Australia has a responsibility to address the humanitarian crisis in the Bay of Bengal because it is a signatory to the UN Convention on Refugees, according to the Indonesian government.
Prime Minister Tony Abbott has refused to offer resettlement to Rohingya refugees fleeing Myanmar on the grounds it would encourage people smuggling.
Asked earlier on Thursday whether the Australian government would help resettle those who have been stranded at sea, Mr Abbott replied "nope, nope, nope".
"I'm sorry. If you want to start a new life, you come through the front door, not through the back door," he said.
But Indonesian Foreign Ministry spokesman Arrmanatha Nasir said Australia could not ignore the humanitarian crisis.
"My point is this: countries that are parties to the convention on refugees have a responsibility to ensure they believe in what they sign," Mr Nasir said.
Indonesia is not a signatory to the UN convention.
However Indonesia and Malaysia have agreed to provide humanitarian assistance to 7000 Bangladeshi migrants and Rohingya refugees still stranded at sea and provide temporary shelter for up to a year.
This was on the provision that the resettlement and repatriation process will be done in one year by the international community.
"I hope all the countries that signed the refugee convention address the issue," Mr Nasir said.
"If you believe it when you sign it, you should act upon it."
Mr Nasir acknowledged there was criminality involved in human trafficking but said you could not simply ignore the humanitarian situation as a result.
He said the Bali process and a meeting with affected countries in the region in Bangkok on May 29 would address the issue of trafficking.
"The issue here is there is trafficking and we have to address it but we can't stop the humanitarian part because we know there is an element of criminality," he said.
Fahri Hamzah, the deputy speaker in the House of Representatives, said Mr Abbott's comments were regrettable.
"Tony Abbott should not put the blame on the asylum seekers. They went on the boats because they were forced to do that. If you look at the map, you'll find out how these people did their journey, they fled from Arakan to the end of its beaches then went down to Thailand, they got rejected and on to Malaysia, got rejected again then more to the south where they were accepted by our Acehnese people," Mr Fahri said.
"Luckily the Aceh people are very generous and helpful."
Hikmahanto Juwana, an expert on international law from the University of Indonesia, said that as a signatory to the convention, Australia was obliged to take in the refugees
"Australia cannot reject helping these people on the waters," he said.
"It is their obligation, unless Australia withdraws from the 1951 convention. So Abbott should not make a statement like that. He should have shown more empathy to countries that are forced to accommodate these asylum seekers, by perhaps saying that Australia will financially help the countries who shelter the asylum seekers while seeking an end to human trafficking."
Professor Hikmahanto said Australia could also use its political influence to put pressure on Myanmar over its treatment of the persecuted Rohingya Muslims.
He said these approaches would have drawn sympathy from Indonesia.
Bilateral relations between the two countries are at a low ebb following the Bali nine executions.
"Indonesia and other countries could have just ignored these people given Australia, who is a signatory country to the UN convention, pushes back the refugees," Professor Hikmahanto said.
"But we didn't do that."
With Karuni Rompies
