REPORTER: Amos Roberts

You don't expect to find Paradise on the outskirts of Stuttgart.

MADAM:   So, hello, welcome to Paradise. Please follow me - I will explain everything to you. Here, you can hang around, the girls are sitting here, and you can talk to the girls, talk about a price, what you want, what are your wishes.

This is part of a chain of luxury mega-brothels in Germany and Austria.

MADAM:   And then you can go and on the first floor there are our rooms and there you can stay with the girls then. I will show you now the erotic cinema.

There is a strict dress code here - customers wear bath robes. Prostitutes wear nothing.  An estimated 1. 5 million men visit prostitutes every day in Germany.

PETER:  What is making this place here so interesting is that you have the changing - you can take at 5:00 a blonde one and at 9:00 a black one, yes? And it's not getting boring.

MICHAEL BERETIN (Translation): Prostitution has always been a social need. It wasn't invented by anybody. We need to deal with it and make it manageable.

Michael Beretin is the marketing manager for Paradise. He has grown rich since Germany liberalised its prostitution laws twelve years ago.

MICHAEL BERETIN (Translation): What can we change? How can women work safely? How can they work under hygienic, clean conditions? What can we do rather than sell women as objects, as people say?

Prostitution has transformed German cities. Men can now go window shopping for sex in the city of Aachen, have unlimited sex with as many women as they like for 99 Euros at a flat rate brothel in Berlin, or visit an eight-storey mega-brothel in Cologne.  And this is where it all began 14 years ago - a small brothel in west Berlin.

In 1999, local authorities tried shutting it down on grounds of immorality. But owner and former prostitute, Felicitas Schirov, won a watershed case in court. A judge decided that morality had changed. Two years later, the Prostitution Act was passed. Now, 12 years later, Germany has a $21 billion a year sex industry.

REPORTER:   What do you think when you hear people describe Germany as the biggest bordello in Europe?

FELICITAS SCHIROV, BROTHEL OWNER (Translation): The only ones who mind Germany being called Europe's largest brothel are those who mind prostitution. But who is really against it?

SYLVIA PANTEL, MP (Translation): We've become a great country for sex tourism and for perversion.

Sylvia Pantel is a member of parliament for the Christian Democratic Union.

SYLVIA PANTEL (Translation): Germany doesn't want to be the brothel of the world. Nor do we want to create incentives to attract sex tourism to Germany.

In 2002, the Prostitution Act was motivated by a desire to improve conditions for prostitutes, making it possible for them to get health insurance and social security, and providing a safe place to work.

MADAM:   So I show you the rooms where you can have fun with the girls.

Paradise believes it is a best-practice brothel - benefitting the women as well as their clients.

MADAM:  So this room is free, you can use it.

The prostitutes must show evidence of medical insurance and a recent health check. But they are not actually employed here.

MADAM:  So, the entry is 79 Euros, the girls you have to pay separate and also the alcohol.

Like their clients, they pay an entrance fee to use the facilities. What they then do here - and what they charge for it - is their business.

MICHAEL BERETIN (Translation): The women are free, they can do what they want. If they want to they only go to a room with a guy.  If they'd rather drink champagne and talk, they do that.

But if they feel like covering up, they can't do that.

ALICIA (Translation):  On my first day I didn't feel good. I said maybe I'll only work two days, and then I'll see.

This is Alicia. Today is only her fourth day in Paradise - and yesterday was the first time in her life she had been paid for sex.

ALICIA (Translation):  Today I still feel ashamed and weird and I still hide in the back. I think it'll be quite some time before I feel okay about it.

She might feel uncomfortable and ashamed - but she doesn't feel exploited.

ALICIA (Translation):  No, I don't feel used. I haven't had a lot of men so far. So far they've all been nice. Normal. We talked normally, as if we knew each other. They didn't use me.

The government believes that, unlike Alicia, most prostitutes are exploited and that Germany's liberal laws have failed them.

SYLVIA PANTEL (Translation): At the time it was thought that legalising prostitution would improve the prostitutes' situation. But that totally failed. We now see that meaning well does not mean doing well.

No-one really knows the extent of forced prostitution in Germany. It's hidden in plain sight. The red light district in Aachen is just a few hundred metres from the city's cathedral. This is all legal, so the police don't bother to come round much. Almost none of these women are actually German - most are from Eastern Europe. But they've also come from southern Europe, Africa and Asia and, according to social workers who visit them, at least some have been trafficked.

REPORTER:   I mean, when you look at the prostitution scene here in Aachen, how widespread would you say the trafficking is?

ROSHAN HEILER, SOLWODI:  It is extremely difficult to find out.

Roshan Heiler works for Solwodi, which counsels and shelters women trafficked into prostitution.

ROSHAN HEILER:   What we can read a little bit is when we do street work with the team and we speak to women sitting behind the window, some of them are not willing to talk to us and this is kind of a sign that there's either someone observing her, or someone told her not to talk.

