A subsidiary of the nation's oil refinery giant Sinopec has been found to have been discharging industrial sewage through flood channels into a nearby river in Guangdong Province, State broadcaster CCTV reported.
The China Petroleum & Chemical Zhanjiang Dongxing Company has been circumventing environmental inspections by pumping unprocessed sewage through flood tunnels into the Nanliu River without treating it, according to the report aired Wednesday.
The plant was also caught replacing sewage samples with tap water to cheat an online supervision system, in an effort to fudge the results of the real-time pollution control network monitored by the local government, the CCTV report said.
The highly polluted sewage may have found its way into the South China Sea, according to CCTV.
The CCTV report, however, neither identified the date when the alleged malpractice began nor clarified the damage caused by the discharges.
Footage showed the Nanliu River being tainted by the pollution, with the surface of some parts of the river covered with tar.
Lü Dapeng, a Sinopec spokesperson, leapt to the company's defense, telling the Global Times that "our preliminary investigation shows that the issue is merely a problem of design."
"What the local environmental protection authority has found could be a problem that may occur in the future, not something Dongxing has already done."
The company is aware of the media reports and has been conducting an investigation into the faulty refinery, Lü said.
"Over the years we have managed to keep the pollution problem under control," said Lü, adding that this incident represented an isolated case.
Zhou Quan, a senior environmental inspection official in Guangdong, was reported to have said at a conference that Sinopec "has often been threatening the local governments," according to China Business online portal.
The report didn't explain how Sinopec has "threatened" the government or why.
According to Sinopec's official website, the Zhanjiang Dongxing Company is a refinery capable of processing 5 million tons of crude oil per year, and is located only 4.2 kilometers from Zhanjiang harbor, one of the largest ports in South China.
It was not the first time Sinopec's Dongxing Company was caught violating environmental regulations. Earlier this year, the Guangdong Environmental Protection Bureau ordered the company to halt operations as the company had failed to meet the requirements outlined after early inspections. Dongxing ignored the government order and re-opened on its own.
Sinopec's stock price dropped 1.35 percent on Wednesday.
Ma Jun, director of the Institute of Public and Environmental Affairs and a prominent environmentalist, told the Global Times that as one of the leading State-owned enterprises, Sinopec has grown so powerful and influential that even provincial governments may find it hard to challenge it.
"Sometimes the local environmental protection authorities give out fines of just 10,000 yuan ($1,586) to 20,000 yuan to the refineries, just to show they have done the required work," said Ma. "Enterprises like Sinopec wouldn't be bothered by that kind of fine. The end result is that the refineries will keep pouring polluted water down into the river."
Ma stressed that the government needs to increase the severity of penalties and show determination in regard to environmental protection.
With over 640,000 employees worldwide, Sinopec is ranked No.5 in the Global 500 list of enterprises. Its revenue topped $273 billion in 2011 and is still growing, reported CNN.
According to the China Business online portal, 26 environmental emergency cases were reported to the Ministry of Environmental Protection in the first half of 2012. Guangdong, with nine cases, earned the dubious honor of being No.1 in the country.
Chen Dujuan contributed to this story