Coromandel's district council says there is no risk of dumped soil containing arsenic contaminating local waterways.
A Forest and Bird spokesperson said dredged material from Furey's creek near Coromandel town had been taken to a cleanfill dump site despite tests showing a level of arsenic above the acceptable site limit.
Forest and Bird's North Island regional manager Al Fleming said the council pre-empted results and moved the material despite higher than acceptable levels of arsenic.
"It transpired that the results exceeded the Australian and New Zealand Guidelines for Fresh and Marine Water Quality standards."
Test results show the amount of arsenic ranged between 23 and 29 milligrams per kilogram of soil. The low threshold and acceptable limit at the cleanfill site is 20.
At 70 mg/kg half of all freshwater organisms would experience serious adverse effects, Mr Fleming said.
He said the material could get into the water table and should be removed.
"We think it's likely that the layer below is permeable, we say that because a contaminated toxic waste dump site would have an engineered structure which ensured that the clay pan beneath would be impermeable and we understand that's not the case at this site because it's a cleanfill and therefore water could move down through it and into the water table," he said.
"So therefore it's above the low trigger by approximately one and a half times and we're very concerned about that given the proximity of the dump site to the town water supply intake and the affects on the Waiau river."
He said the dump site was immediately above the town water supply intake and he'd contacted the local district health board warning them of the situation.
However, Thames Coromandel District Council area manager Greg Hampton said the levels were not significant.
"There is no risk and never has been any risk to the Coromandel town water supply or the surrounding environment," Mr Hampton said.
He said while they weren't aware of the arsenic levels when the sediment was moved and there wasn't reason to believe it would be a problem.
"We had some pressure on us from regional council to shift the material from its location.
"We were also working within a window of good weather. The material was quite dry and we knew there was rain coming so we basically thought that this was a good opportunity to shift it.
"All of the indiciations that we had prior to shifting it from coastal scientists and from WRC was that the risk of high levels of contamination was low," he said.
"The dredged material from Furey's creek is deposited at an authorised cleanfill, and the material is well contained at that cleanfill within clay bunds.
"It is also important to note that standard operating practices (as identified in the site's Cleanfill Management Plan) for erosion and sediment control should be sufficient for controlling discharge to surface water, namely the Waiau River.
"Further to this I gather that specific control to avoid direct discharge to surface water has already been implemented on site by the formation of a bund around the deposited stockpile."
Mr Hampton said the council was mixing the contaminated sediment with other soil which would get it back to allowed levels.
Mr Hampton also pointed out that high levels of heavy metals like arsenic occurred naturally in New Zealand soils and were particularly prominent in the area.
"This is not an uncommon level of contamination to find on the Coromandel peninsula," he said.
"You will find all of those heavy metals including arsenic throughout most of the soils of the Coromandel and in the harbours and in the streams.
"Let's remember this is simply dredged mud from a stream."