Business to business integration has recently been performed by employing Web service environments. Moreover, such environments are being provided by major players on the technology markets. Those environments are based on open specifications for transaction coordination. When a failure in such an environment occurs, a compensation can be initiated to recover from the failure. However, current environments have only limited capabilities for compensations, and are usually based on backward recovery. In this paper, we introduce an engineering approach and an environment to deal with advanced compensations based on forward recovery principles. We extend the existing Web service transaction coordination architecture and infrastructure in order to support flexible compensation operations. A contract-based approach is being used, which allows the specification of permitted compensations at runtime. We introduce the abstract service and adapter components which allow us to separate the compensation logic from the coordination logic. In this way, we can easily plug in or plug out different compensation strategies based on a specification language defined on top of basic compensation activities and complex compensation types. Experiments with our approach and environment show that such an approach to compensation is feasible and beneficial.