The Commonwealth National Preventive Mechanism made a pre-announced visit to Melbourne Immigration Detention Centre and Broadmeadows Residential Precinct over three days in April.
The former is a high-security immigration detention facility in Melbourne's north, about 200 metres from the lower-security Broadmeadows Residential Precinct.
In a report published on Thursday, the watchdog identified a rat infestation, inconsistent security arrangements, and shortcomings in the handling of complaints from detainees.
It also found detainees at the Broadmeadows facility were routinely being restrained multiple times a day to access basic services at the neighbouring Melbourne Immigration Detention Centre.
Under a directive from the Department of Home Affairs, detainees must in some cases be mechanically restrained, either by handcuffs or restraint belts, when being taken outside a facility.
The directive was introduced in April after an escape from another immigration detention centre.
But the watchdog said the routine use of restraints on trips between the neighbouring facilities caused significant distress and could dissuade detainees from accessing essential services.
"Urgent action is needed to address the risk of cruel, inhuman and degrading treatment arising from the blanket use of restraints without adequate consideration of individual circumstances," the report says.
It cited the example of a hypothetical detainee who would be restrained 42 times a week to access medication and gym services over several trips a day.
"People in detention told us this practice was distressing, humiliating and disproportionate to their individual circumstances," the report says.
The report raised other concerns, including a rat infestation at Melbourne Immigration Detention Centre, along with inconsistent communication from staff at the facility, and limited recreational activities at both centres.
It also raised concerns about access to specialised placements for detainees with complex physical and mental health needs.
Despite the findings, the watchdog said safety and security conditions had improved at both facilities since its previous visit and they appeared reasonably well maintained.
It made nine recommendations, including improvements to security arrangements, complaints handling, visitations, and activities for detainees.
The Department of Home Affairs agreed with seven and partially agreed with the remaining two, which concerned the use of restraints and visiting arrangements.
In her response to the report, department secretary Stephanie Foster said the department remained committed to delivering "safe, secure and sustainable" detention services.
"I am pleased that many of the matters identified align with work already underway across the (immigration detention network)," she said.