1. Safety in Plant Construction in China
A perspective from Chinese eyes through Western spectacles
By Kin-wah Francis Li
1.0 Introduction
1.1 Plant Construction in China
For heavy industry projects in China, the majority of the cost is in capital
equipment. The cost of construction is in the vicinity of 15% of the overall
project cost (circa 2013-2015). In western countries, it is about 40%. The
difference in labour rate is one factor. Labour productivity is another
important factor. In the construction industry, productivity is related to the
method, tools, skill as well as safety and quality level of the site team. This
paper is focus on the safety aspect. Majority of the comments equally
applies to quality.
Safety experts said safety is universal and has the same yardstick everywhere.
This is especially true for multi-nationals which build plants all over the world.
They are obliged to apply consistent safety standards in all countries where
they operate. However, plant construction is often handled by the local
workforce with supervision by a few trained local staff or expatriates. This is
when the work culture of that country comes to play. The same safety issue
can be viewed differently depending on how it is perceived and compared.
The writer is an ethnic Chinese who worked in a multi-national company in
Hong Kong, Australia and China with over 30 years of project management
experience in the gas industry. This paper outlines his view on construction
safety issues in China with his Chinese eyes through a pair of Western
spectacles.
1.2 Safety in a Nutshell
From a project management point of view, construction safety can be
transcribed in the following down-to-earth perspectives:
a) Cost – What is the cost of safety to meet expectation of various stake
holders? What is ALARP (As Low As Reasonably Practical) and how far the
project will go to pay a reasonable cost for a reasonable standard?
b) Contract – Can we quantify safety in the tender? What is included in
the contract price to implement acceptable safe practice?
c) Conscience – Everyone should return home safely every day. The family
needs him more than the company.
d) Legal perspective – No one wants to stand in the box.

2. 2.0 Dominant Factors that Impact on Construction Safety Performance
In project management, everything boils down to a common denominator –
MONEY. Like it or not, this is a cruel real world facing every project manager.
However, no one will openly speak out at a corporate level, especially in
relation to safety. In China, the “$” plays a more crucial role. This is partly
due to the predominantly state owned corporate structure and attitude in the
heavy industry. China is growing at a break-neck pace since 2000.
Companies focus on economic performance above all. The key slogan is
“more 多”, “faster 快”, “better 好”, “cheaper 省”. The corporate decision
makers are more Party policy executioner than technocrats who know the
business. They are more interested in building bigger plants at shorter time
with less capital. Would the plant be “better”? Yes, it depends on what you
are contended with between 50% to 100% satisfaction. In project
management, an expedient manager will keep the balance between cost,
schedule, quality and safety like the four legs of a table. If the focus is
biased towards cost and/or schedule, quality and safety will suffer. This is
the common issue for projects in China. The following points outline the
predominant negative factors which contribute to lower safety performance
in China.
2.1 Money Money Money
The aspiration to wealth is a deep rooted culture. The Confucian scholars
consider themselves wealthy in literacy and ethic and look down upon the
businessmen who are wealthy in asset but often unethical. Chairman Mao’s
experiment from the 1950s to 1970s fails to turn around human nature and
results in the ideological gap nowadays. Money and unchecked authority is
the main culprit.
2.1.1 Lowest Price Gets the Job
We all like good bargains. In this competitive world of procurement, the
tender price is often the most important decision factor. Before early 2000,
the official tender qualification process was mainly based on the weighted
score method on tender attributes such as cost, quality, delivery etc. When
personal interest and graft creep in, the score system was subject to
manipulation. To combat against this, the process was changed. For
technically equivalent tenders, the lowest price gets the job. It sounds
logical. However, if we simply assess the specification and proposal at its
face value, a mediocre or better vendor or one who is just above par can all

