Lobby group the Royal Forest and Bird Protection Society has told Parliament the Environmental Protection Authority (EPA) lacks independence.
The Local Government and Environment select committee on Tuesday began hearing submissions on the Environmental Protection Authority Bill 2010 to establish the EPA as a Crown agent.
It will also transfer the Environmental Risk Management Authority's role in managing the Hazardous Substances and New Organisms Act.
Forest and Bird's conservation advocate Quentin Duthie told the committee on Tuesday the EPA should be established as an autonomous Crown entity, not a Crown agent.
Mr Duthie says ERMA is an autonomous Crown entity, which means it must have regard for government policy but cannot be directed by the Government.
Earlier, the Parliamentary Commissioner for the Environment told MPs the EPA lacks power.
Jan Wright says while the EPA will determine approval for a new household cleaner, it will have no influence over major issues such as fresh water management.
Dr Wright says without more functions and powers, the authority would be unable to play a significant role in New Zealand's environmental management.