Use of the antibacterial spray was granted consent by the Environmental Protection Authority (EPA) and the Ministry of Primary Industries (MPI) who then set the rules surrounding its use.
Kiwifruit marketing organisation Zespri then approved its use under its crop protection programme up until December 1 last year.
The reason for the time limit was because after December the kiwifruit vines begin to flower, which could leave the spray's residue on the fruit, Mr Courtney said.
"Only about 10 per cent of the industry actually applied to use it at least once and clearly the vast majority of those people used it within the rules.''
KeyStrepto was allowed to be used only up to three times before December and only as a spray, never as a direct injection.
On March 9 a letter was sent to every grower outlining the declaration process for those who may have used KeyStrepto outside the rules for permitted use, Mr Courtney said.
"We wanted to encourage people to come forward and inform us where they had not followed the rules.
"The point was made in the letter that those who came forward would likely be viewed differently than those who did not and were then caught out by the 100 percent residue testing programme, but also said that ultimately it would be for MPI to decide what penalties would apply to growers.''
The letter from Zespri's chief executive was sent to all kiwifruit growers using the Zespri brand name.
In the letter it was outlined that MAF (now MPI) has the discretion to prosecute those who knowingly applied streptomycin other than in accordance with the approved protocols or sell kiwifruit that they knew has been treated with or exposed to streptomycin other than under approved conditions.
"The ministry has advised that, where growers fail to voluntarily disclose use which may put the industry at risk, they reserve the right to take a hard line approach, as outlined in the ACVM Act 1997.''
Possible punishments include fines of up to $150,000 for companies and imprisonment for up to two years for individuals.
The letter included a declaration for growers to fill in, disclosing whether they had used the antibacterial spray, and whether they had used it illegally.
The letter warned that growers who did not disclose illegal use of KeyStrepto would be found out through residue testing.
Mr Courtney said a number of growers came forward following the letter and admitted to using KeyStrepto outside of its authorised use, and had since had their fruit taken out of circulation to be "dropped onto the ground and mulched.''
The vast majority of the country's crop - more than 99.5 per cent - was cleared for export.
