Australia's immigration processing centre on Nauru is a "blemish" on the country's good human rights record, according to a United Nations official.
UN special rapporteur on the human rights of migrants, Francois Crepeau, spent three weeks visiting migration centres last year and has published an extensive criticism of offshore detention.
While Mr Crepeau praised Australia's "exemplary" resettlement policies, he said the Nauru centre eroded human rights and contravened humanitarian obligations.
"For all the progress made by Australia in all other areas of life, several of its migration policies and laws are regressive and fall behind international standards," his report said.
Mr Crepeau visited the centres before the Federal Government announced a resettlement option with the United States Government, allowing as many as 1,250 refugees to leave Nauru and Manus Island.
Despite this, Mr Crepeau said conditions at the Nauru centre were unjustifiably punitive and designed to deter people travelling to Australia without proper authorisation.
"This treatment is predicated on the idea that it sends a message to the smugglers and the potential candidates for maritime smuggling operations," Mr Crepeau said.
"However, it is a fundamental principle of human rights law that one person cannot be punished only for the reason of deterring another."
Mental health issues 'rife' in Nauru
Mr Crepeau said mental health issues were rife in the centre, with many suffering from post-traumatic stress disorder, anxiety and depression.
"Many refugees and asylum seekers are on a constant diet of sleeping tablets and antidepressants," he said.
"Australia's responsibility for the physical and psychological damage suffered by these asylum seekers and refugees is clear and undeniable."
Mr Crepeau was due to visit Nauru in September 2015 but cancelled his trip, citing concerns the Border Force Act would prevent him from "fully and freely" carrying out his duties.
Government criticises 'considerable' errors in report
In response to the report, the Federal Government defended its migration policies and said Mr Crepeau had made a "considerable number" of errors of fact and law.
"The Australian Government reiterates that it is not appropriate to prepare one country report in relation to visits to two independent and sovereign nations, Australia and Nauru," the response said.
Officials told Mr Crepeau its border protection policies had enabled the Government to make "a generous contribution to global humanitarian resettlement efforts".
"Australia takes its international obligations seriously," the report said.
"Immigration detention is an important part of strong border control and supports Australia's migration system.
"It assists in managing potential risks to the Australian community — including national security, health and character risks — and ensures people are available for removal."
The Government also defended its mental health services on Nauru, saying support was provided by the Department of Immigration's contractors.
"The department has implemented an enhanced mental health strategy in Nauru to improve the provision of mental health services to transferees and refugees," the response said.