By Gideon Long

LIMA, May 30 (Reuters) - More than 12 percent of the mahogany exported by Peru is logged illegally and most of the companies working in the sector are guilty, environmentalists said on Wednesday in a report rejected by the government.

Local campaign group AIDESEP said Peru, one of the world's leading exporters of the timber known as "red gold" due to its reddish sheen and high value, had issued export permits to companies involved in illegal logging.

"At least 20 of the 24 companies exporting mahogany from Peru exported illegally logged mahogany from Peru in 2005," AIDESEP said. "The exports were unlawfully licensed ... and exported to the United States, Europe and other destinations."

It urged importing nations to boycott Peruvian mahogany until the government proved its timber was legally sourced.

The government rejected the findings and said that while illegally logged mahogany may have been exported from Peru in the past, the practice had been stamped out since President Alan Garcia came to power last year.

"Since August last year and during this year so far, not a single cubic centimeter of timber has been exported without the right authorization," said Roberto Angeles, director of INRENA, the government agency overseeing the licensing process.

"We've confiscated all the timber we've found that has been taken illegally from our forests," he told Reuters.

Peru has a flourishing timber industry based in its vast Amazon rain forests, which cover more than 60 percent of its territory. Mahogany exports account for around a fifth of the country's total timber sales abroad.

Each year, the government sets a quota for the quantity of mahogany to be exported. It has cut that quota sharply in recent years amid worries the species faces extinction.

Last year, Peru exported 21,800 cubic meters of mahogany, down more than 70 percent from five years earlier. Mahogany exports were worth $36 million last year.

Since 2003, trade in the wood has been regulated by CITES, an international convention to protect endangered species. It is one of the few types of timber to be granted such protection.

Around 170 countries that have signed the convention are due to meet in the Hague this weekend. AIDESEP is asking them to back a boycott of Peruvian mahogany exports.

Thirteen environmental groups, including AIDESEP and the World Wildlife Fund (WWF), took out a half-page advertisement in Peru's leading newspaper El Comercio this week urging Garcia to do more to protect Peru's mahogany trees.

They say that logging not only threatens the species but is destroying the habitats of indigenous tribes living deep in the forests of the Amazon.

In March this year, INRENA launched a 5-year plan designed to boost plantings of mahogany, which is used to make high-class furniture, yachts and musical instruments.

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