Nicotine patches given to prisoners to help them quit smoking have become highly-valued tradable commodities - leading to standovers and bullying.
The finding is contained in a damning Ombudsman report on Spring Hill prison. It also found a third of inmates claimed to have been assaulted and half feel unsafe.
There is also a "pervasive influence" at the prison of new psychoactive substances that mimic the effects of drugs such as cannabis and heroin, the report states, and nicotine patches had become a "highly-tradable" commodity resulting in bullying and standovers.
Spring Hill Prison opened near Meremere in 2007 and holds 1038 male prisoners with security classifications ranging from minimum to high. The prison was originally designed to hold 650 prisoners. Double-bunking was introduced in 2010, and remand prisoners introduced.
Chief Ombudsman Peter Boshier has today released his office's report on an unannounced inspection of the prison, carried out under the Crimes of Torture Act 1989.
Boshier noted weaknesses in record keeping and monitoring needed to assure the safe operation of Spring Hill, particularly in relation to use of force, segregation and management of at-risk prisoners.
Inspectors working with his office found some use of force forms had not been completed properly, and some were missing altogether, and one in five staff at the prison weren't up-to-date with their control and restraint training.
On the latter failing, inspectors were told there weren't enough instructors in the region.
Prisoner responses to a questionnaire and an interview with the prison director revealed there has been an increase in violence at the prison, including prisoner-on-prisoner assaults.
Fifty-four per cent of prisoners surveyed said they felt unsafe in the prison at some time, and 48 per cent felt unsafe at the time of inspection.
A third claimed they had been assaulted in the prison, but only one in three of those assaulted reported the incident.
"Prisoners stated that they had no confidence that any action would be taken," Boshier noted in his report.
"Prisoners were also critical about many aspects of life at the prison, including their ability to obtain sufficient clothing, bedding and toiletries as well as arrangements for access to their property, and mail distribution."
Time spent out of cells was limited for high-security prisoners and those on voluntary segregation and remand, with 39 per cent of prisoners surveyed reporting they had fewer than four hours out of their cell each day.
"This was compounded by having two prisoners in cells originally designed for one, and prisoners being required to eat all meals in their cell," Boshier noted.
The report found there was a range of constructive activities available to inmates, and access to the library and gym was reasonable depending on security classification. The caged exercise area was "stark and featureless".
Chief Human Rights Commissioner David Rutherford said the report highlighted the need for regular monitoring of prisons.
"It is important that we have a detention system that is transparent and accountable when it comes to how they treat some of our society's most vulnerable."
The report also noted the main gangs represented at the prison and the number of affiliated prisoners. The Mongrel Mob was largest with 100 affiliated members, followed by Black Power (80), Crips (50) and Killer Beez (31).
Inspectors observed gang members giving out lunches without supervision, and gang members held positions of responsibility in most units. Without supervision this provided an opportunity for standovers and bullying. Corrections told the Ombudsman's office that there was no suggestion of standover tactics relating to the distribution of food.
Corrections Minister Louise Upston said there was a zero tolerance to violence, and across all prisons the number of assaults was static.
Upston said she was at Spring Hill last week and was told about the standover problems related to the nicotine patches.
"The next step is looking at what is the next generation of nicotine therapy...my understanding is Corrections are looking at that at the moment."
Corrections' chief custodial officer Neil Beales said the report would assist the prison director to improve management of Spring Hill.
Beales said there was no evidence to suggest the prison was unsafe "relative to its size and the mix of prisoners held at the facility". About 3500 inmates went through the prison in the past 12 months and in that time there was just one serious prisoner-on-prisoner assault.
"Spring Hill is one of New Zealand's largest prisons and as such presents numerous challenges for Corrections and our dedicated staff. Following the riot at the prison in 2013 by a group of violent prisoners with gang associations, the facility has made great strides and is delivering on its core responsibility of keeping the public safe, while also making significant efforts to rehabilitate prisoners through industry, treatment and learning activities to reduce reoffending.
"An increase in prisoner numbers has seen a change in focus to the way the prison was originally designed to operate, including housing higher security prisoners who can be more challenging to manage and can present higher risks to staff and each other."
Budget 2017 set aside more than $1 billion over four years to help cope with the country's booming prison population.
The prison population passed 10,000 inmates last year, with the Government planning on spending billions on new prisons including at Waikeria and looking at double-bunking and reopening closed wings.