On March 3, 2008, Premier Wen Jiabao signed a State Council decree promulgating the "Regulations on the Administration of Geological Exploration Qualifications" (hereinafter referred to as the "Regulations") (view here). The Regulations came into effect on July 1, 2008. Recently, a spokesperson from the Legal Affairs Office of the State Council answered reporters' questions on issues related to the Regulations.

Q: Why was this regulation formulated?

Answer: Geological exploration serves all aspects of the economy and society, playing a crucial, pioneering, and foundational role in their development. Through geological exploration, we can increase the recoverable reserves of mineral resources, thereby providing a resource guarantee for economic and social development. Moreover, by enhancing the accuracy of land surveys, we can offer geologic support for urban and rural planning as well as land rehabilitation efforts. Therefore, strengthening geological exploration is an important measure to alleviate resource bottlenecks and enhance our capacity to secure resources; it forms a vital foundation for promoting urban and rural development and carrying out land rehabilitation; and it serves as an essential tool for preventing and controlling geological hazards and improving living environments.

Formulating regulations to provide legal safeguards for strengthening geological exploration activities is of great significance and plays a crucial role in the following ways: First, it reflects the inherent requirements of geological exploration itself. Geological exploration is characterized by its scientific nature, technical complexity, and high risk level, placing special demands on equipment, personnel, and skills. To ensure the quality of geological exploration work, it is necessary to implement an access management system for geological exploration entities. Second, it is an essential condition for the effective implementation of laws and regulations governing mineral resource management. Article 3, Paragraph 4 of the "Mineral Resources Law" stipulates that engaging in mineral resource exploration must meet prescribed qualification requirements. Similarly, Article 6 of the "Administrative Measures for the Registration of Mineral Exploration Blocks" also requires applicants for prospecting rights to submit a copy of the qualification certificate of the exploration entity when applying for such rights. To ensure the effective implementation of these laws and regulations, it is imperative to clarify the qualification management system for geological exploration entities. Third, it lays the foundation for enhancing resource security capabilities. With the rapid economic and social development in China, demand for mineral resources continues to grow. Faced with the lagging pace of mineral resource exploration and the decline in recoverable reserves of key resources, which make it increasingly difficult to meet the needs of modernization, there is an urgent need to improve qualification criteria, enhance the capabilities of geological exploration entities, and thereby strengthen the resource security capacity of geological exploration. Fourth, it represents an important measure for standardizing the order of mineral resource exploration. As mining activities intensify, some entities lacking the requisite qualifications have begun engaging in geological exploration, leading to a significant decline in exploration quality and frequent safety incidents. There is thus an urgent need to regulate the qualification management of geological exploration entities. Fifth, it serves as an important means of standardizing administrative approval powers. Currently, the qualification requirements and approval procedures for geological exploration are insufficiently clear and standardized, resulting in considerable arbitrariness in the approval process. Establishing a legal framework for qualification management is a critical means of implementing the "Administrative Licensing Law" and ensuring the proper exercise of licensing authority.

Q: What are the categories and levels of geological exploration qualifications?

Answer: Based on the nature and characteristics of geological exploration, classifying and grading geological exploration qualifications is the foundation and prerequisite for achieving scientific management. Drawing on the experience gained from the current classification and grading management of geological exploration qualifications and referring to the classification of the geological exploration industry in the "Classification of National Economic Industries" (GB/T 4754-2002), the regulation stipulates that geological exploration qualifications are divided into comprehensive geological exploration qualifications and specialized geological exploration qualifications. Comprehensive geological exploration qualifications include regional geological survey qualifications, marine geological survey qualifications, oil and gas mineral exploration qualifications, liquid mineral exploration qualifications (excluding petroleum), gaseous mineral exploration qualifications (excluding natural gas), coal and other solid mineral exploration qualifications, as well as hydrogeological, engineering geological, and environmental geological survey qualifications. Specialized geological exploration qualifications include geophysical exploration qualifications, geochemical exploration qualifications, airborne geological survey qualifications, remote sensing geological survey qualifications, geological drilling (and trenching) exploration qualifications, and geological laboratory testing qualifications.

