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Construction clients must accept human rights responsibilities for the sector to ‘build back better’ post COVID-19

8/7/2020 Isobel Archer & Danielle McMullan, Business & Human Rights Resource Centre

Outreach to construction clients shows a refusal to acknowledge human rights obligations for workers on their projects

Since the COVID-19 outbreak we have tracked a significant uptick in reports of abuses against migrant workers in the Gulf. Between April and June, the Business & Human Rights Resource Centre recorded 47 reports of such abuses – equivalent to the total number of abuses we recorded in 2019 – and no doubt a fraction of the abuses actually happening on the ground, due to restrictions on freedom of the press and the activities of human rights NGOs. The links to COVID-19 are clear: the pandemic was cited as a key or exacerbating factor in 77% of cases. 

Many detail allegations that cramped living and working conditions for migrants fuel the spread of the virus. Others are from workers alleging they were unpaid for months before the crisis, and are now forced into unpaid leave or stranded far from home, unable to afford “overstaying” fines when companies fail to renew their visas.

Lack of scrutiny 

Migrant construction workers make up 10 million of the 25 million-strong low-paid workforce across the Gulf and are impacted in 42% of the cases of abuse we track. Large international events requiring massive new infrastructure, like the 2022 FIFA World Cup in Qatar and the Dubai Expo, have led to considerable scrutiny by the media and NGOs (including the Resource Centre) regarding the responsibilities of construction companies to protect these vulnerable workers. Under the kafala (sponsorship) system, companies hold disproportionate power over migrant workers, who are reliant on employers for their immigration status and many other crucial aspects of their lives. However, there has been almost no spotlight on another significant player: client organisations that commission and finance these projects. Whether these clients are private developers or government entities, they have a significant influence on labour standards through their procurement practices and project management. 

Failure to accept responsibilities

In April and May we conducted outreach to eight clients responsible for high-value, high-profile projects in Qatar and UAE to ask them what they were doing to ensure migrant workers are protected from COVID-19, and are not made to suffer disproportionate economic impacts (see our questions here).  Disappointingly, but unsurprisingly, we received only one response, from UAE real estate developer Azizi Developments. While we were pleased to see that Azizi at least accepts the premise that it has responsibilities to workers on its projects and outlined some steps it was taking to implement and comply with government directives regarding worker welfare during the pandemic, its acceptance seems to be a minority view. One other client we contacted explicitly rejected the suggestion that their company has a role in monitoring or ensuring worker welfare during the pandemic and simply referred us to their contractors.

This denial of responsibility is reflected in the fact that only a handful of construction clients have adopted worker welfare standards, most notably the 2022 FIFA World Cup’s Supreme Committee for Delivery & Legacy.  However, a recent report from Amnesty International detailed an ongoing case of months-long wage delays to workers on the World Cup “jewel” Al Bayt stadium, clearly demonstrating standard by themselves are not enough to protect workers. FIFA, in a quasi-joint client role in terms of World Cup infrastructure, state they were unaware of the situation until presented with Amnesty’s findings. Despite operating in a region where workers are at high risk of suffering abuse, FIFA explained they are not “routinely notified” of cases requiring remediation to workers and that they have “every reason to trust” the Supreme Committee’s worker welfare systems. 

Failure to share risk equitably 

Worker welfare is not a consideration for most clients, with contracts invariably awarded to the lowest bidder and some Gulf countries’ public procurement laws expressly requiring this. To win contracts, construction companies must slash costs and too often it is worker salaries and protections that are the first to go. The collapse of Gulf oil prices over the last four years has exacerbated this problem, with clients paying contractors late; contractors being asked to accept discounts on payments that are due; and claims for variations or prolongation costs not being awarded. These practices lead to contractors paying workers late, driving down wages and carrying out mass layoffs, among other serious abuses we track.

COVID-19 is deepening this systemic power imbalance, with clients seeking to aggressively renegotiate contracts. UAE contractors on projects already awarded have been told by clients that they will have to go through price negotiations again. In an industry where there are low barriers to entry, construction firms know that they have little option but to cut prices. As one construction firm official reportedly said, “Clients will not even be willing to listen otherwise. It’s a take or leave it approach”.  

Migrant Rights recently detailed the case of hundreds of workers for Sobha Engineering and Contracting LLC who have not been paid for months. The company Chairman is quoted extensively in their investigation, where he explained: “staff salaries were pending as clients have stopped paying, even though they had received the completed property and started using it.” He refused to name the clients that had not paid, but Migrant Rights notes the company’s high-profile clients include: Kempinski; Al Wasl Group; Emaar; and Rochester Institute of Technology. When we invited the clients to respond to these allegations, the one response we received from hotelier Kempinski deflected any responsibility from the allegations, stating it will be engaged in management of the Kempinski branded hotel once it is built and does not directly employ those who are currently building it. 

COVID-19 exacerbates existing vulnerabilities

While some clients have temporarily ceased operating in response to COVID-19, some construction companies are still under pressure from clients to keep to agreed timelines. Pressure to complete projects ahead of high-profile mega events is bringing construction companies into conflict with social distancing rules which necessitate a reduction in the number of workers on site. We continue to receive numerous reports from partners on the ground of companies flouting social distancing rules on sites, or on transport to them. 

The increase in abuse is a direct result of the pressure constructions firms are under from clients regarding price and delivery.  In a poorly regulated sector, it is inevitable firms will seek to make savings at the expense of workers, resulting in reduced and delayed wages, wage theft, and poorer working conditions as workers are forced to work more overtime for reduced pay. 

Migrant workers in the Gulf are already some of the world’s most exploited and vulnerable. Ultimately, they will be the ones to suffer the most as each actor seeks to pass risk and cost down the value chain. If we are going to “build back better” in the sector’s recovery from COVID-19, there needs to be continued scrutiny on construction firms. But we must also demand clients accept their human rights responsibilities, and start to factor them into their procurement processes and contractual relationships.