Working conditions were described as "modern-day slavery," while forests were effectively being "logged out," the international non-profit organisation said in its report "Logging, Legality and Livelihoods in Papua New Guinea".

The report summarises findings from five independent reviews of the timber harvesting industry conducted since 2000 for the PNG government and the World Bank.

The government of the half-island state off the northern tip of Australia received 30 million dollars in cash revenues from logging annually and official inspections at export only ensured export taxes were paid, the report said.

"Thus, official export documentation merely launders the unlawful timber into legitimately-produced exports accepted by governments and retailers worldwide," it said.

PNG's forest industry is mainly focused on harvesting natural forest areas for round log exports, with little plantation production and a limited number of processing facilities.

"The sector is dominated by Malaysian-owned interests and the primary markets for raw logs are in China, Japan and Korea," the report said. "Many of the logs are processed in China for consumption in Europe and North America."

Corruption was an underlying theme in the independent reviews, it said.

"Corruption has a devastating effect on the living standards in the area as well as the long-term benefits for landowners," said Kerstin Canby, Forest Trend's program manager for finance and trade.

The government needed to support operations which were beneficial to both local landowners and the country or "risks having the international community boycott all of PNG's exports," he said.

The report was released on the day environmental group Greenpeace launched an initiative to establish a "global forest rescue station" in a remote part of PNG to support tribal rights against the logging industry.

Greenpeace volunteers from around the world would live and work alongside local landowners and eco-forestry trainers at the station at Lake Murray in Western Province, the group said in a statement. They would help three Lake Murray tribes establish their rights over approximately 300,000 hectares (740,000 acres) of tribal territories by identifying, marking out and mapping their boundaries.

"We want to say no to loggers who come in and destroy everything," Kuni clan leader Sep Galeva was quoted as saying.

"We want to do small scale logging by the landowners in a way that is sustainable and environment friendly."

Less than one percent of forests in Papua New Guinea had any form of protection and more than a quarter of a million hectares of primary forest were lost each year, Greenpeace said.

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