TAIPEI (AFP) - Taiwan is setting up its first marine wildlife sanctuary, in a bid to protect its dwindling population of Indo-Pacific humpback dolphin, officials said Monday.

Local conservation groups say the dolphin numbers have halved to around 60 in the past decade, due to pollution, industrial development, and destruction of habitat.

"Indo-Pacific dolphin population is a key index to measure the health of the maritime environment," said Tsai Chia-yang, the head of the Chuanghua Environmental Protection Union.

The Council of Agriculture confirmed it will establish a vast 76,300 hectare sanctuary off the west coast of the country.

"We're happy to announce the setting up of the sanctuary before this year's Earth Day," Kuan Li-hao, an official of the forestry bureau, referring to the annual United Nations event launched in 1970 and celebrated on April 22.

Normal fishing in the area will be unaffected, as the government said a total ban would not be possible as sanctuary's success depended on the cooperation of local fishermen.

But the government has tightened guidelines for those operating in the region.

From now on, any development projects in the area will require government approval, council officials said.

Under the new measures, there will be tough punishments for illegal fishing of the endangered species. Poachers of the humpback dolphin could face up to two years in jail and fines of Tw$500,000 ($$20,000). Dredge fishing is also banned.

Anyone caught seriously damaging the habitat could face five years in prison.

"Illegal fishing has seriously ruined the coastal ecological environment, threatening the endangered dolphins," whose main diet consists of mullet and other fish, Kuan said.

The Indo-Pacific humpback dolphin can also be found along the coast of Africa and in the waters stretching from India to Australia.

In 2011, President Ma Ying-jeou decided to put an end to a controversial plan to build a US$20 billion (S$ 27 billion) refinery and more than 20 related petrochemical plants in western Taiwan, in reaction to a series of protests for the endangered dolphin species.

He said there was a need to balance economic development with environmental protection.