Legal information

Article introduction: After the "March 21" extremely large explosion in Xiangshui, Yancheng, Jiangsu, on April 4, Yancheng City held a meeting and pointed out that the Xiangshui Chemical Industry Park would be completely closed.

Part One: After the Xiangshui accident in Yancheng, Jiangsu, all enterprises in the entire chemical industry park will be shut down.

The impact of the closure of Xiangshui Chemical Park is mainly limited to the dye industry. This closure of the chemical park affects not only small and medium-sized enterprises, but also involves many listed companies. Among the recent announcements are Jiangsu Wuzhong, Lianhua Technology, Yabang Co., Ltd.Jihua Group, Qicai Chemical and Annoqi and other listed companies. Zhang Shanrong, deputy magistrate of the county, said that the closed companies will be reasonably compensated in accordance with the compensation policy issued by the county. The Yingting demolition team learned that Jiangsu Province’s “plan” has a greater impact. According to the draft of the "Plan" for comments, it is clear that by the end of 2020, the number of chemical production companies in Jiangsu Province may be reduced to 2,000; by 2022, the number of chemical production companies in Jiangsu Province will not exceed 1,000. In other words, 60% of chemical industry parks in Jiangsu will be closed within three years. So, due to the influence of policies, how to arrange compensation for other companies that have vacated or closed down in Jiangsu Province?

Part 2: Five reasons why companies are shut down

Among the large-scale shutdowns of enterprises caused by the explosion in Xiangshui, Yancheng, Jiangsu, the reasons for the closure of enterprises in the park included policy shutdowns and punitive shutdowns. If Jiangsu Province closes 60% of its chemical industrial parks and some companies switch production to the production of energy-saving and environmentally friendly products and automobile manufacturing, it may also involve industrial shutdowns of companies. Let’s take a look at the five major reasons why companies are shut down and their characteristics.

1. Policy shutdown

Relevant departments shut down enterprises with a task or command-style policy, which is policy-oriented. Targeting the overall work implemented within a province or city, policy shutdowns may involve large-scale shutdowns or the shutdown of a certain type of enterprises with common characteristics. The decentralization of non-capital functions in Beijing and the "three reforms and one demolition" in Zhejiang are all policy-based closures and closures of chemical industry parks.

2. Environmentally friendly shutdown.

The probability of environmental shutdowns in real life is gradually increasing. Due to the intensification of breeding bans and environmental protection efforts, some polluting small and medium-sized industries are shutting down, especially in Jiangsu, Zhejiang and Shanghai. The closure of polluting industries is a general trend, and business owners are fully aware of this aspect.

3. Industrial shutdown

Like Shanghai’s “198 Industrial Land Reduction” and “Five Violations Must Be Corrected” policies, these two policies mainly focus on shutting down and vacating some industrial sites that consume a lot of energy, pollute a lot and make relatively low economic contributions. This is a selective problem that will inevitably be encountered in continued development.

4. Land use closure

The closure of land use is mainly due to the situation where the enterprise may be suspected of illegal land use. A closure of this nature is likely to lead to the demolition of the enterprise. Many companies have changed the use of collective land in practice. Agricultural land or breeding land has been used for industrial construction, and has been deemed illegal by relevant departments and must be demolished.

5. Punitive shutdown

The closure of an enterprise usually results in penalties and enforcement actions. Punitive shutdown refers to situations where an enterprise fails to meet standards in fire protection, safety, environmental impact assessment, etc. In order to achieve the purpose of punishment, the expropriating party will take some shutdown measures.

Part Three: Compensation for enterprise vacation and closure includes these parts.

(1) Fixed asset compensation: enterprise housing compensation and factory building replacement costs.

Land, houses, buildings and ground attachments that cannot be relocated.

1. For production and operation buildings approved by the planning department, compensation will be given based on the new assessment based on the specific use functions and properties approved by the planning department.

2. Houses whose use functions are changed without approval from the planning department and used for production and operation will be compensated based on the replacement price of the collective land residential house combined into a new assessment.

3. Temporarily constructed houses used for production and operation that have not exceeded the approved use period shall be evaluated and determined based on the replacement price and the remaining use period.

(2) Compensation for losses caused by suspension of production and business.

Losses from production and business suspension include “must be paid” and “should be earned”. That is, actual and expected operating losses. In layman's terms, it refers to the related losses and expenses caused by the suspension of production and business.

1. Ying Ting believes that for enterprises that meet the reconstruction conditions, the compensation time for suspension of production and business operations shall be determined according to the reconstruction period determined by the evaluation agency. The compensation time for losses due to suspension of production and business operations of enterprises that do not meet the conditions for reconstruction shall be determined based on the time required for statutory liquidation.

2. For enterprises that meet the conditions for reconstruction, the compensation standard for losses due to suspension of production and business operations can be determined by referring to the average monthly production (operation) costs of the enterprise in the previous year and the expenditures for replacement of fixed assets, technical transformation, and resettlement of employees. For enterprises that do not meet the conditions for reconstruction, the compensation standard for losses from suspension of production and business operations shall be determined based on the actual losses caused by the enterprise's suspension of production and business operations, including the costs involved in resettling employees.

(3) Ancillary compensation such as enterprise relocation and resettlement.

That is, the costs directly incurred by demolition and relocation. Including machine equipment debugging and repair costs, material disassembly and packaging costs, transportation costs, equipment relocation and installation costs, etc.

1. The equipment relocation, installation and debugging costs of the demolished persons will be compensated according to the assessed amount;

2. The equipment of the demolished persons that cannot be restored to use will be compensated based on the replacement price and combined into a new assessment.

(4) Compensation for decoration of corporate houses.

Compensation for decoration and decoration of the house must be measured and evaluated by the evaluation agency to obtain the evaluation results.

(5) Personnel placement costs

(6) Compensation for machine damage

(7) Unexpired house rent

(8) Demolition incentives

In order to complete the relocation task as soon as possible, the demolition party will give some rewards to the people being demolished. For example, limit the number of days to move, how much money can be given, allocate houses in good locations, etc. Yingting understood it to include incentive fees incurred due to the demolition policy, including expedited relocation fees, demolition incentive fees, etc.

(9) Losses caused by illegal demolition

For damage to machinery, equipment and other property caused by illegal demolition, business owners can claim compensation for losses and apply for state compensation.

Yingting reminds you:

If such shut down enterprises have objections to resettlement compensation, what can they do? According to the relevant laws and regulations of our country, the expropriated and demolished persons can file an administrative review within 60 days of receiving the expropriation decision, expropriation compensation decision and other specific administrative actions, and file an administrative lawsuit within 6 months. If your house is forcibly demolished, you must file a lawsuit to defend your rights within 6 months of knowing the date of demolition. If you have not negotiated compensation terms with the government, you can consult a lawyer specializing in land acquisition and demolition, or ask a lawyer to intervene and negotiate with the government using professional legal knowledge to strive for fair and satisfactory compensation.