It is a tragedy that is unfolding every day.

As a result, China has been heavily criticized for importing wood sourced illegally from Indonesia, Russia, Myanmar and beyond. Most dramatic was the discovery in February of the largest illegal wood trafficking operation in the world. Operating between the far-flung Indonesian province of West Papua and the Chinese port of Zhangjiagang, near Shanghai, independent investigators, who caught the perpetrators on film, claim that each month more than 300,000 cubic meters of logs were being smuggled - one shipload every day.

For each ship caught, many more surely slip through to supply China's burgeoning wood market.

At stake are the mightiest forests left on Earth. The orangutan preserves of Indonesian Borneo are being logged illegally to make cheap plywood for use in construction. Pristine rainforests of Sumatra are being cut to make pulp for photocopier paper that is used once and thrown away. The Russian Far East, home to Siberian tigers, is being cleared, often illegally, to supply growing Chinese, European and Jap-anese demand for cheap wood and paper.

Slowly, however, governments are coming together to address the issue. A meeting in early March in Hong Kong highlighted practical steps that could be taken to put the illegal loggers out of business. The Forests Dialogue, an alliance of business and civil society, organized the meeting of 120 leaders from industry, government and environmental groups.

The effort starts with understanding the scope of the problem. Illegal loggers grow wealthy while enjoying virtual immunity by paying off officials and intimidating anyone who gets in their way. Violent conflict is often the result, with opponents threatened, beaten or killed. The offenders flood the market with cheap products and make life harder for companies trying to do the right thing.

Indonesian, Russian and Chinese authorities have vowed to bring the ringleaders of forest crime syndicates to justice, but prosecutions are hard to find.

Why is this illegal trade so rampant and what can be done about it?

Poorly designed laws, low salaries and corruption are the prime drivers of illegal logging. Indonesian officials freely admit that more than half their country's wood industry is illegal. Wood is stolen from community land. The police, military, navy, forestry officials, local politicians and so on up the food chain to senior national figures often benefit from substantial kick-backs. Illegal loggers pay no taxes and have no forest management costs so with the money saved they can afford to pay millions of dollars in bribes.

In Russia, resources for forest law enforcement were slashed following the shift to capitalism. Siberia and the Russian Far East now supply enormous quantities of wood to China and Japan. About one third of this trade is thought to be illegal, possibly more.

Meanwhile, China's appetite for wood continues to grow. An expanding middle class demands newer, bigger homes, infrastructure development continues apace and as businesses grow so does the need for printers, photo-copiers and paper.

Until recently, most wood and paper was produced locally. Following deadly floods in the late 1990s, China's leaders took the bold move of declaring all natural forests in China off-limits to logging in order to protect delicate watersheds. The largest tree-planting program in the world was also launched to create ``great green walls'' to slow the spread of deserts. The State Forestry Administration dramatically shifted course from managing forests for timber to protecting them for environmental services.

As praiseworthy as such con-servation is, reduced Chinese production and increased wood use have resulted in an ever-growing demand for imported wood. Illegal wood imports are also a boon to China's economy. Smuggled logs can be processed into plywood, furniture and other products, generating jobs and helping to keep inflation down.

China is becoming a global leader in the manufacture and export of furniture made from imported wood. Low costs for raw material and cheap labor ensure this furniture is highly competitive on the international market. Indonesian furniture makers complain of a declining market share in the face of Chinese competition.

Senior Chinese officials know that their country is a top illegal wood consumer. They point out they have other, higher-priority, issues to address, including their own tree planting and flood control programs. They rightly suggest that the responsibility for stopping illegal logging rests with producer countries, including Indonesia and Russia.

It can also be tricky for customs officers at ports of entry to spot illegal wood. Indonesia's government has widely publicized the country's ban on exports of unprocessed logs and authorities in importing countries should know that any such logs arriving from Indonesia are illegal. But the smugglers are ahead of the game. Bogus paperwork is often used. Forged documents allow logs from Indonesia to appear as if they have been shipped from Malaysia or Papua New Guinea where log exports are legal. Malaysian and Singaporean companies may also collude through so-called triangular trade, deliberately moving the wood through their ports or switching ships to obscure the country of origin.

