Vanuatu forest authorities have banned Vanuatu Forest Industry Ltd (VFIL) from exporting logs while they investigate landowners' complaints that trees were cleared without permission on the island of Santo.
Workers in uniform, driving vehicles without registration plates, were clearing land during a three-month period in which two prime ministers were voted out in quick succession, said the residents, one of whom accused the Chinese firm of theft.
The export of round logs is banned in Vanuatu, although a government inquiry in 2021 found endangered rosewood being illegally exported to China, where it is prized for furniture.
China is competing with the United States and its allies to win favour with countries in the sprawling Pacific Islands.
Vanuatu says it has a non-aligned foreign policy, although Beijing is its largest external creditor.
A Chinese embassy spokesperson said there was "no connection between these workers and Chinese military" and that VFIL was a private company.
"If the company violates Vanuatu's law, we believe the Vanuatu government will handle with this issue properly and professionally," he said.
VFIL's director, Li Hongqi, said he supplied the uniforms from China because they were suitable for wearing in the forest, and he required Chinese workers to wear them because it was "easier for me to facilitate management".
The company stopped all work in the area after the export ban, Li said by email.
"Our company will strictly abide by the laws of Vanuatu to address those problems," he said.
VFIL, which was registered in Vanuatu in 2019, got a salvage licence in September 2020 to harvest trees knocked down in a cyclone and pledged to build a local wood chip mill to process them for paper, but the mill was never built, government correspondence seen by Reuters shows.
Landowners complained in October and November to police and authorities in Vanuatu's capital Port Vila that the company was still cutting and clearing, using trucks that did not display registration, according to the correspondence and interviews with police and residents.
Li said the company did not log other trees, but farmer Denis Savoie said it had cut down trees on his land in Luganville despite the agreement.
"They ended up slashing all the trees - we tried to stop them," Savoie said.
"They have stolen trees."
In addition to the environmental issues, Savoie and two other Santo residents expressed concern about the workers' blue marines-style uniforms in a town that was a US base in World War II and where China expanded a wharf in 2017, making it large enough to dock warships.
"It is concerning and odd that people in the full uniform of the People's Liberation Army-Navy are clearing forest," said Anne-Marie Brady, a political science professor at New Zealand's University of Canterbury.
Brady viewed photographs, provided by Reuters, of a group of Chinese men in blue camouflage clothing sitting with machinery in the forest and a row of tents.
Li identified the men as his workers.
"It is also concerning the contract was to take fallen trees and they are cutting pristine forest, and now they are clearing the land," she said.
Li signed a deal in 2019 - before Cyclone Harold hit the following April - to build a rosewood processing plant in China's Guangxi province for Vanuatu timber exports.
He signed another in July 2020 to supply Vanuatu rosewood to China's furniture industry.
Li, who said he lives in NZ, told Reuters the agreements were made in China but that "this co-operation has been terminated".
