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Tourism Development and InvestmentCompany (TDIC)Employment Practices Policy (EPP)Compliance Monitoring Report

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TDIC EPP Annual Report December 2014

1TDIC EPP Annual Report December 2014

Executive Summary 2

Background 2

Scope of the 2014 Monitoring Programme 4

Summary of workers interviews conducted 5

Observations from the 2014 Monitoring Programme 6

Future work 9

Findings 10

Appendices 32

About TDIC and Saadiyat Island 33

The Monitoring Programme 36

Details of Monitoring Programme Visits 40

Glossary of Terms 41

Contents

2 TDIC EPP Annual Report December 2014

Executive Summary

Background

Following the completion of two Independent Annual Monitoring Reviews in 2012 and 2013, PwC was reappointed in 2014 by the Abu Dhabi Tourism Development & Investment Company (“TDIC”) to assess TDIC and it’s Contractors and Subcontractors compliance with the UAE Labour Law and the TDIC Employment Practices Policy (“EPP”) which has been developed and implemented by TDIC to safeguard the welfare of workers engaged on Saadiyat Island construction projects.

Economic growth in the United Arab Emirates (“UAE”), especially within the construction sector, has increased in 2014 following improvement in economic conditions. A number of organisations have been attracted as partners for the development of landmark projects. This growth and completion of these landmark projects creates continuing demand for skilled and unskilled expatriate workers.

The United Arab Emirates (“UAE”) has demonstrated its commitment to increasing the standards for worker welfare through ratification of various International Labour

Organisation (“ILO”) conventions such as the abolition of forced labour, hours of work and worst forms of child labour conventions. During 2014, there has been continuing focus on worker welfare issues in the UAE and in June 2014, it was announced that UAE has been elected as a member of the ILO to represent the Asia and Pacific region (55 countries in total) and assigned to the ILO Board of Directors.

As part of its continuing efforts to ensure the stability of the labour market and protection of workers, on 2 October 2014, the Government of Abu Dhabi issued a memo to all local government entities mandating the registration of Contractors and Subcontractors only upon providing adequate proof of: worker health insurance and visas, appropriate accommodation facilities and compliance with the UAE Wage Protection System and adherence to the federal labour law. Local government entities, including TDIC, are also now required to submit quarterly reports on their compliance with these requirements

“TDIC’s vision is to develop sustainable cultural and tourism assets that support the Abu Dhabi Economic Vision 2030 by enhancing the Emirate’s reputation as a destination of choice for tourists, business visitors and entities, and residents.”

7Main

contractors

46Subcontractors

7,297Average monthly number of workers on the TDIC projects during the period December 2013 and November 2014

Total Contrators and Subcontrators in 2014


Established by the Abu Dhabi Government in 2006, TDIC is one of several developers and investors of major tourism, cultural and residential destinations in Abu Dhabi. TDIC’s vision is “to develop sustainable cultural and tourism assets that support the Abu Dhabi Economic Vision 2030 by enhancing the Emirate’s reputation as a destination of choice for tourists, business visitors and entities, and residents”. One of the main elements of Abu Dhabi’s Vision for 2030 is the development of Saadiyat Island, part of which is being overseen by the TDIC.

Saadiyat Island is divided into seven districts, which are being developed by TDIC and other investors and developers. The EPP is only applicable to the projects developed and managed by TDIC on the Island and not the other projects developed by other organisations.

Figure 1: Saadiyat Island (source: TDIC)

Figure 2: Cultural District – Masterplan(Source: TDIC)

Saadiyat Cultral District

Saadiyat Marina

Saadiyat Beach

The Cultural District, which is being developed by TDIC, will be home to cultural destinations such as the Louvre Abu Dhabi, Guggenheim Abu Dhabi and Sheikh Zayed National museums. These developments, in particular, continue to have a high profile due to the large number of local and global stakeholders that are involved in these projects.

During the first half of 2014, there were a number of key developments at TDIC, including the award of two construction contracts for infrastructure projects in the Cultural District and one for the construction of residential villas on Saadiyat Beach.

During 2014, there were seven active projects managed by TDIC on the Saadiyat Island including the construction of the Louvre Abu Dhabi museum, a school, residential villas, two infrastructure projects, a civil defense station and a 1.5km tunnel. These projects were executed by seven main Contractors and their 46 Subcontractors, which have collectively employed a monthly average of 7,297 workers on the Island between December 2013 and November 2014.


Scope of the 2014 Monitoring Programme

The independent Monitoring Programme completed by PwC in 2014 included:

• An independent appraisal of TDIC’s implementation of the EPP including TDIC’s response to the 2013 PwC monitoring findings;

• An assessment of the governance, policies and procedures within TDIC that promote EPP implementation; and

• An independent appraisal of the extent of the EPP implementation by all main Contractors and the largest of their Subcontractors working on active projects on the island.

The 2014 Monitoring Programme covered five projects, selected based on the contract value and the number of workers involved. The programme involved nine monitoring reviews with initial reviews performed between December 2013 and May 2014 and two subsequent follow-up reviews which were carried out between June and August 2014 and September and November 2014 respectively. Between April and November 2014, PwC also performed two reviews which assessed TDICs compliance with the EPP and specific monitoring work in relation to the workers accommodation at the Saadiyat Accommodation Village (“SAV”).

The SAV, built in 2009, is an accommodation facility located on Saadiyat Island capable of housing 20,000 workers.

In conducting the Monitoring Programme, PwC was able to draw on over 20 years’ experience in the area of social compliance monitoring and more widely in supporting major public and private sector organisations on corporate responsibility and sustainable development projects. The PwC monitoring team included individuals who were part of the 2012 and 2013 monitoring programs and specialists drawn from PwC’s global network of firms who have

extensive experience in advising and implementing compliance monitoring programmes. Monitors were selected on the basis of their knowledge, experience, language skills, cultural background and received specific training/ induction prior to commencing the monitoring work.

The Monitoring Programme was consistent with and built on the work carried out in previous years and constituted the following activities:

• Interviews with TDIC’s Employment Relations Manager (“ERM”) and other staff members;

• A review of relevant documentation, including the EPP documents required to be maintained by the Employment Relations Manager (“ERM”), approvals of the Employment Relations Practitioners (“ERPs”), enforcement letters sent to Contractors and the TDIC implementation plan with respect to remediation of observations reported in 2013;

• Formal and informal interviews with workers at construction sites and at the SAV; and

• Visits to SAV to observe and assess the workers living conditions and compliance with EPP requirements and standards mandated by the UAE Labour Law and Cabinet Decision # 13 of 2009 regarding labour accommodation.

