Benjamin Thiery came to China three years ago to work at a local architectural design institute in Beijing, serving as the interface between the institute and foreign designers. Two years ago, he moved over to Bureau Veritas, a French firm with 200 years of history in quality conformity assessment for products and infrastructure. He spoke to CHINA ECONOMIC REVIEW about how the new Fire Prevention Law is good for business.
Q: You’ve been working on property due diligence, specifically on firefighting systems. Can you discuss the new policy environment?
A: The new Fire Prevention Law issued in May last year makes it compulsory to have your firefighting system checked every year. This means you have to properly inspect your fire prevention system. The whole system is usually much more complex than it seems, requiring a perfect coordination between detectors, pumps, valves and engines. We check a lot of firefighting systems here, and we have found that around 40% of the systems installed in the buildings we inspect don’t work. There may be no gas in the fire pumps, or no water in the tanks. In extreme cases, the sprinkler heads will not have any pipes connected to them. Needless to say, if a fire starts somewhere, the whole building would burn down.
Q: Like the fire at the Mandarin Oriental Hotel in the CCTV complex in Beijing? It seemed strange that there was so much damage.
A: Sort of. This building was just finished. It was full of flammable materials – furniture, carpet and so on. It did have a sprinkler system installed at that time, but it was not operational, as the hotel was not open yet. The most likely scenario is that the fireworks set the roof insulation layer on fire. Then burning materials started to fall down from the ceiling through the central atrium, propagating the fire throughout the whole building. A working sprinkler system may not have prevented the fire from starting but would have surely limited its progress.
Q: And the updated law was announced afterward. Was that a coincidence?
A: Yes. We believe the law was already prepared, but it was a good time to announce it. Before, nobody cared about fire safety. And if a building did catch fire, there wasn’t much in the way of penalties. The fine would vary according to the relationship the building owners had with local authorities. The central government already understood the fire prevention system was very bad. For example, the new law puts very high requirements on KTV bars. This is because these places have a lot of small rooms, densely packed with people drinking and smoking, and flammable materials. There have been a lot of accidents in KTV bars. In Shenzhen a few years ago there was an accident in a night club – not a KTV but a similar situation. Somebody decided to set off fireworks inside. The ceiling caught fire, and all the exit doors were locked. This was one of the deadliest fires recorded in China; 44 people died and another 77 were badly injured.
Q: So what has changed? What are the provisions in the new law and what is your assessment of it?
A: In the new law, the fine is defined as between RMB30,000 and RMB300,000 (US$4,390-43,900), which is a ridiculously small amount of money, but they also have the right to shut down your hotel or facility until they deem your fire prevention system is compliant. This does not include the financial losses you would absorb if your building burned down. The law also requires that one of your top three managers is designated responsible for fire safety. This is a big change. In case of an accident, he is the guy who will have to answer personally for it. The government clearly understands that they cannot check everything themselves, so they shifted the responsibility to the owners and operators: "You make sure that your firefighting system is okay, and if it’s not, this guy in your company will be in big trouble." This is a smart move.
Q: Do you expect this law to increase your fire inspection business?
A: Yes. Most of the companies just ask a third party like us to deal with the inspection and the record keeping. Many factories have burned down, including some foreign companies’ factories, and when we came and investigated we found all sorts of basic mistakes that could have been avoided by simple checking.