Close inspection of the logs and paperwork by trained officers should reveal that something is amiss. But in the bustle of a busy port, such rigor is unlikely.

Officials across Asia have pledged to combat illegal logging and associated smuggling. But progress has been slow. At the groundbreaking Hong Kong meeting, Chinese officials and top executives from mainland wood pro-cessing companies voiced their support for many of the proposals. Recom-mended next steps cover public procurement, law enforcement and cooperation between key countries. Experience in Europe may guide the way.

The largest buyers of wood are governments, with about 20 to 30 percent of the wood imported into any country going into construction projects, furniture for public buildings and other publicly funded uses. Governments can set standards for how that wood is supplied. Britain recently introduced powerful new rules gov-erning public procurement. All UK government suppliers are now bound by contract to ensure the wood they sell is from a legal source - illegal plywood from the orangutan forests of Indonesia can no longer be used for Whitehall office fittings.

Officials of the UK Timber Trade Federation, whose members include the UK's top wood importers, have embraced the changes in government rules. Many of the federation's members have implemented similar policies to apply to all of their business, whether or not it is with government. The domino effect has been impressive. Many other European countries are moving quickly in the same direction.

Governments can also help each other ensure that illegal wood is not moving from exporting countries to importing countries. In Brussels, a program is taking shape to exclude all illegal wood from the European Union's 25 member countries. These governments are voluntarily subject to a licensing system that would involve independent verification by a reputable third party. Wood not verified as legal would not be able to enter Europe.

In exchange, exporting countries are likely to get millions of euros in additional development assistance. The voluntary nature of the accords that result means they are unlikely to be challenged under World Trade Org-anization rules that discourage trade barriers.

European officials hope that China will join their program to help reduce the risk of bad wood being diverted through China to ease its import into Europe.

These moves by the Europeans enjoy deep support from environ-mentalists, as well as those working to reduce the bloody conflicts associated with illegal logging.

Development officials also applaud the measures, as they are deeply concerned about lost government revenues that follow forest crime. About a billion dollars each year in revenue is lost in Indonesia alone, roughly equaling the country's annual support from the World Bank.

Another powerful measure, using existing laws, is to step up enforcement in the importing countries. Timber traders, bankers, insurance companies, investors and others who are involved in the illegal wood trade have a responsibility to ensure that they are handling neither stolen goods (from national parks and native peoples' lands) nor the cash that results from forest crime.

Those involved could be prosecuted for money laundering, tax evasion, forgery and other criminal acts. Germany is now actively pursuing these options. If exemplary prosecutions follow, it will surely send a much-needed shudder through the darker side of the timber trade.

Within Asia, importer countries' efforts to spot contraband wood are hampered by poor communications with customs agencies in exporter countries. Discussions will soon begin to design a system whereby the customs agencies of the key wood trading countries in Asia can share information rapidly about suspicious wood ship-ments. This will be an opportunity for China to help shape a solution to the problem.

Experts at the Hong Kong meeting suggested that efforts target wood supplies coming from countries where the risk of illegal logging is high, and in some cases on particular species threatened by illegal logging. They also proposed rating forest products com-panies for risk of involvement in forest crime, much like Standard & Poor's or Moody's rate creditworthiness.

This would help wood buyers, investors, banks and insurers steer clear of those with links to illegal logging. Skeptics might argue that the higher cost of legal wood will deter China from acting. But importing wood that is cut illegally elsewhere, often with fake documents, is in contravention of Chinese laws, according to an analysis by The Nature Conservancy. It is often associated with tax evasion and money laundering. Those found guilty of such offenses can be punished with lengthy jail terms and fines.

China's economic success and abil-ity to attract foreign investment will partly depend on fair and consistent rule of law. Analysts will look at cases such as the import of illegal wood for signs of the leadership's seriousness in combating graft, smuggling and other serious offenses. With practical policy tools available to dramatically reduce imports of illegal wood, China has a clear choice - become a leader in regional efforts to stamp out forest crime or be branded as the preferred market for stolen wood.

Dr Nigel Sizer is Director of the Asia-Pacific Forests Program of The Nature Conservancy. He lives in Indonesia and helped organize the Hong Kong meeting of The Forests Dialogue. For more information: www.theforestsdialogue.org