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Shipping firms to pay for oil spills
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09:29, November 08, 2007

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SHANGHAI: A revised rule that forces shipping companies to shoulder the cost of cleaning up pollution from maritime accidents, such as oil spills, in China's waters, is likely to take effect next year, if not sooner, a senior official with China Maritime Safety Administration (MSA) said yesterday.

If the revised regulation is approved by the State Council, companies such as Sinopec, PetroChina and the China National Offshore Oil Corp (CNOOC) will be required to contribute to a special compensation and clean-up fund, Liu Gongcheng, executive director of China MSA, said.

Liu told a press conference prior to the 2007 Shanghai International Maritime Forum, which kicked off yesterday, the fund will boost the country's emergency response capabilities to maritime pollution disasters.

The official declined to say how big the fund could be.

The rules also include a scheme asking all ships using its seawaters to purchase insurance.

Liu said the mechanism, already in the pipeline for two years, is one of China MSA's measures to handle possible oil spill pollution, as the ocean environment faces greater pressure with increased shipping traffic, including oil cargo ships to and from China's coast.

Figures showed more than 90 percent of China's oil imports - 145 million tons last year - is transported by sea. Some 163,000 tankers of all sizes sailed into and out of China's ports last year, an average of 446 every day.

"The size of oil tankers is also getting bigger, up to 300,000 tons, which has added to the risk," Liu said. "If only 1 percent of the oil is spilled, we will be confronted with a catastrophe."

Oil spills can wreak havoc on sea life, fishing and tourism. They cost millions of yuan to clean up and even more in compensation and damages, he said.

The oil spill from the tanker Prestige, which sank off Spain in November 2002, leaked 77,000 tons of oil that caused several billion dollars worth of damage.

In the past year, there have been several oil spills in domestic seawaters that involved 500 to 600 tons of oil, but didn't cause serious pollution due to emergency response, Liu said.

Losses caused by ships using international waters can be covered by insurance in accordance with international conventions.

However China urgently needs a mechanism to cover the costs many small- and medium-sized ship owners cannot afford.

"It is not fair to let the clean-up companies shoulder the cost, so the compensation fund can be especially useful in that situation," he said.

The administration is continuing to invest in facilities and enhance China's emergency response capabilities.

Source:China Daily

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