3. meet the specification. The subsequent painful price-beating process
further erodes the margin of the vendor. Whoever wins the job will have to
find ways to maintain profitability. It is great if it leads to smarter way to
build. More often, the vendor finds the short cut to compromise safety and
quality. The million dollar question is whether we pay now or pay later.
2.1.2 If we pay peanuts
It may sound a little insulting. Construction workers are usually recruited
locally to supplement the contractor’s own skilled workforce. In an
unregulated labour market, supply and demand governs the pay. With the
pressure to retain or improve the profit margin, the contractor’s manager
tends to focus on the pay rather than the skill of the worker. A peasant
worker once told the writer “I am only paid 50 RMB a day. What do you
expect from me?” Quality of work and safety compliance suffers.
With the low pay, workers tend to jump between sites when another
contractor offers a little bit more to rush his job. The high turnover rate of
labour is a training nightmare for the safety officer. Unfortunately, the same
applies to safety supervisors who are usually recruited from the old, the
young and the inexperienced.
2.1.3 Cost of Safety Management
All contractors can provide excellent chapters in safety management in their
tender document. On site, it is not what they say but what they do that
counts. In China, it is prudent to ask contractors to quote the budget for
safety management and scaffolding as separate items in the breakdown.
The cost of safety management includes PPE, house-keeping, signs,
supervision, safety award/penalty etc. It is not unusual to find site
managers with a shoe-string budget only issue a pair of gloves per week to
workers and to ask temporary workers to bring their own safety shoes. For
construction project where the owner’s main interest is in plant handover,
safety is compromised under the pressure of lower cost. It is evident if we
compare the construction cost of similar plants built under foreign and local
management. Unfortunately, this is the norm.
2.2 Hurry Hurry Hurry
Money is not the only evil as we know in projects. When it comes to return
on investment, working capital and overhead, the pressure is reflected onto
the schedule.
2.2.1 Die for a Deadline
As usual in the world of major projects, the schedule is late before it starts.

4. The delay by senior executives in decision making is never made up in the
project handover date. The project manager is under immense pressure to
meet the deadline which the senior managers promised to the Board. In a
traditional Chinese company, in particular State Owned Enterprise (SOE), the
management style is top down like general to soldier. The milestones are
deadlines for everyone to die for no matter what legitimate reasons or
excuses. In plant construction, safety and quality are usually compromised if
not sacrificed. The risk taking attitude culminates at commissioning time
when the plant is started up even when crucial tests are not finished. Senior
managers are only too keen to tell the Board that the plant is started. Very
often the plant has to be shut down right away for a long time to carry out a
lot of fixes. External pressure for completion leads to unjustified risk.
2.2.2 Short Cuts
It is human nature that we like to take short cuts. In China, the local
construction team always ridicule at the perceived clumsy method used by
expatriates on site. Their ingenious way is often considered as risky
shortcuts in the western eyes. Taking calculated risk is the excuse of
inexperienced people to justify their means. The Chinese construction
industry has yet accumulated sufficient hard lessons learnt from safety
incidents for site personnel to have second thoughts.
2.2.3 Time is Money
Site overhead is time dependent. When schedule is overrun, the site
manager has to control the overhead while keeping sufficient workforce to
finish the job. In China, it is not uncommon to see safety officers, cleaners
and scaffolders disappear by stealth before the end of the project. The
focus is only to finish the job and hopefully without incidents. Unfortunately,
most clients turn their eyes on plant completion and their back to safety.
2.3 The Safety Culture
Behaviour safety is the key to modern day safety management. In the safety
hierarchy, China is still in the passive accident prevention stage. The attitude
to safety is influenced by the pre-dominant social culture typically in:
a. Risk taking – Casinos welcome Chinese patrons. The love to gamble
seems to be inherent in nature. Bigger risk yields bigger return. Most
people are dreaming of the big win and bet on their luck. Dare devils
reward themselves with pride, especially when they feel triumph over
the seemingly cowardice expatriate.
b. Close enough is good enough – The caricature figure Mr. Cha-Boo-Dor 差

5. 不多先生 was created in the 1930s to mock at the prevailing attitude at
that time. Unfortunately, this figure is still alive. Quality and safety
suffer at the lack of seriousness of the workers and their supervisors who
do not take pride on their job.
c. Not my job – A worker throws waste material onto the ground because
there should be a cleaner to pick it up. Poor house-keeping in most
construction sites are good example. If the job is not finished by me
today, someone will finish it tomorrow. If this step is not done by me,
the person picking up the next step will do it. Eventually, safety and
quality defects just keep passing on.
d. Mind your own business - A worker saw his co-worker in an unsafe act
but said nothing because this is the job for the safety officer. It is a
common Chinese mindset “to sweep the snow in front of your house only
各家自掃门前雪”
e. Cover up – The unofficial guideline is to spread the good and positive
news. Bad news puts mud onto the manager or official’s face. See
nothing, hear nothing and say nothing is often the policy when an
incident occurred on site – if and when that incident can be swept under
the carpet.
f. Confusion in safety practice – There is a significant difference in safety
practice in sites run by foreign companies and those run by local
companies. Temporary workers, in particular the peasant workers, stay
on one site a few days and move to the next. They are confused on the
do’s and don’ts, right or wrong. A classical case is a foreign managed gas
plant within a Chinese managed petrochemical complex in Jilin. The
workers cannot comprehend the different practices when they cross the
fence to carry out the same kind of work.
Design and process safety issues have residue risk beyond plant start-up.
Construction risk, no matter how high, will disappear after the milestone
event. This is one of the reasons why construction companies tend to keep
one eye shut if the safety issue cannot be resolved easily.
2.4 Cultural Conflict – East and West
Ever since the open door policy in the 90s, China is at the crossroad between
the east and west. It is a hot discussion topic on its own. In the world of
engineering, the design philosophy may make a difference to the approach.
But the hard principles and formula yield the same results. The construction
field has more human interaction and hence more chance of a clash in work

