Maori fishing quota holders will be exempt from legislation designed to protect migrant workers on foreign chartered vessels from exploitation.
The seven-year exemption has been attacked as "privileged" by Act MP John Banks but defended as essential by the iwi involved.
A select committee report into the proposed Fisheries (Foreign Charter Vessels and Other Matters) amendment legislation says foreign vessels operating in New Zealand waters will have to reflag and register here by 2016, so that New Zealand laws will apply on board.
The bill comes after a ministerial inquiry into allegations of mistreatment and underpayment, which found major changes were required to protect the country's reputation.
However, vessels that hold settlement quota, provided for under the 1992 Sealords Treaty deal, are exempt from reflagging until 2020 if they can show that the quota represents a "significant proportion" of all annual catch entitlement held by the vessel.