The Environmental Protection Ministry issued a guidance on Thursday making it mandatory for enterprises with high environmental risk to join an environmental liability insurance system.

The ministry, together with the China Insurance Regulatory Commission, introduced the insurance system in 2007 in an attempt to use a market-oriented approach to tackle pollution damage and compensate victims for their losses.

The new guideline is to make petrochemical and heavy metal industries join the system, which until now enterprises have joined on a voluntary basis.

The system has already been applied in more than 10 provinces and regions, insuring more than 2,000 enterprises by almost 20 billion yuan ($3.17 billion).

According to the guidance, enterprises that are included in the targeted industries but do not join the insurance system will encounter restrictions and difficulty in the approval of their projects’ environmental impact assessments before and after construction, application of environmental protection related funds and their credit ratings in the banking system.

This is the second move by the ministry in as many days to control the environmental risks posed by hazardous chemicals during industrial development.

Fifty-eight types of hazardous chemicals out of a total of more than 3,000 are labeled as key chemicals to prevent and control in the Five-Year-Plan (2011-15) of the Management of Chemicals’ Environmental Risks, released by the ministry late on Wednesday.

By 2015, a basic management system will be formed to control the environmental risk of hazardous chemicals.

More than half of the 568 environmental emergencies reported to the ministry between 2008 to 2011 are related to toxic chemicals, the plan said.

China receives thousands of production and import requests for new chemicals every year, the plan states. But the impact they have on people’s health and the environment is still unclear.

Chemical industrial output value in China topped the world in 2010, with more than 25,000 large-scale chemical enterprises. The output of pesticides, dyestuff, methanol and chemical fertilizer are all the highest in the world.

“The environment is under great pressure caused by the rapid development of chemical industries,” said Li Lei, deputy director of the ministry’s pollution prevention control department.

“Chemicals, hazardous waste and heavy metal will be the three main targets in pollution control,” she said in an environmental meeting in December.

The plan says that some of the toxic and hazardous chemicals produced or being used in China have already been prohibited or restricted in developed countries.

These chemicals do not easily break down by natural processes. They can accumulate in animals and people’s organs, distorting chromosome structure and affecting their growth, the plan says. They have caused a drinking water crisis in many parts of the country — some regions have even been labeled as “cancer villages”.

Studies show that in recent years, a large number of toxic organic pollutants have been discovered in the lower reaches of the Yangtze River. More than 170 types of persistent organic pollutants have been detected in the waters near the Three Gorges Dam, including 18 species covered by the United States Environmental Protection Agency’s priority pollutants.