Chairman of the Aboriginal Legal Service NSW/ACT, Bunja Smith, urged the ACT government to consider opening an Indigenous-inmate only prison in Canberra, in an effort to cut high Aboriginal incarceration rates.

The prison in recent years has been plagued by a number of issues, including assaults of lower-order Indigenous inmates by non-Indigenous inmates, many on long sentences for much more serious crimes.

Mr Smith said one way to help avoid such conflict in the overcrowded prison was to consider building a facility that focused on healing Indigenous inmates on remand or serving shorter sentences.

With Indigenous inmates making up 27 per cent of all inmates nationally, and similar levels in the ACT such a proposal could be part of the ACT's wider justice reinvestment program.

"An Aboriginal jail could be based on the Swedish model for a more holistic healing place that actually addresses the reasons why they are there, and stop them reoffending and we could fund it with justice reinvestment monies," he said.

Mr Smith said he believed it would "almost definitely" cut the number of prisoner-on-prisoner clashes by isolating those lower-order Indigenous offenders from more serious criminals.

"If we don't address the root causes, it won't change, and it's clear the punishment model doesn’t work, it’s time to try something else and look at a healing model," he said.

His suggestion follows the Australian Law Reform Commission a fortnight ago urging all governments to work together to implement 35 recommendations that would overhaul the justice system in an effort to cut indigenous imprisonment rates.

That report urged action on a raft of issues, including a national inquiry into child protection, overhauling state bail laws, and more concerted action on justice reinvestment — where money is spent addressing the causes of the high Aboriginal rates.

While Mr Smith said the ACT government was among the leaders on justice reinvestment, he said there was much more work to be done in the territory, particularly re-establishing the ACT's Aboriginal justice centre, which was shut down amid "internal issues" some years ago.

The commission also urged state and territory government to remove prison sentences from the statute books for unpaid fines, which disproportionately affect Indigenous and lower socio-economic communities.

It also urged every state and territory government to complete a review of police procedures and policies and police complaints processes, to address racism and policies that have a disproporationate effect on Indigenous people.

Mr Smith said police also had a "major role to play" and New South Wales was currently developing policies to education officers on such issues.

"Clearly we need the police to be on board with this, we don’t need them to turn a blind eye, but to use common sense that when they’re involved in a situation, to use their common sense as to whether or not a full arrest should be done.

"It’s a fine line because it’s their job to enforce the law, but we know that arrest is really a starting point where Aboriginal people enter the justice system."

Mr Smith also said the indigenous community needed to be empowered to deal with such issues, as "we're the best people to be able to stop our people offending, or reoffending".

But he also said the driving factors behind the high imprisonment rate were deeper, and more needed to be done to recognise the role good health, education, housing and employment played in reducing the rate.

While the ACT government already has a number of justice reinvestment strategies in place the commission recommended other jurisdictions trial, a government spokeswoman said there were no plans to build an Indigenous-specific prison, nor to introduce segregated wards in the Alexander Maconochie Centre.

“Rather, our focus is on reducing recidivism by 25 per cent by 2025 and reducing the over-representation of Indigenous people in the criminal justice system,' she said.

“The Moss Review, which considered the issues of kinship ties and accommodation of detainees, did not make any recommendations about a specific facility for Aboriginal and Torres Strait Islander detainees."

She also said keeping inmates separate was "extremely challenging due to available accommodation and detainee numbers", but decisions considered factors including kinship, "so some detainees may appropriately be located with family members".