At least one shark dive operator has earned a reprimand from DoC following evidence gathered by a "secret shopper".
Department of Conservation bosses are employing "secret shoppers" to track controversial great white shark dive experiences.
The undercover divers are videoing and taking photos of dive operators to ensure they are following strict rules around how they interact with sharks in the waters off Stewart Island.
And DoC admits secret shoppers are also being used to monitor dolphin and whale watching tours, kiwi viewing, guided walks and adventure tourism.
South Island conservation services director Allan Munn said the unpaid spies were there to catch out rogue operators.
"If we just rocked up in our DoC uniform and said 'Is everything going alright?' they'd [operators] reply 'Yes'.
"But we want to satisfy ourselves that everything is being done right."
At least one shark dive operator has earned a reprimand from DoC following evidence gathered by a "secret shopper".
DoC is reviewing the permit system for shark cage diving after concerns sharks are being encouraged to attack cages, causing permanent injury or behaviour changes.
Last year, DoC issued two-year permits to two existing Stewart Island tourism businesses setting new rules around how and where they can conduct operations.
But some Stewart Island locals and New Zealand First are campaigning to have the permits suspended until a full study is done on the impact the operations are having on the community and the animals.
Reports on cage diving off Stewart Island, released to New Zealand First MP Clayton Mitchell under the Official Information Act, are largely positive of the operators' practices.
However, one report, from a secret shopper, was critical of Shark Experience and captain Mike Haines.
The author said Haines allowed sharks to take baits - contrary to DoC guidelines - and would pull them close to the cage to attract the sharks.
Guidelines stipulate that sharks should not be fed or allowed to take thrown baits, and that the baits should not be recovered in a manner likely to cause a shark to collide with the cage.
"The strategy [used by Shark Experience] seems to make collisions between the shark and the cage inevitable and we observed two violent collisions," the secret shopper said.
"One of the sharks rammed the cage head-on during the first dive. The impact broke the aluminium mesh and shattered one of the signs advising divers not to place body parts outside the cage.
"It occurred very rapidly and violently and shook the cage."
The report said Haines was intent on luring the sharks as close to the cage as possible "without considering the implications for the shark".