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CNPC, Sinopec Rejected to Insure Their Accident Hazards

The two companies said that they can handle issues of environmental compensation themselves

China National Petroleum Corporation (CNPC) and China Petroleum and Chemicals Corporation (Sinopec), the two major state oil companies have rejected the governmental program on forcing oil firms to buy 'environmental pollution insurance'.

The two companies said that they can handle issues of environmental compensation themselves and that the scale of compensation paid out in the oil industry is too high for China's insurance firms to bear, the China Business News reported.

The insurance scheme is currently being drawn up by the State Environmental Protection Administration and the China Insurance Regulatory Commission.

An editorial in China Business View today criticized the two companies, saying that CNPC had proved itself incapable of dealing with issues of compensation.

Thus, in 2005 an explosion at a CNPC petrochemical facility sent a highly poisonous slick of benzene along the Songhua River, threatening the water supplies of several million people.

In 2006 40 victims of the blast had not yet received any compensation from the company, the editorial said.