The Federation Penal Settlement near Auckland, New Zealand, was the open-air rehabilitation colony where Tom Paris was serving his sentence when Captain Janeway recruited him for Voyager's first mission.
The settlement is seen at the start of Caretaker. Inmates wear ankle monitors and work outdoors rather than sitting in cells, reflecting the Federation's preference for rehabilitation over punishment.
Tom Paris was sent there after being captured on his first assignment for the Maquis. Janeway visits him in 2371 and offers help at his next review in return for guiding Voyager through the Badlands in pursuit of Chakotay's ship.
The colony is referred to again elsewhere. In the Deep Space Nine episode Doctor Bashir, I Presume, Richard Bashir agrees to serve two years in a minimum-security facility in New Zealand for having his son genetically enhanced.