A report into youth residences has uncovered allegations of regular bullying, fight clubs and a "determination" to stay quiet about serious violence and abuse.
The State of Care: A focus on Oranga Tamariki's secure residences report from the Office of the Children's Commissioner said "fundamental changes are needed".
New Zealand's nine youth residences are run by newly-formed agency Oranga Tamariki - previously Child, Youth and Family.
The report found performance of the residences is "middling". While there are pockets of "excellent practice", it's patchy and "there is room for considerable improvement".
While no evidence of systemic abuse was found, there was "bullying and [an] all-too-common undercurrent of violence".
One interviewee told the commission: "There are fight clubs and staff punch young people in the body where it won't mark; they do it away from the cameras."
The claim of staff violence was investigated, and the commission was impressed with the swiftness of Oranga Tamariki's response - but the "results were inconclusive and the claims remain unsubstantiated".
Difficulty investigating reports of violence could partly be down to reluctance for youth to report abuse. "Snitches get snitches," one interviewee said.
The residences are bleak and prison-like, Children's Commissioner Judge Andrew Becroft wrote in his introduction to the report.
"Make no mistake: the youth justice residences look like prisons - youth prisons.
"The care and protection residences are also secure and children and young people are detained there without choice."
Youth in care and protection residences are aged 10-16, and have been placed in care because they are a risk to themselves or others. They are generally younger than those in youth justice residences, have not committed crimes and have usually been victims of abuse.
Youth in justice residences may be on remand or have been sentenced by the youth court to a period of three to six months. They are typically aged 14-16 years, but there may be some 17-year-olds who committed offences when they were 16.
The prison-like physical environment of both care and protection and youth justice facilities "doesn't help". Residences need to be smaller and youth-friendly, and care and protection residences more family-like, the report found.
"When young people are grouped together in institutional settings, sometimes stark and prison-like, it is not surprising that we see young people acting out and learning negative behaviours from each other," it reads.
Judge Becroft said young people in care and protection residences have not committed a crime and should not be locked up in large institutions.
"For the care and protection residences, it may be we should consider phasing them out. I think the tide has gone out on that sort of approach. We need smaller, securer, well-supervised community-based residences," Judge Becroft told Newshub.
In 2016/17 to date, about 500 young people have been admitted to youth justice residences and about 100 admitted to care and protection residences.
The largest youth justice residence visited by the Children's Commission was Korowai Manaaki in Auckland, with 46 beds. The three other youth justice residences visited by the Commission have 30 beds each.
The "conditions don't give them the best chance of becoming productive adults as the mothers and fathers of tomorrow. Most would be much better off in small, community-based centres with proper therapeutic supervision and programmes," the Children's Commission said.
Oranga Tamariki says it shares the same goals at the Children's Commission and welcomed the report.
"The issues are well understood. I absolutely agree there are areas for development to improve outcomes, and work is already underway to address many of the issues raised," Chief Executive Gráinne Moss said in a statement.