The illegal logging trade in Indonesia is estimated to be costing the government about four billion Australian dollars a year in lost tax revenues. Over the past few weeks authorities have had some success in cracking down on the trade, but environmental groups say putting a stop to illegal logging in the long term is a major test for Indonesia's new President.

Presenter/Interviewer: Gavin Fang

Speakers: Julian Newman, Environmental Investigation Agency Agustinus Wijayanto, Conservation International Indonesia

Fang: In Indonesia's Papua Province illegal loggers are plundering once pristine forests... The London-based Environmental Investigation Agency estimates that more than 300-thousand cubic metres of the hardwood Merbau is being smuggled out of Papua every month. In the process the illegal trade is doing untold environmental damage to one of Indonesia's most bio-diverse regions. Julian Newman from the Environmental Investigation Agency.

Newman: Its having an effect by opening up the forest canopy which causes more flooding it also has an impact on bio-diversity we're hearing that in areas that have been logged worse the number of species are declining but it also has a bad impact on the communities there as well often this logging takes place with the involvement of the military and it involves threats and intimidation so its having a social impact as well and it results in a loss of revenue to the indonesian government which can barely afford to lose that revenue.

Fang: According to Indonesian Government figures released yesterday, illegal logging costs the country more than 4 billion dollars a year in lost tax revenues. President Susilo Bambang Yudhoyono has reportedly instructed his Forestry minister to crackdown on the smuggling trade. And environmental groups say that has helped dry up the supply of logs across Asia over the past few weeks. But Julian Newman says putting a stop to illegal logging over the long term is a major test of the Presidents credibility.

Newman: I think its interesting that the timing of this has come with a new administration with a directly elected president who has been elected on an anti-corruption ticket and obviously the problem of illegal logging is not just about trees its about the way the country is governed and about the rule of law and how resources are managed and also corruption so I think this issue is part of the presidents agenda to try and crack down on corruption.

Fang: The logging trade is linked to wider organised crime syndicates that have representatives in Singapore, Malaysia and ultimately China where the vast majority of the logs end up. But Agustinus Wijayanto from Conservation International Indonesia says the trade couldn't go on without the compliance of corrupt Indonesian officials. He says 58 cases of illegal logging have been brought to the attention of authorities by conservation groups this year, only 12 have been prosecuted.

Wijayanto: In Indonesia wildlife traders can touch the judges and the criminal justice system in Indonesia so we said that our enforcement is so low because just the little cases have been brought to the court so far.

Fang: Catching the Mr Bigs of the logging trade and successfully prosecuting them may yet prove to be to tough for Indonesian authorities. Ultimately what's at stake is not just Indonesia's forests but in the eyes of environmental groups, its reputation.

Newman: We'll reserve our judgment we'll wait and see who's caught in this net and whether it will result in any prosecutions we've seen in other places in Indonesia temporary enforcement operations but they don't last very long and they don't result in any of the major players facing the court that's a key element we need to see some of the high up people who are behind this crime being tried and until that happens it will carry on.