The United Nations Human Rights Council passed a resolution on Thursday to launch an independent investigation into alleged atrocities in Sri Lanka, despite fierce opposition and allegations of bias from Sri Lankan officials.
Australia is not one of the 47 voting members of the council but could have co-sponsored the resolution if it backed the inquiry.
Twenty-three countries voted for the bill and 12 against and there were 12 abstentions.
Australia did not co-sponsor the bill or make any comments from the floor.
The Australian government's policy is in stark contrast to Britain's reaction, with Prime Minister David Cameron welcoming the resolution as a ''victory for the people of Sri Lanka''.
Labor and the Greens had also voiced their support in the lead-up to Thursday's vote, and Australian human rights advocacy groups had called on the government to do the same arguing the human rights situation in Sri Lanka continues to deteriorate.
In a statement on Friday, Foreign Minister Julie Bishop said the resolution had not adequately recognised the Sri Lankan government's "significant progress" in promoting economic growth in areas of Sri Lanka formerly dominated by the LTTE (Tamil Tigers).
Ms Bishop said the government, which last year gave the Sri Lankan navy two retired patrol boats to intercept asylum seekers bound for Australia, would rather work constructively with the Sri-Lankan government.
''I am not convinced that the resolution's call for a separate, internationally-led investigation, without the co-operation of the Sri Lankan Government, is the best way forward at this time,'' Ms Bishop said.
''In addition, I do not think the resolution adequately recognised the significant progress taken by the Sri Lankan government to promote economic growth and its investment in infrastructure in areas formerly dominated by the LTTE in the north and north-east of the country."
''We should recognise the brutality of the LTTE, a prescribed terrorist organisation, during the 30-year civil war from which the country is struggling to emerge.
''Australia will increase its efforts to work constructively with the Sri Lankan Government, the Tamil National Alliance and other stakeholders to identify ways to promote economic, social and cultural reconciliation.'' (Sydney Morning Herald)