Rights groups are calling out the Australian government for being “curiously absent” from discussions about further compensation for thousands of families affected by a railway rehabilitation project that it co-funded with the Asian Development Bank.

The bank has borne the brunt of criticism over botched resettlement since its internal watchdog slammed the bank in a January report for failing to ensure the Cambodian government-managed relocation met ADB safeguards.

Its board approved six key recommendations from the watchdog, which included the government setting up a compensation fund of $3 million to $4 million, likely financed by ADB loans.

Last month, an ADB action plan revealed that while the government had agreed to many recommendations, it was refusing to compensate for income lost during relocation or pay for a mechanism to help indebted families with their loans.

The Australian government – which has funded $27 million or 15 per cent of the cost of the project – needs to do more to ensure that long-suffering families receive proper compensation, said David Pred, executive director of Inclusive Development International, an NGO that has lobbied on behalf of affected communities.

“That fact that Australia’s contribution to the Railway project has been fully disbursed does not absolve it of responsibility for the grave harms that resulted from this aid debacle,” he said in an email.

“Yet the Australian government has been curiously absent from discussions about remedial actions following the ADB Compliance Review Panel’s damning investigation report.”

Aside from financing the project, an Australian firm – Toll Holdings – was awarded the contract to operate the railway in a joint venture with Cambodia’s Royal Group. IDI says Australia thus “has a duty to stay engaged” while Toll should also offer its support.

An opinion piece from IDI was published in major Australian newspapers yesterday that called on the government to use its sizeable leverage in Cambodia. But a spokesperson for the Australian Department of Foreign Affairs and Trade said implementing the ADB recommendations was “a matter for the Asian Development Bank and the Royal Government of Cambodia”, not the Australian government.

“Australia is not a party to this process, but as we have done for years, we encourage the parties to ensure fair outcomes for all people affected by the project,” the spokesperson said, adding that Australia welcomed the ADB report.

The spokesperson also said that since 2011, Australia has committed $2 million in extra compensation used for low-interest loans, a social safety net fund, building community centres and improving infrastructure at relocation sites.

“We continue to fund these activities and monitor the resettlement sites.”