- The Washington Times - Friday, July 6, 2007

BEIJING — China said yesterday it would bar bank loans to companies that violate environmental rules, an apparent effort to target businesses that find it cheaper to pay fines or bribes than help reduce the country’s worsening pollution.

The initiative is part of efforts to enforce frequently ignored environmental rules amid increasing concerns about pollution that has left millions of people without access to clean water and makes China’s cities some of the world’s dirtiest.

The deputy director of China’s environmental agency said companies that do not follow environmental protection regulations will be disqualified from receiving loans from any bank or financial institution, the state-run Xinhua News Agency reported.

The report gives no indication how the new policy will be enforced. Regulators already have difficulty enforcing environmental rules because local leaders are reluctant to take steps that might hurt industry or reduce jobs or tax revenue.

Heavily polluting factories frequently bribe officials to look the other way or pay cursory fines, rather than take concrete steps to reduce toxic emissions.

The environmental official, Pan Yue, also said the government will raise sewage fees charged to polluting and energy-intensive companies to pay for better water treatment, Xinhua reported.

The announcement came after the head of the State Environmental Protection Administration said that worsening pollution is increasingly sparking protests by the Chinese public.

The public refuses to accept increasing degradation of the environment, sparking a growing number of “mass incidents,” Zhou Shengxian said late Wednesday, according to Xinhua.

Mr. Zhou did not give figures or examples, but said the number of petitions his administration received this year is up 8 percent from a year ago, the report said.

A quarter of the length of China’s seven main river systems is so toxic that any human contact is harmful, the agency said. Contamination by chemicals is frequent, causing taps to run dry earlier this week in the eastern city Shuyang.

In one of the worst cases, a 2005 spill forced the city of Harbin to cut water to 3.8 million people for five days and strained relations with Russia, into which the poisoned waters flowed.

A Cabinet meeting led by Prime Minister Wen Jiabao on Wednesday approved a draft amendment to the existing water pollution law, calling for more testing, licensing and stiffer penalties, Xinhua reported.

The Financial Times reported Monday that Beijing persuaded the World Bank to cut findings from a draft of an environmental report that purportedly found that pollution causes about 750,000 premature deaths nationwide annually.

The data cut from the draft showed that air pollution levels in Chinese cities cause 350,000 to 400,000 premature deaths each year, the newspaper said Monday. Another 300,000 people die from exposure to poor air indoors, and more than 60,000 die from poor quality water, the report said.

Produced with the cooperation of Chinese government ministries over several years, the report found the deaths occurred mainly from air pollution in large cities, the Financial Times reported, citing unnamed bank advisers and Chinese officials.

A draft of the report was released at a conference in Beijing in March. The final version will be released as a series of papers, the World Bank statement said without giving details.

Foreign Ministry spokesman Qin Gang denied the newspaper report yesterday.

“The report you mentioned has not concluded yet and has not been released,” Mr. Qin said at a regular briefing. “There was no issue of the deletion of relevant data requested by China.”

A World Bank spokeswoman in Beijing, Li Li, would not say whether China pressured the bank to omit data. “There are discussions of the findings.”

A World Bank statement released Tuesday said some subjects, such as economic cost calculations, were left out of a preliminary version of the report because of “some uncertainties about calculation methods and its application.”

The State Environmental Protection Administration did not respond to a faxed request for comment yesterday.

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