Human rights groups have expressed outrage at Australia's decision to automatically send all asylum seekers to Papua New Guinea.
The new agreement, signed by Australia's Prime Ministers Kevin Rudd of and Peter O'Neill of Papua New Guinea, is Australia's latest attempt to stop boats from Indonesia before national elections in which refugee policy is a heated issue.
The Refugee Council of Australia said on Tuesday that the Australian government’s new arrangement with Papua New Guinea would exacerbate the Asia-Pacific region’s challenges with people movement by undermining efforts to improve refugee protection for those who most needed it.
Paul Power, the Council's chief executive, said that Australia could not outsource its Refugee Convention responsibilities to a much poorer neighbour and remain credible in advocating that other nations improve protection standards for refugees.
"By unreasonably shifting its responsibilities for asylum seekers to Papua New Guinea through this Regional Resettlement Arrangement (RRA), Australia’s international advocacy for responsibility sharing has been exposed as hollow and hypocritical," Power said in a written statement.
“This arrangement is without precedent in the world. It cannot possibly be presented as an example of regional co-operation because it is little more than a wealthy country paying a much weaker neighbour to take on its international responsibilities to people seeking asylum.”
Ian Rintoul, the spokesman for Refugee Action Coalition, told Al Jazeera from Sydney on Tuesday that the "right-wing Labor government" was "playing the refugee card" in the lead-up to this year's Australian general election.
Papua New Guinea opposition spokesman Tobias Kulang said his country had no capacity to deal with refugee settlements and said Australia had decided to "dump" asylum seekers.
Analyst Sinclair Dinnen, of Australian National University, said that Papua New Guinea was a volatile South Pacific country that had struggled to maintain law and order and where around 80 percent of 6.5 million residents lead a subsistence life in villages, with little access to health and education services.
"There is a risk there could be resentment towards a group of outsiders, foreigners, who could be seen to be eating up resources which could be used on Papua New Guineans themselves," Dinnen said.
Papua New Guinea is a deeply Christian Melanesian country which is going through a resources boom, including a $15.7 billion Exxon Mobil gas export project, due to start production in 2014 and expected to boost gross domestic product by about 20 percent.
It is fighting entrenched poverty, unemployment and law and order issues and this year reinstated the death penalty and repealed sorcery laws after a string of gruesome "witch" killings and gang rapes.
The Governor of Oro Province, Gary Zuffa, said the plan could fuel hostility.
"If Australia is going to finance that resettlement, then that's going to create a bit of hostility from the local population, because these people will be given funds to start a new business, a new life," Zuffa said.