KUALA LUMPUR, Oct 14, 2025 (BSS/AFP) - Millions of hectares of virgin rainforest in Papua New Guinea are under threat due to a contentious permit scheme, environmental groups warned on Tuesday.

A new 56-page report by Malaysian-based forestry watchdog RimbaWatch, the Papua New Guinea Environment Alliance and the Bruno Manser Fonds, states that at least 1.68 million hectares -- an area larger than East Timor -- have been potentially earmarked for deforestation under so-called Forest Clearing Authorities(FCA) licensing.

The FCA is a type of permit issued under Papua New Guinea's Forestry Act intended to facilitate large-scale forest clearing for agricultural or infrastructure projects, but is often misused as a pretext for illegal logging, the environmentalists claimed.

Despite a moratorium on new FCA licenses issued by Port Moresby in 2023, widespread deforestation and human rights abuses, including failure to consult indigenous landowners, continued, they said.

Further investigations revealed that 65 out of 67 FCA licenses were controlled by companies with Malaysian links, many connected to politically influential families in Malaysia's Borneo state of Sarawak, according to the report.

The report called for an immediate suspension of log exports from FCA areas, pending investigation as well as scrutiny by Malaysia's Anti-Corruption Commission graft watchdog to ensure companies acquired concessions lawfully and without illicit activities.

Papua New Guinea is part of the world's third-largest intact tropical forest ecosystem, but at least 15 percent of its forests have been degraded in recent years due to ongoing rapid deforestation.

Indigenous activist Komeok Joe from Sarawak urged Papua New Guineans to reject companies holding FCA licences in order to protect rainforests.

"Instead of allowing the destruction of its forests by Malaysian linked companies, Papua New Guinea should invest more in strengthening legal protection for forests and landowners, as well as in alternatives to destructive and unsustainable logging," added Pamela Avusi, a PNG Environmental Alliance coordinator.