The intelligence watchdog has criticised ASIO for "inconsistent and arbitrary" practices by denying some refugees legal representation when completing security clearances.
An inquiry by the Inspector General of Intelligence and Security found ASIO staff were not offering all refugees the right to a lawyer in their interview, based on complaints made by asylum seeker service group, the Refugee Advice and Casework Service.
The RACS said the majority of its lawyers had been denied entry to the interviewing process, which is supposed to be the final stage of the refugee process and can severely reduce their chances of gaining a security clearance.
The RACS also alleged the practice had not been uniform and some lawyers who did attend an interview were then told to sign a confidentiality undertaking, but were not allowed a copy.
The inquiry found ASIO officers had no legal basis to exclude lawyers from interviews. It also recommended visa applicants should be asked beforehand whether they wanted a lawyer present at their interview.
In her findings, Dr Vivian Thom of the Inspector General of Intelligence and Security said she was also concerned complex confidentiality agreements were only given to refugees at the time of the interview, not before, saying refugees had no time to fully understand their obligations.
Dr Thom said the document was incomplete and that without a lawyer, the refugee would have little to no understanding of what it meant.
Human rights lawyer, George Newhouse said he was not surprised by the inquiry, adding that many of his clients had no idea they had legal rights or the opportunity to have a lawyer present at their interview.
“It is my observation that ASIO's processes can take advantage of the weak and vulnerable," Mr Newhouse said.
"To qualify for asylum, most refugees will have suffered torture and trauma in their home countries. They arrive in Australia in a confused, exhausted and vulnerable state. Often they don't speak English or understand the complex questions posed to them by ASIO.
"It does not surprise me to hear that ASIO are denying access to lawyers when ASIO are already taking advantage of the fear, frailty and confusion that most asylum seekers exhibit when sitting for an interview."
Refugee caseworkers have applauded the inquiry.
"The recommendations of the report are great for our clients in that it formalises that our attendance at these interviews can continue and in a more consistent way," Katie Wrigley from the Refugee Advice and Casework Service said.
"We would like refugees to have a confidential, consistent and fair security assessment process and we think it is important that it is subject to independent review," she said.
ASIO has agreed to two recommendations of the inquiry, including specifically asking visa applicants whether they want a lawyer and to provide a copy of the confidentiality agreement before the interview process.