Monday, January 12, 2009 8:01
Mega development projects and labour supply chains – whose responsibility is it?
In Guest Writers, Main Stories, Top Story • 2,221 views • 16 Comments
Stephanie Chok
A largely unregulated recruitment industry means unethical agency practices flourish and a highly competitive market continues to reinforce and reward unscrupulous behavior.
In what could be an ominous sign for the year, more than 100 China construction workers spent New Year’s Day, 1 Jan 2009, gathered outside the Ministry of Manpower (MOM) in Singapore. This was their third consecutive day at the MOM – there were 200 workers on 30 Dec 2008 – to complain about unpaid wages and unauthorized deductions. Employed by Zhonghe Huaxing Development and China Nuclear Industry Huaxing Construction, some of the construction workers were building the Marina Bay Sands integrated resort.
In the past few months, reports have surfaced that significant numbers of migrant construction workers building the Marina Bay Sands resort have been embroiled in salary disputes. In October 2008, 180 China construction workers lodged a complaint with the MOM because Ssangyong Engineering and Construction wanted to cut their monthly pay from the agreed sum of $1700 to $1200. Apparently, Ssangyong had found a sub-contractor whose workers were ‘cheaper’.
Sub-contractors – the case of Xuyi
Companies sub-contracted by Ssangyong have also proved problematic. Groups of disgruntled workers from Xuyi Building Engineering Co., listed as a foreign company registered in Singapore, have also been filing complaints with the Ministry of Manpower over unpaid salaries and unauthorized salary deductions. In the past three months, I have spoken with up to five different groups of workers from Xuyi involved in salary arrears cases – some were building Marina Bay Sands and others Resorts World Sentosa. The workers claim their salaries are often withheld for three months or longer, with arbitrary deductions made each month from their wages. They work long hours with no overtime pay (12-13 hours a day is the norm, though time cards have shown 19-hour work days; 24 hour shifts have also been noted), seven days a week. When the workers, dissatisfied with such terms, resign and wish to return to China, they are slapped with ‘breach of contract’ fees. This can result in workers being given minimal sums of several hundred dollars – despite being owed several thousands in back wages – and repatriated.
Workers’ contracts are often signed in China and under coercive conditions. As one Xuyi worker related, “We were told plainly – if you don’t sign this contract, you don’t get on the plane to Singapore”. This is after they have already paid thousands of dollars in agency fees. Typically, this contract determines that Xuyi workers are not entitled to annual leave, or paid medical leave, nor overtime pay, nor a higher rate of pay for working on public holidays. This contract gives their employer the right to withhold workers’ passports and work permits and also states that workers’ salaries will be withheld for three months and is subject to ‘miscellaneous fee deductions by the employer’. Many of these terms violate those laid out in Singapore’s Employment Act.
Returning to China, workers’ problems often escalate, as they have loans, generated by hefty agency fees, to repay. One group of 12 workers who returned to Henan in early November 2008 reported that they were beaten up by thugs hired by their labour agent in China. This happened because they tried to recover their agency fees, which ranged in thousands of dollars. Other Xuyi workers have reported that family members in China received intimidating phone calls when they made official complaints about their company here in Singapore.
Big-brand developers
What does all this unrest mean for ‘big brand’ project developers? Currently, it is unclear if key developer Las Vegas Sands, with its headquarters in Las Vegas, is aware of the ground level troubles its Marina Bay Sands worksite in Singapore is facing. From a supply chain perspective, however, it is reasonable to ask if such ignorance absolves it from responsibility. In the past decade, we have seen ‘big brand’ apparel and electronic manufacturers taken to task by human rights groups for unethical labour practices down its supply chain. While the corporate response in the early days tended to be denial or finger-pointing, global pressure for companies to be socially responsible has meant they are less able to do this now without severe damage to their reputation.
