Logs from this corner of the rain-forested island of Borneo will end up as plywood, floorboards and furniture around the world.

And some timber barons are beginning to realise the benefits of branding their timber with the globally recognised Forest Stewardship Council (FSC) certificate of approval.

"We are finally resigning ourselves to approaching the reality (of FSC certification)," S.T. Mok, a former forestry department official turned timber industry consultant, told Reuters.

Timber firms' re-think is driven by hard cash more than concerns about distressed orang utans or disappearing cultures among Sarawak's dozens of different indigenous peoples.

And their change of heart is unlikely to impress many of the Penan and Iban forest dwellers protesting timber and plantation firms' working in areas they say are their ancestral lands.

Hundreds of miles (km) to the west, across the South China Sea in the capital Kuala Lumpur, talks on forest management have begun between parties including loggers, government and indigenous peoples' groups.

On the agenda is Malaysian adoption of globally recognised certification under FSC, in place of a home-grown system.

Wood and woodland products carrying the FSC stamp must come from forests managed according to benchmark environmental, social and economic standards.

These include protecting the existing variety of animals and plants, setting up sound management plans and - crucially for Sarawak - improving the economic and social conditions of indigenous groups.

Tough times since Asia's 1997-1998 financial crisis, the sleepwalking economy of former dream market Japan and cheap logs from politically unstable Indonesia all helped change the tune.

Tropical timber prices are half their 1993 peak of around $300 per cubic metre (yard).

"Ironically, the Asian financial crisis was a bit of a blessing. The demand in China and Japan went down, they had to find new markets and the main markets are in the U.S. and Europe," said Mok.

Barney Chan, general manager of the Sarawak Timber Association, is hopeful of agreement on FSC standards but guarded about the market benefits of certification.

Chan points to Malaysian exports of timber and timber products last year, worth 12.2 billion ringgit ($3.2 billion) excluding furniture, with just over half coming from his state.

Of the Sarawak component, some 142 million ringgit's worth went to Europe and 253 million to the United States, where Chan said a "very small" number of environment-sensitive customers wanted timber from certified forests.

Mok said industry scepticism ignored potential demand from FSC enthusiasts like the United States's Home Depot Inc and European retail group Kingfisher , owner of home improvements and electricals business B&Q.

"In the end, it's the mighty dollar that will influence the decision," said Mok.

"What they do not know is the scale of the requirements of these big department stores."

LAND RIGHTS THE ISSUE

But Malaysia's approach to certification has critics, who say the process fails properly to address native land rights issues.

Raymond Abin is executive director of the Borneo Resources Institute, one of 13 Malaysian non-governmental organisations (NGOs) who recently boycotted further talks.

The NGOs complained of tokenism by authorities on land rights issues, saying their repeated objections to the national system had been ignored or left unresolved.

"If they move the way they are moving now, by totally neglecting the land rights issues of the native communities, it would still be a long way for them to go," Abin said.