Maria came to Germany from Romania and spent four years working as a prostitute. She had run away from home, fleeing abuse.

REPORTER:   How did you feel when you started doing this work?

MARIA:   Very bad. Very bad. The first day was like a bad - a nightmare. I never forget all the number - you know, the number of men. I didn't forget from the first day. It's disgusting.

REPORTER:   How many men?

MARIA:  Seven. On one day.

REPORTER:   And after that, does it become easier?

MARIA:  No.

Maria wasn't trafficked, but she is struggling to come to terms with her experiences and visits Solwodi for counselling.

MARIA (Translation):  I want to forget the past. I don't want to...It's difficult for me to talk about it. It's not a job or anything you'd be proud of. You can't be proud of it.

REPORTER:   There is a big debate in Germany, of course, about how many of the women working in prostitution have been actually trafficked.

MARIA:  Yes.

REPORTER:   Was that something you experienced? Were there women there who really had no choice at all?

MARIA:   In the most situations, the woman is not alone, yes? She has a boyfriend. Yes. We call it pimp, you know? This kind of" Boyfriend".

REPORTER:   So this is common that women work in prostitution because their boyfriends pimp them out basically?

MARIA:  Exactly. Yes.

In other parts of Europe - most recently France - concern about trafficking is leading to far stricter laws than Germany's.

NEWSREADER:  The French lower house has voted to pass a reform of the prostitution law. The controversial measure will see clients fined up to nearly 4,000 Euros if they are caught repeatedly with a prostitute.

Around 100 sex workers gathered outside the French parliament, furious by the ruling.

France is taking its inspiration from Sweden where a similar law punishing clients was passed in 1999 and apparently it has cut street prostitution in half.

In February, a vote in the European Parliament also endorsed the so-called Nordic approach.

MARY HONEYBALL:   Very, very few women go into prostitution as a free choice. I mean, I agree there are some. But I mean, I agree there are some. But it is a very, very small minority.

Mary Honeyball wants all of Europe to reduce trafficking - by punishing, not the prostitute but the client.

MARY HONEYBALL:   I think what we should be looking at is reducing demand and there is a lot of evidence from Sweden which has had their law since 1999 that it has actually done that.

MICHAEL BERETIN (Translation): It doesn't make sense to punish clients, but permit prostitution. There's a certain helplessness in some European countries. They're wagging their moral finger, making sure people know they're taking a tough line. But that doesn't mean there's no prostitution there.

Here we have our bar and general are for the girls and guys. This is a large room with a jacuzzi.

While every effort is being made to squeeze the sex industry in France, in Germany another mega-brothel is due to open soon in Saarbrucken. The latest branch of Paradise will offer customers a choice of around 90 prostitutes. The sex industry is expanding rapidly in this small city for one significant reason. Its proximity to France.

This is the border between France and Germany. It is only a few kilometres from Saarbrucken and Michael Beretin wants French men to know that across the border in Germany, Paradise awaits.

MICHAEL BERETIN: To the French people I say, "Thank you so much", all the French people are welcome here!

But Germany also plans to introduce a stricter prostitution law this year. This could include a licensing system to control brothels, raising the minimum age for prostitutes from 18 to 21, and granting residency to victims of human trafficking who cooperate with police. There's also one other thing that social workers would like to see Germany borrow from the French legislation.

ROSHAN HEILER:  What is very much needed is exit programs, and these programs where women who have been in prostitution are being helped to get out and find alternatives - this is missing completely. And it is very much needed.

Definitely not on the cards, as government MP Sylvia Pantel explains, is a Swedish-style attempt to eliminate prostitution altogether.

SYLVIA PANTEL (Translation): It's something that has always existed. We believe that, if it takes place in a regulated environment, women are not exposed to violence or forced to prostitute themselves. So we don't want to prohibit it.

Brothel owner, Felicitas Schirov, has always defended a woman's right to sell her body. She understands that opponents of prostitution are also defending women's rights, but believes that wishing for a world without prostitution is extremely naive.

FELICITAS SCHIROV (Translation):  There are two options: Either prohibit it, or permit it. Support it, make it more transparent. We went down the transparency path. Prostitution is a need, we all know that, including Scandinavian countries and France, and prohibition will not make it go away. You only make it less visible.

ANJALI RAO:   Amos Roberts reporting there. Canada, too, is rewriting its sex trade legislation. At a press conference in Ottawa on Monday, with Prime Minister Tony Abbott by his side, Canada's leader, Stephen Harper, rejected Australia's relaxed approach to prostitution and defended a newly introduced bill punishing those who pay for sex. On our website there is an interview with Amos talking about attitudes to prostitution across Europe and you can tell us what you think there too. That is at SBS.com.au/decline.

Reporter/Camera
AMOS ROBERTS

Producer
ALLAN HOGAN

Fixer
MICHAEL KAPPLER

Translations
MARIANNE BOROWIEC

Editors
DAVID POTTS
NICK O'BRIEN