China is to get tough on corporate executives responsible for causing severe pollution by imposing hefty fines on them.

Heads of Chinese enterprises which cause severe pollution incidents may face the fine equivalent to half of their annual income, according to the draft of an amended law on water pollution.

The draft of amendment to the Water Pollution Prevention and Control Law was submitted on Tuesday for review to the 32nd session of the Standing Committee of the National People's Congress (NPC), or top legislature.

"Enterprise heads directly responsible for causing severe water pollution incidents and others with direct responsibility would be fined up to half of their income in the previous year," the draft said.

Previous punishment of responsible company heads stopped at administrative penalties.

Enterprises would be held responsible for 30 percent of the direct loss of any serious water pollution incident they cause and 20 percent for incidents of medium consequences.

Environmental officials and experts have repeatedly called for heftier fines on illegal polluters as a way to curb environmental violations.

"The fine should be made heftier, especially on those who repeatedly violate the environment rules," said Hou Yibin, a deputy to NPC's Standing Committee.

"The amount of fines should be imposed according to the severity of violations, and too little money cannot effectively tackle the long-standing problem of 'low violation cost'," said a statement of the NPC's Law Committee issued in December.

Water pollution is one of the biggest environmental concerns for both the government and public.

A 2006 survey revealed China's surface water generally suffered from medium pollution, but one third of the 744 samples tested were graded as the worst pollution rating.

According to statistics from the State Environmental Protection Administration (SEPA), the administration handled 161 emergency environmental pollution incidents in 2006, 59 percent of which involved water pollution.

Pan Yue, the vice director of SEPA, said on Monday that the agency has issued a regulation stipulating that highly polluting companies must pass environmental inspections when applying for an initial public offering (IPO) or re-financing, one major step toward a "green securities policy".

The regulation targeted companies engaged in power generation, steel, cement and aluminum production, and provincial companies classified as energy-intensive or highly polluting. That latter category covers 13 industries, including metallurgy, coal, textiles and paper.

Besides the "green securities policy", China has introduced two other green policies -- one for insurance, one for credit -- in a bid to solve severe environmental problems through economic measures.

The "green insurance system", which aimed to have all industries with pollution risks insured, will be implemented nationwide by 2015 after a trial period. The goal would be to have insurers compensate victims of environmental accidents, avoid bankruptcy by the polluting company and lessen the government's financial burden.

The "green credit policy" was launched in July. It instructed banks to limit lending to energy-intensive, polluting industries. Under this policy, companies with violations could be barred from getting loans and those with outstanding loans could have their loans called in.

(Xinhua News Agency February 27, 2008)