By CHUIN-WEI YAP
BEIJING -- For the first time, some Chinese companies in industries that pose serious risks to the environment are being required to take out insurance.
China's Ministry of Environmental Protection said recently that its pilot insurance plan is now mandatory for mining and smelting producers, lead-acid battery manufacturers, leather goods producers and chemical factories.
Conducted jointly with the China Insurance Regulatory Commission, the plan provides compensation for damage caused by accidents from environmental pollution.
Petrochemical companies and those involved in businesses related to hazardous waste are "encouraged to be insured," the ministry said in a statement, without elaborating further on the rules.
The program already covers more than 2,000 companies "that pose serious environmental risks," and has already underwritten some 20 billion yuan ($3.2 billion) worth of risk, it said.
Businesses that undertake the program will enjoy access to special environmental protection funds and also priority in bank loans, it said.
Dow Jones Newswires