About 98 per cent of breeding occurs on the subantarctic Campbell and Auckland Islands, but there are also small populations on the lower South Island and Stewart Island.
Forest and Bird oceans advocate Anton van Helden said although any sea lion death was unwanted, "that this is a juvenile female that had no chance to even get into the breeding population is tragic for our own nationally critical sea lion".
It again led van Helden to question the efficacy of sea lion exclusion devices, or SLEDs, which are designed to allow animals accidentally captured in nets to escape.
New research was under way to better understand the measures and whether they can be improved.
"It is a sad but timely reminder that there is more work to do and that we need to be ever vigilant, so ensuring that we continue to have observers on boats is critical in informing this work, and underscores the need for the Government to commit to a zero by-catch goal."
Deepwater Group chief executive George Clement said the industry still had "great confidence" in SLEDs as a mitigating tool, supported by a significant body of science and observations.
Over the past decade, total estimated captures based on high levels of observer data had declined to two-three each year, or less than a 10th of numbers at the start of the 2000s, he said.
"They are not a perfect solution and at times an individual will not escape at times, for reasons that are unclear," Clement said.
"However the reduction in captures over the last decade is very significant, important and consistent."
MPI recently reviewed the squid fishery and concluded fishing was not the major factor in the observed population change.
The species' Threat Management Plan (TMP) also recognised no single threat was affecting the population, and that recovery would require mitigation of multiple threats at the four main breeding sites.
But with pup numbers having fallen by 40 per cent in just 20 years, Conservation Minister Eugenie Sage wanted that decline reversed, and for the TMP to result in sea lions thriving and no longer being categorised as threatened.