The Monitoring Programme for 2014 also focused on the Health & Safety (“H&S”) issues which were covered also as part of the 2013 Monitoring Programme, in particular:

• The implementation and maintenance of H&S standards on TDIC construction sites by Contractors and Subcontractors, TDIC’s monitoring of those standards, and the overall framework for H&S management within TDIC;

• The H&S management framework at the SAV; and

• Accident, incident and injury reporting procedures within TDIC.

“The 2014 Monitoring Programme covered five projects, selected based on the contract value and number of workers involved.”


Summary of workers interviews conductedIn 2014, PwC interviewed 1,050 workers representing 14.4% of the average monthly worker population on Saadiyat Island during the period of December 2013 to November 2014.

It should be noted that none of the workers interviewed were recruited or employed by TDIC. They are primarily recruited by Contractors and Subcontractors through recruitment agents in the worker’s country of origin to work on projects. Some are recruited directly to work on TDIC projects whilst others were previously recruited and worked on other projects before being deployed on a TDIC project.

All of the workers interviewed originated from four countries: India (51%); Pakistan (27%); Bangladesh (20%); and Nepal (2%).

Executive Summary

Age range of 1,050 workers:

54%Age 21-30

38%Age 31-40

8%Age 41-50

23%

2010 andbefore

11%

2011

8%

12%

46%

2012

2014

2013

Our sample of workers interviewed consisted of workers who were hired by their employers in:

20%Bangladesh

51%India

27%Pakistan

UAE

2%Nepal


Observations from the 2014 Monitoring Programme

Our 2012 and 2013 Annual Reports1 provided detailed findings of the previous Monitoring Programmes along with TDIC’s responses.

Throughout our monitoring work, TDIC and most of the Contractors and Subcontractors were supportive of the EPP and its objectives and facilitated the delivery of the Monitoring Programme.

Overall, this year we have been able to identify more detailed and specific insight and information on EPP implementation and enforcement issues; and, as a result to, increase the number of positive interventions made by TDIC as a result of the Monitoring Programme.

This is an outcome of the cumulative knowledge built up from our previous monitoring work, the increased focus on EPP implementation and enforcement by TDIC and the subsequent improved quality and availability of documentary evidence within TDIC and its Contractors and Subcontractors relating to the areas covered by the EPP.

In response to the 2013 monitoring findings, in 2014; TDIC has sought to continue to implement and strengthen initiatives to provide support to workers and improve overall working and living conditions.

In particular, we have observed and obtained evidence that:

•

“In 2014 TDIC has sought to continue to improve overall working and living conditions.”

• TDIC has strengthened the framework to promote EPP implementation activities within TDIC, positioning the EPP implementation activity under a newly established Compliance Function and developing an internal EPP implementation model which TDIC is planning to activate in 2015;

1. http:// www.tdic.ae/TDICWSAssets/En/pdf/20120923_TDIC-EPP-Compliance-Monitoring Sep2012.pdf

http://www.tdic.ae/TDICWSAssets/En/pdf/pwc’s_tdic_epp_annual_report_2013.pdf

A new Operator has been contracted to operate the SAV. The new Operator is directly responsible for dealing with TDICs Contractors and Subcontractors in relation to providing accommodation for workers on Saadiyat Island in addition to operating and maintaining the facility. During our last monitoring review, we observed that additional services had been introduced to provide better living conditions for the workers. These include, for example, door to door laundry services, daily cleaning of rooms and bathrooms, full renovation of the main kitchen and a plan to enhance recreational activities;

TDIC appointed an EPP Administrator to assist the Employment Relations Manager (ERM) in enhancing EPP implementation across TDIC project sites. This has resulted in the re-activation of periodic compliance reviews conducted by TDIC staff, principally the ERM and EPP Administrator, to assess Contractor’s compliance with the EPP;

TDIC has increased enforcement actions for Contractors/ Subcontractors found to be in breach of EPP requirements;

TDIC has strengthened the framework to promote EPP implementation activities within TDIC, positioning the EPP implementation activity under a newly established Compliance Function and developing an internal EPP implementation model which TDIC is planning to activate in 2015;

TDIC has enhanced levels of governance over EPP activities and focused on achieving increased levels of worker welfare standards. An internal team was formed from different parts of TDICs operations to review the EPP policy and establish a formal operational framework along with policies and procedures for the EPP implementation;


In addition to these observations we also noted that during 2013, a widely reported incident occurred at the SAV as a result of a personal dispute between two individuals. This subsequently escalated into a large ethnic conflict. Under instruction from the local security authorities, TDIC relocated a number of workers on a temporary basis outside of SAV for their own safety and security. Subsequently, the workers were rehoused at the SAV and for a period of time in 2014 were segregated across the accommodation clusters by nationality. During our most recent visit to the SAV we have observed that workers have now been re- allocated to different clusters by project regardless of their nationality/ethnicity.

As a result of our detailed Contractor and Subcontractor monitoring programme, we have noted performance improvement in a number of areas related to EPP implementation. These include providing EPP and Health & Safety (H&S) inductions for workers and increasing the worker’s awareness of their employment rights.

Executive Summary

Figure 3: TDIC Project Site(Source: TDIC)

TDIC management has been liasing closely with their Museum Partners to obtain their input on the enhancement of the workers welfare programme for the upcoming projects in 2015; and

TDIC has continued to receive approaches from other organisations active in the region who wish to learn from TDIC’s experience in relation to their workers welfare program.


Other specific monitoring observations reported to TDIC in 2014 included the following:

In April 2014, a Contractor submitted a petition, signed by over 2,000 workers engaged on their projects, listing complaints about the accommodation and services available in the SAV. TDIC responded to this by immediately relocating workers to one of the recently renovated clusters and, as noted in the previous pages, has subsequently appointed a new Operator to manage the SAV.

In one incident in June 2014, an oversight in the EPP Contractor Exemption approval process at TDIC resulted in a Contractor being given an exemption to accommodate 310 workers outside the SAV without prior assessment of the accommodation standards as required by the EPP. A site visit to the Contractor’s accommodation facility was subsequently conducted by TDIC and the accommodation was found to be of adequate standard and the exemption was formalised.

Of the 1,050 workers interviewed, 88% stated that they had paid recruitment fees and 89% had paid relocation costs. None of the workers were able to provide evidence of these payments.

As noted in our previous reports, full resolution of this issue requires action beyond TDIC’s control and outside of the UAE.

