NYU set to compensate thousands of migrant workers on Abu Dhabi complex

New York University (NYU) has pledged to compensate thousands of migrant workers who built its new campus in Abu Dhabi after an investigation found that roughly a third were excluded from safeguards intended to stop them from being abused and exploited.

About 10,000 people were not covered by the university’s labour guidelines, which were meant to protect them from exploitative conditions including forced labour, poor wages, illegal recruitment fees and associated debts, squalid living conditions, and abuse and harassment, according to a report by the international investigations firm Nardello & Co.

The report found that the system monitoring compliance with the guidelines was flawed, with local contractors – including Mubadala, a real estate company owned by the Abu Dhabi government – exploiting a loophole to exempt some subcontractors from the labour guidelines, which increased their profits. It concluded that “this practice … created a significant gap in coverage that disenfranchised thousands of workers from the protections contemplated by the labo[u]r guidelines”.

The investigation was commissioned by NYU and its partner Tamkeen, following reports by the media and human rights groups suggesting that many migrant workers building the new campus on Saadiyat Island lived in squalid conditions, were charged supposedly outlawed recruitment fees, received wages far lower than they were promised, and had their passports confiscated by their employers. These findings were cited in a complaint by the International Trade Union Confederation to the International Labour Organisation, which is conducting an investigation into allegations of forced labour in the United Arab Emirates.

The Nardello investigators determined that NYU and Tamkeen were genuinely committed to fair working conditions and that their guidelines and monitoring arrangements had improved the lives of many workers. However, their report also “corroborated many of the allegations levelled by the media and NGOs and found that the implementation of the [employment] standards was flawed”.

In a joint statement, NYU and Tamkeen welcomed the finding that 65%-70% of the 30,000 migrant workers involved in constructing and operating the campus on Saadiyat Island, which opened last year, had been protected by the guidelines. But they also accepted that the system was flawed, adding that they would provide compensation to the excluded workers in “line with what they should have received under our labor standards”.

“That error, for which we take full responsibility, was inconsistent with the project’s publicly stated commitment to ensure that all of those working on the construction of the NYUAD Saadiyat campus would be covered by our standards and compliance-monitoring program,” the statement said.

It added that a third party would be appointed to reimburse the affected workers, who also include some not paid their full wages despite being covered by the guidelines. An NYU spokesman did not elaborate on the amount of compensation that would be provided.

Originally only a narrow group of workers were exempted from compliance with the labour standards, such as outside vendors delivering goods to the main campus project. But the contractors widened this group to exclude subcontractors whose work was valued at less than $1m (£665,000), those who worked onsite for less than 31 days, and those with gaps of 30 days between visits to the site.

As contracts included additional payments for “compliance-related costs”, this provided a financial incentive for contractors to subcontract work into smaller amounts, exempting them from the guidelines and eliminating the associated extra costs, the investigators found.

“It is evident that decreasing the number of covered workers would have had the net effect of lowering compliance-related costs and increasing profits for the company,” said the report.

The investigators found that the project’s main contractors, Mubadala and Al Futtaim Carillion, a UAE affiliate of the British construction firm Carillion plc, which was responsible for implementing the guidelines, exploited the flaws in the system, thereby increasing their profits.

The report noted that correspondence among Mubadala, AF Carillion and EC Harris, the cost consultant on the project, referred to NYU and the Executive Affairs Authority of Abu Dhabi having been “fully aware” of the exemption strategy. However, it also said NYU, and NYU’s monitor of the labour guidelines, Mott McDonald, appeared not to have been aware of the practice of granting exemptions, adding that “accounts vary” as to what each party knew. Some NYU staff interviewed by Nardello said they were aware of a “time threshold” but not a financial one.

Nicholas McGeehan, Gulf researcher at Human Rights Watch, said: “Not only was there a policy to exclude workers from the labour guidelines, but firms were able to increase their own profits on account of that policy using money designated to help them comply with those guidelines. Nardello have said in interviews that it was beyond the scope of their mandate to investigate this issue in full, which is a great shame.”

In a statement, John Sexton, president of NYU, said that neither the university nor Tamkeen were aware of the exemption policy “or how widely it was being applied”. But he added: “The bottom line is that we both nonetheless must take responsibility for the lapses that occurred and must try to address them”.

The report found that only 20 of the 25,000 who qualified for reimbursement of the recruitment fees they paid to secure work in the UAE, typically $1,000 to $3,000, received any financial compensation. It also noted that 30% of workers reported they were forced to hand over their passports to their employers to gain employment on the campus, in breach of the labour guidelines.

The Coalition for Fair Labor at NYU, a campaign group of staff and students, welcomed the report. It said the findings showed that Mott MacDonald had “failed to do an adequate job, and that the process, as a whole, was poorly designed”.

A footnote in the report said: “UAE law is completely inconsistent with labor practices in the US and elsewhere in the west”, adding that it was “difficult to reconcile” NYU’s labour guidelines with UAE law, specifically its ban on unionisation and criminalisation of strike action.

Sharan Burrow, general secretary of the International Trade Union Confederation, said: “The acceptance of these laws by NYU simply means that workers will face serious exploitation with no effective means of redress. They continue to employ support, cleaning, catering and maintenance staff who are forced to pay illegal fees to get jobs, pay them poverty wages and deny freedom of association.”