Conservation group WWF let timber companies use its panda brand logo while they were razing some of the world's most biologically rich rainforests or trading in potentially illegally sourced timber, according to the investigative group Global Witness.

The WWF's flagship Global forest and trade network (Gftn), which is part-subsidised by the US government and EU, promotes sustainable timber, bringing together more than 70 international logging companies and large numbers of timber sellers. The WWF says the 20-year-old scheme is now responsible for nearly 19% of forest products bought or sold internationally, with members' combined annual sales approaching $70bn (£43bn).

However, Global Witness's report, Pandering to the Loggers, claims Gftn's membership and participation rules are inadequate, allowing companies to systematically abuse the scheme.

"There are few minimum standards required for companies joining Gftn," says the report. "Meaning even companies involved in highly destructive activities, such as clearing natural forests to make way for plantations or buying wood products from illegal sources can join and benefit." WWF rejects that.

The report, which is billed as a "basic evaluation of the operation and effectiveness of the scheme", looks in detail at three case studies.

One is the Malaysian logging company Ta Ann Holdings Berhad, which has clear-felled rainforest in Borneo equivalent to nearly 20 football pitches a day while a member of the WWF scheme. Investigations by Global Witness show it working legally within the boundaries of a WWF conservation project that WWF bills as, "crucial to the survival of Borneo's endangered species including orangutans and clouded leopards".

Another member of the scheme, UK building supplier Jewson, failed to ensure all its timber came from legal sources for nearly 10 years after joining. WWF said Jewson had changed its timber sourcing practices after problems had been found.

Global Witness also claims that a third timber company, the Swiss-German Danzer Group, has a subsidiary working in the Democratic Republic of the Congo which has been allegedly involved in conflicts with local communities.

"Gftn rules are less stringent than US and EU laws prohibiting the import of illegal timber," said Tom Picken, a forest campaigner at Global Witness in a press release. "When a landmark scheme created in the name of conservation tolerates one of its member companies destroying orangutan habitat, something is going seriously wrong."

WWF said many of the allegations were misleading. "Gftn has made a major contribution to conservation through its ability to engage with industry. Participants make clear commitments that demonstrate they reject illegal or suspicious timber. Trade participants report on an annual basis, and sites are inspected on an annual basis where appropriate."

It also said that only Ta Ann's processing facilities were included in the WWF scheme. "The first year of work with Ta Ann's mills has resulted in improvements in their sourcing profile. As with all participants, longer term compliance with the agreed action plan will be critical to their continued participation."

It added that it was investigating allegations of an incident involving a community associated with the Danzer subsidiary in Congo. "Whilst WWF-drc continues to investigate the case, no further engagement will be taken [with the subsidiary]."

WWF, which is celebrating its 50th anniversary this year, makes about $500m a year from donations and corporate endorsements but has been criticised by other environment groups and NGOs for its links to forestry, mining, tobacco, banks, palm oil, biofuel and other companies. Last month a German public broadcaster accused WWF of being too close to GM food companies working in Latin America. The charge was strongly denied by WWF, which argues that it seeks a "constructive dialogue" with industries. GM soybeans have been certified as "sustainable" by the Round Table on Responsible Soy Association (RTRS), an organisation instigated by the WWF.

Global Witness has called on WWF to rigorously evaluate the scheme with a comprehensive independent audit. "Donor governments using public-sector funds to finance Gftn should make further support conditional on such an evaluation being carried out, along with the implementation of any resulting recommendations being realised," said Picken.