China Cracks Down on Water Polluters As River Foams Red

Bosses in China could be fined up to half their annual income if their companies are convicted of polluting water under new laws, it emerged yesterday.

With China keen to step up the pressure on environmental offenders before the Olympic games, legislators told the state news agency Xinhua that the law was likely to be agreed at next week's full session of the People's Congress (NPC).

News of the legislation, which would also increase maximum fines for the companies, emerged shortly after authorities cut water supplies to as many as 200,000 people after a stretch of a river system in central China turned red and foamy.

Officials in Hubei initially blamed high levels of pollutants, saying tests showed high levels of ammonia, nitrogen and permanganate. But last night water supplies to most residents resumed, with the authorities saying that non-toxic algal bloom due to weather changes was to blame for the problems along tributaries of the Han river, a branch of the Yangtze.

Water pollution incidents account for three-fifths of the emergency cases handled by the State Environmental Protection Administration (Sepa) and in a 2006 survey, one-third of the water samples tested earned the worst pollution rating. But at present the maximum fine it can impose is only 1m yuan (£71,000).

NPC standing committee member Hou Yibin told Xinhua: "[Fines] should be made heftier, especially on those who violate environment rules repeatedly."

The latest draft also retains a clause added in December, which would allow water pollution victims to join together in civil class actions against companies.

Its publication coincided with the environment watchdog's call for an end to tax breaks for damaging exports. Sepa has blacklisted 141 products such as DDT and nickel-cadmium batteries, describing its list as a reference point for future economic decision-making.