The report, by the Justice Centre Hong Kong and Liberty Asia, says the government should broaden its definition of trafficking and pass comprehensive new laws to stamp out the practice.
"As an important regional hub and both a destination and transit territory for human trafficking, Hong Kong is failing to fully comply with the minimum standards for [its] elimination," it says.
The report comes as the trial of the employer accused of abusing domestic helper Erwiana Sulistyaningsih is set to resume.
Public concern over the abuse of helpers has increased after claims that three Indonesian maids were abused by the same employer. Another helper alleges abuse by another employer.
Report co-author Victoria Wisniewski Otero said: "Recent cases of abuse against helpers should raise warning flags because they bear many hallmarks of forced labour, such as contractual deception, excessive agencies fees leading to debt bondage, the retention of passports and physical or sexual violence."
Figures show that between January and July last year, 2,172 foreign domestic workers were granted visa extensions to resolve legal disputes with employers or agencies, but not a single case of trafficking for forced labour was identified by the Hong Kong authorities, the report says.
And despite a record number of complaints against recruitment agencies last year, the Labour Department revoked the licences of just four out of more than 1,200 operating in the city.
"Clearly, victims are slipping through the net and perpetrators are able to operate unhindered," the report says.
Unlike Macau and Taiwan, Hong Kong has no comprehensive anti-human-trafficking law, relying instead on several measures to deal with the problem - the Crimes Ordinance, Immigration Ordinance and the Offences Against the Person Ordinance.
A Security Bureau spokesman said the penalties contained in the ordinances - with maximum jail sentences ranging from 10 years to life imprisonment - were "sufficiently stringent".
The Department of Justice amended the Prosecution Code last September to define "human exploitation cases" to cover activities that demean the value of human life, covering cases such as sexual exploitation, enforced labour, domestic servitude, debt bondage and organ harvesting, the spokesman added.
But the report says that as the amendment is not backed up by legislation, there is little likelihood of cases being prosecuted.
"The change to the prosecution code is meaningless if trafficking cases do not make it to court," said co-author Archana Sinha Kotecha, of Liberty Asia.
Secretary for Security Lai Tung-kwok told a meeting of Legco last month that the existing legislation provides a "solid framework" on trafficking.
But the US State Department ranked the city's efforts to stamp out human trafficking on a par with those in Congo and Serbia.
Campaigners say trafficking for forced labour constitutes about 68 per cent of total human trafficking and generates illicit profits globally of US$32 billion.
The International Labour Organisation says nearly 21 million people are victims of forced labour worldwide, with 11.7 million in the Asia-Pacific region.
The new report's authors say no estimate is available of how much of that trafficking either comes to Hong Kong or passes through it because trafficking for forced labour is not adequately monitored.
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