The Waitangi Tribunal has found the Crown failed to protect Maori rights over the Otaiti reef, during a consent bid to leave the Rena wreckage where it is.
An interim Tribunal report into the Crown's dealings with tangata whenua was released on Friday.
The report said consultation over deeds which the Crown signed with the Rena's owner weren't robust or meaningful.
The Tribunal found the Crown failed; to fully consult Motititi Island Maori, act in good faith and uphold its Treaty of Waitangi responsibilities.
In the report, Judge Sarah Reeves, suggested the Motiti Island community would suffer.
" [They] bear the brunt of what seems likely to be significant adverse cultural and environmental effects, if the wreck is allowed to remain on the reef. It is in this light that we consider that the Crown's consultation with them has been neither robust nor meaningful. The consultation process has neither adequately informed the Crown of Maori views, nor adequately equipped Maori to participate usefully or with informed insight in the resource consent process", he said.
Judge Reeves also said the Crown faced a significant, if not insurmountable challenge to fix the situation given its actions to date.
One of the claimants, Motiti Rohe Moana Trust's chairman, Umuhuri Matehaere, said the report vindicates its concerns, and he hopes the crown listens.
He said it was looking forward to immediate engagement with the Crown on the matter.
Mr Matehaere said the application was 1600 pages long and hapu shouldn't be expected to provide detailed comment without assistance from the Crown.
But the head of a collective of Motiti hapu elders, Nepia Ranapia, who wasn't a claimant, said tangata whenua had always had a chance to consult with the Crown.
The Crown said it would carefully consider the report when deciding the Government's response to the resource consent application on July 28.
Submissions on the resource consent close on August 8.
The Waitangi Tribunal's full report on the Crown's conduct when it responded to the Rena hitting the reef will be released at a later date.