The Australian

By Paul Maley and Leo Shanahan.

Nearly 300 asylum-seekers who have arrived since the Gillard government announced its controversial refugee swap with Malaysia look increasingly likely to be processed in Australia, despite a government pledge to deport them to a third country.

As a boat carrying 59 passengers and two crew sailed to Christmas Island yesterday, the UNHCR's top official in Australia, Richard Towle, called on the government to determine the fate of the 274 people slated for deportation, and whose refugee claims the government has refused to process.

"We are troubled by the present uncertainty," Mr Towle told The Australian yesterday. "Unless there is some clarity very soon, there does not appear to be any viable alternative than for them to be processed in Australia."

The warning came as Australian and Malaysian negotiators wrangled over the final details of the memorandum of understanding that will govern the transfer of up to 800 boatpeople to Malaysia. 

Sources said officials were still debating the wording of a single clause in the document. It was not clear which one, but The Australian was told the disagreement was minor and would be resolved quickly. It is understood Malaysian Home Affairs Minister Seri Hishammuddin Tun Hussein is expected to visit Australia to sign the document before Monday, when the Malaysian parliament is due to sit.

The warning from the UNHCR came as the head of Customs and Border Protection Command, Mike Pezzullo, predicted the government's Malaysia deal would stop the people-smuggling model "stone dead".

If people-smugglers "are in a position where people in effect say 'No, I'm not going to waste my money because I'm going to go back to Malaysia and I'm not being resettled at all in Australia', if those conditions are met, then the people-smugglers' model will basically be stopped stone dead", he told The Australian, following a presentation at the US Studies Centre conference in Sydney yesterday.

But in comments that challenge longstanding government orthodoxy about the root cause of the people-smuggling trade, Mr Pezzullo said asylum-seekers were "very, very sensitive" to changes in Australian approaches to the issue.

"Travellers these days are very, very savvy," he said.

"And the people coming into Australia are not actually ignorant of the conditions they are coming into.

"They are very, very sensitive to market information. They are very, very sensitive to changes in Australian approaches."

The government has long maintained that push factors such as war and chaos abroad were the main drivers behind the asylum-seeker surge, downplaying the role of Australian policies, which Labor softened after coming into office.

Mr Pezzullo said asylum-seekers got their information about local conditions through social media and "viral messaging".

"With Facebook and Twitter, these days word of mouth has actually gone global," he said.

Opposition immigration spokesman Scott Morrison said Christmas Island - where the 274 were being held - had become one of the largest "transit lounges" in the country.

"Labor still can't say where they will be transferred or when, in what has become another rolling farce," he said.

Since the government announced it had a deal with Malaysia, six boats carrying a total of 274 people have arrived.

The government had planned to deport them all to Papua New Guinea, as the Malaysians were understood to be reluctant to backdate the agreement.

But with no agreement with PNG in sight, due largely to the poor health of Prime Minister Michael Somare, there is growing acceptance in the government that the 274 will have to be processed here.

Immigration Minister Chris Bowen's spokesman said boatpeople who came after May 7 would be detained "pending transfer to a third country". 

Michael Pezzullo