The pollution situation has gotten so bad in China that the State Environmental Protection Administration (SEPA) plans to launch a pilot project that will provide insurance coverage to victims of environmental disasters.

Pan Yue, the head of SEPA hopes that by 2015, all industries facing a high risk of pollution incidents will be covered by the insurance system and provide due compensation to those affected. The Xinhua news agency says that while the program is meant to protect high-risk firms from bakruptcy from clean-up costs, it in no ways give companies the green light to pollute or become careless.

"It, however, doesn't mean polluting companies can rest assured to pollute, as the insurance premium is in proportion to a company's pollution risks," it quoted Pan as saying.

Recent pollution incidents have included an industrial plant explosion that released toxic chemicals into the Songhua River, a tanker truck crash that spilled 30 tonnes of sulphuric acid into a river and an oil pollution threat that saw 100,000 people without drinking water when the supply was cut off. Companies dealing with chemicals, hazardous waste material and petrochemicals will all initially be required to participate in the program.

» Reuters Environment