Meanwhile, the regulations also stipulate that qualifications for regional geological surveys, marine geological surveys, exploration of oil and natural gas mineral resources, exploration of gaseous mineral resources (excluding natural gas), airborne geological surveys, remote sensing geological surveys, and geological laboratory testing are divided into two levels: Grade A and Grade B. Other geological exploration qualifications are divided into three levels: Grade A, Grade B, and Grade C.

Q: What are the requirements that entities applying for geological exploration qualifications must meet?

Answer: The regulations stipulate that entities applying for geological exploration qualifications shall meet the following basic conditions: (1) Possess legal person status as a corporation or public institution; (2) Have qualified exploration technical personnel appropriate to the category and level of qualification being applied for; (3) Be equipped with exploration equipment and instruments suitable for the category and level of qualification being applied for; (4) Have a quality management system and a safety production management system appropriate to the category and level of qualification being applied for.

Meanwhile, given that the specific requirements for different categories and levels of geological exploration qualifications vary, the regulation also stipulates that the detailed standards and conditions applicable to each category and level of geological exploration qualification shall be prescribed by the competent department of natural resources under the State Council. On April 29, 2005, the Ministry of Natural Resources issued the "Notice on Carrying Out the Registration and Filing of Geological Exploration Qualifications" (Guotu Zihangfa [2005] No. 41), which clearly specified the particular requirements for different categories and levels of geological exploration qualifications. Following the promulgation of this regulation, the Ministry of Natural Resources will further supplement and refine the specific requirements for various categories and levels of geological exploration qualifications in accordance with the regulation’s provisions, thereby ensuring the smooth implementation of the regulation.

Q: How does the regulation specify the authority responsible for approving and issuing geological exploration qualifications?

Answer: To clarify the authority responsible for approving and issuing geological exploration qualifications and to facilitate applicants for such qualifications, the regulation stipulates that qualifications for marine geological surveys, petroleum and natural gas mineral exploration, airborne geological surveys, and other Class-A geological exploration qualifications shall be approved and issued by the competent department of land and resources under the State Council; all other geological exploration qualifications shall be approved and issued by the competent departments of land and resources under the people's governments of provinces, autonomous regions, and municipalities directly under the central government.

Q: What provisions does the regulation make regarding the review and decision-making procedures for geological exploration qualifications?

Answer: The standardized review and decision-making procedures are an important means of effectively restraining the approval authority’s power to grant approvals and ensuring that qualification approvals are carried out in accordance with the law. To this end, the Regulations provide as follows:

First, the review period is clearly defined. The regulations stipulate that the approval authority shall complete the review within 20 working days from the date of acceptance of the geological exploration qualification application.

Second, the decision-making process following review shall be clearly defined. The regulations stipulate that if an application meets the required conditions after review, the approving authority shall publicly announce the approval, with a public notice period of no less than 10 working days. If no objections are raised by the end of the public notice period, the application shall be approved, and the geological exploration qualification certificate shall be issued within 10 working days. In the event of objections, the approving authority shall, within 10 working days, notify the applicant unit to submit relevant explanatory materials. If the application does not meet the requirements after review, the approving authority shall notify the applicant unit in writing, stating the reasons for the rejection.

Third, establish a public announcement system. The regulations stipulate that the approving authority shall promptly announce to the public the geological exploration qualification certificates it has issued and provide convenient access for public review.

Q: What are the regulations in the ordinance regarding changes to geological exploration qualifications?

Answer: According to the regulations, if a geological exploration entity changes its name, registered address, or legal representative, it shall, within 20 working days from the date of the business registration change or institutional registration change, go to the original approving authority to complete the procedures for amending its geological exploration qualification certificate. If a geological exploration entity merges, splits, or undergoes other changes that result in a change to the qualification category or level specified in its geological exploration qualification certificate, it shall reapply for qualification in accordance with the provisions of the regulations.

Q: How does the regulation govern the renewal of geological exploration qualification certificates?

Answer: According to the regulations, the validity period of a geological exploration qualification certificate is five years. If a geological exploration entity wishes to continue engaging in geological exploration activities after the expiration of its geological exploration qualification certificate, it shall submit an application for renewal to the original approving authority three months prior to the expiration date. The approving authority shall make a decision on whether to grant the renewal before the expiration date of the geological exploration qualification certificate. If no decision is made within the prescribed time limit, the renewal shall be deemed granted.

