The labour market will be under the spotlight in 2007. After sharp criticism from the media and human rights watchdogs, the government of the UAE has promised to improve living conditions of workers and there are plenty of observers who will be making sure it delivers. A report by New York-based Human Rights Watch in November stated: 'The federal government of the UAE has abdicated almost entirely from its responsibility to protect workers' rights by investigating, prosecuting and remedying abusive and unlawful conduct by employers towards the construction workers.' Dubai, in particular, is keen to prove the critics wrong. Stung by criticism from the media and human rights watchdogs, the ruler of the emirate and UAE Vice-President and Prime Minister Sheikh Mohammed bin Rashid al-Maktoum responded publicly, ordering the government to improve the working conditions and the health and safety of labour camps. Although many viewed the order with a degree of scepticism, the call is beginning to have an effect. And where Dubai leads, others in the Gulf are likely to follow. In late November, Dubai Municipality responded by closing more than 100 of some 495 labour camps in Al-Muhaisnah. The inspection teams found that accommodation, some of which was among the oldest in the emirate, breached a wide range of regulations covering building standards, sleeping quarters, drinking water, health services, waste removal, pest control and first aid.

Camp sites

Spot checks are the first part of a comprehensive campaign drawn up by the newly-formed Committee for Environmental & Health Affairs of Labourers to improve living conditions in Dubai's labour camps, says Salem bin Mesmar, public health director at Dubai Municipality and chairman of the committee. 'It is of high importance that these visits are conducted without prior notice to make sure that we receive the real picture, and that we are able to correctly identify any non-compliance with the laws.'

Temporary camps are also on the agenda. The committee will not renew permits for interim camps unless strict health and environment regulations have been met. Makeshift accommodation has traditionally been used at remote worksites to ease logistical challenges and ensure projects meet deadlines. As development in Dubai has accelerated, however, many contractors have been forced to use temporary accommodation on a regular basis. 'During recent visits, we realised that some temporary labour accommodations do not meet the set standards. Therefore, it has been decided to freeze all permits unless the companies that built them improve health and environment conditions there,' says Bin Mesmar. 'The committee will undertake future surprise visits to assess the situation of different labour accommodations within the emirate.' The municipality is not alone. Dubai's Department of Civil Defence has been drafted in to improve the safety record of camps in the emirate. A key concern is safety. Fires frequently break out at camps where gas cylinders are used to cook in sleeping quarters. The civil defence department plans to form a permanent committee to ensure that all labour camps are safe and have correct procedures in place for emergencies. Other emirates are expected to follow suit. The 2007 federal budget included a provision of AED 50 million ($14 million) for the Labour Ministry to bolster its inspection teams visiting construction sites and labour camps. The tough stance adopted by the authorities will mean that many contractors will be forced to invest and improve their facilities. 'I'd like to think that we meet all the regulations,' says one international contractor. 'But the reality is that we will be made an example of for breeching some of the regulations and we will have to put that right.'

Costly changes

For contractors that comply with most of the regulations the investment required will be minimal. But for companies such as those at Al-Muhaisnah that have camps closed down, building new accommodation will be costly. 'Some contractors will be forced to increase their labour rates,' says the international contractor. 'And that isn't a bad thing because it will mean everyone is competing on a level playing field.'

For developers the fear is less competitive pricing. Contracting across the federation has become a sellers' market as new projects stack up and many clients increasingly voice concerns about contractors raising prices to unreasonable levels. Even though direct labour costs typically account for 4-5 per cent of the total contract value, any hike may be passed on directly to the client, threatening the profitability of projects. Labour Minister Ali bin Abdullah al-Kaabi was quick to dispel these fears stating that labour costs, including fees, accommodation and salaries, account for less than 14 per cent of total project costs. 'Contractors will undoubtedly complain about having to build new accommodation,' says a consultant working in Dubai. 'But at the end of the day camp facilities are not that expensive to build.