Health workers are required to notify authorities when they suspect abuse or violence.
But Dr David Rosengren from ACEM says the law is murky when it comes to reporting drug traffickers.
Customs authorities say so-called body-packing is a growing global problem.
They are often treated in hospitals with complications from attempts to smuggle packets of drugs internally.
"Doctors would be far more comfortable participating in reporting in these events if they felt there was protection in the law to provide that service," he said.
Professor Malcolm Parker from the University of Queensland says the law should be clarified but authorities run the risk of deterring drug mules from seeking help.
"On the one hand you've got the need to keep patients confidences, on the other hand the perceived need to alert police," he said.
The ACEM says drug trafficking should be included in legislation to protect staff who alert authorities.
Doctors are being urged to discuss their legal options with hospital management.