Q: How should geological exploration qualification certificates that were legally obtained before the regulation came into effect be handled?

Answer: In accordance with the spirit of Article 8, Paragraph 1 of the Administrative Licensing Law, which stipulates that “administrative licenses lawfully obtained by citizens, legal persons, or other organizations are protected by law, and administrative agencies may not arbitrarily alter administrative licenses that have already taken effect,” the Regulation provides that entities that had already obtained geological exploration qualification certificates in accordance with the law prior to the entry into force of this Regulation shall, 30 working days before the expiration date of their original geological exploration qualification certificates, reapply for geological exploration qualifications in compliance with the provisions of this Regulation. Those who fail to complete the reapplication within the prescribed time limit shall be prohibited from continuing to engage in geological exploration activities.

Q: What regulations does the ordinance include to strengthen the supervision and management of geological exploration activities?

Answer: Effective supervision and management are crucial means of ensuring that geological exploration activities are conducted in a standardized manner. To further strengthen the regulation of geological exploration activities, the regulations stipulate the following:

First, establish a professional file management system. The regulations stipulate that the approving authority shall establish and improve a professional file management system for geological exploration units. Such professional files shall record the geological exploration unit’s professional experience, work performance, professional reputation, inspection and evaluation results, social complaints, and any illegal activities.

Second, the daily activities of geological exploration units shall be standardized. The regulations stipulate that geological exploration units may not engage in geological exploration activities beyond the categories or levels of qualification specified in their qualification certificates, nor may they issue false geological exploration reports. They may not subcontract the geological exploration projects they have undertaken, nor may they allow other entities to carry out geological exploration activities in the name of their own unit. Furthermore, before the commissioning party obtains a mineral resource exploration license and a mining license, the geological exploration unit may not conduct mineral geological exploration activities for that party.

Q: What legal liabilities will be incurred for violating the provisions of the regulation?

Answer: Strict legal liability is the ultimate guarantee for the effective implementation of the law. To enhance the deterrent effect on illegal activities and increase the severity of penalties, the regulations provide as follows:

First, the responsibilities of staff members of relevant state organs are clearly defined. The regulations stipulate that the land and resources authorities at or above the county level and their staff members—whether they issue qualification certificates to applicant entities that do not meet the requirements, issue such certificates beyond their statutory authority, fail to issue qualification certificates to applicant entities that do meet the requirements, fail to issue such certificates within the statutory time limit, fail to investigate and deal with illegal acts upon discovery, or fail to handle complaints in accordance with the law—shall be subject to disciplinary action under the law against the directly responsible supervisors and other persons directly accountable for such violations. If their actions constitute a crime, they shall be held criminally liable in accordance with the law.

Second, the responsibilities of geological exploration units are clearly defined. The regulation stipulates that if a geological exploration unit obtains a qualification certificate through improper means such as deception or bribery, its qualification certificate shall be revoked and it shall be fined. If the act constitutes a crime, criminal liability shall be pursued in accordance with the law. If a geological exploration unit engages in geological exploration activities not in compliance with the qualification category or level specified in its qualification certificate, issues false geological exploration reports, subcontracts the geological exploration projects it has undertaken, permits other entities to carry out geological exploration activities in its own name, or conducts mineral geological exploration activities for a client before the client obtains a mineral resource exploration permit or mining permit, the unit shall be ordered to make corrections within a specified time limit and fined between 50,000 and 200,000 yuan. Any illegal gains shall be confiscated. If the unit fails to make corrections within the prescribed time limit, its qualification certificate shall be revoked. Meanwhile, the regulation also provides that any entity whose qualification certificate has been revoked may not reapply for geological exploration qualifications within one year from the date of revocation.

Third, the responsibilities of other entities are clearly defined. The regulations stipulate that anyone who engages in geological exploration activities without obtaining the required qualification certificate shall be ordered to make corrections within a specified time limit and fined between 50,000 and 200,000 yuan; any illegal gains shall be confiscated. Furthermore, the regulations provide that anyone who forges, alters, or transfers a qualification certificate shall have their certificate confiscated or revoked and be fined between 50,000 and 200,000 yuan; any illegal gains shall be confiscated. If such actions constitute a violation of public security administration, the public security authorities shall impose administrative penalties in accordance with the law; if they constitute a crime, criminal liability shall be pursued according to law.