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China is likely to ask all ships plying its seawaters to buy insurance and set up a fund to contribute to the huge amount needed to clean oil leaks.

The two measures are part of the to-be-revised rules' draft to prevent ships from polluting the ocean environment, Yang Xinzhai, director of ship safety and pollution prevention department with China Maritime Safety Administration, said yesterday.

If the State Council approves the draft, nearly 20,000 ships will have to abide by the new rules. China's three big petroleum companies, too, will contribute to the fund.

The official, however, refused to say how big the fund could be.

The quality of water in China's coastal areas has been worsening. Official data show that by 2006, China had 120,000 square kilometers of oil-polluted seawaters. The Bohai Sea is the most seriously affected, with a third of the polluted area being in its range.

"The major sources of pollution are inland rivers and factories in the coastal areas, but ships too account for part of the pollution," the official said.

According to existing laws, a company has to pay the cleaning-up cost if oil leaks from its ship.

Usually, an oil leak needs up to 100 million yuan ($12.9 million) to clean up and compensate the fishing and tourism industries.

As no shipping company can afford to spend such a huge amount, an international convention asks member economies to pay the amount and also to set up a fund to cover the cost.

The administration wants to apply international regulations to China, too. But since the measures involve the interests of petroleum and shipping companies, the suggestion has not been put to test since it was made at an international maritime safety forum in 2005.

"We will continue our efforts this year to set up the compensation mechanism to prevent and fight oil pollution caused by ships," Liu Gongcheng, deputy director of China Maritime Safety Administration under the Ministry of Communications, told a working conference yesterday.

Also, the administration has decided to strengthen anti-pollution infrastructure, he said. Major oil wharfs have to have facilities to deal with oil leak emergencies.

The administration will organize a drill near Qinhuangdao in Hebei Province in the first half of this year on how to deal with oil leaks.

More than 80 oil leaks were reported in China's waters from 2000 to 2004. The latest was on December 31, 2006, in Guangdong Province. Though the 5,000-ton vessel had delivered the oil it was carrying, it still burnt for 8 hours killing two sailors and injuring five others.

But the Guangdong maritime safety bureau acted swiftly to prevent the remaining oil in the ship from leaking, Nanfang Daily reported.

All Chinese ships plying international waters are covered by insurance in accordance with international conventions. But China has not yet joined the convention for a fund to fight oil pollution.