The government should write off the $1.16 billion the UN refugee agency owes it and view it as a 'positive contribution' to a humanitarian crisis, the agency's Hong Kong representative has urged.
The money is owed for the upkeep of Vietnamese boatpeople.
Monique Sokhan also said Hong Kong must enact a clear policy for handling asylum seekers or risk infringing its international obligations.
Ms Sokhan, who was in Sudan before moving to Hong Kong last year to head the UN High Commissioner for Refugees (UNHCR) office, said she was amazed there was no clear refugee policy in a city that prided itself on the rule of law.
'I'm surprised Hong Kong still has a policy of detaining asylum seekers,' she said.
'For such an advanced jurisdiction not to have a clear policy and procedure on asylum is surprising.'
Hong Kong is one of the few places with no refugee crisis and an advanced legal system where the UNHCR is charged entirely with determining refugee status.