Australians risk being used "as pawns and bargaining chips in geopolitical games" through hostage diplomacy as the federal government reviews how it tackles such cases.
Those taken captive by authoritarian or corrupt regimes "suffer lengthy imprisonments frequently marked by inhumane treatment and human rights violations that deprive them not only of their liberty but also their dignity".
"They are denied any semblance of justice, unable to access help, and cut off from their families and the rest of the world," a report into how the federal government should address the issue found.
Academic Kylie Moore-Gilbert, who was wrongfully detained in Iran on trumped-up espionage charges, described a lack of support when returning to Australia, with no medical or psychological help provided.
Other former detainees gave similar evidence and outlined hardships for their families.
Dr Moore-Gilbert, who is the Director of the Australian Wrongful and Arbitrary Detention Alliance (AWADA), has spearheaded a push for the government to set up a dedicated wrongful detention envoy to offer more support for people affected.
A clear definition of wrongful detention, a specialist team to handle such cases and greater support for returned Australians leveraged in hostage diplomacy were recommended by the Liberal-chaired Senate committee that examined the issue.
It also recommended greater transparency and reporting on cases of wrongful detention, more visible travel warnings and consequences like sanctions to be a clear threat to nations who use the practice.
Sanctions should target senior officials responsible for the wrongful detention of Australians, including judges who allow or authorise imprisonment, while public attribution should be used to increase deterrence, the report said.
A lack of process and no clear definition of what constitutes wrongful detention meant the number of Australians affected remains unknown, the report said.
The government had to ensure it acted swiftly to implement the recommendations, Human Rights Watch Australia director Daniela Gavshon said.
"The Australian government should be taking a more comprehensive and strategic approach to these cases for the sake of the individuals detained, their families and those whose release has been secured," she said.
The Department of Foreign Affairs told the inquiry there were no instances of foreign governments detaining Australian citizens and then seeking to use them as leverage for a particular outcome.
The committee found strong evidence the practice was increasingly common and there were indications Australians had been wrongfully detained for diplomatic leverage.
The Australian government "must not be afraid to call out and punish cases of hostage diplomacy, particularly those perpetrated by known, serial offenders such as Iran, China and Russia" by prioritising public perceptions of cordial diplomacy, it said.
