The 600 remaining asylum seekers are refusing to leave the protection of the detention centre, after clashes with PNG locals this year.
Tensions between the PNG armed forces and Manus Island asylum seekers are already at boiling point.
Earlier this year, the local military allegedly shot up the detention centre after a fight between soldiers and detainees at Lombrum Naval Base.
Now, with 600 asylum seekers refusing to leave the centre, which will be non-operational by the end of this month, Immigration Department secretary Michael Pezzullo said they would be dealt with at the discretion of the Papua New Guinean government.
Mr Pezzullo indicated the ordinary laws of trespass may apply because PNG was planning to reoccupy the former military facility.
“They don’t have a human right to trespass on a naval base,” he told senators.
Greens senator Nick McKim said the government was trying to “starve out” the refugees remaining in the detention centre by cutting off food, water and power after October 31.
“Don’t you think you’re risking a human rights disaster here and potentially a mass loss of life?” he asked.
Australian not-for-profit Asylum Seeker Resource Centre has come out strongly on Twitter, saying any blood would be on Malcolm Turnbull’s hands.
The majority of the 750 men in the #Manus camp were found to be refugees years ago, yet in limbo they remain. They’ve watched people die in front of them, been threatened and shot at and now to leave them at mercy of PNG forces is a crime. Whatever happens is on @TurnbullMalcolm
— ASRC (@ASRC1) October 20, 2017
The asylum seekers have been protesting peacefully for 84 days, as they cling to hope that the Australian government will intervene at the 11th hour.
— RAC Victoria (@racvictoria) October 22, 2017
What has been organised for the asylum seekers
So far, 54 people have moved to the US under a settlement deal that could see up to 1,250 people settled there.
A further 52 people have accepted a $25,000 payment to return to their countries-of-origin, and are expected to be home by the end of the year.
SBS reports the 600 remaining will be settled in government-run accommodation on Manus Island capable of housing up to 700 refugees. They will be split between two sites in Lorengau, the town where two detainees were attacked with machetes in separate incidents. A third site called Hillside House can hold up to 198 certified non-refugees.
The department has also booked 48 beds in PNG hotels to help fill the gap until construction of the housing is complete.
The total cost of housing the remaining population – including security, food, employment services and healthcare – will cost between $150 and $250 million for 12 months, depending on the final contracts and how many refugees are taken by the US.
“It’s actually quite a tight estimate given the variables that we deal with,” Mr Pezzullo told the Senate Estimates hearing today.
“We are very mindful of costs and value for money,” he said.