DEVELOPERS AIM TO INCREASE LABOR ACCOMMODATION STANDARD

C O N F I D E N T I A L SECTION 01 OF 03 DUBAI 000329 SIPDIS NEA/ARP MASILKO; DRL/ILSCR ANZALDUA; DRL/GTIP PATEL E.O. 12958: DECL: 8/19/2018 TAGS: PGOV ELAB PREL PHUM AE SUBJECT: DEVELOPERS AIM TO INCREASE LABOR ACCOMMODATION STANDARD REF: A. A) DUBAI 271 (MEGA-PROJECTS, PART 1) ¶B. B) DUBAI 286 (DIC) DUBAI 00000329 001.2 OF 003 CLASSIFIED BY: Paul Sutphin, Consul General, Consulate Dubai, UAE. REASON: 1.4 (b),(d) ¶1. (U) Summary: In the absence of a federal labor housing standard, the UAE's large population of foreign workers lives in a wide variety of lodgings -- from the squalid and unacceptable to the reasonably comfortable. A few large developers across the UAE -- notably in Dubai, with the Emirates' largest population of low-skilled foreign labor -- have taken it upon themselves to improve worker accommodations, at the urging of government authorities and in response to intense criticism from human rights and labor groups, but also to improve worker productivity (and stave off poor accommodations as a source of laborer unrest). This message outlines how new housing projects by large Dubai para-statals Nakheel and Dubai Industrial city (DIC) aim to change the way in which laborers and other low skilled employees live by providing upgraded rooms, recreation facilities, healthcare and dining options at accommodations located near the projects employing the workers. However, improvements can double accommodation expenses for the company. One challenge facing developers will be convincing contractors and sub-contractors to ante-up the extra funds to improve their contract workers' quality of life. End summary. No Federal Standard for Labor Accommodation -------------- ¶2. (C) According to Alex Zalami, advisor to the UAE Ministry of Labor (MOL),the MOL has not set federal standards for labor accommodation; standards differ across the UAE's seven emirates. However, the MOL is currently consulting with the International Labor Organization (ILO) to develop federal standards for accommodation, heath and safety. While, according to Zalami, UAE law requires companies to provide "decent" accommodation for their employees, he acknowledged that that decency is a vague concept. Typically, better living conditions cost more and require more land per person housed. With rocketing real estate prices in the UAE, "many companies are looking to the government to provide the land [for new labor accommodations]." Zalami would not speculate on whether the UAEG is considering land donations or entering the business of providing homes for the hundreds of thousands of construction workers building the country's infrastructure. Nakheel's model labor accommodation -------------- ¶3. (C) However, it appears that Sheikh Mohammed bin Rashid al Maktoum (MbR, Prime Minister and Vice President of the UAE and Ruler of Dubai) might be taking a more active interest in worker welfare. According to Shehab Elorabi, Nakheel Senior Development Manager for the Omran project, MbR specifically directed para-statal master developer Nakheel to create a labor accommodation facility to serve as a model for future developments. Nakheel's new Omran accommodation project, situated adjacent to the Palm Jebel Ali and Dubai Waterfront mega-projects (reftel A),was initially conceived to house 60,000 construction workers laboring on the massive island building projects. A recent strategy shift (according to Elorabi, requested by Nakheel's hospitality division) has refocused the project to include housing for near-by hotels' hospitality staff, as well as labor accommodation. ¶4. (U) Construction and hospitality workers are housed in self-contained but geographically co-located facilities. There are four room configurations for the construction component: Executive (one person); Senior (one person); Junior (two people); and Shared (four people). The hospitality project features three room types: Senior (one person); Junior A (two people); and Junior B (three people). Omran also offers female-only housing in the hospitality facility. All rooms come complete with furniture and bedding materials; occupants are allowed to bring personal refrigerators and televisions, which can be connected to satellite free of charge. ¶5. (U) In addition to the living facilities, the Omran development offers a range of other amenities including a full-size cricket pitch, outdoor multi-purpose courts for basketball and volleyball, an indoor gym with fitness instructor, a library featuring books and newspapers in multiple languages, three separate language-specific television lounges, internet facilities, a mosque (and available rooms for other worship services),weekly laundry service, and a barber shop. DUBAI 00000329 002.2 OF 003 Food from five different regional cuisines is provided for all residents four times per day. All services, with the exception of internet access and barber, are provided free of charge. Residents are encouraged to provide