Red light to red tape: NSW brothels report

A brothel licensing system and expanded police powers are needed to combat a reported rise in "harrowing" sex slavery, a NSW parliamentary committee has determined.

The select committee chaired by Liberal MP Alister Henskens was formed in response to concerns unapproved brothels were being run out of suburban massage parlours and karaoke bars and exploitation of vulnerable sex workers was flourishing.

On Tuesday the committee handed up its report, which recommended a major overhaul of the way brothels are regulated in NSW, in a move critics say heralds a return to the "bad old days" of police corruption.

But the report authors have defended their recommendations, saying criminals and slavelords are in their sights, not sex workers themselves.

"Reports to the police of sex slavery in NSW are increasing," Mr Henskens said.

"The conditions that usually-Asian women are subjected to in sex slavery are particularly harrowing and reprehensible.

"Sex slavery must be stopped."

He has rejected suggestions a licensing system will re-criminalise the industry, saying it will offer safeguards in an area largely overseen by ill-equipped local councils.

The suggested scheme would apply a "fit and proper person" test to prospective brothel owners but would not require individual workers to apply for a licence.

He said this could help weed out criminal elements from the industry, citing police claims 40 of the state's estimated 340 brothels have bikie gang ties.

Although the committee recommended councils maintain a role in regulating brothels, it called for the establishment of a Sex Services Industry Coordination Unit within the NSW Police force as well as stronger powers of entry, search and seizure.

The committee's recommendations have already attracted condemnation from industry figures and from three dissenting committee members.

Earlier on Tuesday, Sex Workers Outreach Program CEO Cameron Cox said he worked on inner-city streets in the Wood Royal Commission era, when bribes, corruption and pay-offs were part of the job.

"That's something we could easily return to," Mr Cox said.