The Department of Conservation (DOC) is shirking its responsibilities and putting the endangered yellow-eyed penguin at risk in order to build a carpark in Southland's Curio Bay, a volunteer ranger says.
Locals and businesses are also voicing their concerns, with video footage circulating showing trucks and bulldozers next to the nesting penguins.
The South Catlins Charitable Trust is building a multi-million dollar Natural Heritage Centre in coalition with the Department of Conservation as well as other local groups.
It is a push to have more infrastructure in the area to help service the 100,000 visitors Curio Bay has every year.
Sian Torrington, a volunteer ranger for DOC, was worried the construction site to build that carpark was dangerously close to where the rare yellow-eyed penguin, or hoiho, were nesting.
"It's right next to a yellow-eyed penguin's nest. Less than 10 metres, which is the minimum that even a person is meant to be, let alone a bulldozer," she said.
"The chicks that are in that nest may not survive this season."
She said the hoiho was already struggling.
"There's only three breeding nests in that area this year. The number has dropped a lot over the years so each nest is really, really precious."
Ms Torrington has spent the last three weeks in Curio Bay, working with the nests she was concerned about.
She said she had been ignored by her superiors when voicing concerns about the construction site.
"It's not feeling like they're really hearing what is actually happening, which is really disturbing and really strange.
"[I've] been there working really hard to keep human beings 10 metres away and protect this precious species when there's literally a massive building site."
One of the managers she spoke with was John McCarroll - DOC's acting operations manager for the Murihiku district.
He said he had received several calls from residents and businesses voicing concern for the penguins and had another ranger check the nests.
"The nest and bird he's assessed as being in good health. There's no damage to the actual nest itself so he was satisfied with the condition of the penguin and also the nest."
Mr McCarroll had no qualms with the construction going ahead.
"The program of work that they've got coming up is further away from that known site. So based on that there we've allowed for that work to proceed."
Nick Stratford, a local farmer and business owner, said part of the development at Curio Bay would ultimately protect the penguins from another problem - visitor disruption.
"Unsupervised people can just walk right up to the penguins and actually block the access of the penguins to the nests.
"To have that business there and get in the carpark to manage people more effectively in the long run is actually better for the birds."
Mr Stratford said the penguins faced more concerning threats to their numbers than the construction site, such as viruses and environmental issues.