Shanghai’s Urban Environmental Protection Committee is deliberating on a draft law that could force shipping companies to take out insurance against pollution spills, reported China Daily. It remains undecided whether companies would be forced or simply encouraged to buy insurance, and when the law will be enacted.

Pollution resulting from ship collisions in the upper Huangpu River is the greatest safety threat to Shanghai’s main drinking water source, according to a recent investigation. Compensation for spills usually exceeds the financial capacity of shipping companies involved in a spill.

A recent report by the committee found there to be, over the past two decades, an average of 40 spills a year that posed a serious threat to water safety.

The introduction of insurance regulation should reduce the financial risks for shipping lines, and ensure that environmental accidents are dealt with in a timely manner, said committee member Mao Wenpei.

China Shipping Group commented that the new law represented a step forward in better protections for water safety in inland rivers. However, it said that small shipping companies were unlikely to want to pay for the insurance.