During our review, we found 261 workers were hired by one Contractor from recruitment agents who were charging the workers a recruitment fee. The agreements between the Contractor and the agents stated that the Contractor would reimburse the workers any fees paid after six months. However, our monitoring work indicated that the majority of eligible workers had either not been reimbursed or fully reimbursed the appropriate amounts.

Under instruction from TDIC, an enforcement notice was issued requiring the Contractor to immediately investigate and rectify these non-compliances. A financial penalty was also applied to the same Contractor relating to this issue and other EPP non compliances. The Contractor indicated they will respond with an action plan to rectify this issue by January 2015.

One Subcontractor was found to be deducting AED 100 (USD 27) from all its workers on a monthly basis as contribution to a worker saving scheme which had not been approved by the relevant authorities. In addition, we also noted that the Contractor had not adequately explained the terms and conditions of the saving scheme to its employees. We noted that whilst the Contractor claimed that the funds could be withdrawn by the individual employee at any time, the workers believed that these funds could only be reclaimed on termination or expiry of their employment contracts.

On identification of this finding, the Contractor agreed to return the money retained to all of his workers on the TDIC project, which we confirmed had occurred by subsequent review in June 2014.

We noted one incident of a Contractor delaying payment of salaries for one month. However, during our subsequent reviews we noted no further delays in payments of workers’ salaries.

Out of the 1,050 workers interviewed, seven workers from one Subcontractor had stated during their interviews that they were not provided the option of retaining their passport by their employer. TDIC acted upon this issue immediately and requested the Subcontractor to return all passports to the workers.


Future work

Based on our review of TDIC’s implementation of the EPP in 2014, we have proposed a number of improvements in relation to EPP implementation and monitoring for 2015, which should contribute to further improvement in the effectiveness of EPP implementation and overall standards of worker welfare on TDIC projects.

For TDIC, we have suggested that they:

Executive Summary

Release the updated version of the EPP in early 2015 and activate their new EPP enforcement model;

Further enhance the level of resources focused on EPP implementation and enforcement; and

Continue to engage and work with business partners and other stakeholders to address workers welfare issues.

Planned future developments of the independent monitoring programme include:

Updating the monitoring tools and techniques based on the new version of the EPP to be issued in early 2015;

Increasing the coverage of the Monitoring Programme by including more Subcontractors and extending the scope of the testing and document review process and monitoring visits; and

Extending the scope of workers interviews to gain greater insight into overall levels of worker welfare and into the views of workers on their experience and the benefit and costs to them of employment in the UAE.


Findings


Context

The Monitoring Programme included a review of five out of the seven active projects on Saadiyat Island during the period from December 2013 to November 2014, including:

• The Louvre Museum Abu Dhabi;

• Saadiyat Beach Villas – Phase 2;

• Marina District Infrastructure Phase 1A;

• Cultural District Infrastructure; and

• Saadiyat Tunnel Project.

Findings

Bangladesh

Pakistan

India

UAENepal

Figure 4: Country of Workers’ Origin employed on TDIC projects covered in 2014

The Monitoring Programme covered four Contractors and six Subcontractors operating on Saadiyat Island in 2014. In total these Contractors and Subcontractors were responsible for an average of 4,188 workers (57%) out of the monthly average of 7,297 workers employed on the Island during the monitoring period.

The workers we interviewed employed on Saadiyat Island originated from four countries: India, Pakistan, Bangladesh and Nepal.


Key Monitoring Findings

Based on the scope of our monitoring review during the course of the year, we provided TDIC with detailed ‘Initial’ and ‘Follow-up’ Monitoring Reports on the status of EPP compliance for each Contractor and Subcontractor monitored. These reports have been discussed and agreed with the Contractor and TDIC, and include their respective responses to reported non-compliances and other matters identified. We have summarised the main observations from the 2014 Monitoring Programme in this section.

Note: for each performance area addressed, a summary of the EPP requirement is included. Please refer to the latest version of the EPP which is available on the TDIC website for more detail (www. tdic.ae).

1. EPP Compliance & ImplementationThroughout our 2014 Monitoring Programme, we have observed that TDIC has continued their commitment to enhancing standards of worker welfare by instigating a number of changes. Some of these changes were a result of observations we identified and reported during the course of year. Our main observations and specific actions taken by TDIC are as follows:

• There was a lack of consistent and rigorous internal EPP monitoring in place at TDIC. In response to this, TDIC has recently positioned the EPP under a newly established Compliance function and sought to develop the operational framework for EPP implementation which involves collaboration between the different functions within TDIC;

• There continues to be ambiguity in terms of consistent EPP interpretation by Contractors and Subcontractors. This has resulted in EPP conditions being interpreted to the benefit of the Contractors/ Subcontractors rather than the workers on a number of occasions. TDIC has noted possible areas of ambiguity and sought to eradicate these in the revised version of the EPP which is expected to be released in early 2015;

• In response to increasing complaints received from workers and Contractors on the accommodation and services at SAV, TDIC terminated the contract of the previous Operator in mid-2014 and contracted a new Labour Accomodation Operator. Following this action, we observed an increase in the quality of accommodation and services provided including door to door laundry services, daily housekeeping of workers bedrooms, a new kitchen facility and a plan for new recreational facilities;



• We noted that only three out of six financial penalties issued to Contractors have been applied by TDIC during 2014 in relation to EPP non-compliances. We have been informed by TDIC that application of the three remaining penalties is pending final settlement with the Contractors; and

• In previous years, TDIC has primarily developed and enhanced the EPP internally. During 2014, we have observed increased TDIC engagement with TDIC’s project partners to obtain their input on worker welfare requirements.

1.1 TDICs Internal Monitoring ProgramTo enhance implementation and conformance with the EPP, TDIC appointed an EPP Administrator in Q1 2014 who is responsible for assisting the Employment Relations Manager with day to day activities. In addition, the TDIC EPP team is supported by an external Contractor to conduct site H&S inspections and worker interviews. However, we have noted the following:

• Reports produced by the TDIC EPP team were not being escalated to TDIC management and were not acted on or used for Contractor financial penalty determination; and

• Although EPP required reports were submitted by Contractors and the SAV Operator on monthly basis, no analysis was carried out by the EPP team on the submitted data to ensure consistency and accuracy of reported information.

In response to the above findings, in April 2014, TDIC strengthened the framework to promote EPP implementation activities by positioning the EPP activity under a newly established Compliance Function and investing in an EPP monitoring model which TDIC is planning to introduce in early 2015.

