The alleged incidents have been happening at a recently opened detention center on Papua New Guinea.
The Papuan government agreed to have the camp on Manus Island in return for foreign aid from Australia.
Would-be asylum seekers arrive by boat in Australian waters after paying notorious people smugglers for their perilous journey across the high seas from Indonesia and Malaysia.
Australia's The Age newspaper reported that a Papua New Guinea national worker at the camp who asked not to be identified for fear of losing his job also alleged G4S -- the security company running the center -- was making huge profits by exploiting local labor and paying meager salaries of about $40 a day.
The guard said Papua police hadn't been informed of the attacks.
Papua nationals working for G4S were asked to go to the single-men's quarters and help remove a badly injured man who had been raped. The victim was a Pakistani national who had been raped by six Middle Eastern men, he said.
''We had to go into the tent and he was there and it was very bad,'' the guard reportedly said. ''There was excrement all over the tent.''
He said the man spent about two weeks in the camp medical clinic before being put back into the single-men's compound where his attackers roamed freely. ''Nothing happened to [the suspected rapists],'' he said. ''It's not a good thing.''
The revelations are an embarrassment for Australian Prime Minister Kevin Rudd. He said the agreement meant successful asylum seekers would be resettled in third-party countries including Papua New Guinea, off Australia's northern coast.
A report by The Australian newspaper said since Rudd announced the policy last week 205 asylum seekers had arrived in Australian waters.
Many of the unseaworthy vessels head for Australia's Indian Ocean territory Christmas Island where the detention center is overflowing with several thousand boat people.
The latest arrivals test the limits of the plan as the government races to expand Papua's Manus Island center by creating a tent city, despite warnings about the abuse of asylum-seekers.
The Australian said a former Christmas Island harbor master and others familiar with sea conditions in the Christmas Island area believed most of the vessels would have started their journey after Rudd announced his new policy to ship asylum seekers to Papua.
More than 520 boat people are being held on Christmas Island for onward transportation to Manus Island -- more than the Manus center can cope with, The Australian reported.
What to do with increasing numbers of asylum seekers is becoming a more prominent issue as Australians are scheduled to vote in a federal election by November at the latest.
Rudd's Labor government is lagging in opinion polls slightly behind the main opposition Liberal coalition.
Liberal leader Tony Abbott announced a plan to appoint a senior military commander as head of a force to go after people smugglers and boat arrival operations.
Abbott's Operation Sovereign Borders plan is for the 12 agencies involved in border protection to come under the command of a single three-star military commander.
He said the plan would be set up within 100 days of a Liberal coalition victory in the federal election.
But lobby group Australia Defense Association dismissed Abbott's plan, a report by the Business Spectator said.
"It isn't conducive to informed public debate ... to militarize the discussion of what remains unequivocally a civil law enforcement issue," the ADA said.
It also may not be conducive to stemming the flow of asylum seekers.
The Age reported survivors of an asylum seeker boat that sank off Indonesia on Wednesday said Australia's threat of being sent to Papua rather than to Christmas Island wouldn't deter them from future journeys.
Police on the Indonesian island of Java said 11 people drowned and 189 people survived the sinking in which passengers abandoned the vessel when it sprang a leak.
The Age reported one Sri Lankan survivor had told Australia's Fairfax Media that the Papua New Guinea center on Manus island was ''OK, no problem.''
''But for me any country in the world is better than going back to Sri Lanka,'' the 28-year-old survivor said.
Notable deaths of 2014 [PHOTOS]