EAP Insights: Why shine a light on Mega-Sports Events?

In July EAP launched the first of three papers focussed on addressing key concerns in the infrastructure delivery of Mega-Sport-Events (MSEs). Author of the papers, Maria da Graça Prado explains why the focus areas – labour exploitation, corruption and social accountability – are so important to address now and in times of Covid-19.

The first three MSEs papers kicked off EAP’s new Insights series to help inform better infrastructure policy and practice. Why did you select the MSEs focus for these initial papers?

Our Insights series on MSEs emerged as an organic follow up to previous EAP research that started in 2016, initially exploring issues of late or non-payment of wages in Gulf Cooperation Council (GCC) countries. The Gulf region’s construction workforce largely comprises low-skilled migrant workers and recent regulatory and policy changes in GCC countries – for example the adoption of the Wage Protection System – offered a great opportunity to evaluate whether the changes were translated into practical improvements to the countless migrants in the region.

After a deep dive into the challenges impacting migrant worker wage protection in the region, our latest report took the issues beyond the Gulf in order to understand how other countries and regions were dealing with payment challenges that have, unfortunately, become commonplace in infrastructure delivery. It was during the process of mapping common challenges that another theme emerged – in countries such as South Africa, Brazil, Russia, China and Qatar we found MSEs to be a common denominator behind key shortcomings in infrastructure delivery. We saw how these events have left a legacy of exorbitant infrastructure costs, widespread corruption, white elephant projects, a lack of public participation and unfair treatment of the workforce. It didn’t seem like a fair game, we wanted to explore the topic further and so we selected it for the first focus of our insights series.

The first MSE paper published in July highlighted the many issues impacting on workers’ rights. Could you further explain how the current set up of the sub-contracting chain plays a role in this?

The construction industry today is characterised by long sub-contracting chains where capital, management and labour work in silo. This happens because labour is no longer directly contracted by the project owner or the first-tier contractor, but it is outsourced to small subcontractors or labour contractors down the supply chain who become the employers of the construction workforce.

This creates situations where contractors sign a commercial contract with an intermediary to provide workers, while the intermediary signs a contract of employment with the workers. Because there is no direct contractual relation between the contractor and the workers, contractors are distanced from the risks associated with employing workers. This pattern is so ingrained in the industry that International Labour Organisation considers that this to be “the norm in most countries”.

Our research in GCC countries shows that labour supply companies have been able to sidestep the restrictions imposed by sponsorship laws and move workers between contractors as needed. This poses many challenges for workers as they end up employed by small companies down the chain, normally tied to ‘pay when paid’ provisions that can subject them to months without wages when payment is delayed down the sub-contracting chain.

Poor occupational health and safety (OSH) is another area influenced by the industry’s structure. Where workers on large construction sites are employed by different employers, many of them small, effective OSH monitoring is disaggregated and becomes challenging. When tight deadlines, delivering a multitude of infrastructure projects and poor OSH monitoring is added to MSE delivery, the impact can be seen from recent statistics – as outlined in the paper only the London Olympics recorded no fatalities on sites. Instead of host countries adopting higher labour standards, MSEs are reproducing the same exploitative pattern of abuse that affects construction workers worldwide.

Why are construction workers particularly at risk now during times of Covid-19?

Covid-19 has had a severe impact on workers employed on construction sites. Lockdown measures didn’t extend to the infrastructure sector in ways it did to others and construction projects, for the most part, continued. This has presented cause for alarm concerning the protection of workers – including difficulties of social distancing on site, unsanitary working and accommodation conditions which can exacerbate the spread of the pandemic, and further challenges in OSH monitoring. In the US, reports mention that between March and July, the number of OSH inspections was cut by about two-thirds compared to the same period last year. Subsequently, workers moved to push for site monitoring via whistle-blowing channels.

Post-Covid recovery plans have put infrastructure as a key engine to reignite countries’ economies. If construction continues in a way which lacks a safe working environment, a new wave of human rights violations will affect the construction workforce.

In relation to MSEs, the temporary stoppage of games has created enormous pressure to resume these events and rapidly complete necessary infrastructure for those now scheduled for 2021 and beyond. Although reports have been published by the media and civil society on the lack of adequate labour protection on construction sites in Qatar and elsewhere, sports organisers are, unfortunately, not responding. This is a missed opportunity to change the narrative and to use the MSEs to push for positive change in labour conditions across the construction sector more broadly.

The corruption focus – why is this such an issue in MSE infrastructure delivery?