Complex supply chains in the construction industry, particularly for large-scale projects, make it difficult to establish clear lines of responsibility. Often, workers are not aware of who their ‘big boss’ is and generally take orders from a workplace supervisor; workers can also be sent to different work sites on ‘loan’. Guidelines are blurry and errant employers are able to shut down and register new companies quite easily. A largely unregulated recruitment industry means unethical agency practices flourish and a highly competitive market continues to reinforce and reward unscrupulous behavior. At the moment, there appears to be little financial incentive to operate ethically. Defensiveness makes the problem-solving process challenging, particularly when issues of national sovereignty come into play. At times, receiving countries blame sending countries, bigger companies shift responsibilities to smaller sub-contractors and vice versa. Everyone embroiled in this web of unrest and dissatisfaction generally feels squeezed and exploited – developers by a worsening economic situation, sub-contractors by tenders with marginal profit margins and tight deadlines, workers by labour recruiters and employers.
Yet ignorance and finger pointing can only be tolerated for so long. With the growing numbers of disgruntled workers and media attention, answers must soon be provided as to who is responsible and what needs to be done. A ‘race to the bottom’ should not be a foregone conclusion. With the global surge of interest in corporate accountability and ‘sustainable development’, a ‘hands-off’ approach by stakeholders is unacceptable. Construction site banners that proclaim, ‘We are building in an environmentally sustainable manner’, ring hollow when it becomes apparent worksites are teeming with unhappy, exploited workers. It is time for the construction and property development industry to take pro-active measures to ensure ethical recruitment and subcontracting practices all the way down its supply chain and from the moment of a project’s conception right to its operational phase. Tourism and hospitality businesses – like gaming developers, hoteliers, and large-scale entertainment venues – are intertwined and dependent on these industries and are equally culpable.
The desire to maintain labour flexibility in order to attract foreign investment must be balanced by adequate protection for vulnerable workers. The ‘free market’ myth has been debunked by the global financial chaos experienced in 2008. We are now nine years into the new millennium. It is time to embed ethical business practices, which respect labour laws, and the principles outlined in the UN Global Compact, into mainstream business models all the way down the supply chain and for all industries.
Stephanie Chok is a PhD student at the Asia Research Centre, Murdoch University, Western Australia.
This article was first published in CSR Asia.
Visit Migrant Workers Singapore.
Read also: Sent home with $600.
——-
Related posts:
16 Comments
moshedyan
itigoti
The logistics of labour supply in the construction industry has been messy all along and subjected to abuse, by main contractors and labour supply agencies.
I thought MOM have clear regulations as to the numbers of foreign workers that could be brought in, which takes into consideration of ratio to local workers, project size, etc., and yet cases of such unethical practices seems only to increase. Has the MOM regulatons been sidestepped in our haste implement these mega projects? What happen to all the “man-year entitlement” etc.? Or are our MOM regulations so punctuated with loopholes and are consistently exploited by contractors and manpower agencies. ?
In time of construction boom payment are smooth-flowing and every down the chain are happy. But in current situation, contractor are worried about what happen when their current stock of projects are completed. Cash flow cannot be “rolled over ” to subsequent projects and more default in payment, whether in workers’ wages, material purchase etc., will surely happens.
So much for our “golden era “…………
Let us look at policy issue.....
Great and timely article. Congrats to TOC.
When we are able to look after the poorest residing in our nation, we do justice to the word ‘justice’.
MOM just need to hire more people in this downturn to ensure that the right thing is done instead of sweeping under the carpet.
If there are more international effort putn on the plight of our migrant workers – maids, construction workers, or local contract workers – cleaners etc etc – that would keep our MOM on its toes – since our national papers happen to be a govt spokesman only.
Gilbert Goh
Well wrtitten article by Stephanie.
MOM needs to steup up it’s policies on hiring of the FWs.
As the govt also has a stake in the IRs it is tough for them to be overly policing.
Lets hope that once th IRs are up, they will gear up the employment of the FWs.
Personally, I find that we are being over flooded with FWs these two years. Let’s hope that once IRs are up, we are free of their labour. They are clearly being exploited and the govt seems to allow it strangely perhaps because their hands are tied by the IRs.
Millions of dollars change hands for every 100 FWs that are being sent here and our repuation is clearly affected recently by so many scandals involving them.
Many came without stable jobs and are make to work like daily rated labourers. I guess many came with their eyes blinded as they are all snooped by the middle agents.
Contractors also bid too low for the jobs and they cut corners to stay afloat and FWs get the raw end of the deal.
The current recession does not make it easier for them.
My only hope si for the IRs to be completed faster so that FWs can go home – it can only be good for all involved here.
The IRs could end up to be the curse of our nation.
The Singapore Daily » Blog Archive » Daily SG: 12 Jan 2009
[...] Strangers in a Strange Land – TOC: Sent home with S$600 – TOC: Mega development projects and labour supply chains – whose responsibility is it? [...]
Wattanaporn
I dun think the government wants to assume responsibility over these issues..that is until the foreign workers turn violent and start pouring kerosene over their bosses or turn to crime in Singapore.
Sylvia
Well done Stephanie. (I’ve also read Alex Au’s stories on Yawningbread which mentioned you.) Keep up the good work; it’s high time MOM takes a more active approach in safeguarding the rights and ensuring proper treatment of foreign (and domestic) workers in Singapore.
teo soh lung
It appears to me that the problems face by foreign workers today have increased a thousand fold since the 70s and 80s. We all know that protests do not receive much sympathy from MOM. And many will probably end up being deported if they don’t accept mediated sums that do not cover the payment made by them in their homeland.
The problem has magnified a thousand fold today because many projects are really large. GNGOs can never solve these problems as long as the lawmakers and people in power do not want to solve these problems. They will only make matters worse even though they may feel quite good in doing a bit of do gooder’s work now and then, like what I was doing before. I am pessimistic about our future and how we treat workers, both Singaporeans and foreigners.
Tai Hong Eng
this article shows the Casino project.
TW held a ‘kong tou’, which i believe translates into referendum
for its people to decide on their casino in somewhere like peng hoo.
don
Today’s problems will not be around or be so big-scale if pay-and-pay did not adopt an open policy. Recruit more foreign workers and they can collect more taxes, why not? Wow First Class gahment didn’t anticipate that problems like underpaid workers, unfair treatment, overcrowding, hygiene conditions can occur.
Just simply they don’t care. Just let the “money” come.
Same as they don’t care about how it is affecting us on the whole when there are too much foreign workers competing with us.
In their eyes, there are only the elites and the peasants / slaves.
Money come Money come Monekam.
Li Ma Ma
while this is a pro bis environment,
we should condem employers who withhold pay of their workers who sweat for the company.
we should condem employers who under pay their low pay workers.
companies should be ethical. else, get the ….. out of my uncaring face.
K Das
From what I can gather, the main contractor and the sub-contractors are in cahoots with the labour supply agencies to squeeze maximum sum of money as agency or job placement fees from the workers. Millions of dollars change hands between these parties even before the workers set foot in S’pore. The money is collected upfront from the workers in their home country and in some cases substantial part there and the remaining from their wages here. The overseas agents are conduits through whom the money is channeled to the local parties mentioned above. I do not know the amount collected as job placement fees for China, Thailand or Burmese workers. But for those from Bangladesh and India the fee is said to range from $5,000 to 8,000 (for construction workers) Taking the mean figure of $6,500, the upfront collection for 1,000 workers will be $6.5 million. If a main contractor is a given a quota of 3,000 workers to employ for a 2 year period, he can collect a cool $19.5 million! The revenues from this source alone is so big that the local contractors set up proxy employment agencies under the names of family members, relatives or reliable contacts to corner this revenue direct.
