Dozens of villagers from Hunan province have been compensated for damage caused to their vegetable fields after a chemical leak. This was the country's first environmental insurance payout.

Dozens of villagers from Hunan province have been compensated for damage caused to their vegetable fields after a chemical leak.

Hunan Haohua Chemical is a pesticide manufacturer. The company bought the insurance, valued at 40,800 yuan, just this past July. On September 28th, chloride gas leaked from the company and poisoned the surrounding vegetable fields. More than 120 villagers were compensated a total of 11,000 yuan. The Ministry of Environmental Protection said on Monday that this is the first case of its kind in China.

Bie Tao, Vice Director of Policy & Law Department of MEP said "More insurance companies and enterprises are needed to join in the insurance market. When a company has an accident, everybody pays for the compensation together."

A senior official from the MEP said the environmental liability insurance, which is still a new idea in China, is regarded as one of the most effective market instruments and incentives to foster environmental protection and curb emissions.

The official added that the MEP, along with other government departments, will further specify the status and scope of the insurance in relevant laws and regulations, in an effort to set up a long-term mechanism.

(CCTV December 3, 2008)