The Transport Accident Investigation Commission (TAIC) has found a tour boat which caught fire off the coast of Whakatane did not have a fire alarm - but did not legally have to.
The PeeJay V sank in flames as it was returning from White Island in January 2016.
The 53 passengers and seven crew jumped into the water one at a time, and were pulled to safety by other boats.
TAIC said because the boat was not recovered it could not establish the cause of the fire.
However, it did establish the absence of a fire detection system which meant crew had limited warning time.
It found because the fire spread quickly, the crew could not launch the life raft on board, or reach all the life jackets, meaning some people had to abandon the vessel without one.
But Maritime Rules did not require the PeeJay V to have fire detection or automatic fire alarms installed even though it could carry up to 90 passengers and operate up to 12 nautical miles from the coast.
TAIC reinforced a previous recommendation made to Maritime New Zealand in 2003 that existing passenger vessels above 15 metres, or carrying more than 36 passengers should be fitted with fire detection equipment.
The commission also found that the CO2 fire suppression system was not effective, because the area was not fully closed off.
"When the CO2 system was triggered it did suppress the fire, but only for a few minutes, the reason for this was there was four ways for fresh air to enter the engine room after the CO2 had been injected into the compartment," the TAIC report said.
TAIC also recommended to Maritime New Zealand that those involved in the design, installation and use of any fixed fire-fighting systems should fully understand the principals and operations of those systems.
Maritime New Zealand accepted this recommendation and said it would communicate directly with surveyors and other relevant people over the next 12 months.
Its director Keith Manch said they had already begun working on recommendations made as part of a wider review of 40 maritime rules.
"As part of a substantive review of Maritime Rules for ship design, construction and equipment, Maritime NZ will undertake a cost benefit analysis to assess whether to recommend mandatory rules be made by the Minister.
"These rules would require existing restricted limit passenger ships to install fire detection and automatic fire alarm systems, and remotely operated extinguishing systems, in engine rooms," Mr Manch said.
He said the review was expected to be completed over the next few years.
The company White Island Tours has changed hands since the fire.
The new owners Ngati Awa Group Holdings said the report confirmed the previous owners met all Maritime New Zealand requirements.
It said if Maritime implements the changes recommended by TAIC then the company would apply them.
"We retain the utmost confidence in our skippers, crew, current training procedures and the safety of our passenger vessels.
"We would also like to acknowledge the actions of the skipper and crew members in ensuring the safe evacuation of PeeJay V," the company said.