China to Penalize Offshore Oil Companies for Spills

China to Penalize Offshore Oil Companies for SpillsChina to Penalize Offshore Oil Companies for Spills

The Chinese government is considering imposing penalties on offshore oil companies that damage marine environment, state media said on Monday, in the latest effort by Beijing to clamp down on environmental pollution and tackle risks from oil leaks.

The Legislative Affairs Office of the State Council on Monday published an early draft of the regulation, which includes damages for cleanup costs and restoration of ecological balance in marine environments, according to Xinhua.

Companies will also have to invest in environmental monitoring and evaluation, and use professional consultants if necessary, Reuters reported.

Last year, ConocoPhillips and CNOOC Ltd were embroiled in a series of legal claims following oil spills in 2011 in the Bohai Bay, which polluted more than 6,200 square kilometers of water.

In October 2015, a Chinese court ordered Conoco to pay 1.68 million yuan ($251,625) in compensation to nearly two dozen aquaculture farmers who said their livelihoods were hurt by the leaks off the nation's northeastern coast.

Xinhau said companies would have to compensate the relevant industries, if they damaged fisheries.

They will also be obliged to take emergency response measures and cooperate with investigations, it said.

In February, China approved the country's first oil spill emergency response scheme, expected to be ready by 2020.

In addition to compensation, companies may also be subject to fines or suspension of operations, the draft said.