Findings

1.2 Demobilisation of Subcontractors not in compliance with various elements of the EPP During our 2014 Monitoring Program, we observed that all 138 workers interviewed for one Subcontractor, acting as a manpower supplier on one project, stated that they had paid recruitment and relocation fees to recruitment agents. The Subcontractor stated that all workers deployed on the project had been hired prior to their commitment to the EPP and that they had no intention of hiring any new workers specific to the project on Saadiyat Island.

When requested, the Subcontractor did not make his contracts with the recruitment agents available to PwC. We reported this finding to TDIC and were informed that this Subcontractor would be demobilised from the project by the Contractor.

We confirmed that the Subcontractor was demobilised from the project site during our monitoring review conducted in November 2014.

1.3 Consistency of EPP Standards and Due DiligenceIn one incident in June 2014, an oversight in the EPP Contractor Exemption approval procedures at TDIC resulted in a Contractor being given an exemption to accommodate 50% of their workers at the SAV (310 workers were exempted as of June 2014). This exemption was incorporated as one of the contractual conditions between TDIC and the Contractor. The EPP requires that if such an exemption is to be granted, workers need to be accommodated in a facility that meets the minimum standards of the local labour regulations. However, we noted that TDIC had not confirmed that this requirement was met prior to granting the exemption.

TDIC acted on this finding, conducting a review of the alternative accommodation and confirming it to be of an appropriate standard. Procedures have subsequently been enhanced to prevent such EPP related exemptions being granted without appropriate prior approval.


1.4 Workers Living ConditionsDuring 2014, a number of changes have taken place in relation to SAV.

In April 2014, a Contractor submitted a petition, signed by 2,170 workers engaged on their projects, listing complaints about the accommodation and services available in the SAV.

In response to this petition and other reported concerns, TDIC terminated the contract of the previous SAV Operator and appointed a new Labour Accomodation Operator. The new Operator is responsible for all maintenance and operations of the SAV and has direct responsibility for dealing with TDICs Contractors in relation to workers accommodation and service provision.

In early 2014, TDIC appointed a Contractor to renovate the Red and Blue Clusters in SAV. However, during our 2014 Q2 and Q3 visits to the SAV, we noted that the previously reported issues (such as leaking toilets and washing facilities) were still prevalent. TDIC informed us that the performance of the maintenance Contractor had not been deemed acceptable and action was being taken against this Contractor and to address the outstanding issues.

Figure 6: SAV Recreational Facility(Source: TDIC)


Findings

2. Retention of PassportsEPP Clause 16.3: Contractors and Subcontractors shall not keep or retain the passport of any employee, other than for the purposes of obtaining or renewing a Residency Visa or cancellation of a Residency Visa upon termination of employment.

Our reviews conducted in Q1 and Q2 of 2014 indicated that Contractors have provided all workers interviewed with the option for their passports to be safely held by their employers with the worker’s prior consent. This was evidenced by the completion of a ‘Passport Handover’ form.

However, during our final review in Q3 2014, we interviewed 25 workers working for one Subcontractor, of which 7 stated that they were not provided with the option of retaining their passports. Upon further investigation we identified that these workers were asked to sign a ‘Passport Handover’ form releasing custody of their passports to the Subcontractor when in fact their passports were being retained by their direct employers, a manpower supplier.

The Subcontractor has stated these workers were hired 3 to 4 years earlier by the manpower supplier and therefore could not confirm whether they were provided the option of retaining their passports.

Upon reporting this finding, TDIC requested the Contractor and Subcontractor to return all passports to the workers. We followed up on this issue following completion of our review and confirmed that the workers were provided with their passports by their employer.


Figure 7: SAV - Red Cluster(Source: TDIC)


3. Recruitment Fees and Relocation Costs

EPP Section 15: Contractors and Subcontractors are liable for the payment of recruitment fees and all monies to relocate workers to the site, including visa fees, travel/ ticket and all monies necessary to assign the employees to the site. Contractors and Subcontractors are required to have formal agreements with recruitment agencies. These agreements should include a clause prohibiting payment of recruitment fees by workers.

88% of the workers interviewed stated that they had paid recruitment fees and 89% workers stated they had paid relocation costs (including visas and air ticket costs) in cash to recruitment agents in their home countries. None of the workers interviewed in 2014 were able to provide any evidence such as receipts to support their claims.

As noted in our previous reports, the full resolution of the recruitment and relocation cost issue is beyond TDIC’s direct influence and also requires action outside of the UAE.

We reviewed the agreements between the Contractors / Subcontractors (21 contracts in total) and their respective recruitment agencies and noted that seven (33%) of these agreements contained a clause prohibiting the collection of recruitment fees and relocation costs from the workers. All of the recruitment agents involved were registered and licensed in the workers country of origin.

“As noted in our previous reports, the full resolution of the recruitment and relocation cost issue is beyond TDIC’s direct influence and also requires action outside of the UAE.”

However, for one Contractor, which currently has agreements with 17 recruitment agents, we noted that 12 agreements allowed the agents to charge workers a fee for recruitment and relocation ranging between AED 1,400 (USD 382) to 1,600 (USD 436). The agreements also stated that this amount would be reimbursed by the Contractor after the worker completed his six month probation period.

We interviewed 335 workers from this Contractor and found that 261 (78%) were hired from agents that were allowed to charge the worker the fixed fee for recruitment and relocation.

Of these 261 workers, we selected a sample of 115 workers who were eligible for reimbursement and noted that the reimbursement arrangement is not formalised within any of the workers’ offer letters or contracts of employment and that 107 (93%) workers had not been reimbursed by the Contractor and the remaining eight (7%) had only received two or three partial reimbursement payments.

In response to this finding, TDIC issued an enforcement notice in November 2014 requiring the Contractor to immediately investigate and rectify these non-compliances. A financial penalty was also applied to the same Contractor related to this issue and other none compliances. The Contractor indicated they will respond with an action plan by January 2015.

Findings


4. Terms of Employment and Site Assignment Agreements

EPP Clause 17.3: Workers shall receive and acknowledge receipt of official confirmation of their terms of employment before leaving their country of origin. Furthermore, prior to being assigned to a site, workers should sign a Site Assignment Agreement (SAA) to confirm, amongst other items, that they have not been required to pay recruitment fees to any Agent in respect of gaining employment.

In total, 51% of workers interviewed indicated that they had received an official confirmation of their terms of employment (official contract of employment) prior to leaving their home countries. However, 33% of these workers stated that this offer letter was not in their native language.

