Nearly one in three lodges monitored in the Marlborough Sounds are breaching rules about how they get rid of wastewater, including one without the necessary resource consent.
A report to the Marlborough District Council's environment committee showed five of the 17 lodges monitored did not meet the required environmental standard for the year from June 2016 to May 2017.
Two were found to be "significantly non-compliant", even after monitoring in the previous year.
Committee deputy chair Gerald Hope said the problem could be more widespread than the results showed.
There had been consistent breaches over many years, he said.
"These are not new stories.
"In my time on council we've seen the issue arise, we've seen abatement notices issued and we've seen improvements to systems, but some continue to fail," Mr Hope said.
The wastewater systems at the Portage Hotel and Punga Cove Resort were non-compliant in the 2015-16 year, and follow-up monitoring revealed that had continued the following year, the report said.
The Portage Hotel had been discharging wastewater to sea since the 1980s under a series of permits, the last of which expired in August 2012, but treated wastewater continued to be discharged to sea unlawfully.
In late 2015, a new permit allowed it to get rid of wastewater direct to the land but in February 2017, it was discovered that a discharge to sea was still happening.
The lodge owner told the council it was an emergency response due to damage to the wastewater system from the November 2016 earthquake and subsequent heavy rain, but it was issued with an infringement notice.
An application to change the resource consent conditions was being processed, the council said.
The council report said that for a number of years the quality of wastewater being discharged to land was below standards set in the discharge permit for Punga Cove Resort.
Some progress has been made on improvements, it said.
Mr Hope said failures sometimes happen in circumstances beyond the control of the consent holder, such as during heavy rain, but it was still unacceptable.
It was doubtful the wastewater was polluting the sea, but it was also doubtful people would want to swim where it occurred, he said.
The council is factoring more monitoring resources into its budget.