Oman: AIIB and construction joint venture respond to concerns over labour safeguards for migrant workers on port project

In May 2017, the Bank Information Center and Business & Human Rights Resource Centre issued a joint submission to the Asian Infrastructure Investment Bank (AIIB), sharing concerns about the application of AIIB’s Environmental and Social Framework on the  Duqm Port Commercial Terminal and Operational Zone Development Project in the Sultanate of Oman.

The concerns relate to the provisions outlined in the Preliminary Environmental Impact Assessment (PEIA) and other project-related documents regarding the employment and safeguarding of migrant construction workers, information disclosure and consultation, and the project-level grievance mechanism.

Migrant workers in Oman

According to the most recent U.S. Trafficking in Persons Report, of the foreign migrant workers who “migrate to Oman willingly and legally with the expectation of employment in domestic service or in the construction, agricultural, and service sector [...] some are subjected to conditions of forced labor, including excessive work hours, passport confiscation, non-payment of wages, food deprivation, and psychological and sexual abuse.” In a recent case, 800  migrant construction workers were left stranded by their employer and not paid for 5 months.

The existence of this type of labour exploitation indicates the need to go beyond national legislation to protect workers. Gaps include “the sponsorship - based employment scheme that renders expatriate workers vulnerable to exploitative labor;” the lack of “formal procedures to identify trafficking victims among vulnerable populations, such as migrant workers;” and a lack of efforts to “impose dissuasive penalties on employers who withhold their employees’ passports.”

According to the Duqm Port Project PEIA, 90% of the workers at the Port are foreign workers. The PEIA estimates that the construction of port-related infrastructure under the Project will involve approximately 900 workers.The majority of these workers will consist of laborers, which Is the category of workers most vulnerable to forced labor. However, the PEIA makes no mention of the risk of the use of forced labor in the Project, nor does it identify any actions needed to address this risk.

AIIB's Environmental & Social Policy

AIIB’s environmental and social standards require AIIB to ensure that its clients address “all key potential environmental and social risks and impacts" of projects. Clients are required to ensure that projects are not connected to “any kind of forced or compulsory labor;" to disclose information about projects and meaningfully consult stakeholders; and to create operational-level grievance mechanisms to receive and resolve environmental and social concerns. AIIB also states that it "recognizes the important role of workers and their representatives in the development process."

AIIB’s response

AIIB responded to the letter on the 20th of July, 2017 and to a subsequent rejoinder in August. In parallel, Business & Human Rights Resource Centre invited the companies awarded the construction contract for Oman’s Duqm Port Project, MSF Engenharia (Portugal) and Serka Taahhut Insaat (Turkey), to share information on the safeguards they have in place for their migrant workforce, based on a survey of construction companies conducted by the Resource Centre last year. The Serka-MSF joint venture in Oman responded to the survey in August.

All the referenced project documents, NGO submissions, and responses from AIIB and the construction company are available below.

Duqm Port Oman

Photo credit: Duqm Special Economic Zone Authority

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Disclosure
25 August 2017

AIIB response to rejoinder

Author: Asia Infrastructure Investment Bank (AIIB)

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Survey response
18 August 2017

SERKA-MSF JV: Survey response

The SERKA-MSF joint venture responded to Business & Human Rights Resource Centre's survey on the policies and procedures it has in place to safeguard migrant workers' rights on the AIIB-funded Duqm Port Project in Oman.

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NGO rejoinder
20 July 2017

Rejoinder to AIIB response

Author: Bank Information Center and Business & Human Rights Resource Centre

After receiving AIIB's response to our submission via email, we issued the following rejoinder.

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Item
1 May 2017

Submission to AIIB on Oman's Duqm Port Commercial Terminal & Operational Zone Development Project

Author: Bank Information Center and Business & Human Rights Resource Centre

The AIIB’s Environmental and Social Framework (ESF) stipulates that, as part of its due diligence, the Bank is required to determine whether “all key potential environmental and social risks and impacts of the Project have been identified” and whether “effective measures to avoid, minimize, mitigate, offset or compensate for the adverse impacts are incorporated into the Project’s design and ESMP.” ...Environmental and Social Standard 1 (ESS 1) requires the Client to “assess labor and working conditions of project workers” and “ensure that, in connection with the Project, there is no work or service not voluntarily performed that is exacted from an individual under threat of force or penalty (including any kind of forced or compulsory labor, such as indentured labor, bonded labor or similar labor-contracting arrangements, or labor by trafficked persons).”

As we explain in more detail below, in our view, the Preliminary Environmental Impact Assessment should be revised to identify and address the social risks attached to the employment of migrant construction labor on the Project...[And] address the risk of use of forced labor in a manner that is consistent with international guidelines for construction projects in the Gulf region. 

In addition, the AIIB should ensure that the Client conducts due diligence assessments of the private entities executing the construction contract, with particular attention to the companies’ records on labor and their operations in the Gulf region. MSF Engenharia operates in the UAE and is involved in three infrastructure projects in Qatar, a country that is infamous for the worst forms of the kafala system and abuses of migrant construction workers. Serka Taahhüt /Adali Holdings has been involved in construction and service projects throughout the MENA region. Similar due diligence also is necessary with regard to any labor brokers used in the course of the project, since many abuses of migrant workers in the Gulf involve third-party brokers.

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Item
19 February 2017

Serka-MSF JV: Construction Environmental Management Plan

Author: Serka-MSF JV (Oman) on Duqm Special Economic Zone Authority (SEZAD) website

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Item
8 December 2016

AIIB Project Document: Oman Duqm Port

Author: Asia Infrastructure Investment Bank (AIIB)

"Project document of the Asian Infrastructure Investment Bank - Sultanate of Oman Duqm Port Commercial Terminal and Operational Zone Development Project", 8 Dec 2016.

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Item
1 February 2016

AIIB Environmental and Social Framework

Author: Asia Infrastructure Investment Bank (AIIB)

Policy Description: Environmental and social sustainability is a fundamental aspect of the Bank's support for infrastructure development and enhanced interconnectivity in Asia. The Bank's Environmental and Social Framework (ESF) is a system that supports the Bank and its clients in achieving environmentally and socially sustainable development outcomes. It does so by integrating good international practice on environmental and social planning and management of risks and impacts into decision-making on, and preparation and implementation of, Bank supported Projects.

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Item
1 March 2015

Preliminary Environmental Impact Assessment Study for Duqm Port

Author: Khatib & Alami Consultants (Oman), on Duqm Special Economic Zone Authority (SEZAD) website

"Preliminary Environmental Impact Assessment Study Commercial, Governmental Berths and Pre-Gate & Inspection Zone", Mar 2015.

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