A new White Paper published by the International Labour Organization and written by Dr Jill Wells, Engineers Against Poverty addresses two key challenges in the construction industry – how to ensure that workers are paid on time and that they are protected from unsafe working conditions. Given the increasing prevalence of complex supply chains in the construction industry – both in the Middle East and globally – there is a need to ensure that workers throughout the supply chain are protected. Thus, the Paper offers innovative ideas to address gaps in legislation, Wage Protection Systems, and occupational safety and health (OSH) policies, to ensure a strengthened and reputable construction industry in the region.
Construction is one of the most dangerous industries worldwide, and especially in the Middle East, with a high rate of accidents. Yet occupational safety and health (OSH) is not the only risk to which workers in the industry are exposed. As a result of increased subcontracting in the region, workers are further and further legally separated from the client and the principal contractor, and thus vulnerable to delays in payment when a company in the supply chain becomes bankrupt or disputes the amount they should pay to a subcontractor.
Fluctuations in the oil price can, in particular, impact on construction projects, resulting in bankruptcy which leaves workers stranded without pay. Recent examples have seen companies shut down their operations, citing worsening economic conditions due to an oil price dip, and leaving government authorities, embassies, unions and civil society organizations struggling to find a solution for thousands of workers requiring back wages.
To help avoid such crises, structural reforms to the way that payments are made in the construction industry should be put in place.
“Currently contractors are not obligated to pay their subcontracts until they have received payment from the client,” said Dr Jill Wells.
“But this means that it can take months for payment to reach workers at the bottom of the supply chain, creating a risk of non-payment. Abolishing such ‘pay when paid’ systems, as has already been done in the United Kingdom and other countries, or adopting other innovative solutions such as a ring-fenced project bank account which allows subcontractors to get payment after completion of work, can offer a safeguard for workers, helping to ensure they are paid on time,” Dr Wells continued.
Legislative reforms can also help to strengthen OSH in the sector, said Sophia Kagan, Chief Technical Adviser of the FAIRWAY Project in the ILO Regional Office for Arab States.
“By introducing legislation that makes the principal contractor and the immediate employer jointly liable for OSH, governments can avoid the situation of each subcontractor having to develop and implement their own OSH policy and the fragmentation of OSH standards that one currently sees on construction sites,” Ms Kagan explained.
In addition to legislative reform, there is a need for responsibility to be shared between principal contractors, direct employers of workers, and ideally, the client, to ensure clear OSH standards, provision of welfare facilities and the establishment of safety and health committees with worker representatives.
The Paper offers practical recommendations, based on international experience and good practice. Introducing innovative approaches, as proposed in the Paper, which regulate the labour market will not only help to protect migrant workers from abuse, but also improve the efficiency and productivity of the construction industry in the region.
For a summary of our findings and recommendations download our visual infographic:
