Papua New Guinea demands end to Australia refugee contract

Australia must end or completely rework a controversial multi-million dollar contract to manage refugees stuck in tropical island camps, Papua New Guinea's prime minister demanded on Tuesday.

"I will ask the Australian government to stop this contract forthwith," James Marape told parliament, saying the arrangement should be "reviewed to the fullest, or we ask for this contract to be terminated".

Marape said the Paladin Group's contract to manage facilities on Manus Island holding around 500 refugees and asylum seekers turned away by Australia must include local companies.

The contract, worth over Aus$400 million (US$280) over the last two years, has been the subject of deep controversy.

From 2012 to 2017 Australia ran detention facilities on Manus under a hardline policy of turning back anyone trying to arrive in the country by sea -- including refugees fleeing wars and unrest as far afield as Sudan and Iranian Kurdistan.

But after the PNG Supreme Court ruled the arrangement unconstitutional, Australia handed the camps over to local authorities, with daily management of security and other operations given to Paladin, a little-known private company, under a contract issued without any competitive tender.

The 500 men still on Manus have been in the island camps for at least five years.

In recent weeks the camps have seen a rash of suicide attempts as refugees and asylum seekers try to draw international attention to their plight.

The Paladin contract -- which reportedly does not include food or medical care -- has been backed by Australian home affairs minister Peter Dutton -- who has advocated for an extension.

Marape seemed to shoot down that possibility, at least without significant revisions.

"We don't intend for foreign contractors to operate here in business like security. These are businesses that local companies can participate in, " he told a regular session of question time.

Marape called on his foreign affairs and immigration ministers to convey his message to Canberra "at the earliest".