In it's first assessment of the hardline policy announced a week ago by Prime Minister Kevin Rudd, the United Nations High Commissioner for Refugees said it was concerned greater numbers of asylum-seekers could be sent to the poor and developing nation.
"UNHCR is troubled by the current absence of adequate protection standards and safeguards for asylum-seekers and refugees in Papua New Guinea," it said in a statement.
Australia resumed sending asylum-seekers offshore to PNG's Manus Island and the Pacific state of Nauru in 2012 in a bid to deter record numbers of asylum-seekers arriving by boat.
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Hundreds have drowned making the perilous journey.
But under the new arrangement, which the UNHCR said raised serious, and so far unanswered, questions, they will not only be processed in PNG but permanently resettled there if found to be genuine refugees.
Rights groups have already criticised the state of facilities on Manus and Nauru, and the UNHCR said there were also legal consideration