Wellington train stations are installing large digital billboards with cameras embedded in them.
The regional council said it did not realise they would have cameras and they would not be activated.
"It was not intended that the units include cameras, and Go Media did not specify the inclusion of cameras at the time of purchase," Metlink group manager Samantha Gain said.
Many billboards host cameras to count pedestrian numbers and even spot the number plates of cars; some are capable of running facial recognition, but companies say they do not identify passersby.
The cameras on the train station platforms were from Swedish company Axis, which has supplied tens of thousands of cameras to China for its Skynet and Sharp Eyes surveillance projects across many cities.
At least 10 big billboards have begun working at Wellington's central station.
There are a total of 36 at nine stations - 16 in Wellington, six in Waterloo, three each at Petone, Porirua and Paraparaumu, two at Upper Hutt and one at Melling, Tawa and Johnsonville.
"During shipping, we became aware that camera hardware was included in the units provided," Gain said.
"The cameras in the units installed across the Wellington rail network are not physically connected and cannot be activated.
"Go Media will also look to cover the camera apertures to provide further assurance that the cameras are not a functioning part of the units."
Go Media declined to comment.
Axis told RNZ it did not provide facial recognition technology.
However, online marketing advertises how facial recognition can be added to them.
Axis said it had a privacy shield tool that "masks the identities of individuals in live and recorded video".
It has defended itself against criticism from Amnesty International that its cameras in China - some with a range of 300-400 metres - were supporting a state system that oppresses minorities such as the Uyghurs.
Axis told RNZ that since 2020 it had scaled down its sales operations in China, focusing on international companies operating there instead.
It only developed "solutions for legal, responsible and ethical usage".
"This means we oppose our products being used in ways that could violate human rights.
"At the same time, we are aware that our products, like many other technologies, can be used in less desirable ways, and we work constantly with balancing the need for safety and security with individuals' need for privacy," it said in a statement from Sweden.