"Certainly human trafficking is a crime, and that has to be stopped. We will do whatever we can" to halt it, Prime Minister Abdullah Ahmad Badawi told reporters.
Abdullah said that the government has drafted a bill on fighting human trafficking, and that Parliament is debating it. Approval of the bill as a law is considered a formality.
Abdullah said the bill contains provisions "including punishments, which are very severe." He said authorities hope it will reduce any human trafficking in Malaysia.
The government has not released details of proposed punishments, but said the new law would make it easier for police, immigration departments and other authorities to pursue, prosecute and convict alleged human traffickers.
In its annual "Trafficking in Persons Report," the U.S. State Department on Tuesday downgraded Malaysia from a watch list to a blacklist "for its failure to show satisfactory progress in combating trafficking in persons."
The report cited the Malaysian government's failure to prosecute and punish traffickers, to provide adequate shelters and services to victims, and to protect migrant workers from involuntary servitude.
Malaysia is among 16 countries on the U.S. list, which subjects them to possible sanctions for not doing enough to stop the yearly flow of about 800,000 people across international borders for the sex trade and other forms of forced and indentured labor.
About 80 percent of the victims are female and up to half of them children, and most are seeking to escape poverty.
Malaysia's Women, Family and Community Development Minister Shahrizat Abdul Jalil said in a statement Thursday that putting Malaysia in the blacklist was "unfair and unreasonable."
"We are very disappointed with the report as it is inaccurate and does not reflect Malaysia's continuous efforts in combating human trafficking," Shahrizat said.
Besides pushing for the new legislation, the ministry expects to open two shelters for trafficked women and children by the end of the month, the statement said.
The ministry, together with the U.S. Embassy in Malaysia, has also run a workshop to train law enforcement officers how to deal with victims of trafficking, it said.
Tenaganita, a local nonprofit organization, agreed that Malaysia did not adequately protect foreign migrants and domestic workers, upon which the country relies heavily for menial work.
"In reality we really haven't done very much. We still have a very far way to go," said Aegile Fernandez, coordinator of Tenaganita's program to combat human trafficking.