Two payments of US $10,000 were allegedly paid by check to the Karenni village representative by Te Za, who was then asked “for a favor” in return, the source said. Te Za then allegedly requested the representative sign a blank piece of paper thought to have subsequently been applied to a logging agreement. The incident has been brought to the attention of the relevant authorities in Rangoon who have said they will not investigate, despite the admission of the payment by Htoo Trading.

In reply to the accusations the company admitted paying US $20,000 “to a village representative to upgrade their schools and local clinics.” It denied the payment was made by check and that Te Za made the payment in person.

Htoo Trading has not yet begun logging in the area but has been given permission to do so by the Myanmar Timber Enterprise, the logging license-issuing authority responsible for contracting private logging firms in Burma. As a result, Htoo Trading said it has done nothing illegal.

“It is erroneous to assume that local entities can grant the necessary legal licenses by bribing them for the permission for logging,” Thiha, the brother of Te Za, said in a statement to The Irrawaddy.

However an environmental group operating in Karen State says such allegations have been made previously against Htoo Trading, which it says has a lot to gain from paying off local authorities who can give access to rebel-controlled areas in some cases.

“In Karen areas they find influential people and give money for investment. That way they have access to the areas,” an environmental worker in Karen State said. “Htoo will find delegates to negotiate with local leaders or township leaders to get permission [for logging].” Many armed groups are “pro-Htoo,” he added.

For its part, the Ministry of Forestry has refused to investigate the matter further. In response to the allegations, Aye Min, general manager of the Department of Forestry, said: “It is impossible. We’ve never heard of this kind of problem.”

According to Global Witness, which has extensively documented illegal logging in Burma, the authorities routinely ignore acts of impropriety in the logging industry, often because government officials are directly involved.

In its 2003 report, A Conflict of Interests, Global Witness documents the case of a Taiwanese businessman, working with senior forest department officials, who bought more than 300 tons of illegal teak, worth up to $600,000 on the international market. The report alleges that the deal was uncovered but that the investigation “was quashed from above.”