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Sinopec, China's largest oil company, has ordered three subsidiaries in Guangdong province to shut operations and correct problems that violate pollution regulations.

In a statement on Wednesday night, the company said it will set up a special team to investigate its three Guangdong-based subsidiaries.

'People who are responsible for the subsidiaries will be seriously punished according to the investigation result,' the statement said.

The announcement followed local government accusations that three subsidiaries of Sinopec, one in Guangzhou and the others in Zhanjiang, have long been violating environmental rules despite repeated demands from pollution watchdogs for rectification.

On Wednesday, environment authorities of Guangdong said the three subsidiaries have openly disregarded local government calls to stop their polluting practices over the past few years.

'They always threaten the government by claiming that what they do is for the national economy and the people's livelihood!' Zhou Quan, director of the environment inspection bureau of the Guangdong Environmental Protection Department, shouted at a meeting.

'Well, the environment is the people's livelihood,' he added.

The meeting, held to conclude an inspection campaign by the province's environmental authorities, was broadcast on China Central Television on Wednesday.

At the meeting, Zhou said some government departments did not dare to inspect or supervise Sinopec even after they found the company was discharging excessive pollution.

The three companies have a combined oil refinery capacity of more than 18 million metric tons a year, according to local media report.

Sinopec Guangzhou, which operates a refinery petrochemical complex that can process 13.2 million tons of crude a year and produce 220,000 tons of ethylene a year, was found to have stored a large amount of an unidentified liquid in two of its emergency tanks.

'The tanks could cause severe environmental pollution in the event of an accident,' Zhou said.

Sinopec's Dongxing petrochemical company in Zhanjiang, of western Guangdong, was found illegally discharging sewage through its rain drainage system.

The Dongxing plant, which was originally a Sino-foreign joint venture founded in 1992, was officially taken over by Sinopec in 2002.

The environmental protection authority of Guangdong ordered it to suspend its production in May. However, it later resumed production without permission, Zhou said.

Another subsidiary, the New Sino-US Chemical, a polystyrene producer with a capacity of 100,000 tons a year in Zhanjiang, was accused of illegally dismantling its sewer system and diluting the waste before discharging it into rain tunnels.

The Ministry of Environmental Protection has reported 26 pollution cases in the first half of this year, with nine of them related to Sinopec or its subsidiaries, according to China Central Television.

In Shanghai, a Sinopec subsidiary was fined 200,000 yuan ($31,700) in April 2011 for causing a toxic gas leak that affected many parts of the city.

'It is hard to assess how much pollution the subsidiaries have caused to the local environment,' an anonymous official with the Guangdong Environmental Protection Department told Yangcheng Evening News on Thursday.

The official called on the government to set up a trade system for sewage discharge to encourage companies to introduce efficient emission reduction measures.

'Companies may be fined after illegally discharging pollutants, but they can also benefit a lot. That's why Sinopec has ignored the environmental rules,' the official said.

'It will be hard for the company to prevent such wrongdoings if we only rely on the environmental rules to supervise its operation. A more effective trade system to let companies benefit from upgrading sewage discharging facilities is needed.'