The State Environmental Protection Administration (SEPA) is
currently considering the development of an environmental pollution
liability insurance system along with the China Insurance
Regulatory Commission (CIRC), The Beijing News reported on
Thursday.
The announcement comes not long after SEPA jointly implemented a
"green credit" program with the People's Bank of China and Banking
Regulatory Commission, whereby businesses who fail to adhere to
environmental regulations would be challenged in their applications
for bank loans.
During this year's two sessions of the National People's Congress
(NPC) and the Chinese People's Political Consultative Conference
(CPPCC), some CPPCC member proposed to set up legal coverage for
the damage and losses caused by environmental pollution.
SEPA and CIRC conducted a pilot research report in Jilin and Zhejiang provinces during the first half of
this year, where they solicited opinions from enterprises on
petrochemicals, dangerous goods transport, hazardous waste
disposal, and insurance companies. The findings were recently
completed and distributed to local environmental protection bureaus
as a reference for further work.
Many enterprises expressed their support for the liability
insurance system, said the report. Representatives from PetroChina
and China Petroleum and Chemical Corporation suggested it was not
prudent to bring large chemical companies into a compulsory
insurance system at present. Unlike small companies, which lack
financial resources, they are able afford compensation without
assistance.
On the other hand, some enterprises felt that the injured party
would have a right to demand compensation directly from the
insurance company if compulsory insurance were implemented. The
insurance company could then pay part of the indemnity in advance
for accident management and compensation to the third party.
The insurance companies hope to improve related laws with
administrative supports and solve problems on assistance of
reinsurance. A new law should first define the scope of coverage
then design insurance products. At the present research stage, they
have suggested paying indemnities for direct damages, like a
contamination disposal fee, but not to collateral damage, like
recovery of an ecological environment.
The research team has appealed to start pilot programs as soon
as possible in the trades of dangerous goods production,
transportation, storage, and petrochemicals, particularly in the
areas of Taihu Lake, Huaihe River, Yellow River, Songhua River, and
the lower reaches of the Yangtze River.
(China.org.cn by Li Shen August 24, 2007)
