An expelled magistrate of Nauru and a Pacific media watchdog have accused Nauru of breaching its international obligations by introducing a law restricting free speech.

The government has amended the criminal code to make comments deemed in breach of the new amendments of the criminal code an offence punishable by up to seven years in jail.

On Tuesday, Nauru justice minister David Adeang presented to parliament the Criminal Code (Amendment) Bill 2015, which prohibits language "that is threatening, abusive or insulting in nature and has the intention to stir up racial or religious hatred".

In documents sighted by the ABC, the final Act enacted by parliament adds "political hatred" as a trigger for criminal proceedings.

In his second reading of the bill to parliament, Mr Adeang referred to the right to freedom of expression in the Nauru constitution, and said the amendment was in the interests of defence, safety, morality and health.

"We have to appreciate the constructive critique that comes from our people but as of late, this freedom has been tainted with somewhat vile and tasteless words that have no place in our country and amongst our traditional and Christian values," he said.

Under the changes, public statements that are likely to threaten national defence and public order would also be an offence.

Australian Peter Law, who was deported from the island and fired as resident magistrate last year, said the law was aimed at stifling free speech.

"This is one more nail, if you like, in the coffin of democracy in Nauru," he said.

With a national election slated for August 2016, Mr Law said he was concerned human rights could be further eroded.

"What happens between now and then is anyone's guess to where this is going to go," he said.

The Pacific Freedom Forum (PFF) told Radio Australia's Pacific Beat the laws go against Nauru's international commitments.

"The law itself will be causing the most emotional stress right now, I would imagine, for those who want to exercise their freedom of speech," PFF editor Jason Brown said.

"Seven years is enough to put fear into anyone, that's a really chilling effect on freedom of speech.

"Nauru is signatory to all kinds of treaties and international laws that assure the international community that they'll respect human rights including freedoms of speech.

"This obviously goes against all those commitments."

New laws 'not a good look' for Australia

Mr Brown said the new law was also "not a good look" for Australia, which runs an immigration detention on the island and is Nauru's largest aid donor.

"The government of Australia was urged a few years back by the international community to focus more on the Pacific region," he said.

"I don't think suppressing freedoms of speech is what taxpayers and developed countries had in mind when they're paying for aid."

Mr Law said Australia and New Zealand both had a moral obligation to intervene.

"Both Australia and NZ, as donors to Nauru, have very big responsibility to try ensure Nauru can be put back on road to democracy," he said.

A spokeswoman for the Department of Foreign Affairs and Trade said "Nauru is a sovereign nation able to establish its own legal framework".

"Any concerns held by the Australian Government would be raised directly with the government of Nauru," he said.

The ABC has attempted to contact the Nauru government for comment.

The new law comes less than two weeks after Nauru imposed a temporary ban on Facebook, sparking condemnation from refugee advocates and opposition MPs.

They accuse the government of attempting to restrict asylum seekers in detention from communicating with the outside world.

President Baron Waqa rejected claims the Facebook ban was linked to the issue of refugees, saying asylum seekers had "plenty of email and social media options".

About 400 people have been released from the Australian-run detention centre to live in the community after being given refugee visas by the Nauruan government.