The Polluter Pays Principle was first widely discussed in the United Nations Conference on Environment and Development held in Rio de Janeiro of Brazil in June 1992. The principle was endorsed by all the attending representatives of the countries. Following this principle, the sewage services charging scheme was introduced in Hong Kong on 1 April 1995.

Each day, individual households and trades and industries turn over million tons of tap water into wastewater which requires proper treatment before disposal. Prior to the introduction of sewage services charging scheme, the cost of sewage collection and treatment came entirely from the public revenue. The disadvantages of such an arrangement are that the public is unaware of the cost of the sewage services and therefore has no incentive to reduce water pollution.

With the introduction of the sewage services charging scheme, dischargers are required to pay the cost of the sewage services according to the pollution level and quantity of their discharge. To maintain a modest charging level, the scheme aims at recovering only the operating and maintenance cost of public sewage facilities. The construction cost of  these facilities remains to be funded from the public revenue.