More than half of Papua New Guinea’s log trade is illegal, according to a report by a British think tank, with Hong Kong and Malaysia-based companies responsible for vast illegal shipments, with as much percent of it going to China.

The 28-page report, Illegal logging in Papua New Guinea by Chatham House, home of the Royal Institute of International Affairs, was written by Sam Lawson, an independent researcher and founding director of Earthsight, an organization that specializes in researching and investigating environmental and social crime and injustice.

Greenpeace estimates that Papua New Guinea, perceived as one of the region’s most important green lungs, has lost 60 percent of its forest cover to logging. It is hardly alone. Some 80 percent of total forest cover across the planet has been destroyed or degraded, with the price being escalating climate change, loss of biodiversity and displacement of native communities.

The Chatham House report details licenses being issued or extended in breach of regulations; extensive breaches of harvesting regulations by concessionaires; and, most recently, the abuse of licenses for clear-felling forest for commercial agricultural plantations. Illegal small-scale sawmilling to supply urban markets in PNG is thought to be a significant problem: wood balance analysis suggests that this may account for 10 percent of all harvesting.

While most of the country’s timber is exported as logs to China, a very small percentage of exports are for Europe or the US, with that share declining in response to increased concerns about illegal logging and import controls.

The largest Chinese importer of PNG logs in 2000 was identified a company called Wayne Wood (HK) Ltd. In 2003, the report noted, the company was exposed as being one of the largest buyers of illegal, smuggled merbau logs from Indonesian Papua. The company’s owner, Ngo Cheng Long, was named as the most powerful member of a major international syndicate that had arranged the illegal export of 50 massive cargo ships full of logs between 2001 and 2003.

“The logs were being illegally harvested and illegally exported in contravention of a log export ban; bribes were allegedly paid in order to ensure safe passage,” Lawson wrote. “In addition, one of the PNG companies from which Wayne Wood was buying in the early 2000s was Concord Pacific, a subsidiary of the Samling logging conglomerate, which was later ordered to pay US$100 million in damages for illegal logging.

The biggest challenge is dealing with collusion between corrupt officials and logging firms, Lawson told Mongabay, the popular environmental protection website. "The logging industry in Papua New Guinea is very powerful, while the government is extremely weak...The largest logging firm owns one of the two national newspapers, for example."

The logging industry has managed to skirt some of the strongest community and forest land rights in the world—at least on paper. In practice, according to the report, Papua New Guinea's customary land laws suffer from poor transparency and few mechanisms to mitigate conflict.

"In theory [Papua New Guinea's community rights] should help protect forests, but the reality sadly has been that powerful businesspeople and corrupt politicians have been able to sell the communities short through fraud, bribery and intimidation," Lawson told the environmental organization.

Independent reviews of the logging sector in the early 2000s documented three particularly egregious illegal logging cases, .

”In the largest case, beginning in 1995, a series of licenses were granted for clearing forest to construct a road through an area of pristine forest in PNG between the towns of Kiunga and Aiambak. The company involved – Concord Pacific, a subsidiary of the Malaysian logging giant Samling – was illegally given rights to log a three kilometer-wide strip of forest to make way for the road, although the regulatory limit was just 40 metres. No proper road was ever built. An official review of the project in 2001 found that the permits for successive phases had all been illegally Illegal logging in Papua New Guinea.”

Samlng Group, headquartered in Sarawak with close ties to chief minister Abdul Taib Mahmud, has become one of the world’s largest diversified timber companies and has been accused of environmental degregation in Cambodia, Liberia, PNG and Malaysia itself.

Among other breaches, no consent was obtained from local landowners, according to the report. The project was finally halted in 2003, by which time the forest was mostly logged out, and more than 600,000 cubic metres of logs had been cut and exported. Although in 2011 Concord Pacific was ordered by PNG’s National Court to pay US$100 million in damages, the local subsidiary was wound up and the fine was never actually paid.

In the past five years large swaths of PNG’s remaining forests have been licensed for clear-felling and conversion into agricultural plantations, principally oil palm, according to the report. The number of these licenses increased dramatically after 2007, when amendments to the Forestry Act made it easier to exploit them as a means of gaining access to timber.

The expansion was given further impetus in 2010, when the government announced that all new selective logging concessions would be required to process 100 percent of production prior to export.

“This meant that the only scope for expanding log exports was through clear-felling. By 2011 (these agreements) covering more than 5 million hectares of customary owned land had been issued, representing 11 percent of the country’s total land area and 16 percent of its commercially accessible forests. According to analysis by Greenpeace, the licenses cover 14 percent of PNG’s remaining intact forest landscape, and even encompass 130,000 hectares of protected areas.

“Although almost all harvesting in Papua New Guinea has some form of license and exports are all signed off, the weight of available information suggests that the majority of the country’s timber production is nevertheless illegal in some way,”the report concludes. “Improper license issuance and failure to follow guidelines meant to minimize environmental impacts of selective logging are among the most common problems.

“Deep-rooted problems of corruption and poor forest governance in PNG have been documented in detail on multiple occasions over the past 25 years, yet successive administrations have failed to address them. While PNG has one of the best legal frameworks governing forests and forestry of any major developing country, these laws have failed to protect forests and forest-dependent people because they have not been effectively implemented and enforced.”

Sadly, there is little or no evidence to suggest that logging practices have improved, the report continues, and in fact the problem has probably got worse.