During our 2014 monitoring visits, 100% of the workers interviewed had signed the SAA in their respective native language while 87% of these workers had signed the SAA prior to commencing work on a TDIC job site as required by the EPP.

5. Payment of WagesEPP Section 20: Wages are paid directly and electronically into the bank account of the Employees in UAE currency. No wages shall be paid in cash. The Employer shall not deduct any money from any employees’ wages, except as permitted by law or for repayment of a loan. Deductions shall not exceed 10% of employees’ wages. The Contractor shall also provide Employees with pay slips when making salary payments and must provide proof of payment of wages to the ERM.

The 2014 Monitoring Programme indicated evidence of effective actions by TDIC and Contractors in relation to wage payment processes.

These included proof of payment being submitted to the ERM on a monthly basis, payslips being provided to all workers with details of their salary break-down, and salaries being paid through the Wage Protection System (WPS).

However, some non-compliances were identified as detailed below:

• A delay of approximately one month in payment of salaries was noted for 50 workers interviewed from one Contractor. This issue was immediately addressed and workers paid once it was reported to the Contractor and TDIC. During our subsequent reviews, we noted no further delays in payments of workers’ salaries.

• During our review in March 2014, we noted one Subcontractor had put in place a saving scheme whereby AED 100 (USD 27) was being deducted from all workers of one Subcontractor every month. We noted that this worker saving scheme had not been approved by the relevant authorities. Workers interviewed indicated that they were not aware that they could withdraw their saved amounts at any time, believing that they could only be reclaimed on expiry or termination of their employment contract.

Following identification of this practice, all amounts being withheld for all workers were reimbursed and the scheme was discontinued in June 2014.

During our Q3 review of one Contractor, we noted that 25 workers had not received their monthly payslips. We also noted discrepancies between overtime hours recorded and the amount paid. On receiving this information, TDIC issued an enforcement note to the Contractor, which the Contractor confirmed they had complied with in September 2014.

We followed up on this issue following completion of our review and confirmed that the workers were paid for the difference in overtime hours and payslips were provided to the workers as required by the EPP.

“During our 2014 monitoring visits 100% of the workers interviewed had signed the SAA and in their respective native languages.”


Findings



6. Accommodation and Facilities

EPP Clause 46.1: Contractors to house all their workers in the SAV. Any exemption has to be approved by the ERM. Where the Contractor does not utilise the SAV, it will provide accommodation that meets the requirements set by TDIC and by the Ministry of Labour. The EPP states that workers shall have freedom of movement outside SAV and Contractors shall provide employees with free transportation.

OccupancyThe SAV was established in September 2009 and has a capacity to house approximately 20,000 workers. The SAV consists of four clusters (Red, Blue, Green and Purple). Each cluster has a capacity to house 5,000 workers. The EPP requires all workers engaged on TDIC projects on Saadiyat Island for more than 30 days to be accommodated in the SAV.

The utilization of SAV in November 2014 was 38% with 7,513 workers residing there. During 2014, only the Red and Blue clusters, which were renovated in 2014, were being utilized, with 3,887 and 3,626 workers residing in each cluster respectively. The Green and Purple clusters were closed for refurbishment.

During our initial and follow up reviews in 2014, we observed that 96% of the workers interviewed were residing at SAV.

We also noted that, whilst the SAV has received all the required notices of compliance from the appropriate authorities, it is still to obtain the necessary final, formal approvals in relation to the UAE Cabinet Decision No. 13 relating to Minimum Standards for Group Labour Accommodation Camps.



Operations and MaintenanceIn April 2014, a Contractor submitted a petition signed by over 2,000 workers engaged on their projects listing complaints about the accommodation and facilities available at the SAV. Concerns raised included: water leakages in the toilets and washrooms; quality of food; lack of coverage for cellular devices; and a lack of transportation from the SAV to Abu Dhabi city.

TDIC responded to this petition by immediately relocating workers to one of the recently renovated clusters and in June 2014 appointed a new Operator to manage the SAV. The new Operator is directly responsible for dealing with TDICs Contractors and Subcontractors in relation to providing accommodation for workers on Saadiyat Island, in addition to operating and maintaining the SAV facility. During our Q3 monitoring review, we observed improvements introduced to provide better living conditions for the workers. These included: door to door laundry services; daily cleaning of rooms and bathrooms; full renovation of the main kitchen; and a plan to enhance recreational activities. However during our most recent visit to SAV in November 2014, we noted the following issues, either based on workers statements or PwC monitor observations:

• Continuing maintenance issues related to water damage to false ceilings in a couple of bathrooms at the red cluster, cracks in showers stalls and the use of old water filters at drinking water stations. We did also note however that the new SAV operator had only been in place for a short period of time and work was still ongoing to rectify these issues.

• A number of health and safety related issues were noted, such as use of appropriate language for safety signage and appropriate electrical back up for the fire alarm systems.

Findings

“The current utilisation of SAV is 38% with 7,513 workers residing there as of November 2014. Currently only the Red and Blue clusters which were recently renovated are being utilised with 3,887 and 3,626 workers residing in each cluster respectively. The Green and Purple clusters are currently closed for refurbishment.”


7. Health and Safety (H&S)

As construction activities on Saadiyat Island have increased significantly, it is critical to have appropriate H&S management resources in place to ensure Project Management Consultants and Contractors are complying with the EPP, the UAE H&S legislation and global H&S good practices.

Our 2013 Monitoring Program highlighted the transition of TDIC’s H&S function to an outsourced model.

In 2014 we have noted that there is now a formalised governance structure for H&S, whereby two engineering consultancy firms have been assigned the responsibility of overseeing day to day H&S management on project sites.

In addition, these engineering consultants report to the Project Management Consultants on a weekly and monthly basis regarding H&S performance.

EPP Clause 32.3: H&S inductions should be conducted, protective clothing should be provided to workers free of charge, and occupational injuries register should be maintained, H&S instructions should be displayed on notice boards and at least one first aid box shall be provided for every 100 employees.

In 2014, 93% of workers interviewed reported that they had received H&S induction prior to commencing work at site.

We noted that notice boards are placed at all construction sites and these contained the relevant and appropriate H&S information as stipulated by the EPP. We also noted provision of first aid boxes, occupational injury registers and provision of regular medical examinations in line with EPP requirements.

To date, approximately 21,000,000 man hours have been worked on TDIC job sites since 2012.

