Australia's largest exporter of eucalyptus woodchips has had its environmental certification stripped and been forced to make an embarrassing public apology over the harm it has caused to koalas.

In July ABC's 7.30 program revealed the sad story of thousands of koalas facing injury or death as vast areas of blue gum timber plantations in south-eastern Australia matured for harvest and the loggers moved in.

Wildlife carers told 7.30 they routinely had to deal with koalas who had suffered "broken limbs, impact wounds, broken backs, severed arm," as well as "dead mothers with joeys still alive".

The 7.30 report triggered a strong denial from the country's largest plantation woodchip exporter, Australian Bluegum Plantations (ABP), which was named in the program.

ABP issued its denial via the environmental certification authority, the Forest Stewardship Council of Australia (FSC).

"FSC... have been advised by Australian Bluegum Plantations 7.30 showed footage of injured koalas in plantations not owned or managed by them," the FSC statement said.

"The footage was old and not involving current processes... to manage the safety of koalas."

Company stripped of environmental certification over 'significant failures' to protect koalas

The chairman of the Forestry Stewardship Council at the time was the chief executive of Australian Bluegum Plantations, Tony Price.

Following 7.30's report, Mr Price had to step aside as FSC chairman, as environmental auditors launched an investigation into his company.

In the past week the forestry giant has been stripped of its environmental certification by FSC and has had to suspend harvesting operations large areas of koala habitat.

Anita Neville from the international environmental auditor Rainforest Alliance says environmental auditors found "significant failures" in ABP's wildlife management.

"Across six areas Australian Bluegum Plantations was found to have what we call major non-conformances, significant failures in their management systems related to how they manage wildlife on their operations," she said.

Damning auditors' report says koalas killed, injured, dying from exposure

The auditors' full report has now been published. It is damning of Australian Bluegum Plantations.

"Given the numbers of koalas that continue to be injured, killed or found in poor health (e.g. suffering from pneumonia due to exposure)... ABP is not taking sufficient steps to recognise the extent of the issue and address the issue," the report states.

Thousands of koalas face injury or death in vast timber plantations. ( ABC TV )

"FSC certification is almost becoming an essential in the forestry industry in order to do business," Ms Neville said.

When asked if he felt guilty that it had taken so long for his company to be forced to do something, Mr Price said the company was "deeply sorry".

"We are deeply sorry for the fact that koalas have been harmed on our property. Deeply sorry," he said.

"We are very very keen to make sure that going forward we do everything we can to avoid harming koalas."

Sacked as chairman, but CEO remains on Forest Stewardship Council board

Last year ABP was named the FSC's Australian Forest Manager of the year.

Though he has now resigned as chairman, Mr Price remains a director on the FSC board.

Mr Price was asked if, having been found guilty of such breaches, it would be fair to step down as a leader of the Forest Stewardship Council.

"We are focused on addressing some findings in an audit that we've just had - and our intention will be to get those things closed out, signed off by the auditor, and have our certification reinstated," he said.

Environmental auditors are paid by the forestry companies they inspect.

Wildlife carers fear penalties will not be neither tough enough nor imposed frequently enough to deter ongoing mistreatment of koalas.

They are also concerned huge numbers of koalas will continue to be left with nowhere to go once their habitat is harvested.

To date the efforts of wildlife volunteers have been self-funded.

Mr Price said his company would help with funding if it was asked to and there is a need.