Labour Fray

A strike involving hundreds of workers at construction giant Arabtec has once again thrown the spotlight on the rights of migrant labourers in the Gulf
By Daniel Shane
Sat 08 Jun 2013 11:28 AM

The clanking of cranes, diggers and other heavy machinery is a familiar sound for anyone who has visited or lived in the UAE. On 18 May 2013, however, some of this work fell silent as workers downed tools across several major construction projects in Dubai and Abu Dhabi in an incident that could have wider repercussions on employers’ treatment of their labour force in the Gulf state.

Strikes — as well as workers’ unions — in the UAE are illegal, and subsequently rare. For four days though, hundreds of foreign labourers – mainly from south Asian countries including India, Pakistan and Bangladesh — stayed away from work at Arabtec, Dubai’s largest listed building contractor.

The employees, mostly working on construction projects in the emirate, were reportedly seeking a pay rise of about AED200 ($54) per month. Prior to the strike, the workers were said to be receiving about $160 to $190 as their monthly salary.

Arabtec projects across both Dubai and Abu Dhabi were temporarily impacted, including Dubai’s $163m expansion of terminal two at its airport, as well as a government housing project in Al Barsha and commercial towers on Sheikh Zayed Road and in Dubai Marina.

The strike ended after four days when police entered Arabtec workers’ accommodation, according to reports.

In a statement to the Dubai Financial Market on 21 May, Arabtec said that all of its employees had returned to work after both parties had reached an “amicable solution”, however the company did not specify whether that included pay rises. Arabtec, which built the Burj Khalifa in Dubai and is part-owned by the Abu Dhabi government, said that a “minority group” within the striking labourers would be “held responsible for their actions”, without specifying what it meant.*

Arabtec added that the strike had come to an end following negotiations with the country’s Ministry of Labour and Dubai Police. It said that no project delivery timelines had been impacted.

Stuart Poole-Robb, CEO of UK-based KCS Group, a security services firm which has extensive experience in the UAE and wider Gulf, said that the Arabtec strike has again raised questions regarding the treatment of labourers by their pay masters.

“What’s concerned us has been the treatment of those individuals within those sites. The lack of support facilities, the fact that they are viewed as cheap labour, and as a consequence they can be treated quite appallingly,” he tells Arabian Business.

This was by no means the first time workers in the oil-rich UAE have been involved in such disputes. About 30,000 Arabtec workers famously refused to show up for work for ten days in November 2007, with 5,000 downing tools for almost two weeks in January 2011. In both cases employees requested pay rises and complained that they had not received wages for overtime.

Many construction workers at Gulf contractors — not just Arabtec — live in so-called ‘labour camps’ where as many as eight men share a room. “There was a chief operations officer or chief financial officer at one of these labour sites, where he was talking about ‘two-star’ or ‘four-star’ camps. That’s absolutely ridiculous,” Poole-Robb says. “They pay them a pitiful wage and they’re working in extraordinary temperatures with very little facilities, and they refer to them as two-star or four-star camps. It’s like sticking Pontins in the desert and saying ‘get to work’.”

Poole-Robb claims that for many construction firms in the region, raising wages, even marginally, can be expensive when done in bulk. For a company like Arabtec, which employs thousands of blue-collar labourers, the cost of raising pay by a $100 per employee per month will easily amount to millions of dollars on the end-of-year balance sheet.

“Their margins are very, very tight. A contractor comes in and he quotes the cheapest possible price, because he knows if he doesn’t someone else is going to win the contract. The contractors do the best deal they possibly can, and that means the labour costs are cut,” Poole-Robb explains.

One factor that could explain why the strikes happened when they did is currency appreciation in the home markets of labourers. This year has seen sharp rises in the currencies of Sri Lanka and Bangladesh, among others, which has dramatically impacted the value of the Gulf’s lowest salaries, most of which is remitted out of the region. “All the money they get, or the most part of it, they send it home to their families — they’re living on almost nothing,” adds Poole-Robb.