6. culture.
2.4.1 The Players in a Construction Site
There are a few variants:
a. Chinese owner with local site management company (typically from
design institutes) and local supervision team.
b. Chinese owner with foreign site management company, mixed expat
and local supervision team.
c. Foreign owner with foreign site management company, mixed expat
and local supervision team.
In all cases, they have to deal with a local construction company and
workforce who have varying degree of knowledge and experience of western
quality and safety practice – more for skilled labour but less for the unskilled.
There are a few salient points:
a. Bargaining – to the expats, compliance with standard is the minimum.
To the locals, 60% is good, 80% is excellent.
b. How safe is safe – Is the expat supervisor asking too much?
c. 阳奉阴違 – Literally means “promise yes but act to the contrary”. This
is the survival culture over two thousand years of authoritarian rule in
China. This is also the sore point of expats who expect ‘yes’ means ‘I
do’.
These issues culminate in frequent conflict between expat and local
supervisors and local contractors.
2.4.2 The Management Dilemma
Over the years, a lot of local managers and supervisors are familiar with
western practice through employment and training in multi-national
companies. Their dilemma is how to adapt or localise these practices to
work in harmony with a variety of clients and contractors. Since the early
20th
century, many intellectuals struggle with the ideology of applying
advanced practice from the west but using Chinese principle as the
framework. 中学為体, 西学為用. The analogy is to have a western body
with a Chinese brain. This is an ideal but challenging goal.
2.4.3 Ideal and Practice
On the paper, the Chinese standard is as good as any western standards in Q
and HSE. The safety procedures in SOEs are as good as their counterparts in
the west (P.S. it is more or less cut and paste with local adaptation and a
different logo.), only if it is followed. In one project for a SOE, the writer
persuaded the Global SHEQ Director not to insist on the SOE’s contractor to
adopt the seemingly superior western safety management system (SMS), but

7. instead asked them to comply with the SOE’s SMS. In this way, it annulled
the contractor’s resistance to something foreign. They had no excuse for not
able to comply with their own standard even though no one really push them
to comply in the past.
2.5 Subcontracting Environment
The writer worked in China from 2004-08 and 2013-14. The subcontracting
environment changed substantially.
2.5.1 Changes to Major Construction Companies
Most of the major plant construction companies in China originated as part of
the SOE in the petrochemical, metallurgical, or nuclear industries. These
companies have the construction licence, the central and regional
management structure and a team of skilled workers that can be despatched
to any project around the country. With the structural reform in the late
2000, these companies were spun off from the SOE to become independent.
A number of these big companies changed their business structure to
decentralise the regional branches. On the face of it, these sub-companies
use the same name, paperwork and builder licence as the mother company.
In reality, it is franchise in disguise. The sub-company’s manager bids and
wins a job, pays a contribution to the mother company and pocket the profit
or loss of the job. This is not considered as sub-letting of contract which is
illegal in China. This business structure has the following impact on site
safety.
a. The skilled team is reduced to a few core workers with special skill. The
rest of the site team are hired from local. Their background, experience
and safety practice vary, in particular the unskilled peasant workers.
b. These sub-companies are independent. They are not chip of an old
block or part of a big reputable company as in the past. Complain to the
mother company is no longer ineffective as compared with the past. In
tender evaluation, it is more important to judge their Q & HSE
performance in recent construction jobs than to use historical references.
c. With this added profit & loss layer, the sub-company has to strive to be
profitable, usually at the expense of safety and quality.
2.5.2 The Market Force
It is well recognised that the law of supply and demand is driving the price.
With the move towards market economy, there are more construction
companies, SOE and private, in open competition since mid 2000. Some of
them are fighting for growth but some are fighting for survival too. In a cut

