"I'm sorry that we did not use the Games to get Guanabara Bay completely clean," Paes said. He added he was "not afraid for the health of any of the athletes. It's going to be fine."
Yachting New Zealand have 18 sailors competing across nine of the 10 Olympic classes this week. A total of 34 countries and 320 athletes are expected to attend.
YNZ high performance director Jez Fanstone said they are taking precautions against what observers have described as brown-black water sometimes capped by green foam.
"The water quality in the bay definitely isn't great and all the locals we have talked to would like to see improvements," he said. "However, a presentation from the local government demonstrated they have put a lot of things in place to prevent and mitigate pollution in the bay.
"As a team, we need to strike a balance. We don't want to let it become a distraction from our main goal, which is preparing and learning as we target medals here in 2016. Whatever this venue throws at us, we need to be able to deal with it and perform.
"No venue we sail at is pristine and we're being cautious about covering any open wounds and general hygiene and cleanliness."
Stopgap remedies are in place. Boats collect floating debris and barriers prevent sofas, wooden chairs and plastic bags entering the bay. Rio officials said three boats retrieved 33 tonnes of solid waste in the first three months of the year. Ten will be operating for the test event.
The problem of untreated human waste is less visible and leaves a stench around the bay. To allay fears, the International Sailing Federation (ISAF) and local organisers are encouraging teams to test the water around the courses.
Environment officials say they monitor fecal coliforms monthly but have been doing it every two weeks since June to prepare for the regatta.
Tides, shifting currents and rainfall mean parts of the bay are cleaner than others, and several race courses are located outside the bay in the open Atlantic.
"We were rather shocked at the state of the water when we arrived last year but, so far this year, it seems better," Olympic 470 champion Jo Aleh said. "Obviously it's far from perfect, but they seem to be making a big effort [to clean up]. We have seen lots of boats out scooping up rubbish, so hopefully it will just get better each year.
"It can't actually be that bad as we are seeing plenty of wildlife. We even had a pod of dolphins come through our race course today - a great distraction from the racing. Our plan is mostly to stay out of the water - it's much faster to sail upright."
Alastair Fox, head of competitions for ISAF, said no health recommendations would be made, although a physician said sailors should be vaccinated for hepatitis A.
Other waterborne diseases such as diarrhoea and gastroenteritis can be picked up in dirty water.
Fox said many sailors were more concerned about floating furniture, submerged rubbish bags and streams of flotsam fouling their rudders, than human waste.
- Additional reporting AP
