Shellharbour MP Anna Watson has questioned why Shellharbour's wastewater treatment plant was placed "on bypass" last week by Sydney Water.
"The local community is entitled to know why the plant was on bypass, allowing untreated wastewater to flow into our local waterways to pollute our award-winning beaches," Ms Watson said.
A Sydney Water spokeswoman confirmed a "wet-weather bypass" did occur at the plant last week.
"This occurs when stormwater enters the wastewater system through illegal connections and cracks in pipes and can result in increased flows," the spokeswoman said.
"As a result of the bypass, 173 million litres of wastewater was fully treated and 38 million litres was partially treated. All flows were disinfected prior to discharge.
"This process complies with the Environment Protection Authority's licence for the plant."
An EPA spokeswoman said the authority was aware of bypasses at the Cronulla, Warriewood and Shellharbour sewage treatment plants last weekend "due to extraordinary rain events".
"Bypasses occur at wastewater treatment plants when the in-flow exceeds the capacity," the spokeswoman said.
"The EPA continues to work with Sydney Water to ensure that sewerage infrastructure improvements such as leakage and overflow reduction programs are prioritised in areas of greatest benefit to the community and the environment."
The spokeswoman said people should avoid swimming during and at least one day after heavy rain at ocean beaches, and for at least three days at harbour beaches, due to possible pollution.