8. throat market, price is often the most significant selection criteria. The
impact is obvious. As a comparison of two similar size projects, the
construction (ME&I) contract value of project A in 2005 was 40.3 million RMB
and project B in 2013 was only 44.5 million. It is recognised that the
productivity of Chinese contractors have improved a lot over the years due to
experience, better management and mechanisation. The cost of
construction materials has also dropped due to mass production. However,
this is insufficient to offset the wage-price inflation over the same period.
The net effect is either a drop in profit margin or serious cost cutting, usually
at the expense of safety and quality.
2.5.3 Illegal Sub-letting
It usually happens on civil work in smaller cities and smaller projects. A
contractor bids and wins a contract and has to recruit local labour to work for
his site management team. The local labour is controlled by one or a couple
of labour-hire companies. In order to gain access to this pool of labour, the
contractor, usually one of those mentioned in 2.5.1, is quite often coerced if
not forced into a form of subletting. It is not just labour hire but in essence
subletting the contract to the labour hire company. The contractor’s site
management is still dealing with the client contractually but has little control
on who to use and how they perform. It is also intrigue how the contract
payment ends up in whose pocket. With the pressure on schedule and
absence of legal enforcement, the client usually keeps one eye shut. The
safety and quality supervisors can only sigh.
2.6 Safety Management and Supervision
As mentioned in 2.4.3, the construction safety management system for major
SOE projects is as good as any multi-national projects, at least on paper. The
local project managers and site managers are conversant with safety practice
and management technique. The question is their resolve to implement it in
the face of project priority and personal interest, either their own or senior
manager’s as discussed in 2.7.
2.6.1 Safety Supervision Team
Most of the construction projects have three parties involved in safety
supervision.
a. The Client may have their own safety supervisor or engage a
construction management company as the Client’s representative. For
foreign company projects, expat are often brought in to support the
local team.

9. b. For SOE projects, a third party supervision company監理公司 is usually
engaged to provide quality and safety supervision. Some documents
have to be signed off by these supervisors as required by Government
regulation.
c. The Contractor provided his own safety manager and supervisors as
part of the contract scope.
Government involvement is scant unless there is a major incident.
The above arrangement appears to be very secured as all stake holders are
party to site safety. Safety is always number one in all project charters.
The question is how to achieve this common goal in a complex team
environment.
2.5.2 Implementation of Safety Management on Site
As mentioned above, project priority and personal interest tend to
compromise if not override safety principles. The safety manager is a paper
tiger without the irrevocable backing of his senior managers. Unfortunately,
it all happens so often that the Contractor finds the back door to annul safety
instructions.
The experience and calibre of safety personnel in construction management
companies or western companies are usually up to standard with modern
practice. The cultural differences as mentioned in 2.4 often lead to friction
with their expat counterparts. The conflict in teamwork results in safety
issues falling between the cracks.
The safety personnel in Third Party Supervision Company are usually recruited
from retired people or young graduates. These companies are remnant of
the past project management system for SOE. They have a place because of
regulatory requirement in quality certification. With their cosmetic safety
role, low calibre and lack of motivation, these supervisors have no teeth and
are usually treated as just an extra pair of eyes.
For the Contractor, he has to provide sufficient safety personnel according to
the size of the workforce on site. The safety manager is usually an
experienced person with qualification vetted in the tender phase. However
safety supervisors are usually drawn from the old, the young and the
unskilled to make up the number. As mentioned in 2.1.2, you get what you
pay for. The safety discipline does not get the respect it deserves.
2.7 Guan Xi – Relationship or Graft?
In China past and present, Guan Xi 关係 appears to be an indispensable tool
to get a job done. Relationship is developed through acquaintance via

