Penguin Rescue manager Rosalie Goldsworthy said the critically endangered birds, at present fledging at sea for up to six months, faced a grim return home.
The Kātiki Point sanctuary continues its efforts to protect the birds, but mounting environmental pressures, including disease and pollution, threaten progress.
One looming danger is highly pathogenic avian influenza, which has increasingly impacted seabird populations.
Ms Goldsworthy noted some recent positive signs, such as improved feeding conditions and movement between colonies.
However, she warned these gains were overshadowed by escalating ocean warming and local pollution.
A recent Environmental Defence Society report identified the Otago coast, including Moeraki, as experiencing some of the most extreme marine heat.
The Yellow-eyed Penguin Trust backed the report, which links environmental degradation directly to rising hoiho mortality.
Among local concerns is the Moeraki wastewater treatment plant, established by the Waitaki District Council in 2023.
Ms Goldsworthy said treated water from the plant had turned nearby beaches green and might be harming marine life, including hoiho and the world’s rarest sea lion species.
"There’s a civic responsibility to care for this environment.
"And charging contaminated water into the ocean, into the habitat of really endangered species, it’s not my idea of taking responsibility," she said.
The Otago Regional Council (ORC) audited the plant in 2023 and found significant non-compliance with nitrogen limits.
Council staff also acknowledged irrigation failures, which may have led to over-irrigation and nutrient runoff.
While the ORC’s last tests showed no toxic organisms in the green beach material, and no concerns from recent shellfish or seawater samples, Ms Goldsworthy remains worried about untested contaminants such as E. coli.
"We’ve never seen this kind of runoff before," she said.
She was urging the council to move the septic outflow further from the coast as the issue was "fixable".
Despite ongoing conversations, "we haven’t had any joy at all".
"The council is talking about privatising the water, the delivery of water and the removal of wastewater — this should be a priority action for them."