Monthly health and safety reports on contractor performance in 2014 indicate that a total of 792 hours have been lost as a result of four Loss Time Incidents (LTIs). A total of 284 first aid cases have been recorded which include minor injuries such as cuts, burns and bruises for which medical attention was provided on site. Seven near miss incidents were reported to date across all TDIC project sites.

The numbers of reported near misses is very low when compared to global industry statistics. For example, the US Bureau of Labour Statistics estimates that there is typically one serious injury for every 300-600 near misses.

This suggests that further work is required to improve the reliability of this reporting by Contractors.

During our final follow up visits in Q3 2014 we visited two project sites and noted a number of safety related issues e.g. use of Personal Protective Equipment (PPE), poor housekeeping, locked first aid cabinets, need to improve fire evacuation signage and evidence of workers not following defined H&S procedures.

Upon identification of these issues, the main Contractors have informed us that actions would be taken to address them.

“In 2014 we have noted that there is now a formalised governance structure in place whereby two engineering consultancy firms have been assigned the responsibility of overseeing day to day H&S management on project sites.”


EPP Clause 31.1:The Contractor shall ensure that it obtains all the relevant insurance, in terms of the Local and Federal Law to ensure that all Employees have access to health insurance from the date of assignment.

Our reviews in 2014 indicated that 99% of the workers interviewed were in possession of a medical insurance card. Those workers interviewed who did not have medical insurance cards are under a health insurance cover arranged by their Contractors with hospitals close to the project site.


Findings


8. Grievances

EPP Section 36: The Call Centre number should be provided to workers during their induction. The EPP requires that all calls, as far as practically possible, should be responded to in the workers’ native languages. Additionally, the Contractor shall ensure all Employees are duly informed of their rights, with regard to the referral of disputes, to the UAE Ministry of Labour and Industrial Action procedures shall be addressed during the Induction Programme. The Contractor shall train its managers and supervisors in the management and implementation of the Industrial Action Handling Guidelines and all relevant aspects of the ER Procedures.

TDIC established a Call Centre in June 2010 with a toll free direct access line which workers are able to call to raise grievances, report concerns and make suggestions. Calls, as far as practically possible, are conducted in the native language of the workers.

During our monitoring reviews, we noted that TDIC have required Contractors to respond to logged calls within two days.

During the monitoring period (December 2013 – November 2014) workers made 39 calls to the Call Center.

A summary record of each call is maintained with each call assigned a high, medium or low priority. A note is made to confirm that the issue has been addressed and closed. The 39 calls related to a range of areas including:

Area No. of calls

Non-receipt of labour/ medical cards

15

Wages 13

Worksite condition 5

The quality of food 2

Availability of transport 1

Health concern 1

The quality and comfort of accommodation

1

Retention of passport 1

Discrimination or harassment 0

Leave entitlement 0

Overtime 0

Employment Visas 0

“We noted that 22% of workers interviewed were unaware of the TDIC Call Centre number and improvement from 43% in 2013”


Findings

Despite the telephone number being observed in visible and prevalent locations in the SAV and on issued personal equipment for example, safety helmets and ID cards using worker’s different native languages, during our monitoring visits in 2014, we noted that 22% of the workers interviewed stated that they were either not aware of the existence of a call center or not aware that concerns can be raised in their respective languages.

This is an improvement to year 2013 when we noted that 57% of the workers interviewed were unaware of the TDIC call center number.

During our reviews in Q1 and Q2 of 2014, 75% of workers were aware of industrial action procedures and 77% of workers were aware of their rights to refer disputes.

The ERM at TDIC has provided a standardised induction document to all Contractors and Subcontractors currently working on Saadiyat Island. We were able to confirm that all workers interviewed have attended the EPP induction which covers information relating to the TDIC call centre,referral of disputes and industrial action procedures.

Figure 11: SAV Cluster Dining Room(Source: TDIC)


9. Working visas

EPP Clause 14.1: Expatriate employees will not be allowed to work on site unless they are in possession of a valid work permit in accordance with UAE Labour Law.

All workers interviewed during the 2014 Monitoring Programme had valid work permits in accordance with UAE Labour Law. We verified this by requesting documentary evidence of valid Labour Cards issued by the UAE Ministry of Labour from all the workers during our interviews.

10. EPP Induction

EPP Clause 18.6: Induction should be provided to employees by the Contractor before they commence work on site. The induction document should be in a format approved by the ERM and shall be available in the majority of languages spoken by the workers including Hindi, Bengali, Telugu, Malayalam and Tamil.

Though all workers interviewed confirmed attending the EPP induction, we noted that 15% of the workers had received induction after commencing work on TDIC project sites.

The EPP induction presentations have been translated into the seven most common languages spoken by the workers and approved by the ERM. The contents of the induction presentation are verbally explained to the workers and efforts have been made by Contractors and Subcontractors to enhance the induction approach and make it more interactive to increase level of understanding and awareness of the EPP.



Findings



11.EPP Administration

EPP Clause 11.1: Major Contractor and Subcontractors shall employ a full time qualified and experienced ERP on the site and shall co-ordinate all Employment Relations (ER) functions. Such ERP appointment shall be approved in writing by the ERM prior to them assuming their duties. Where a Contractor/ Subcontractor have less than 300 employees on site, the Contractor will have one of its Senior Managers dedicated and appointed to the ER functions (Designated Employment Relations Practitioner). The ERP and DERP are required to attend a workshop arranged by the client to familiarise them with EPP. The ERP and DERP shall attend the ERG meetings.

In Q2 2014, one of the Contractors who is currently engaged with five Subcontractors had not reviewed the suitability of the assigned Designated Employment Relations Practitioner (DERP) from the Subcontractor against the minimum requirements of the EPP.

When we conducted our follow-up review of the same Contractor in Q3 2014, we were provided with evidence of a new DERP whose CV had been evaluated against the job description and approved by the ERP.



Findings

Our 2014 reviews confirmed that the Employment Relations Group (“ERG”) and Work Place Group (“WPG”) meetings, as required by the EPP, were carried out between the ERM, the ERP and the DERP.

We confirmed this by reviewing a sample of minutes of meetings from the nine months between March and November 2014.

In Q2 2014, upon review of the compliance of the different Contractors with the administration aspects of the EPP, we have identified ten workers working with one Subcontractor who were not accommodated at SAV. This is contrary to the requirements of the EPP and to the contractual commitments made as per the Contract of Agreement with the main Contractor.

