Victoria's government-owned logging company illegally cleared 1,000 square metres of protected possum habitat and broke the law in 25 out of 30 logging areas, according to a government-commissioned audit.
The Forest Audit Program report found that in 19 of the 30 areas it assessed, breaches by VicForests had the potential to harm the environment, while the likelihood of environmental harm from breaches in another six areas was "negligible".
The most serious alleged breach involved VicForests illegally clearing 1,000 square metres of protected Leadbeater's possum habitat near Mount Matlock in the state's south.
The report includes a comment from VicForests, in which the agency says the clearing was a result of a GPS error.
The audit focussed on 30 areas, logged in 2019 and 2020, which had the potential for breaches of rules around steep slopes, waterways and threatened species habitats. Because of that risk-based selection, the results cannot be generalised across VicForests' operations.
The assessment measured Vicforests' activities against 169 different legal requirements, and found that on average 6 per cent of those requirements were breached in each logging area, or "coupe".
VicForests said it was "pleased" with the results.
"These findings are a testament to the diligent and detailed work our passionate staff undertake in the forest with commitment and care for the environment," the government agency said in a press release.
"Our staff are committed to continuously improving our practices and strive to demonstrate excellence in all that we do.
"As part of our continuous improvement program, we use findings from these audits to improve our operational practices."
David Lindenmayer, a forest ecologist from the Australian National University, said the findings were bad news.
"If VicForests think it's fantastic that the report shows breaches in two thirds of the coupes, I'd hate to see what a bad report looked like," he said.
Audit follows similar allegations of illegal activity
VicForests, which is responsible for harvesting, selling, and regrowing timber from Victoria's state forests, has been the subject of numerous allegations of illegal activity and failing to regenerate logged areas.
The ABC put a number of additional questions to VicForests about the audit, but did not receive a response by time of deadline.
Professor Lindenmayer has conducted a number of analyses of VicForests' operations, and concluded the agency breaches laws in a "widespread" and "systemic" manner — an allegation denied by VicForests.
In one analysis, he said he found breaches of laws intended to protect water supplies in hundreds of logging areas.
The ABC revealed last year the Office of the Conservation Regulator also found some evidence supporting those claims, but only investigated two logging areas. The OCR found breaches in both areas but didn't take any regulatory action.
The regulator did not investigate the broader claims of widespread breaches, but found those claims could not be substantiated.
An independent review of those investigations commissioned by Victorian Environment Minister Lily D'Ambrosio found that the regulator "did not demonstrate a strong, strategic, preventative and intelligence-led approach" when examining the claims of widespread and systemic breaches.
Professor Lindenmayer said the latest report from the Forest Audit Program was consistent with his findings.
"They found, with a very small audit, what we found with an extensive spatial analysis across whole catchment areas," he said.
A spokesperson for Minister D'Ambrosio said the government took allegations of non-compliance "very seriously".
"That's why we set up the Conservation Regulator back in 2019, to ensure compliance with our environmental protections including during timber harvesting operations," they said.
The Office of the Conservation Regulator, which is tasked with regulating VicForests, said it was investigating the alleged breaches of the law identified in the report and so would not comment further on them.
Hundreds of allegations of illegal logging will never be investigated by the regulator due to a statute of limitations, which requires criminal charges be brought within three years of the alleged activity occurring. VicForests has denied most of those allegations.
Satellite imagery shows logging in the area with the most serious alleged breach from the audit report, where protected Leadbeater's possum habitat was cleared, ceased by February 2020, suggesting the statute of limitations may expire in February 2023.
