Australia has a higher proportion of prisoners in privately run jails than any other nation in the world thanks to its asylum seeker policy, a report says.
It says the population in Australia's privately run prisons has increased 95 per cent in the past 15 years.
Australia has the most detainees in profit-driven facilities because its detention centres for asylum seekers are run by private companies, the report says.
The report, International Growth Trends in Prison Privatisation, said 19 per cent of the nation's 28,711 prisoners were in privately run facilities in 2011.
According to the report, prepared by a US lobby group called The Sentencing Project, Australia's first private prison was opened 23 years ago and there has been an increase in similar facilities ever since.
It said that, as of 2011, there were more than 5500 prisoners in jails managed by for-profit companies.
While prisoners in privately run prisons increased more than 90 per cent since 1998, the number of prisoners in state-run jails grew by 50 per cent and the total prison population increased by 57 per cent.
All the ACT's prisons are managed by the territory government while the privately run facilities are in New South Wales, Queensland, Victoria, Western Australia and South Australia.
A criminologist at the University of Canberra, Lorana Bartels, said historically the main criticism against privately run facilities was that they focused on maximising profits.
One of the more controversial cases in Australia involving private contractors was the death of an Aboriginal elder in Western Australia who died in January 2008, after being transported hundreds of kilometres by a private prisoner transport company.
"Some questioned whether this would have happened if it was a government-run prisoner transport van,'' she said.
Fairfax Media reported in April that private security company Serco's contracts with the government had blown out by $1.5 billion, as Australia's border protection system became strained because of increased flows of asylum seekers.
It was reported one Serco contract, for running Australia's detention centres, was originally valued at $279 million in 2009. Three amendments later, it was worth $1.67 billion. A contract for residential housing and immigration transit services grew from $44 million in 2009 to $195.4 million this year.