A draft bill to revamp regulations for native forestry in NSW was slammed as "overly complex" and inequitable, and it failed to address "an inherent conflict of interest" in the oversight of state-owned Forestry Corp.

Documents obtained by Fairfax Media show the NSW Environment Protection Authority found the government's draft native forestry bill unfairly favoured Forestry Corp by remove licensing requirements for the corporation while maintaining them for landholders or industry seeking private native forestry.

It would also leave the corporation with powers unmatched for a state agency, including its protection from third-party challenges such as from environmental groups.

"The inherent conflict of interest for a corporation in having a concurrency role for negotiating, revoking or changing the terms of their licence ... and the removal of third party legal rights, exists nowhere else in NSW legislation or regulation," the EPA's leaked assessment made last December shows.