Two environmental activist groups blasted the World Bank over its reported decision to block a probe into its support of industrial-scale rainforest logging.

Greenpeace and Global Witness issued a statement condemning last Friday’s decision by The World Bank Board of Directors not to pursue a review of its lending to industrial logging companies. The review was recommended by an independent audit committee that has been conducting an evaluation of the effectiveness of a decade’s worth of World Bank forestry investments.

“The very survival of tropical forests and the way of life of people who live in them is under threat, and the World Bank is in denial about its contribution to the problem,” said Rick Jacobsen of Global Witness in a statement. “As a public institution tasked with reducing poverty, the World Bank should take very seriously its own evaluators’ finding that its approach is not helping vulnerable forest communities. It’s time for the Bank to stop defending destructive logging practices in the name of development benefits that never materialize.”

The report, developed by the Independent Evaluation Group (IEG) which is comprised of bank staff and outside consultants, is highly critical of the bank’s investments in 345 forestry projects between July 2001 and July 2011. It says that while the bank’s $4.1 billion investments helped protect 24 million hectares of forest and set aside 45 million hectares for indigenous people, it largely failed to achieve its social and environmental targets.

The report criticized the bank for continuing to fund industrial logging, failing to involve communities in decision-making, and supporting approaches where benefits accrued to the wealthy at the expense of the poor. According to IEG, the World Bank mostly ignored the informal sector, which is an important source of income for many forest-dependent people. Conservation projects often forced local people to move against their will.

The bank accepted seven of the recommendations, including the need to support direct forest management by forest-dependent communities, but said it “disagreed with IEG’s recommendation regarding timber concession reform in tropical moist forest countries” and “was not in favor of undertaking a parallel review” on the issue.

Greenpeace International said it was disappointed with the decision, especially in light of continuing problems in the Congo Basin, where logging has been linked to corruption, conflict, and environmental degradation.

“After 10 years of World Bank-led reforms in the Democratic Republic of Congo (DRC), roughly 150,000 km2 of rainforest remain in the hands of poorly regulated international logging companies, while communities are once again being left behind,” said Susanne Breitkopf of Greenpeace International in a statement.

Greenpeace added that “The reform process in the DRC has been marred with irregularities and widely criticized; meanwhile, a law that would support community management of forests has been stalled for years, and the Bank is financing a forest zoning process that is likely to earmark huge areas of rainforest for industrial logging.”

Rainforest logging remains a controversial issue. Supporters argue that well-managed industrial logging operations can generate revenue and employment for local people without substantially degrading the resource base. Opponents maintain that logging, even when conducted selectively, leaves forests more vulnerable to fire, drought, illegal encroachment and hunting, and outright deforestation. They add that industrial logging generates few benefits for forest-dependent people. While certification schemes like the Forest Stewardship Council (FSC) aim to mitigate the impacts of logging, critics say that many of the same issues still apply, especially when logging is carried out in ecologically-rich old-growth forests.

The World Bank has long been a target of environmentalists for its involvement in destructive forest projects, ranging from dams to oil palm plantations to logging. In response to these criticisms, in 2002 the bank launched a new forestry strategy that put greater emphasis on conservation and more sustainable use of forests. Implementation of that strategy over its first ten years was the focus of IEG evaluation.