Australia remains a destination for women and girls subjected to sex trafficking and, increasingly, for women and men subjected to forced labour, according to a US State Department report.
Australia and New Zealand fare relatively well in a world report on sex trafficking and forced labour, but the US says both nations can do better.
The annual global Trafficking in Persons Report, released by US Secretary of State John Kerry on Monday, rates Australia and New Zealand in the top tier of nations who comply with the minimum standards for eliminating trafficking, but both countries were urged to step up efforts.
Australia has not taken significant steps to reduce the demand for forced labour or commercial sex acts and needs to vigorously investigate, prosecute and stringently sentence trafficking offenders.
"Australia is primarily a destination country for women and girls subjected to sex trafficking and, increasingly, for women and men subjected to forced labour," the report states.
"Child sex trafficking occurs involving a small number of Australian citizens, primarily teenage girls, as well as foreign victims exploited within the country."
Australia was praised for a program, administered through the Australian Red Cross, that provides income support, safe accommodation and legal assistance, among other services, to victims.
However, the report describes Australia's anti-trafficking law enforcement efforts as modest.
The Australian Federal Police investigated 87 alleged trafficking cases in 2014, an increase from 46 the previous year, but it did not convict any traffickers.
"Judicial officials dismissed trials for three alleged traffickers and dropped a trafficking charge against one defendant for undisclosed reasons," the report states.
Some victims of sex trafficking and women who migrate to Australia for arranged marriages are subjected to domestic servitude, according to the report.
Unscrupulous employers and labour agencies subject some men and women from Asia and several Pacific Islands to forced labour in Australia's agriculture, construction and hospitality industries.
The report describes New Zealand as a destination for foreign men and women subjected to forced labour and sex trafficking and a source for children subjected to sex trafficking within the country.
"Foreign men and women from China, India, the Philippines, countries in the Pacific, South Africa and the United Kingdom are vulnerable to forced labour in New Zealand's agriculture, horticulture, viticulture, construction and hospitality sectors, or as domestic workers," according to the report.
Papua New Guinea was placed on the "Tier 2 Watch List" for countries whose governments do not fully comply with minimum standards, but are making significant efforts to bring themselves into compliance.
"An estimated 19 per cent of the country's labour market is comprised of child workers - some of whom are subjected to forced labour or child prostitution," the Papua New Guinea chapter states.
Countries in the bottom Tier 3, described as having governments that do not fully comply with minimum standards and are not making significant efforts to do so, include Russia, Thailand, Syria, Iran, Zimbabwe and North Korea.