Our inquiry further revealed that the Subcontractor’s Management had manipulated the current procedures and reporting requirements in the interpretation and application of the definition of “Temporary Workers” as per the EPP and the contract signed with the main Contractor. Accordingly, despite the fact these ten workers had worked on site for a period of more than 30 days, the Subcontractor had inappropriately continued to accommodate these workers at his own accommodation facilities.

Upon our identification of the matter, TDIC immediately notified the main Contractor and required immediate rectification of the anomaly. No further similar instances of non-compliance were found in our Monitoring Program for 2014.

Furthermore, we have observed further stringent controls by TDIC being imposed over the definition and control logs of Temporary Employees and any other exemptions from housing workers at the SAV.


12. Employee Personal Files

EPP Clause 25.1: Contractors and Subcontractors to maintain a file for each employee showing his basic information, wage and adjustments thereto, record of leave, penalties imposed, disciplinary records, grievance records, appraisals, records of medical examinations, occupational injuries and diseases the Employee sustained, and the date and reason for termination of employment. The file shall also contain a copy of the Employee’s Contract of Employment, Site Assignment Agreement, induction records, and skills history, or as otherwise required by the ERM. The EPP also requires the Contractor to keep a record and copies of all Contracts of Employment and the SAA and these shall be filed in fire proof cabinets.

Our initial and subsequent follow-up reviews in 2014 found appropriate maintenance of the sampled employee personnel files. However, it was noted that one of the Contractors was not maintaining some key information such as workers marital status, disciplinary and induction records and appraisals. During our follow-up review, we were able to confirm that this issue had been rectified and complete records were maintained for all workers interviewed from this Contractor.



Findings

13. Site Facilities

EPP Clause 35.3: Employees shall be provided with prayer rooms and adequate drinking water and toilets as per Ministerial Regulations.

EPP requires that employees use the designated site entrance, and follow the shortest safe access route when travelling to and leaving from their work areas, in order to comply with all Security procedures. Appointed Security representatives may undertake random testing in respect of the above, in terms of the relevant Security Rules and Regulations.

During one visit to a project site in Q1, we noted that only two toilets were provided for 200 workers. The Environment Health and Safety Management System (EHSMS) mandate states that at least four toilets should be provided where 200 workers are working.

During our follow-up review of the same project site in Q3 we noted that the Contractor had provided an additional four toilets increasing the total to six. However, the number of employees had also subsequently increased to 650 which require 13 toilets to be in place.


Appendices


Appendices

About TDIC and Saadiyat Island

Abu Dhabi is the capital and the largest of the seven UAE Emirates and is a key contributor to the UAE’s economic and cultural development. Saadiyat Island, part of Abu Dhabi, is a natural island occupying 27 square kilometers. It is planned that the island will be the location for a wide range of luxury-based experiences, including hospitality, leisure and retail activities as well as educational and residential developments.

TDIC was established in 2006 as a master developer of key cultural, residential and tourism destinations in Abu Dhabi. Its purpose is to support Abu Dhabi’s vision to become a leading destination for tourists, businesses and residents.

The company is responsible for some of Abu Dhabi’s major projects. One of its largest developments is part of Saadiyat Island, which will house iconic museums such as The Louvre Abu Dhabi which is already under construction, and the Guggenheim Abu Dhabi and the Sheikh Zayed National Museum.

Projects in 2014The Louvre Abu Dhabi project began construction in 2013 and work to date has included the building’s detailed design and the completion of the infrastructure, including marine, excavation, piling and substructure works and permanent gallery structure.

In December 2014, TDIC announced that the Louvre Abu Dhabi’s dome was successfully lifted and placed into its final position – firmly sitting on top of the museum’s four main permanent piers. Moreover, advanced construction milestones have been achieved throughout the museum’s site ahead of its anticipated completion at the end of 2015.

Three new projects were awarded in 2014 which include Phase II of the Saadiyat Beach Villas, the Cultural District Infrastructure (Roads and Utilities) and the Saadiyat Tunnel Project.

Development and Implementation of the EPP

TDIC created the Employment Practices Policy (EPP) in 2009 setting out welfare standards for workers on construction projects at Saadiyat Island. The EPP requirements are included as part of the commercial agreements between TDIC and its Contractors, with a requirement that these standards should also be implemented by their Subcontractors working on TDIC projects.

The requirements of the EPP are based on UAE Labour Law and, in certain areas, accepted international labour practices. Details of clauses relating to these areas are available in the latest version of the EPP available on the TDIC website. Figure 16 provides an overview of the EPP Implementation Framework.

TDIC revised the EPP in 2012 to enhance the controls over standards of worker welfare. During 2014, TDIC made further revisions to support more effective implementation or workers welfare standards.

“TDIC was established in 2006 as a master developer of key cultural, residential and tourism destinations in Abu Dhabi. Its purpose is to support Abu Dhabi’s vision to become a leading destination for tourists, businesses and residents.”


Figure 16: EPP Implementation Framework

Tourism Development & Investment Company

EPP implementation at TDIC is a collaborative effort involving multiple internal and external stakeholders, as shown below.

Oversight and Implementation

1. Implementation of EPP

2. Regular Monitoring and Reporting of EPP Implementation

3. Independent Monitoring of EPP Implementation

ExecutiveCommittee

Keeping External Stakeholders Informed and Involved

Marketing, Communications, Media and Public Relations

Board/Audit Committee

Internal Auditand Employment

PracticesCompliances

Auditor (EPCA)

Compliance Function / EmployeeRelations Manager

(ERM)

KeepInformed

Keep Involved

EPP Enforcement

Project

Services

DeliveryDepartment

Lega

lDe

partm

ent

Contractors

ManagementFacilities

Manag

emen

t

Proje

ctCons

ulta

nts


Contractors and their WorkersThrough a competitive tendering process, TDIC has awarded construction contracts to multiple Contractors for the development of various projects on Saadiyat Island.

In each case a main Contractor has been appointed who has overall responsibility for delivering the project. Each main Contractor appoints a number of Subcontractors to deliver parts of the project. These Subcontractors may in turn appoint other Subcontractors for completion of specific tasks. As a consequence of this complex contracting supply chain, the number and nature of the Subcontractors working on any individual project may vary significantly across the life of the project. In particular towards the completion stage of a project there may be a large number of small Subcontractors operating at a site.

Each of the main Contractors and their Subcontractors rely on a complex network of Recruitment Agents to recruit the majority of workers required to deliver their projects. These Recruitment Agents include organisations based in the UAE and in the workers’ home countries. The network of Recruitment Agents ranges from formally established entities in the UAE and the workers’ home countries, to friends and family members in their communities. The unregulated system of recruitment brokers in Asia leaves workers and their families vulnerable to potential exploitation.

