China is to introduce a "green insurance system" to better monitor polluting industries and help victims get immediate compensation, said Pan Yue, vice director of the country's top environmental watchdog, in Beijing on Monday.
The system, which aimed to have all industries with pollution risks insured, will be implemented nationwide by 2015 after a trial period, according to a road map jointly set by the State Environmental Protection Administration (SEPA) and the China Insurance Regulatory Commission (CIRC).
Pan said the system would be tried out this year in "companies that produce, sell, store, transport or use high-risk chemical products" and "petrochemical industries and dangerous waste disposing enterprises that are prone to heavy and serious pollution accidents".
"Enterprises and industries having caused serious pollution accidents in recent years will be specially targeted," he said.
In the past, once a serious environmental incident happened, the company responsible usually resorted to bankruptcy in face of the huge compensation and pollution control expenses.
Victims usually couldn't get timely compensation, and the government had to earmark huge funds to rectify the situation, Pan said, noting the green insurance system would solve the problem.
Under the system, insurers would give timely compensation to victims if an accident occurred. The polluting company would avoid going bankrupt and the government's financial burden would be lessened.
"It, however, doesn't mean polluting companies can (be) rest assured to pollute as the insurance premium is in proportion to a company's pollution risks," Pan said.
The insurer will also invite experts to monitor and control the environmental risks of the insured, according to the official.
China is in a period of "high incidence of environmental pollution accidents", Pan noted.
Altogether, 108 cases of emergent environmental incidents were reported in 2007, with one case every two days on average, according to Pan.
SEPA figures show 81 percent of the country's 7,555 large scale heavy chemical projects are in environmentally-sensitive areas that are densely populated or adjacent to neighboring rivers, while 45 percent are "sources with serious risks".
The green insurance system was the second economic environmentally-friendly policy introduced in China to curb pollution, Pan said.
The first, called a "green credit policy", was launched in July. It instructed banks to stop making loans to high-energy consuming and polluting industries.
According to the policy, not only companies causing heavy pollution and wasting energy are disqualified from getting loans, companies that already have loans, but are later discovered to have violated environmental protection regulations will also have their loans called in.
(Xinhua News Agency February 19, 2008)