Who will supervise China National Petroleum Corporation?

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Last updated at: (Beijing Time) Wednesday, January 14, 2004

Who will supervise China National Petroleum Corporation?

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Most gas blowout evacuees return home on Dec. 30

The error made by a commercial institution has led to the death of several hundred innocent people and brought disaster on tens of thousand people, leaving them homeless to wander from place to place. It is shown that State-owned monopoly enterprises gained so much power while the government is not able to supervise them.

At 22:00 pm January 4, the death toll of the "12.23" gas blowout caused by the negligence of the Chuandong Oil Exploration Drilling Company under China National Petroleum Corporation has reached 243. Additionally, 396, including 27 serious cases, are still in hospital for treatment. The death toll is likely to increase.

Who dares move China National Petroleum Corporation?

Small private coal pits can be closed at the government's order when their error resulted in a series of accidents, but maybe nobody ever thinks of ordering China National Petroleum Corporation, which caused an accident of heavy casualties, to suspend production for rectification.

The stunning gas blowout is not unavoidable. With current exploitation technologies, a complete set of operation standards has been formed for highly perilous projects. There should not be gas blowout as long as various preventive measures are in place. Even there is, the exploitation technology can put the accident under control within a small area. Even though the accident cannot be kept under control instantly, there should not be casualty in such a big area. The gas blowout in Kaixian County of Southwest China's Chongqing municipality is absolutely due to the lack of various safety production measures and preventive measures. And the continuous production without proper measures indicates relevant departments' ineffective supervision.

Donation for gas blowout victims

Then why departments concerned were ineffective in supervising such super-class "aircraft carrier"?

One-third of the 250-billion-yuan profit realized by China's 510 key enterprises in 2002 is from the petroleum and petrochemical industries to which China National Petroleum Corporation is a major contributor. China National Petroleum Corporation earned 379.2 billion yuan of sales income, 64.4 billion yuan of tax payment, and 53.6 billion yuan of profits, thus making it top the list of all domestic enterprises.

As the lifeline of the national economy, State-owned enterprises have great influence on China��s economy. It is not exaggerative to describe the position of China National Petroleum Corporation as "dominant."

The dominance determines that the "fleets" of petrochemical industry have a great influence on the government in its decision-making. With huge economic strength, they often win the "games" played with the governmental supervision departments.

Gas blowout victims begin to return home after cap operation

The excessive strength of the monopoly enterprises inevitably enables them to voice with their profit advantages. For instance, the leaders of the petrochemical industry can boldly ignore the governmental supervision departments, including departments supervising safety production, such being the case, it is even more impossible for local governments to exercise the power of supervision over these magnates.

In fact, China National Petroleum Corporation is a share-holding company investing with the nation's authorization while the department supervising safety production is a branch institution of the government. As the two are under one and the same government, conflicts arising in certain aspects of functions do exist when the latter is conducting supervision over the former. To avoid this, the governmental supervision departments would spare these State-owned monopoly enterprises' sensibilities out of whatever consideration.

It is reported that the State Administration for Safety Production Supervision, while drafting "Rules on Safety Production License", intended to include the first batch of five categories of enterprises into safety production management, respectively they are mines, construction, dangerous chemicals, fireworks and firecrackers, and civil explosive equipment. But people don't know why large petrochemical enterprises are not included into the list.

It should be admitted that the five industries did have generated a series of major production accidents, but omission of the petrochemical industry also easily gives rise to major safety production accidents, one possible reasonable explanation for this is that among the five petrochemical industries, there have existed numerous competitive non-State-owned enterprises, whereas almost all enterprises in the petrochemical industry remain State-owned monopoly businesses. Their profits constitute one-third of the total of the entire State-owned economy. As long as investments in safety, environment and social responsibilities are increased, great influence will be exerted on the profits of all State-owned enterprises. In the era when the State-owned economy still has to play a leading part in the economy, who can shoulder the responsibility for affecting the profits of State-owned enterprises?

Small private coal pits can be closed at the government's order when a series of accidents happen, but when accident causing serious casualties occurred to the China Oil, maybe nobody would think of ordering it to suspend production for rectification.

The lack of industrial supervision

With the petrochemical fleets becoming giants under nobody's supervision, there will be an exception in terms of supervision with regard to such enterprises.

The traditional petroleum industry has always practiced a system featuring the integration of government and enterprise. From 1998 to 1999, the department in charge of the petrochemical industry was dissolved and enterprises such as China National Petroleum Corporation were reorganized, as a result, they were changed from government-run enterprises to commercial entities. However, what was puzzling in the transformation is that an effective supervision mechanism has never been established.

So, the petrochemical fleets became colossi under nobody's supervision. If, in the past, it was the government who ran the enterprises, now, enterprises in commercial operation have replaced the government to supervise themselves in the aspect of safety production.

Without external control, enterprises definitely reduce the investment in safety preventive measures out of consideration of their own interests. Moreover, no one can govern them even if they do not execute the rules on safety. Therefore, although China National Petroleum Corporation did not conduct safety risk evaluation of the environment in No.16 well in Luojiazhai of Kaixian County, nor did it formulate emergency plans, there was no institution urging it from outside.

There have been people who propose the establishment of a commission or a ministry of energy resources performing the function of industrial supervision. However, judged from the operation of the industrial supervision departments, they remain the competent department of the industry representing the interests of the enterprises and bargaining with the government and the public, rather than an enterprise supervision department representing public interests.

Supervision departments in telecommunications, banking, insurance and power have not changed their role and have not given full expression to their public nature. On the contrary, they maintain the monopoly position of State-owned enterprises in the industry. In terms of supervision, exception can hardly be avoided with regard to these enterprises.

On which side do local governments stand?

Local governmental officials have said they do not hope to meddle in the production of the petroleum departments on matters related to dealing with the aftermath of the accident and compensation for the masses. Then who will act as the real representative of the interests of the 243 dead and other victims to negotiate with China National Petroleum Corporation?

Since mineral resources are naturally owned by the State, so it is impossible for locals to have so much immediate benefits from resources exploitation. As for local governments, despite documents issued by the central government as basis, the safety production supervision department under the local government has no power of supervision over China National Petroleum Corporation. Once a major, widely affected safety production accident occurs, local residents would be the victims bearing the blunt of the accident. In the face of the losses of lives and damage of the environment, the local government was put in an embarrassed position.

The local government should try by all means to conduct negotiations with China National Petroleum Corporation on behalf of the local people and do the aftermath work well, especially on the issue of the compensation. However, under the present system, local government officials are not responsible for local people but instead for the upper-level government.

Local officials ought to protect the production and operation of the State-owned enterprises, but they should take more responsibilities for safeguarding the interests of the common people.

In fact, local government officials have said that compared with China National Petroleum Corporation, they are in a better position to "do mass work". They also did not hope that the aftermath of the accident and compensation for the masses would interfere with the production of the petroleum department.

Then who will really represent the interests of the victims to negotiate with China National Petroleum Corporation?

President Hu Jintao once said: "We use power for the people, show concern for the people and work for the benefit of the people." At the time of the occurrence of a specific event, such requirement is a test for anybody. People will wait and see whether our belief and value standard will be obstructed, distorted or bent in the face of immediate benefits and whether "power used for the people" will be changed into "power used for benefit."

By People's Daily Online

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