Greenpeace is criticising the Ministry for Primary Industries over its efforts to prosecute people for fish dumping.
The fishing industry has 1500 registered vessels and catches 600,000 tonnes of fish a year.
However, figures released under the Official Information Act show there have been just 28 dumping prosecutions since 2004.
A fisheries inspector's report leaked in May this year said inaction by the Ministry for Primary Industries (MPI) was making dumping and overfishing worse.
A video leaked from one of MPI's fishing investigations, Operation Achilles, showed five out of six boats openly dumping off Timaru and Oamaru. Inspectors estimated between 20 and 100 percent of some quota fish were being dumped every haul.
The ministry earlier said it was prosecuting 300 fisheries cases a year.
However, the figures show dumping charges make up less than 1 percent of that, and just one in five prosecutions are carried out against commercial fishing operations.
More than half of the prosecutions were against recreational fishermen.
Greenpeace executive director Russel Norman said the ministry was giving people the wrong idea.
"MPI mislead the public when they told us that we should be relaxed about all the evidence of fish dumping, because MPI go around and prosecute lots of people, they mislead the public because they weren't actually prosecuting people for fish dumping, mostly they were prosecuting recreational fisherman for other things," he said.
Dr Norman said he questioned the ministry's ties to the fishing industry.
"MPI is basically working for the commercial fishing industry, rather than for the people of New Zealand, what we need is for a department that works for the people of New Zealand to protect the fish stocks."
But in a statement, the ministry said it keeps a close watch on all types of illegal fishing activity and takes action where there was evidence to do so.
"MPI has always acknowledged that commercial dumping occurs in New Zealand waters, and it is a problem, as it is in every commercial fishery around the world.
"We continue to dedicate significant resources to understand the level of the problem and to address it," a spokesperson said.
"The number of government observers on-board commercial fishing vessels has more than doubled in the past 10 years. Last year MPI officials conducted more than 1000 commercial vessel inspections, and MPI observers collectively recorded more than 11,500 days at sea."
Fish dumping prosecutions low - researcher
The lead researcher of a report into fish dumping in New Zealand said official figures showing the number of prosecutions for the crime were extraordinarily low.
Glenn Simmons is the author of a report released earlier this year which showed the number of fish caught in New Zealand waters had been under-reported for six decades.
Dr Simmons said the new figures were a surprise given the scale of the issue.
The ministry set up an independent inquiry in May by former Solicitor-General Michael Heron QC, which is still ongoing.