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It was to have involved retailers being given the option of placing posters in shop windows stating those wearing gang regalia of any kind - including colours and patches - were not welcome.
The posters, which have been printed, were scheduled to be distributed several weeks ago but that has been put on hold.
Waitaki Mayor Gary Kircher said this week the initiative, which involved the Waitaki District Council, Safer Waitaki and police, was "ready to be rolled out" but was yet to be, as he had been told by police gang activity in the town had "gone a bit quiet".
However, he then said that "it looks like they haven't".
Mr Kircher clarified his comments when spoken to by the Otago Daily Times yesterday.
"With the posters, we've accepted what they [police] had to say at the time and we're certainly keeping a close eye on that.
"There continues to be various crimes occurring that suggest they are being initiated because of issues like drugs and potentially gangs, but we really rely on the police to let us know what the case is and act accordingly."
The council would continue to meet police to discuss issues, he said.
Sergeant Tony Woodbridge, of Oamaru, said since the poster initiative was first discussed several months ago, gang-related issues in Oamaru appeared to have subsided.
"Since then, we have agreed that problems have lessened around town with gangs and we have not had members of the public speaking about issues. At the moment we have not been alerted to issues by the public about people wearing gang regalia."
Legislation prevented gang regalia being worn at council-owned grounds such as parks and reserves, and buildings including libraries and council offices.
One person had been spoken to in relation to that recently and was co-operative, he said.
Sgt Woodbridge asserted the poster initiative was "not about infringing people's rights".
"It's just the public see the gang colours and regalia as being intimidating in nature and it's about keeping the public safe.
"While there is gang members and ex-gang members in Oamaru, that have come here to get away from that life, it is not as much of a problem as in other parts of the country. But, it is something we will address if there is some more issues identified to us."
Mongrel Mob, Black Power and the Barbarian Stormtroopers members are known to be or to have been based in Oamaru, as well as families with gang affiliations.
It was not uncommon to see gang members from outside Oamaru either pass through or visit associates, Sgt Woodbridge said.
On Monday, the ODT reported the Gore District Council mayoral office was reluctant to ban gang patches, in part because it wanted to protect its burgeoning relationship with a Mongrel Mob leader, after Acting Inspector Peter Graham, of Invercargill, emailed the Southland Chamber of Commerce and the Invercargill City Council in November last year, to say he was trying to organise signs for inner city retailers asking gang members to remove their patches.