Australia said Sunday it wanted asylum seekers it sent to Malaysia to be treated fairly, but refused to confirm a report that they would be granted the right to work.

The Australian government is expected to this week sign a deal with Malaysia under which the Asian country will take 800 asylum seekers who have arrived here by boat in exchange for the resettlement of 4,000 of their refugees.

malaysia worst refugees place 180609 03 Home Affairs Minister Brendan O'Connor said negotiations were in the final stages, but refused to confirm a report that those shipped to Malaysia would be allowed to earn a living.

"We want to treat people fairly," he told ABC Television.

"This is an historic and innovative approach to, I think, undermining the people-smugglers' model."

The report in the Sun-Herald said that the agreement, the details of which have not been released, would give the 800 asylum seekers a legal right to employment in Malaysia.

"These guys will have a recognised ability to work," an unnamed source told the paper.

The proposed deal, which has drawn criticism because Malaysia is not a signatory to the UN convention on refugees, is part of Canberra's push to develop a regional solution to people smuggling.

malaysia worst refugees place 180609 01 O'Connor said since the deal was announced in early May, there had been a "very significant decline" in asylum seekers making the treacherous boat trip to Australia.

"We want to treat people fairly. We do know that this is an innovative approach and we do believe it will undermine the people smugglers' model which is effectively saying 'if you get on this vessel we will get you to Australia and you will be settled there,'" said O'Connor.   

That had led to people undertaking perilous voyages which sometimes ended in tragedy, he added. 

"Five hundred or so people have arrived, compared with what would have been 1,700 in the same period last year," he said.

"So we are already seeing, I think, impacts as a result of the announcement."

Reaping from human misery

The deal announced by Prime Minister Julia Gillard ( below ) on May 7 has been subject to intense discussions between Canberra and Kuala Lumpur.

NONE O'Connor said the government was putting in place a sustainable solution for what was a complex regional problem.

"Having this approach I think will see a continued decline," he said.

"In the end the people smugglers who seek to reap profit from human misery will not be able to sell the message they are currently selling."

The Australian government, which has a policy of mandatory detention for asylum seekers until their claim for refugee status is resolved, is facing rising tensions in some of its detention centres over the processing of claims.

The immigration department said Sunday about 60 inmates were taking part in a peaceful protest at the Scherger detention centre in Queensland, with about 50 of these engaged in voluntary starvation.

- AFP