The government has admitted two Australian citizens were sent to the detention facility on Christmas Island within recent months by mistake.
According to a statement from the Department of Immigration and Border protection, the pair had their visas cancelled under section 501 of the Migration Act.
Under the Act, non-citizens visas will be automatically cancelled if they have received a prison sentence of at least 12 months within Australia, or have been found guilty of a crime involving the sexual abuse of a child.
The department adds that "after it was identified that each individual held dual Australian citizenship, arrangements were immediately made for their release from immigration detention".
Principal solicitor of the National Justice Project, Professor George Newhouse, said it’s "a shocking state of affairs".
"We have a situation where Australian citizens can be wrongfully detained on the whim, on the decision of a bureaucrat or a government minister," he said.
Professor Newhouse said he believes the reasons these cases occur is because the system is "unaccountable", where "you don’t need to be taken before a judge or a court" for visa decisions.
"Mistakes happen when you cut corners and you take away due process," he said.
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Australian citizen Cornelia Rau was held by authorities for 10 months from 2004-2005, later receiving more than $2 million in compensation.
Prior to this, in 2001, Vivian Solon was wrongfully deported to the Philippines, with Australian authorities believing she was an illegal immigrant. Despite the government realising its error in 2003, it did not come to light until 2005.
A 2005 inquiry conducted by former Australian Federal Police commissioner Mick Palmer found the department breached its own guidelines regarding dealing with detainees, and slammed its treatment of Ms Rau as "demonstrably inadequate".
More than 200 cases of alleged wrongful deportation were referred to the then-Immigration Minister Amanda Vanstone for review.
But Professor Newhouse said things have changed since the investigation.
"The government’s policies have just got harder, and they’ve eroded the protections recommended by Mick Palmer," he said, accusing the Australian Border Force of having a so-called “cowboy culture”.
According to the Australian Financial Review, current Border Force head, Roman Quaedvlieg, is on extended leave after an external investigation over his personal behaviour.
The government recently proposed reforms to citizenship, including changing the English language test and introducing a "values" test.
Immigration Minister Peter Dutton, who already has the power to veto decisions on visas by the Administrative Appeals Tribunal, also wants his powers extended further.
Professor Newhouse said the minister wants to be "judge, jury and executioner".
He warned that the situation could get worse.
"We live in a country where Australian citizens can be taken prisoner by their own government, when they’ve committed no offence, and done nothing wrong," he said.
- with wires