The UAE has not escaped criticism internationally over the welfare of migrant workers. In October last year, the European Parliament issued a resolution highlighting alleged human rights abuses in the country, particularly migrant workers. The UAE’s foreign minister Anwar Gargash was quick to dismiss the resolution as “biased and prejudiced”, adding that it “purposely overlooks the milestones made by the UAE and endorsed by the relevant international organisations, particularly in the areas of foreign labour, comprehensive social care and women’s empowerment”.

The country has been keen to stress that recent labour reforms have improved the situation for migrant workers. Legislation that came into force in 2011 was designed to make it easier for both skilled and unskilled workers to switch jobs, without requiring the consent of the current employer. The changes were intended to stem abuse of migrant workers by employers, for whom previous employment contracts were heavily weighted in favour.

The UAE has been acknowledged internationally for some of the improvements in its labour conditions. In 2012, a Human Rights Watch (HRW) report on labourers working at Abu Dhabi’s Saadiyat Island tentatively praised commitments made by Emirati developers and their Western partners for positive changes designed to better uphold workers’ rights.

The 85-page study, entitled ‘The Island of Happiness Revisited’, said that since 2009 employers on projects including the Guggenheim and Louvre — another project built by Arabtec — had committed to ensuring regular payment of wages, rest breaks and days off, employer-paid medical insurance and the appointment of independent monitors to report rights violations.

However, the investigation did find that contractors were still regularly confiscating employees’ passports and replacing labour contracts with less-favourable ones once workers arrived in the country.

Nicholas McGeehan, a researcher at HRW who specialises in the UAE labour market, confirms that some improvements have been made in the last few years, although the pace of reform has not been quick.

For one, he points to the introduction of electronic payment systems, which have helped ease disputes between labourer and their paymasters over wages.

“This was obviously a major complaint,” he says, adding that while international criticism of labour rights in the country has receded in recent years, more reforms are still required. “[The UAE has] been relatively successful in propagating this narrative of the reforms they’ve made for migrant workers,” McGeehan adds.

International scrutiny on labour rights in the Gulf is likely to intensify in the run-up to Qatar’s hosting of the FIFA 2022 World Cup. In the years prior to the soccer tournament, oil and gas-rich Qatar says it will spend more than $200bn on infrastructure projects including a new international airport, a rail network and twelve dedicated stadia.

The International Trade Union Conference (ITUC) has called for the bidding process to host the event to be repeated, however, this time with bidding required to demonstrate their commitment to human rights. The ITUC claimed that more than 1 million migrant workers in Qatar are being exploited, receiving “poverty” wages and being denied basic human rights.

Tim Noonan, campaigns director at the ITUC, believes that now is the time for the country to reform its sponsorship system, which effectively ties workers to their employers and does not permit freedom to move between jobs.

“It’s a tremendous opportunity to Qatar to make the changes that need to be made. We’ve been in dialogue with the authorities in Qatar, and we’ve been in dialogue with FIFA. Promises have been made [of reforms] for two years now but nothing has fundamentally changed,” he claims.

Qatar has recently introduced a ‘Workers’ Charter’ which the country says will boost the welfare of migrants labourers in the country, but the ITUC says that workers remain “in the dark about their rights”.

Barring a brisker pace of improvement to the welfare of overseas labourers in the Gulf, the mass walkout seen at Arabtec last month is a scenario that could be repeated again, Noonan believes.

“What you have is a pressure cooker situation in the labour camps. It can be something very small that sets off the spreading of the feeling of disentitlement and discontentment [contribute to people] one day saying ‘we’re not prepared to go to work’,” Noonan believes. “We don’t think this situation is going to go away. There’s a really high risk of the situation throughout the Gulf without migrant workers deteriorating.”

* At the time of publication Arabtec had not responded to Arabian Business’ request for clarification on the fate of the striking workers.

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