The NSW Forestry Corporation has been accused of breaching rules designed to protect endangered greater gliders - 188 times in eight weeks.
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Conservationists have asked the Environment Protection Authority to shut down active harvesting operations in nine state forests, citing clear evidence of systemic failures.
The watchdog says it's investigating a new audit, released by a coalition of conservation groups on Friday, suggesting almost 80 per cent of the corporation's glider work does not satisfy strict new conditions.
The rules governing pre-harvest surveys for greater gliders and their den trees were changed in February after the corporation admitted looking for the nocturnal species during the day.
The admission appalled experts, given the animals spend daylight hours out of sight, sleeping inside hollow den trees.
The updated rules require night-time spotlight surveys that must begin within an hour of sunset, when gliders typically leave their hollows to feed.
That hour-long window is crucial when it comes to identifying den trees and protecting them from logging.
The Forestry Corporation considers a tree to be a protected den tree if a glider is spotted exiting or entering a hollow.
But an audit of 243 den tree surveys - carried out under the new rules - found 188 occurred at the wrong time, when gliders would have been away foraging.
Scott Daines from South East Forest Rescue carried out the desktop audit and says that's a non-compliance rate of almost 80 per cent, with some surveys commencing in the dead of night.
He says the Environment Protection Authority must ensure the government-owned Forestry Corporation does not destroy den trees as a result of its failure to follow the rules.
WWF Australia conservation scientist Kita Ashman says the approach is a bit like someone deciding to destroy their neighbours' house because the residents haven't been seen walking through the front door.
"But you know they live there," she says.
"There are two brief moments when you can see this species come out of a tree hollow or go back in. If you are surveying outside those times you may as well be looking during the day, which we know they were doing before."
The Forestry Corporation told AAP "it is always our intention to apply the rules" and it has been working closely with the EPA since they came into effect.
"That has included sharing all search and survey data with the EPA over this time."
The corporation says it's reviewing the audit released by conservation groups, which also include Wilderness Australia, the Nature Conservation Council of NSW, and the National Parks Association of NSW.
The EPA has told AAP it is "currently investigating the matters raised by the conservation groups around glider surveys conducted by Forestry Corporation NSW".
Australian Associated Press
