It follows the publication of the latest annual report by the State agency overseeing the housing of people applying for refugee status.
IRC spokeswoman Sharon Waters said the system of housing asylum seekers in 35 centres around the country, while preventing them from working, was unjustified on grounds of basic human rights.
Ms Waters also expressed concern that there was under-reporting of serious incidents at such hostels, including child sex abuse and domestic violence.
She claimed the nature of the direct provision scheme made it difficult to implement proper, child protection policies.
The annual report for 2012 by the Reception and Integration Agency (RIA) documented 121 reports of incidents involving children at hostels accommodating asylum seekers last year, including seven cases of alleged inappropriate sexual behaviour.
The ombudsman, Emily O’Reilly, recently warned there was a real risk of another child sex abuse scandal emerging in such hostels, similar to ones which had affected the Catholic Church.
However, the IRC believes the true extent of such incidents is much greater, based on feedback the organisation receives directly from asylum seekers.
“In our experience, they are terrified of making a complaint to either hostel staff or the RIA,” said Ms Waters.
“Many asylum seekers have a genuine fear that they will be transferred, penalised or even deported if they try to raise an issue.”
The IRC has also complained that the hostels are not subject to any independent oversight and inspection regimes outside the aegis of the Department of Justice.
The latest RIA annual report revealed that almost 60% of the 4,841 asylum seekers housed under the direct provision scheme have spent more than three years living in such hostels. The average length of stay is 45 months.
Ms Waters said the IRC welcomed a recent challenge begun in the High Court against the scheme of direct provision which involves a weekly payment of €19.10 to each adult and €9.60 per child.
“There is no justification for direct provision. It fails to provide any semblance of normal family life for people who are having to wait an inordinate amount of time to have a decision made on their application for asylum,” said Ms Waters.
She also expressed concern that there has been no sign of promised legislation designed to streamline and reform the asylum process.