Corruption in MSEs has become as cyclical as the events themselves, it is deeply ingrained and almost seen as ‘business as usual’. A key point is to understand the cause of corruption so safeguards can be put in place to minimise integrity risks. In terms of corruption in MSE infrastructure projects, we are not only talking about stadia and sports arenas, but a plethora of supporting infrastructure such as roads, airports, underground and urban train connections, housing and accommodation facilities for athletes and tourists, etc.

Infrastructure is already a sector prone to corruption because of certain characteristics found in project delivery (the high amount at stake, technical complexity and limited access to information). When coupled with characteristics of MSEs (seasonality, numerous stakeholders in different jurisdictions, politicisation of decision making, logistical complexities, opportunities for rent seeking throughout implementation, etc.) we see a perfect storm for corruption.

The legal structure adopted by MSE organisers, including their legal establishment as Swiss not-profit associations, also presents challenges for accountability as these organisations are not bound by the obligations applied to normal businesses, for example the publication of financial compensation received by directors. Although there has been some reaction to this, such as challenges to the status of non-profits adopted by the sports organisations and changes in country bids with the adoption of non-corruption provisions, deeper changes are still needed to break the pattern of collusion and low monitoring seen in MSEs today.

The final issue of the MSE series on promoting ‘social accountability’ is not so commonly reported on. Why is it so important?

In my view the lack of social accountability is a root cause and a core barrier to addressing the issues explored in the Insights series. The low level of public participation is enabling scenarios of labour abuse on construction sites and widespread corruption. Without this layer of scrutiny, we continue to see an aura of secrecy around the bidding process, how countries and companies are selected to host and implement these events and how public money is spent.

Full transparency is a precondition for social accountability to be exerted with purpose in MSEs. Because citizens are not granted full access to the information related to these events, channels to exert social accountability are weakened. In Australia, the Cabinet imposed a ban on Freedom of Information requests related to all Olympic documents. In many other countries, there are stories of secret bid dossiers and even when citizens request information via formal channels that are backed by Access to Information Laws, the access to the documentation related to these events is only partial.

Further exacerbating this issue is the lack of tools to aggregate and analyse the data to help citizens make sense of the available information on the infrastructure projects. This is a challenge not restricted to MSEs but also affecting these events because of the technical complexity, lack of access to information and other characteristics mentioned above. There is another complication in MSEs – as they are spread across borders a collaborative approach is required to gather and aggregate data from multiple sources and ensure it is made available to citizens in an easy, intelligible way to further accountability.

Social accountability during bid and delivery stages can prevent scenarios of poor-quality infrastructure being delivered at inflated prices and without consideration to the utility of the facilities after the events. It can avoid escalated outcomes as seen in Brazil which subsequently led to the 2013 public demonstrations against the World Cup. The voice of civil society, the public and others needs to be heard and addressed throughout the cycle of these events.

We have spoken about heightened concerns in labour exploitation during Covid-19. What are the implications for corruption and social accountability?

Emergency procurement measures enacted during Covid-19 have aggravated the risk of corruption and this could be an issue in future MSE delivery. However, because the delivery of MSEs occurs in prolonged stages of conception, bidding and implementation, the risk may be less prominent since the bidding stage for a future event will likely have occurred years before the date marked for the event. Therefore, clear justification would be needed as to why infrastructure projects agreed years earlier would now fall under emergency procurement rules.

For social accountability, the risks may be more significant as Covid-19 brings even more challenges for public participation. Civic space has been limited during the pandemic as in the case of Hungary where the Prime Minister was temporarily authorised to rule by decree. Restrictions are still ongoing which could mean less space for civic action in MSEs going forward. To help mitigate these issues, open data and transparency of information will be crucial.

Despite the many challenges Covid-19 presents, are there any opportunities that could ensure better infrastructure delivery in MSEs?

Using MSEs as our ‘debut’ Insights series invites us to discuss the events beyond our role as the spectator. We need to acknowledge the many challenges and issues that exist in the delivery of these events, taking stock of the past in order to rethink the future. To use the words of the former UN Secretary General Ban Ki-moon, these events can be a source of positive transformation and create opportunities for ‘long-lasting, sustainable and widely shared change’. But the governance of these events needs a serious redesign to improve the transparency, accountability, participation, value for money, labour standards and quality infrastructure associated with MSEs.

The recommendations proposed in this series are developed with these purposes in mind. We are also thinking more broadly about how changes to the design of MSEs could have a knock-on effect, allowing host countries to acquire new skills and test innovative governance structures that could improve their infrastructure policies and practices in the long term. Key to this will be sports organisers and governments recognising their role as agents of change, making MSEs a source of positive impact outside the pitches.

Useful links

The next two papers on corruption and social accountability will be published later in 2020, helping to enhance scrutiny as MSEs make a comeback. To access the recently published first paper on labour exploitation please click here.