By Eoin Blackwell, AAP 

Greenpeace has blockaded a Chinese ship carrying what the environmental group says are illegally-acquired logs from the Papua New Guinean island of New Britain.

The Chinese vessel, the Fu Tian, is docked in a lagoon near the village of West Pomio, where as many as 200 landowners have gathered to protest the logging activities of Malaysian owned company Rimbunan Hijau (RH) and its subsidiary, Gilford Limited.

Greenpeace activists on board the Esperanza ship painted "Stop the Land Grab" on the side of the Fu Tian early on Monday morning, Greenpeace forest campaigner Paul Winn said.

"The Fu Tian should be departing for China soon and we're trying to slow that down," Mr Winn told AAP.

"We still claim that this is unlawful logging."

He said the ship was carrying as much as 4000 cubic metres of logs from the West Pomio area and was making its eighth trip this year in defiance of a government order issued by former acting prime minister Sam Abal.

In a statement, RH condemned the Greenpeace protest, saying the group was obstructing a palm oil project.

"There is no justification for Greenpeace's actions in Pomio today," RH Corporate Policy Manager Axel Wilhelm said.

"The palm oil project is supported by by the majority of landowners in the area, based on a Special Agricultural Business Lease (SABL) in place under which all correct procedures were followed."

SABLs are currently being investigated by a Commission of Inquiry amid allegations they are a cover for clear-fell logging.

New Guinea Islands Police Commander Anton Billie said Greenpeace's protest was illegal because the group had failed to seek permission from the provincial police commander.

"If they fail to seek permission, then what they are doing is illegal and they should not go ahead and do it," he said.

"Greenpeace has no right to stop it. They stop it and the police will stop (them)," he said.

However, as of Monday afternoon the police had not moved on the Greenpeace vessel.

On Sunday, the environmental group denied a request by armed police to board the Esperanza.

Later the same day, pro-logging landowners had scared some of the 200 protesters back to their villages, Greenpeace spokeswoman Jessa Latona said.

"The pro-logging landowners and the loggers... scared the 200 anti-logging villagers off back to their villages," she said.

"They were peacefully protesting but the pro-logging landowners were aggressive and many were drunk."

No one was hurt, she said.

A fortnight ago, protesters from villages in and around West Pomio accused police of harassment and abuse, saying police hired by RH beat them and removed a roadblock set up to protest Gilford Limited's acquisition of land last year.

Police Commander Billie confirmed on Monday that RH had paid for a police squad to fly from Rabaul to West Pomio.

"That is the case and they are still there," he told AAP.