feedback through comment cards or through resident representatives (selected from each group of laborers working for a specific contractor -- representatives meet weekly with Omran management to discuss issues and review suggestions). ¶6. (SBU) Currently, Omran houses approximately 1,700 laborers. An additional 8,300 tenants, split between the construction and hospitality industries, are scheduled to move into the facility within the next three months. Nakheel plans to add a series of self-contained housing compounds for 5,000 employees each over the next 15 years, targeting a total capacity of 60,000. Elorabi added his hope that other developers would follow Omran's lead and emphasized that Nakheel would willingly share its labor accommodation plans with other interested parties. ¶7. (C) Key to Omran's plans will be convincing contractors to pay the higher costs of Omran style accommodation. The lowest cost option (4 to a room) runs 55 AED ($15) per day versus the market standard rate of 20-25 AED ($5.45-$6.80) per person. Although unable to quantify the bottom line financial gains realized by contractors providing better accommodations, Elorabi quickly pointed out that improving workers' quality of life ultimately results in increased productivity from satisfied, well-fed, healthy employees. In addition, he noted, providing suitable accommodation "is an ethical decision." Dubai Industrial City (DIC)--a similar model -------------- ¶8. (SBU) Dubai Industrial City (Ref B),a 55 square kilometer mixed-use development including manufacturing, industrial, commercial and residential zones, has also incorporated workforce accommodation into its master plan. According to CEO Rashed Al Ansari, DIC is committed to creating a new standard for labor accommodation. He stressed that DIC's standards exceed existing Dubai government standards and also cover many additional areas not addressed by the municipality code. ¶9. (SBU) Eventually, DIC plans to construct seven different labor "villages", each providing accommodation for approximately 12,500 workers (87,500 total capacity). The existing facility at DIC houses 10,000 people, but construction on the additional villages, including one specially designated for female employees, is underway. While the accommodations are not restricted to DIC tenants, many of the individuals living in the facility will work at one of the tenant companies. According to Al Ansari, occupancy for the existing (and some unfinished) labor villages is already 100 percent. ¶10. (U) DIC facilities, similar to those at Omran, offer several room and furnishing configurations ranging from single occupancy rooms for supervisory level employees to rooms that can accommodate up to seven laborers. A central kitchen prepares regional cuisine based on the demographic of the labor population. In addition to room and board, each DIC labor village incorporates amenities such as grocery stores, post offices, and barber services. A host of recreational outlets -- including volleyball and basketball courts, a shared football/cricket pitch, and an indoor gym -- provide additional recreation options for village residents. A number of training courses, ranging from instruction on proper hygiene to healthy eating, will be offered periodically to further contribute to the residents' well-being. Each facility also has an information distribution system to alert occupants to new notices, residence regulations, and other important messages, displayed prominently in multiple languages near building entrances. Emergency numbers are prominently displayed throughout the camp to provide for rapid response of on-site civil defense and police personnel. Comment -------------- ¶11. (SBU) Efforts by DIC and Nakheel to upgrade workforce accommodation in Dubai and the UAE represent an encouraging trend, although the nascent effort appears limited to very large-scale employers. Without a clearly quantified cost-benefit analysis or a strictly-enforced government mandate to improve worker housing country-wide, ethics alone are not likely to sway many of the UAE's bottom-line focused contractors to change current practices. The fact that Omran revised its strategy to include higher price point hospitality workers (even before it began operations) suggests that Nakheel may already have a hard time selling its pricing model to less well-funded DUBAI 00000329 003.2 OF 003 developers and contractors. While DIC has managed to achieve 100 percent occupancy, its tenant base is more aligned with the hospitality industry than the construction worker demographic (typically one of the lowest paid segments of the Dubai workforce). All interested parties (the UAEG and individual emirate governments, socially responsible corporations, workers rights advocates, and the labor force itself) will need to cooperate to sustain needed improvements in worker housing. We believe a strong national mandate from the central government is key to this effort. End comment. SUTPHIN