International human rights have been relegated by the Foreign Office, the Conservatives' commission on human rights has said.
Mr Hague said ambassadors could join pro-democracy protests
Shadow foreign secretary William Hague called for a government minister to be appointed to concentrate on the issue.
Publishing the first annual report of the commission, Mr Hague said human rights would be central to Conservative foreign policy.
He also called for ambassadors to be more "proactive" in championing them.
Mr Hague said: "Currently it depends to a large extent on the individual ambassador or diplomat. It should be a requirement of the job, and outstanding service should be rewarded and recognised.
"Embassies should become freedom houses. Ambassadors should provide dissidents with a platform, and - where appropriate - should be willing to join pro-democracy demonstrations."
The report highlighted the case of Craig Murray, the British ambassador to Uzbekistan who was removed from his posting after speaking out about torture in the country.
Mr Hague said: "We have the privilege of living in freedom. But with that privilege comes the responsibility to use our liberty to speak up for those who are denied it.
"It is not only morally right that we should speak for the oppressed; it is also in our national interests to do so.
"Dictators do not make the best allies. Freedom and prosperity go together."
The commission, chaired by MP Gary Streeter, said ministers' dual responsibility for both trade and human rights created a conflict of interest.
The commission plans a "substantive consultation" with human rights groups such as Amnesty International and Human Rights Watch, as well as a review of the arms trade.
The report details 18 countries monitored during the past year, and ranks them on freedom, rule of law and human rights violations.
Burma had the most violations, while North Korea was the worst violator of freedom and rule of law.
'Killing and torture'
Others near the top of the list for violations were Tibet, Iran, Saudi Arabia, Turkmenistan, Vietnam, Cuba and Belarus.
The commission called for further reform of the United Nations, describing it as "the only club in the world in which a country can frequently violate the rules with little or no penalty."
Among instances of human rights abuses, the report mentioned "the killing and torture of civilians and the displacement of up to 25,000 villagers in Burma's Karen district in the course of 2006 alone".
It also highlighted "the 200,000 political prisoners incarcerated in North Korea's jails, who are the victims of a regime which is known to arbitrarily imprison up to three generations for the transgression of a single individual".