The federal court has ruled VicForests breached threatened species laws in a central highlands logging scheme.

A conservation group called Friends of Leadbeater’s Possum challenged logging by the state-owned forestry corporation in 66 coupes in Victoria’s central highlands.

It argued that VicForests breached the code of practice in its regional forestry agreement, meaning its exemption from national environmental laws therefore does not apply.

It called on the court to prevent further logging unless it is approved by the federal environment minister, Sussan Ley.

The court agreed that VicForests breached provisions relating to environmental conservation in the code of conduct, and that both past and proposed logging would have a significant impact on the vulnerable greater glider and the critically endangered Leadbeater’s possum.

Environmental Justice Australia represented Friends of the Leadbeater’s Possum, and its senior lawyer Danya Jacobs says the case has profound implications.

“The logging industry has operated for 20 years as if it doesn’t have to comply with our federal environment laws because of regional forest agreements,” she told reporters.

“This case overturns that position and clearly finds that the exemption can and will be lost where threatened species protections are not complied with.”

The parties to the case have the opportunity to respond to the findings before the court finalises its orders.