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China's petrochemical and chemical industries located near water pose a huge threat to the environment, the country's top environmental watchdog said yesterday, as it completed an inspection of 20 such projects at different sites.

"To make matters worse, there exists a loophole in the mechanism for preventing such environmental crises from occurring," said Pan Yue, vice-minister of the State Environmental Protection Administration (SEPA).

"So putting a system of environmental impact assessment (EIA) in place is the only way to stop the potential threat on the environment and safeguard people's health."

Since the Songhua River chemical spill in November last year, SEPA launched a thorough inspection of 127 petrochemical and chemical factories located in environmentally sensitive areas, mostly along the riverside, to minimize the possibility of environmental crises.

The 127 factories and projects near environmentally sensitive areas have attracted investments totaling 450 billion yuan (US$55 billion). Among them, 20 factories and projects were subjected to a direct check by SEPA due to the size of their operations, their location and their potential to hurt the environment.

"The 20 factories and projects cover oil refinery, ethylene production and methyl alcohol production, with such production playing a large part in China's economic development," Pan said.

SEPA's investigation found that the Sichuan branch of the Chinese Petroleum Corporation planned to build a factory with an annual production capability of 800,000 tons of ethylene, with an investment of 21 billion yuan (US$2.6 billion), along the Tuojiang River, which is one of main tributaries of the Yangtze River.

Situated on flood land and with abundant resources of underground water, SEPA found the project did not have adequate measures in place to protect the water. Following the inspection the project has submitted a proposed wastewater process system to SEPA.

The 20 factories will invest more than 1.6 billion yuan (US$197 million) to further improve their environmental protection facilities, with the initial construction input already at 60 billion yuan (US$7.4 billion). "However, such measures are just temporary solutions," Pan said.

"The right way to stop improper industrial distribution is to ensure EIA for newly-launched projects and to promote it in policy-making."

According to EIA Law, SEPA has the approval rights for large-scale projects, while planning approval rights are in the hands of local government.

Local government sometimes approves plans on the basis of economic growth, which is detrimental to the environment.

(China Daily April 6, 2006)