The Conservation Minister says if it were up to her, a seabed mining exploration permit would not have been approved off the Taranaki coast.
The permit, which was granted to Ironsands Offshore Mining Limited, falls two nautical miles within a marine mammal sanctuary that is home to the critically endangered maui dolphin and the rare southern right whale.
The mining exploration permit is allowed under the Taranaki Regional Council's coastal plan rules.
There are estimated to be between 57 to 75 maui dolphins left in the wild and the permit will cover an area that fall two nautical miles within the 12 miles that make up the sanctuary, which is designed to protect them.
Debbie Ngarewa-Packer, from South Taranaki iwi Ngāti Ruanui, said the iwi was against the decision, as it had not had validation best practice was taking place.
"In one breath we're being told one part of the ocean is off bounds...[but] we're told another part, which is right smack in the middle of a marine sanctuary for maui dolphins is open for extraction business," she said.
Ms Ngarewa-Packer said while the permit was not directly in their area, sediment plumes would come south into Ngāti Ruanui's borders.
Greenpeace labelled the permit as absolutely absurd.
Its executive director and former Green Party leader, Russel Norman, said he was disappointed by the decision made by New Zealand Petroleum and Minerals, which is a division of the Ministry of Business Innovation and Employment (MBIE), but not surprised.
"The question is why the government hasn't stepped in to stop them," he said.
But Mr Norman said all government parties should have an interest in the permit and any legislation in the way needed to be changed.
Conservation Minister Eugenie Sage said if the permit had gone across her desk then she would not have approved it.
"I'm very well aware of the shortcomings of the Marine Mammals Act, that's why I've asked [the Department of Conservation] to do some work in that space, have written and advised Minster [Megan] Woods of the significance of the sanctuary, I know she's aware of that, but MBIE granted the permit," she said.
She said if the exploration permit lead to a request to mine, that would be when she would expect DOC to get involved.
A spokesperson for Ms Wood's office said the decision was made under the very strict criteria of the Crown Minerals Act, inherited from the previous government.
However, they said there would be a full Resource Management Act process with opportunity for consultation if mining rights were applied for.