China's State Forestry Administration has ordered a division of
Indonesia-based paper giant, Asia Pulp and Paper Co. (APP), to
immediately stop attempting to buy a large area of state-owned
forest.
Hainan Jinhai Pulp and Paper Company had breached regulations by
trying to acquire a 58 percent stake in the state-owned Yunnan
Yunjing Forestry and Pulp Company in southwest China's Yunnan Province. This would have involved the
transfer of a million mu (667 square kms.) of woodland, said
administration spokesman Cao Qingyao on Wednesday.
The worth of the woodland hadn’t been valued legally and the
sale price the two companies had agreed upon was too low. Specific
numbers remain confidential, Xinhua was told by the
administration.
To prevent the loss of state assets Chinese law requires that
all transfers of state-owned forest resources follow strict
evaluation procedures and conform to State Council earnings
distribution regulations.
However, some local governments had leased and sold state or
collectively-owned forest resources to enterprises at less than
market value or manipulated such deals, said Cao. He said the
practice seriously harmed public interest.
The Yunnan provincial government was considering ways to resolve
the problem, Cao added.
In 2005 the government investigated an APP project in Yunnan
Province involving illegal logging of over 2,700 cubic meters of
timber.
The Hainan Jinhai Pulp and Paper Company is the 13th such
business in which APP has invested on the Chinese mainland and had
an output of 800,000 tons in 2005.
APP, a subsidiary of the Indonesia-based Sinar Mas Group, is one
of the world's largest paper and pulp producers. It owns 18
subsidiaries and more than 20 forest farms in China with 56 billion
yuan (US$7 billion) in assets.
(Xinhua News Agency February 8, 2007)
