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Oil companies cough up for spills

By Xin Dingding (China Daily)
Updated: 2009-09-16 08:01

Workers clean up a large patch of oil from a cargo ship that hit the rocks in Zhuhai port, Guangdong province, yesterday. The oil spill is covering more than 24,000 sq m. The accident was caused by Typhoon Koppu, which hit the country yesterday. [Li Jiansu]

Major oil companies will soon be required to contribute to a special fund to clean up damage from oil spills.

Last year, 109 oil spills occurred in China's seawaters, leaking 354 tons of oil into the waters.

The spills wreak havoc on sea life, fishing and tourism, and can cost millions of yuan to clean up and to compensate victims for the damage.

Draft details of how the new regulation will be put into effect next year suggests oil companies pay about 0.3 yuan (4 cents) for each ton of imported oil.

If last year's figure of 190 million tons of oil imported into China remains constant, the fund could collect about 57 million yuan a year.

Major oil companies such as Sinopec, PetroChina and the China National Offshore Oil Corp will be most influenced by the regulation, Xu Shiming, deputy director of Ship Safety and Pollution Prevention Department with the administration, told China Daily in an exclusive interview.

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The regulation was passed by the State Council on Sept 2.

Increased shipping traffic, including oil cargo ships to and from China's coast, in addition to the bigger size of tankers, is putting greater pressure on the ocean environment.

Once an oil spill occurs, the shipping company will be asked to pay for cleanup and compensation up to a certain insurance limit. But in many cases, the damage exceeds that amount.

The new fund will then be used to take care of the rest of the cost and reduce victims' losses, Xu said.

Victims can either apply to maritime safety administrations for mediation, or file a lawsuit asking for compensation.

But the fund is unlikely to cover all losses, as the draft plan suggests an upper limit of 50 million yuan for compensation, he said.

China has joined a number of international conventions, and taken measures to prevent oil spills and to build up the emergency response capacity to deal with accidents.

So far, most large ships sailing on international routes or along the coast have to buy insurance.

According to the newly approved regulation, oil tankers of all sizes and ships for other purposes with gross tonnage over 1,000 tons will be forced to buy insurance in the near future, he said.