The UN stresses criminals cannot claim refugee status
He was speaking at the opening of a two-day conference in Geneva attended by representatives of 156 states, including nearly 80 ministers from signatories of the 1951 Refugee Convention.
There are currently about 22m refugees in the world.
The convention has been signed by 141 states since it was established 50 years ago and Mr Lubbers said it was "no less important today".
He praised it for helping "millions of people throughout the world" to find safety and build new lives.
'Fear and mistrust'
Governments, however, now tended to treat asylum-seekers as a burden, lumping them together with "economic migrants".
"We see governments refusing to accept refugees because they are so many, refusing to accept them because they are
mixed up with economic migrants, refusing to accept them because of a lack of burden-sharing among states," Mr Lubbers said.
Government policies were "often based on fear and mistrust" and political leaders were failing their countries if they fuelled "anti-foreigner and anti-refugee sentiments".
The UN high commissioner voiced concern at the continuing global traffic in human beings but he argued that restrictive government policies forced many asylum-seekers to turn to the smugglers.
"Unless governments do more to find lasting solutions for refugees, more of them will fall into the hands of human smugglers, traffickers and criminal networks," he said.
"Who is then fuelling crime? Fleeing refugees or failing governments?"
Unfair share
The Refugee Convention was established to cope with the huge numbers of people displaced in Europe by the Second World War.
Mr Lubbers appealed for states to do more to share their responsibility for refugees.
He contrasted the difficulties Pakistan and Iran experienced coping with millions of displaced Afghans with calls by the EU and states such as Australia for refugees to be confined to their own regions.
He said there was a paradox:
"If all countries lived up to their obligations with respect to refugees, there would be no problem of burden-sharing but countries are not prepared to live up to their obligations unless there is burden-sharing."
In perhaps an indication of the prickliness of the subject, some of the guests to the conference in Geneva decided not to attend.
British Home Secretary David Blunkett, German Foreign Minister Joschka Fischer and French Cooperation Minister Charles Josselin all sent deputies to take their place.