China´s environment watchdog announces green insurance system

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Source: CCTV.com | 02-25-2008 09:09

The national environment watchdog says it's introducing a green insurance system to improve monitoring of polluting industries and help victims get immediate compensation. This latest initiative follows the Green Credit Measure adopted last summer.

Rapid economic development has also created a high incidence of environmental pollution accidents. Last year, over 100 environmental emergencies were reported.

The system aims to have all industries with pollution risks insured with insurance companies. According to the State Environmental Protection Administration, the system will be implemented nationwide by 2015 after a trial period.

Bie Tao, deputy director of Policies & regulations Dept, SEPA, said,"The higher the risk of causing serious pollution, the more money an enterprise needs to pay for the insurance. The premium could bankrupt an enterprise."

The system will be tried out this year in companies that produce, sell, store, transport or use high-risk chemical products, the petrochemical industry and dangerous waste disposal enterprises that are prone to serious pollution accidents. Enterprises and industries that have caused serious pollution accidents in recent years will be especially targeted.

At the moment, if a serious environmental incident happens, the company responsible usually resorts to bankruptcy to avoid paying the huge amount of compensation and pollution control expenses.

Bie Tao said, "There's no mechanism to ensure that enterprise fulfill their responsibility to compensate victims and restore the environment after an incident. This situation where enterprises make profits and society pays the cost of cleaning up will not continue."

Rapid economic development has also created a high incidence of environmental pollution accidents. Last year, over 100 environmental emergencies were reported.

SEPA's figures show that over eighty percent of the country's 7,500 big chemical projects are in densely-populated areas or next to rivers.