The UAE needs to do more to stop torture but the Gulf country has made progress on workers' rights, the US-based Human Rights Watch group (HRW) said.

Sheikh Issa bin Zayed Al-Nahyan, a son of the founder of the UAE, was exonerated this month of responsibility for torture of an Afghan grain trader that was shown in a video first made public by ABC News last year.

'If the UAE government really wants to stop torture and to restore its sullied reputation, it has much to do, especially in light of Sheikh Issa's acquittal,' Middle East director Joe Stork said in a statement announcing the group's annual report.

'The government needs to set in motion significant institutional reforms and to make certain that human rights violations are punished.'

The UAE, most of whose 4.5 million population are foreigners, has tried to improve its human rights image after criticism over its treatment of blue-collar workers while it sought US approval for its civilian nuclear energy programme.

The UAE's ministry of foreign affairs called the report 'unbalanced' and 'factually incorrect' in a statement carried by state news agency WAM on Sunday.

The report 'has major drawbacks and fails to adequately record the positive steps taken by the UAE with regard to labour and human trafficking issues, not just in 2009 but also in the last few years,' the statement said.

UAE daily al-Khaleej described the report as 'premature and disappointing'.

HRW researcher Samer Muscati told a news conference he was surprised by the Issa verdict and there were more cases which had been discussed in recent US Congressional hearings.

Sheikh Issa was found to have 'diminished liability' because two former business associates had drugged him before shooting the video to extort money from him, but most accused accomplices were convicted

The US State Department has said it had questions about the acquittal and would like to review the judge's decision.

The judge's reasoning was not announced at the time but details published by Gulf News last week said Sheikh Issa, who had been on medication, was given 'mind-affecting substances' without his knowledge by business partners out to blackmail him.

The verdict said the court concluded he had no control over his behaviour at the time, the newspaper said.

But Muscati praised government measures to improve the situation of workers through compulsory housing standards and an electronic payment system for salaries.

'The electronic payment system has ... been beneficial to monitor if companies are paying on time,' Muscati said.

The HRW report said tens of thousands of migrant workers had returned home because of the global economic downturn's effects in the UAE, but some companies had sent them on unpaid vacation to avoid paying compensation. – Reuters