directly to failures in these duties. The 2026 campaign mandates “tougher penalties for serious violations” and “expanded credit sanctions” against individuals. The Fire Control Law adds personal sanctions: fines, detention up to 15 days, and — in cases of death or serious injury — criminal liability for “major liability accident” or “endangering public safety.” For a New Zealand director whose company sources from a Chinese factory, this means your duty of care under HSWA 2015 may be breached if you knew, or ought to have known, of systemic fire hazards and failed to exercise due diligence. The Companies Act 1993 does not shield you from personal liability when a factory fire kills workers and the trail leads back to your board’s oversight of supply chain safety.
The Control
Your board must demand independent verification of fire safety compliance across high-risk Chinese manufacturing sites — not a certificate from the supplier’s own safety officer. Commission third-party audits that assess fire design approval, hot-work permit systems, and emergency evacuation routes against the Fire Control Law. Ensure your contractual terms with suppliers include audit rights and penalty clauses for non-compliance, and that your due diligence records demonstrate active, documented oversight. China’s regulators are now automating enforcement; your governance must automate accountability.
The Challenge
These are the critical questions you should be raising at the board table:
| Does our due diligence framework for Chinese manufacturing suppliers include documented verification of fire control design approval and hot-work permit systems, as required by China’s Fire Control Law? | |
| What specific contractual penalties and audit rights do we hold against suppliers that operate without required licenses or fail to remove known fire dangers, and when was the last time we enforced them? | |
| If a fatal fire occurred at our primary Chinese supplier tomorrow, could we demonstrate to a New Zealand court that the board exercised active, documented due diligence under HSWA 2015, or would the record show we relied solely on the supplier’s own safety attestations? |