An environmental group says a decision by the Environmental Risk Management Authority about the use of the toxic fumigant methyl bromide is a sham.
The authority says it will be 10 years before companies using the fumigant to treat timber exports are legally required to prevent it escaping into the atmosphere.
It says, however, that the public's exposure to the gas can be reduced by other measures, such establishing minimum buffer zones.
The environmental group Guardians of the Sounds says the decision favours the companies involved rather than easing the fears of the community near the port of Picton. Spokeperson Peter Beech says the authority has not taken residents' concerns seriously.
He says the gas, which is used in the treatment of timber exports as a biosecurity measure, and also protects New Zealand from the invasion of pest species, is a deadly neurotoxin.
A spokesperson for the Soil and Health Association, Steffan Browning, says the group didn't expect an outright ban.
But he says the timeframe for the recapture requirement should have been five years rather than 10, and the buffer zones for communities could have been larger.