The Malaysian Timber Certification Council told Samling Strategic Corp. Sdn. Bhd. in July to negotiate with the Penan community, which lives in jungles in Sarawak state on Borneo island, the council's chief executive officer Chew Lye Teng said.

If Samling fails to resolve the issue by November the council could revoke the company's certificate of sustainable management. The council is an independent body but many countries in Europe, as well as Australia, South Korea, Japan, and the U.S., require such a seal of approval for timber imports, Chew said.

The dispute is over a road Samling is building in the remote Kelabit highlands in Sarawak to transport timber out of its concession area. Penan villagers have repeatedly put up roadblocks to protest the building of the road and the company's logging work, which they say encroaches onto their land and pollutes their rivers.

Samling needed to allay the villagers' concerns, Chew said, denying the council was pressured by non-governmental organizations, which have criticized the council for certifying timber from the highlands area. He said the council's order was based on a survey earlier this year by an independent inspection company.

A Samling spokeswoman did not immediately return a message asking for comment. Samling Strategic Corp. is part of Malaysia-based Samling Global Ltd., one of the world's largest hardwood plywood makers with about 4 million hectares (9.9 million acres) of forest resources around the world, according to its Web site.

An estimated 15,500 Penan live mostly in poor rural settlements in the jungles. Activists say their livelihood is being threatened by companies that clear land for logging and oil palm projects, and laws do not recognize or protect their indigenous customs and right to land ownership.