Four Shenzhen companies have so far had applications for bank loans rejected on the basis of their poor environmental records, the Shenzhen Municipal Environmental Protection Bureau announced at a press conference Monday.

They became the first companies to be denied loans on environmental grounds after the bureau launched a "green credit" policy which made each company's environmental record a part of its credit history.

The four companies, which were not named, were found to have discharged polluted water and toxic waste earlier in the year. They did not stop doing so even after the bureau imposed penalties on them.

The enterprises were denied a total of 11.9 million yuan (US$1.6 million) and US$13.5 million in bank loans. They also have to spend 7.31 million yuan upgrading their facilities.

Under the bureau's policy, which is the first of its kind in the country, companies which violate environmental protection regulations will be disqualified from getting loans from banks or financial institutions.

The bureau regularly hands over lists of heavy polluters to the People's Bank of China Shenzhen branch.

So far the names of 82 violators have been placed on the lists, the bureau said.

More than 8,000 Chinese companies were penalized for pollution in the first eight months of this year, the State Environmental Protection Administration (SEPA) said earlier this month. The SEPA introduced the policy in July, one month after Shenzhen did.

China used to resort to the traditional mode of administrative penalties to curb pollution, but now long-term restrictions designed to affect the way businesses operate are favored over one-off fines.

(Shenzhen Daily September 19, 2007)