The story does not end here. The company recruiting 3,000 workers does not keep to its end of bargain. It gets even greedier. The promise was to employ the worker for 2 years. Midway through this period, be it 8 months, 1 year or whatever, the company will send back home few hundred of these workers, citing reasons like business slump, no projects etc. It pays them a paltry sum as inducement and they have their bouncers to ensure the workers comply. As soon as say 500 workers had returned home, the company will bring in another 500 as replacement collecting a further $3.25 million. So the cycle of recruitment spins like the Russian roulette giving the contractor constant additional capital. This then is the nub of the problem
It is not that the Ministry of Manpower (MOM is not aware of all these going-ons. The issue is how to tackle this problem to ensure the workers are not ripped off and short changed by their employing companies.
Two suggestions:
1. If Company A supplies its foreign workers (FWs) to subcontracting companies B C and D, make A liable to pay promptly the salaries of its workers outsourced to B C and D. It is for A to get the reimbursement from the other 3 companies
2 Where a company wishes to mass retrench FWs, require it notify or get clearance from MOM before they are sent back home. MOM can request the company to forward an undertaking informing that all outstanding wages for the workers have been settled and, if need be, conduct an exit interview of a select few of these workers to ensure compliance on the part of the company. Where a company sheds FWs without proper justification, its quota should be reduced by the number of the workers it has sent back. This will go some way to compel companies to recruit workers to actual needs and not excess to needs that make these workers as cash cows for the company to milk money.
teo thong lee
I quote from this article :
“The poll predicts gross domestic product (GDP) will contract
1.1 percent in 2009. That marks a rapid deterioration in the economic environment from two months ago, as the global financial crisis has deepened. A similar poll in late September forecast 4.6 percent GDP growth.
Singapore’s bleak performance has been the result of its exposure to the US market.
”
=end quote=
I cannot help but ask
MANY PREVIOUS ECONOMIC RECESSIONS TELL US THE SIMILAR PROBLEM : EXPOSURE TO US MARKET. SO, SINCE THEN WE HAVE LEARNT RIGHT? BUT WHY STILL BLEAK PERFORMANCE DUE TO USA EXPOSURE?
WITH SO MANY TALENTS , AS PROVEN BY THEIR WORLD RECORD SALARY, THE WEAKNESS SHOULD BE GONE ALREADY RIGHT?
teo thong lee
ooops! the article is this
http://www.thepeninsulaqatar.com/Display_news.asp?section=Business_News&subsection=market+news&month=January2009&file=Business_News2009011504255.xml
ashamed
Why are the politicians turn a blind eye to the existence of this social unjustice? Tightening the regulations implis increased cost? Do not want to offend big businesses who may simply packup and go? Do we need to work for the magic number of GDP?
It is the inherent weakness of the system built by the government that constraints them – economic growth at all cost, GDP growth will solve all problems (this has been questioned), welcoming MNC with open arms, involving state wealth/national reserve/our money in other words in investments with no clear objectives – what do we do with the earned money – certaintly not to help the ciitizens and it is especially painful when they keep making big losses.
Back to the issue, when can we as a nation turn our attention to this issue?
gemami
They should have consulted the feng shui masters when they designed the building. See, now the three tombstone tablets of the father, son and holy Goh are going to entomb the foreign workers with them.
I have a prophecy based on a premonition; and it is this; that this building will become the mark & symbol for freedom in Singapore. Mark this comment down, and when they day comes, don’t say I did not tell warn you.
do you peeps wnat to know
the whole GoddamnTruth stories
behind all this walls?
it very easy to tender to get a contract
off course with our singapore kiasu government scholars
you just bid the LOWEST..
unless you happenned to be a LEE clan
than different story lark…….
onced you bid
you happy
but as you keep goin on your project
you find suddenly
materials went up
take a look @ the sandSTORMs recently
how many small kachan puteh subcontractors got burnt?
if you kannaed burnt
how to carry on with your project
must cut costin right?
the naswer
my friends
is
blowin in the wind……………..