mineral resources

Article introduction: There is a storm of business closures in various places. Will those administrative licenses obtained in accordance with the law be revoked? What compensation will be received if the business is shut down?

Part One: In recent years, businesses have been closed down across the country.

In recent years, there has been a storm of business closures across the country. Including coal mines, non-coal mines, hazardous chemicals, fireworks, construction, special equipment, tourism, oil and gas pipelines and other industries, a concentrated crackdown on illegal production safety activities has been carried out. By the end of 2018, more than 4,000 companies had received corresponding penalties, including warnings, suspension of production and operations, revocation of licenses, fines, and some companies had been shut down. Many small factories have simply closed down because they cannot bear the cost pressure. There are also some small factories that have achieved transformation. There are also some companies that have moved out of the city into industrial parks, or moved into industrial parks from remote places. The park has a unified sewage treatment plant, circular economy supporting facilities and other facilities. Although it meets the requirements in terms of environmental protection, the cost will be much higher. Where is the way out for small and medium-sized enterprises? If these enterprises do not transform and are shut down or demolished, what compensation will they receive?

Part 2: What compensation will companies receive if they are shut down or demolished?

1. What are the reasons that lead to business closure?

(1) The first category includes substandard environmental protection, construction of breeding farms in prohibited areas, air pollution, water pollution, noise pollution, etc. It failed to meet environmental standards and was shut down for environmental reasons. In practice, this situation is very common.

(2) The second category is closure due to safety issues. For example, if the location is less than 500 meters from a residential area, or the location is very close to a primary or secondary school, the company must be shut down due to safety issues. Ying Ting believes that there are also production safety requirements that are not up to standard. For example, there will be some safety hazards in production equipment, facilities, processes, etc., especially in the coal mines and chemical industry, which may involve such safety issues.

2. What kind of compensation are there for closed companies?

1. Fixed asset compensation

Compensation for land, houses, buildings and ground attachments that cannot be relocated, as well as machinery and equipment lost due to relocation, etc.

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.

3. Costs related to demolition and relocation

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.

4. 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.

Yingting reminds you:

1. According to the provisions of Article 8 of the Administrative Licensing Law, administrative licenses obtained by citizens, legal persons or other organizations in accordance with the law are protected by law, and administrative agencies shall not change administrative licenses that have already taken effect without authorization. If the laws, regulations, and rules on which the administrative license is based are modified or abolished, or the objective circumstances on which the administrative license is granted change significantly, the administrative agency may change or withdraw the effective administrative license in accordance with the law to meet the needs of the public interest. If this causes property losses to citizens, legal persons or other organizations, the administrative agencies shall provide compensation in accordance with the law.

2. The "Opinions on Improving the Property Rights Protection System and Protecting Property Rights in accordance with the Law" also clearly states that if it is necessary to change government commitments and contractual agreements due to national interests, public interests or other legal reasons, it must be done in strict accordance with legal authority and procedures, and the property losses suffered by enterprises and investors shall be compensated in accordance with the law.

Therefore, if a company is shut down, it should strive for reasonable compensation. Enterprises should proactively negotiate with relevant departments and not wait passively. The result of waiting is often to miss the statute of limitations. In practice, if you are dissatisfied with the administrative penalty decision made by the relevant department, or believe that the specific administrative action of the relevant department infringes upon your legitimate rights and interests, you can file an application for administrative reconsideration within 60 days from the date of becoming aware of the specific administrative action, and file an administrative lawsuit within 6 months. If you have not negotiated the compensation conditions with the department, you can consult a lawyer specialized in business closure, or ask a lawyer to intervene and use professional legal knowledge to negotiate with the relevant departments to strive for fair and reasonable compensation.