10. various channels and is further enhanced by food, drink, entertainment and
apparently good will gifts. It is also customary to return such good will when
the time comes. In plant construction, it may appear in the following forms:
a. Tender time is usually the best time to those responsible for contractor
selection to get a first bite of the cherry. This point will not be
elaborate here.
b. The person who controls contract payment and variation approval is the
real boss for the contractor – no matter how the organisation chart is
drawn or management responsibility is defined. If his need is looked
after, the contractor will have a free hand irrespective of the instruction
from the site management team.
c. Relationship may further drill down to site supervision level. Unless
this culture of ‘mutual benefit’ and ‘friendly accommodation’ is abated,
it is difficult to enforce impartial judgement to achieve a high standard
in safety and quality.
For multi-nationals or western style management companies, there are
various checks and balances in the process to minimise such occurrence.
Higher salary and education of their employees also help to reduce the
tendency towards graft. The situation is starting to improve with President
Xi but is still the most worrying factor in China at large. The cultural change
in Singapore instigated by the late Lee Kuan Yiew showed his deep
understanding of this issue in the Chinese society.
3.0 Continuous Improvement
Safety is a passage 过程, not the destination 目的. Over the writer’s 40
years of professional life in the western world, people’s perception and value,
their behaviour, corporate policies and Government regulations gradually
evolve into this current state. There is a big divide between the
under-developed, developing and developed countries. It is impractical and
unrealistic to expect developing countries such as China to reach the same
level in two decades when the west takes half a century to reach. From the
writer’s experience, China is catching up at a very fast pace with the following
drivers.
1. Loss vs Reward – Risk and opportunity are measured by loss and reward.
In plant construction, severity and probability of incident is generally
proportional to the size of plant, complexity of construction and

11. number of workers on site. In the last two decades, plants built in
China are getting bigger and more integrated. Construction related
incidents are more serious and incurred much bigger loss in lives and
asset. Corporate executives and Government officials are starting to
weigh in the financial and social losses against the reward in shortcuts
and undercuts.
2. Publicity – For those at high office, losing face is often more damning
than losing money. Nowadays, news spread quickly through local and
overseas social media. It is more difficult for Government to hide or
big corporations to cover up. They are forced to put more attention to
safety to avoid negative impact to corporate image and reputation of
China. In line with practice in developed countries, safety
performance is set as a KPI for managers in SOE and responsible
Government officials. It provides the top down pressure to improve.
3. Social Pressure – When the first level in the hierarchy of needs is
satisfied, people start to put more value to their life and its quality.
Safety is also needs driven – that is when people know what they can
ask from themselves or the company to protect their well being.
Safety awareness of the public and workers provides the bottom up
pressure for corporate and Government to improve.
4. Education and training – In the last few years, Chinese companies are
providing more training to the workforce in order to lift their
performance in productivity and safety. The younger generation are
more educated and more ready to accept safe practice. Their safety
awareness is growing.
5. Increase mechanisation – The expansion of the service sector in China
provides more job opportunity and better environment than the
construction industry. The days of abundance of cheap labour is
waning. The capital cost of construction machineries has dropped and
availability improved. Construction sites are more mechanised in
lifting, working at height, excavation and site transport. The reduction
in manual labour work also reduces the likelihood of personal injury.
6. Legal – Last but not least is the shadow of the gallows over the
manager’s head. In developed countries, the corporate and
responsible persons in the line of duty are legally liable in incidents
causing injury or death. The law is also introduced in China now. At
this stage, it may not be very objective and fair due to back door
interference. Nevertheless, it is a good start in the right direction.

12. 4.0 The Brighter Future
China’s growth is spearheaded by her economic development. A wealthy
and educated middle class evolves. These people are more exposed to the
outside world and are more receptive to changes in order to catch up with
their counterpart in the developed world. This new middle management
provides the drive to improve not only in management practice but also in
social conscience within the organisation. The change is more widespread in
the commercial world than in heavy industries where SOEs still dominate the
field. Nevertheless, the word “safety” is more spoken and emphasized by
senior managers and officials in China now.
As with all types of development, safety also needs investment. Monetary
investment in hardware is more noticeable such as in PPE, mobile work
platforms, scaffolding, construction machineries, tools etc. It is relatively
easy to achieve. However, more time and effort are needed for investment
on the software such as in training, risk identification and mitigation, incident
investigation, consequence management etc. Moreover, it is even more
critical to raise the safety awareness and responsibility of the workers to
protect themselves and those around them. It is like teaching a child to
swim so that he will not drown. The concept of behaviour safety is
beginning to gain ground. With a younger and more literate workforce, it
will be easier to get the safety message to their minds than with the peasant
workers in the past.
Change of mentality in a national scale will take one generation to achieve.
Steep change is possible in captive organisation and private enterprise. This
is evident in foreign owned companies and joint ventures managed by the
foreign partner. We should have a prudent view that safety in the Chinese
construction industry will be better but not best. Eventually, there will be
closer alignment in principle and value between the east and the west in this
global village. Safety should be an essential element in the first level of the
hierarchy of needs.
Kin-wah Francis Li - 2016