IT was the two Englishmen sharing her hotel who made Wendy feel uneasy. One in his 50s, the other perhaps late 30s, and both with Filipino companions. The girl with the younger of the two men was around 16, the other girl looked just 14. It was one of the most popular holiday islands in the Philippines and Wendy Shepherd was seeing sex tourism in action.

"There was certainly a sexual relationship going on. The younger man was quite open about it, although the older one was more cautious, probably because of the girl's age.

"People living on the island said these guys came every year, picked girls up from Manila and took them there," Wendy says.

Even though everybody on the tiny island knew what was going on, and many of the islanders disapproved, a general blind eye was turned to the sex tourists.

And there was little faith that the authorities would take action. Wendy spoke to one girl, Anna, who had been taken on a holiday to the island by a family friend when she was just 16. When she arrived, she was introduced to an American man in his late 40s and taken to his house in a secluded bay.

The American raped her before passing her on to his friend, who also abused her. Anna's friend was paid the equivalent of £10 for introducing Anna to her abusers.

Anna met another girl on the island who had undergone a similar experience. When this girl reported it to the police, the officer raped her and then made her clean his office. No complaint was ever filed.

Wendy, manager of a Barnardo's project working with teenage prostitutes in Middlesbrough, was in the Philippines as part of a worldwide look at the sex trade, also taking in the United States, Australia, Hungary and Moldova.

The trip, funded by a fellowship from the Winston Churchill Memorial Trust, also looked at different approaches to the problem of sexual exploitation of children.

IT became apparent during her trip that one problem was the lack of policing of Internet cafes. On one occasion, again in the Philippines, Wendy found herself sitting at a terminal next to a man who was downloading child pornography. Another time, she was in a cafe with a man who was using a webcam to take pictures of himself with a girl who looked to be about 15.

"The police can seize your home computer, but if these guys are going into Internet cafes completely anonymously, how can the police check that out?", she says. "There are clearly issues of how Internet cafes register people going in."

She was also horrified to see video tapes of child pornography were openly on sale in markets for the equivalent of 30p.

Much of the sexual exploitation of children relies on poverty to provide the opportunities, as people resort to desperate measures to survive, and traffickers see the potential rewards of connecting buyers with sellers. Low wages can also mean police and other officials are prone to corruption, or at least to turning a blind eye.

But it is far from confined to developing countries, and there are also signs that legalising prostitution may not be a solution.

Working with outreach projects in Australia, where prostitution is legal, Wendy came across 14 year olds in brothels, and a loophole which means children can go into sex clubs, as long as they don't pay for any services.

"Some club owners welcome young men into their clubs, don't charge them for entry, and these young men then engage in sexual activity with other men for money.

"The risk with legalised prostitution may be greater for young people, because there are no checks and it's less visible because you don't see them on the street corner. When brothels have been raided, within a few weeks they're back open again," she says.

But some of the most shocking tales of the sex trade were much closer to home, in Moldova, a republic wedged between Romania and the Ukraine, which was formerly part of the Soviet Union. As the poorest country in Europe, the potential for exploitation of children is large.

"There is street prostitution, but it is also going on behind closed doors, in clubs, and it is being openly advertised in newspapers," says Wendy.

Perhaps even more disturbing, is the number of Moldovans who are leaving their homes for a better life, and ending up working in the sex trade.

Wendy spoke to one woman whose daughter had gone to work in a shop in Russia when she was 16, but who switched to a nightclub and then into the sex industry. Photographs sent home charted her descent over a period when she also had two children, until one day when she was found dead in her flat, leaving her mother to bring up her two sons.

Another girl had been taken by a family friend to start a new life in Italy, only to find herself forced into prostitution.

"Some of them have been so used and brutalised, by 20-30 men a day. They have gone away in the belief they will be working as a waitress. These young people end up emotionally and mentally scarred. Some of them feel ashamed because they had knowingly gone to work as a dancer, and felt it was their own fault.

"Recruiters go into villages and find vulnerable families and offer to look after a child. Sometimes the families know where their children are going, and they are being sold. I know of one woman who sold her child for a bottle of vodka," Wendy says.

Poverty means Moldova has a large number of street children, who are vulnerable to exploitation, a problem it shares with the Philippines. The need to survive means many street children in the Philippines spend time in prison for petty offences, sharing cells with adults and convicted sex offenders.

A project working with street children in the Philippines found a ten-year-old girl in chains in her house. She had been locked up by her mother to stop her running away. Her mother made money by selling her to male visitors to the house.

"There are children as young as eight in prison with known paedophiles. The prisons are overcrowded and the conditions are abysmal," Wendy says.

"On the streets, there are children living in sewers, and for survival they will sell sex. I asked one boy selling cigarettes what happened to the girls, and he said they're all sent to the bars and they don't stay homeless very long. I said 'What happens to you?', and he said: 'I just sell cigarettes,' and started laughing."