(ECNS) -- China plans to make environmental pollution liability insurance compulsory for companies that fall under eight categories. Those that fail to buy the insurance could face fines of up to 30,000 yuan ($4,400), CCTV reported.
The Ministry of Environmental Protection and the China Insurance Regulatory Commission have jointly released a proposed guideline on environmental pollution liability insurance, which is open for public feedback until July 10.
According to the guideline, eight categories of companies – including those engaged in the extraction of petroleum and natural gas; the gathering, storage, utilization and disposal of hazardous wastes; and the production of active pharmaceutical ingredients – will be required to buy environmental pollution liability insurance.
If they fail to do so, a grace period to buy or renew the insurance would be allowed, but companies could also face fines of up to 30,000 yuan.
In addition, the new rule also clarifies what the insurance must cover, including personal injury, property damage and environmental impairments, as well as emergency treatment and clean-up costs.
The guideline also requires insurance companies to issue an environmental risk assessment report before signing insurance contracts.
However, insurers will be exempt from providing compensation in cases where damages are caused by natural disasters, environmental pollution crimes, illegal discharging of pollutants, or unaddressed environmental safety hazards, as well as other cases deemed worthy of exemption.
China began to pilot the insurance program in 2007, in a bid to better compensate pollution victims and raise companies' awareness of environmental protection. So far, insurance companies have provided more than 130 billion yuan in coverage for Chinese companies.