Many sexual abuse survivors are getting to the age where they may die before their stories are told and their abuse is independently investigated, Ms Shelly said.
"We need to explore how institutional abuse here was able to occur, and how to protect children and young people in order to prevent it happening again."
Cases of abuse are currently investigated internally by Catholic Church committees, Ms Shelley said, but a Royal Commission would be much better equipped and properly trained to investigate cases.
The Commission would need to investigate reports of abuse counsellors, tutors, chaplains and nuns in schools and orphanages, and of priests abusing altar boys, she said.
Having the sexual abuse cases investigated was the only way to make sure changes were made, Ms Shelley said, to prevent it happening again in the future.
"We need to explore how institutional abuse here was able to occur, and how to protect children and young people in order to prevent it happening again."
Complaints of sexual abuse made to the Catholic Church in New Zealand are not passed on to police, and the church leaves it up to survivors to complain to police when and if they want to.
The church justifies the policy with a directive from Pope Francis earlier this year, Ms Shelley said, but it should actually be referring cases to police to investigate.
"Pope Francis is saying that the Catholic bishops are not obliged to report cases of clergy abuse to police, but he's not saying they're can't or they shouldn't - he's just saying they're not obliged to."
The Catholic Church unreservedly apologised for the actions of Peter Hercock, and Archbishop of Wellington Cardinal John Dew said the crimes should never have been allowed to happen.
"It brings shame on the church. We would certainly want to apologise to them, and say how deeply sorry we are that they've suffered this terrible trauma
"It's a complete breach of trust by someone who was in a position of power and influence. People should be able to trust their priest."
