China's Maritime Safety Administration (MSA) would soon establish an oil pollution fund and shipping companies would be charged a levy to help fund it.

A rise in collision incidents, as a result of a sharp increase in shipping traffic, had led to oil spills, and this was creating unprecedented pollution in China's waters, the report said.

This has prompted the administration to set up a compensation regime to help fund cleanup operations in the event of oil spills and to compensate victims of oil spills.

"While prompting compulsory insurance oil pollution from ships, the administration plans to set up a fund by levying a charge on ship owners and cargo consignors, as they should take responsibility for oil pollution and compensating the victims of oil spills," said Liu Gongshen, deputy director-general of the MSA, in a speech at the International Maritime Forum in Shanghai.

He said the oil pollution fund would be set up once the State Council approved the proposal of such a fund.

Currently, the government bore the brunt of the financial burden when an oil spill happened and there were signs that oil spills were increasing in the country, the report said.

Between 1973 and 2003, more than 2,350 oil spills occurred along China's coast, an average of one spill every 4.6 days.

Although China is part of the International Fund Convention on oil pollution, the convention is only applicable to the Hong Kong Special Administration Region. As such, oil pollution damage elsewhere in China is not covered by the fund.

(Shenzhen Daily July 8, 2005)