Twelve heavy polluting enterprises have had crucial bank loans recalled, suspended or rejected as the nation's new green-credit policy begins, yesterday's China Youth Daily reported.

The report fell short of naming the companies, but outlined several cases. One involved a brewery in eastern Anhui Province whose application for a 10-million-yuan (US$1.35 million) bank loan was rejected due to violations in waste-water discharge.

In another case, a power company in Chengdu, capital of Sichuan Province, had its bank loans recalled after it failed to pass an environmental assessment.

The 12 companies were among the 30 the State Environmental Protection Administration reported to the People's Bank of China and the China Banking Regulatory Commission in July.

"The purpose of this move is to force enterprises to pay the price for environmental violations," the newspaper quoted an SEPA official as saying.

China's enterprises are only subject to a maximum 100,000 yuan fine for environmental violations, according to law.

"Compared with the economic benefits of illegally discharging pollutants, this kind of financial punishment is just a drop in the bucket for these enterprises," the official said.

In July, SEPA, the central bank and banking regulators jointly issued the green-credit policy, which required SEPA to hand over lists of heavy polluters to the central bank and the regulatory commission.

The companies that fail to pass environmental assessments or to implement environmental protection regulations are disqualified from receiving loans from any bank or financial institution.

Companies that already have loans, but are later discovered to have violated rules face recalls, according to the policy.

(Xinhua News Agency November 17, 2007)