An executive director of the Māori Council says holding young people in police cells is a breach of Te Tiriti o Waitangi.
The latest figures show almost 200 young offenders were held in police cells for more than 24 hours and in some instances, up to seven days.
Up to 80 percent of those detained were estimated to be Māori.
One of the Māori Council's executive team, Matthew Tukaki, said holding any young person in a cell was wrong.
"Across the hallway from one police cell could be an adult offender who has committed a major crime," he said. "How do we know that child isn't going to hear what is going on or even witness or see what's happening?"
On 1 July, the Oranga Tamariki Act will be amended, and will require that the agency provides a practical commitment to Te Tiriti o Waitangi. That includes ensuring its policies and practices have the aim of reducing disparities for Māori children.
Mr Tukaki said holding a young person in a police cell would be a direct breach of Te Tiriti o Waitangi because it failed to honour the partnership between the Crown and Māori.
The Children's Commissioner, Judge Andrew Becroft, said the government could honour Te Tiriti o Waitangi by outlawing the practice.
"Given the extreme disproportionality of Māori in police cells one thing the government could do in response to treaty obligations, is to remove and abolish that statutory option from the books straight away."
Judge Becroft said that would be a practical first step and could be generally seen as honouring the treaty.
However, Judge Becroft said the rates of Rangatahi in cells needed to be seen in the wider context of Māori disproportionality, which often times stemmed from poverty.
"If we reduce child and family poverty, we will reduce other adverse life experiences including criminal offending," he said.
"I think that's the challenge for the whole country."
Oranga Tamariki Youth Justice System development director Phil Dinham said the agency was working hard to bring down the numbers of young people in the cells, and that iwi partnerships played a big role in that.
But, he said the overall justice system could be improved to more visibly adhere to Te Tiriti o Waitangi.
"We incarcerate 10,000 adults, and those 10,000 adults are often mothers, fathers of children that Oranga Tamariki becomes involved with, so can we as a system do more to stop that route to incarceration? Yes, yes we could."
Mr Dinham said Oranga Tamariki was exploring the idea of opening more community and marae-based residences throughout the country so young offenders weren't held in the cells.
But he cautioned that would take some time, because the agency did not want to take a cookie cutter approach for every town and city they would operate in.
Mr Dinham said he would rather take the time to do things right, than rush in and risk making mistakes.