Only a month out from its March 21 launch, the Biennale of Sydney faces a major impasse stemming from its sponsorship arrangements with Transfield, a company contracted by the Immigration Department to run various services at detention facilities on Nauru and Manus Island.

Australian artists including Callum Morton, Bianca Hester, Charlie Sofo, Nathan Gray, Matt Hinkley and Angelica Mesiti, as well as prominent international artists such as Ólafur Ólafsson, Sasha Huber, Sol Archer, Nathan Coley and Turner Prize winner Martin Boyce, have penned an open letter calling on the Biennale of Sydney board to abandon its sponsorship arrangements with the company. In the letter, released yesterday, the 28 artists stated that they view “the mandatory detention of asylum seekers” as “ethically indefensible and in breach of human rights” and that as a community of artists, educators and arts workers, they “do not want to be associated with these practices”.

The letter – which throws its weight behind the “vision” and “energy” of artistic director Juliana Engberg and her staff – goes on to suggest that withdrawing from the arrangement with Transfield would set “an important precedent for Australian and international arts institutions, compelling them to exercise a greater degree of ethical awareness and transparency regarding their funding sources”.

The campaign has garnered particular momentum in the wake of Monday’s riots on Manus Island, which – according to official statistics – resulted in the death of one asylum seeker and the injury of a further 77, with various advocacy and artist groups taking to social media to debate the broader implications of the Biennale’s links to detention centres (at the time of publishing, a Facebook page dubbed ‘Boycott the 19th Sydney Biennale’ had garnered 768 likes).

The unfolding incident highlights the myriad issues surrounding corporate sponsorship in the context of a dwindling public arts funding pool and poses questions of the ethical responsibilities of arts organisations in dealing with corporate backers.

While the open letter makes no explicit reference to an artist boycott, the implications and potential repercussions are clear enough. The Biennale of Sydney has a problem, and it’s not about to go away.