China has put a hold on the sale and leasing of state-owned forests in order to head off a potential environmental disaster.

The country's forest watchdog said yesterday that the review of applications will not reopen until the State Council maps out tough new rules.

The move was sparked after several illegal operations were uncovered by the State Forestry Administration.

The nationwide inspection revealed a serious problem, said Cao Qingyao, a spokesman for the administration.

Cao did not reveal a timetable for the new rules.

He said a large number of forests have been chopped down to make way for infrastructure, including the construction of railways, roads, hydropower stations, and electricity facilities.

The administration found construction projects covering 741.3 hectares of timberland across the country have been done without approval, and work on 2,874.4 hectares of timberland began before the official go-ahead was given.

Nearly 100 hectares of forests were illegally destroyed to build quarries or mines. Another 204.4 hectares of woodland was turned into quarry or mine sites before approval was received.

The administration has ordered the Hainan Jinhai Pulp and Paper Co, a branch of Indonesian-based Asia Pulp and Paper Co, to cease its efforts to purchase a large area of state-owned forest.

Cao said Jinhai breached rules by attempting to acquire a 58 percent stake in the state-owned Yunnan Yunjing Forestry and Pulp Company in southwest China's Yunnan Province, involving a transfer of 66,667 hectares of woodland.

He said the forest resources had not been legally valued, and the sale price the two companies agreed upon was too low.

Chinese law requires that all transfers of state-owned forest resources follow strict evaluation procedures, and conform with State Council earnings distribution regulations.

Cao said some local governments have leased or sold state or collectively owned forests to enterprises at prices lower than market value.

He said the practice seriously hurt the interests of the country and the public. It is "short-sighted," losing focus on the real possibility of long-term damage.

The administration listed the 10 most severe local authority transgressions during the inspection of forests in 203 counties since 2005.

Top of the black list was the communications bureau of north China's Inner Mongolia Autonomous Region, which illegally expropriated 356.14 hectares of forest and felled 6,170 cubic meters of trees to build a freeway.

Next on the list was the forestry bureau of Yuexi County in east China's Anhui Province. The bureau granted the Liuqian Highway Company a license, without proper procedures, which led to an illegal expropriation of 120.68 hectares of forest and the loss of 4,727.2 cubic meters of trees.

Cao said the administration has notified provincial governments and urged them to dole out necessary penalties.

(Shanghai Daily February 8, 2007)