Australian Defense Minister Stephen Smith on Tuesday released an independent inquiry report highlighting a culture of predatory sexual behavior and tribalism aboard the Naval supply ship HMAS Success.
The inquiry was commissioned by Defense Force Chief Angus Houston, after allegations of misconduct emerged during the ship's 2009 tour of South-East Asia and China.
It found the lack of action on earlier complaints created the perception that these sailors were a protected species, and Smith said it was "a confronting read".
"The report is not a good read," he told reporters in Canberra on Tuesday.
"The report makes for very sorry and confronting reading about the failure of personal conduct, about the failure of discipline, and the failure of authority and the inappropriate culture aboard the Success."
Retired New South Wales judge Roger Gyles, the author of the report, found the sailors place bounties on one young female sailor.
He said the evidence of competitions to have sex with nominated females, as organized in the engine room, had been part of the folklore of Success since at least 2004.
Also in his report, Gyles concluded that the behavior of the crew of Success was out of control and discipline had broken down while crew members were visiting Asian ports in early 2009.
Two bars in Manila were damaged while sailors committed a public sex act and damaged property in Qingdao of China.
Giles said alcohol was involved to some degree in all incidents, and has called for a reassessment of the culture of alcohol in the armed forces.
"No doubt the considerable volume of alcohol that was consumed by many members of the crew, male and female, was a factor contributing to virtually every untoward incident," Gyles wrote in the report.
He said the command structure failed to discipline transgressions properly, and there had been a culture of silence and mutual protection among marine technical sailors on the supply ship.
Smith said Gyles' document outlined unacceptable behavior that fell below community and navy standards, and such behavior will not be tolerated by the chief of the defense force and chief of navy, and "certainly will not be tolerated by men and women in the Australian community".
Meanwhile, Chief of the Navy Vice Admiral Russ Crane said the Navy is working to change this culture, and is considering a ban on alcohol in certain overseas locations.
"The misuse of alcohol is a common theme in the report. Navy is deeply committed to the development of a new Australian Defense Force alcohol management strategy," he told ABC News on Tuesday after the release of report.
"The misuse of alcohol generally leads to poor behavior ashore. Whether at sea or ashore, Navy people are ambassadors for this nation.
"They must not forget this. Those who behave unacceptably will be dealt through the disciplinary relations."
Air Chief Marshal Houston said the Defense Force will act on all recommendations of the report and warned the personnel named in the report may face serious disciplinary actions.
He added that 26 people had been identified as having been involved in incidents that could require action, and another 23 involved in incidents that required further investigation.