Human Rights Watch says the Australian government needs to do something to end the limbo of refugees languishing on Papua New Guinea and Nauru.
More than 2,000 refugees who had sought asylum in Australia remain at centres in the two countries as part of Canberra's hard line towards people who seek asylum by boat.
In a new report, the NGO said many of the asylum seekers and refugees had dire mental health problems, exacerbated by their prolonged uncertainty about when and where they may be resettled.
Human Rights Watch's Australia director Elaine Pearson said Canberra had, so far, struggled to strike resettlement deals, and a one-off deal with the United States looked unlikely to get off the ground.
Ms Pearson said something had to give.
"In 2016 we heard a lot of talk but we didn't see any action, and so what the Australian government really needs to do is to find an immediate solution and we think that starts with Australia."