Workers interviewed in 2014 we recruited were from four different countries including India, Bangladesh, Pakistan and Nepal.

As of October 2014, the monthly average number of workers employed by the projects under construction on Saadiyat Island was approximately 7,297 workers as compared to 2,977 in 2013.

The workers involved in the development of TDIC projects on Saadiyat Island are hired and paid directly by their employers, the Contractors and Subcontractors commissioned by TDIC to work on these projects. In a few instances we have noted that workers are sourced by Contractors and their Subcontractors through manpower supply agencies.

Workers Welfare IssuesThrough our experience of conducting the EPP Independent Monitoring since 2011, we have identified a number of observations that highlight the complexity of issues surrounding workers welfare on TDIC project sites.

As highlighted in our detailed findings, the issues around recruitment and relocation fees, provision of offer letters, living conditions and payment of wages are still prevalent despite a number of initiatives being implemented by TDIC to monitor their Contractors.

We have set out recommendations for TDIC to consider which may further help enhance the standards of worker welfare on their job sites in addition to addressing some of the more issues.

We also believe that in addressing complex issues relative to worker welfare the following needs to be considered:

• Monitoring needs to be applied alongside broader Contractor engagement, education and support; and

• Issues identified by monitoring can often not be solved by one company alone i.e. they are systemic and require long term collaboration and partnerships to address them.

“The network of Recruitment Agents ranges from formally established entities in the UAE and the workers’ home countries, to friends and family members in their communities. The unregulated system of recruitment brokers in Asia leaves workers and their families vulnerable to potential exploitation.”

Appendices


The Monitoring Programme

Independent MonitoringMore than 10,000 hours of effort has been invested in the Independent Monitoring Programmes by 15 PwC staff members since 2011 which included interviews with approximately 3,000 workers across 11 different projects.

In 2014, TDIC re-appointed PwC to continue their independent role to monitor and report on EPP implementation. There are currently seven active TDIC projects across Saadiyat Island including the construction of a museum, school, residential villas, 2 infrastructure projects, civil defense station and a 1.5 km tunnel. These projects are being executed by 7 main Contractors and their 46 Subcontractors, who have collectively employed a monthly average of 7,297 workers between December 2013 and November 2014.

The Monitoring Programme focused on five projects which were selected based on the number of workers involved and contract value. A review of these projects involved interviewing 1,050 workers (14.4% of the total average monthly number of workers on the Island) during the period between December 2013 and November 2014.

The programme included:

• An independent appraisal of TDIC’s implementation of the EPP including TDIC’s response to the 2013 monitoring findings;

• An assessment of the governance, policies and procedures within TDIC that promote EPP implementation; and

• An independent appraisal of the extent of the EPP implementation by four main Contractors and the largest six of their Subcontractors working on active projects on the Island.

In scoping and conducting the monitoring

programme, PwC was able to draw on over 20 years’ experience in the area of social compliance monitoring and, more widely, in supporting major public and private sector organisations on corporate responsibility and sustainable development projects.

The PwC monitoring team included individuals with previous experience of advising and implementing compliance monitoring programmes. The dedicated full time PwC monitors were selected on the basis of their knowledge, experience, language skills and cultural background. The team includes professionals based in the UAE supported by experts drawn from PwC’s Global Network of Firms.

PwC are independent of management and report to the TDIC Executive Committee who are ultimately accountable to the Audit Committee of the Board. PwC meets with the TDIC Executive Committee on a periodic basis to provide feedback on the progress and results of the monitoring programme. On a day-to-day basis the PwC team coordinated with TDIC’s Internal Audit Department. PwC had direct access to the TDIC Audit Committee to report instances of non-compliance and any other areas of concern.

Scope of Work CompletedIn the 2014 planning phase of the Monitoring Programme, we made a number of enhancements to the monitoring approach, sampling methodology, monitoring visit protocols, communication plan and reporting deadlines to ensure we incorporated lessons learned from our previous monitoring cycles.

We also reviewed the requirements of the EPP, applicable provisions of the UAE labour law and relevant directives and regulations from Municipalities and other Abu Dhabi Government Agencies to support the revisions to the monitoring protocol.

“In the 2014 planning phase of the Monitoring Programme, we made a number of enhancements to the monitoring approach, sampling methodology, monitoring visit protocols, communication plan and reporting deadlines.”


The Monitoring Programme for 2014 was extended to cover Health & Safety (H&S) in more depth including a review of:

• The implementation and maintenance of H&S standards on TDIC construction sites by Contractors and TDIC’s monitoring of those standards;

• The H&S framework at the SAV (including first aid facilities, accident reporting and availability of medical staff and facilities); and

• Accident, incident and injury reporting processes within TDIC.

Our monitoring work consisted of the following activities:

• Interviews with TDIC’s ERM and other staff members;

• A review of the EPP (dated February 2012), documents maintained by the ERM, approvals of the ERPs, letters sent to Contractors and review of the implementation plan with respect to remediation of observations reported in 2013;

• Interviews with workers at the construction sites;

• Visits to Contractors head offices and document review, including review of the Contractors and Subcontractor’s relevant policies and documentation. This included human resource processes and systems providing information on, for example, remuneration, working hours, recruitment, grievance and disciplinary procedures; and

• Visits to the SAV to review workers living conditions and compliance with standards as mandated by the UAE Labour Law.

SamplingThe Monitoring Programme included a review of all material contracted and active projects on Saadiyat Island during the period from December 2013 to November 2014 for the:

• Louvre Museum Abu Dhabi;

• Saadiyat Beach Villa – Phase 2;

• Marina District Phase 1 A;

• Cultural District Infrastructure; and

• Saadiyat Tunnel Project.

For each project, PwC reviewed EPP implementation for the main Contractor and the largest Subcontractors.

At the Louvre Abu Dhabi project, PwC reviewed additional Subcontractors’ implementation of the EPP considering the total manpower and number of Subcontractors working at site. The number of workers interviewed was based on the criteria shown in the diagram below:

Appendices

1000 andbelow

1001-3000 3001-5000

Number of employees of contractor and subcontractor

Num

ber

of

wo

rker

s in

terv

iew

ed

5001-8000 8001 andabove

50

100

200

250

300

Figure 17: Worker Interview Sampling Approach


Approach to the Monitoring VisitsThe 2014 Monitoring Programme involved three monitoring periods. The first set of visits were conducted between December 2013 and March 2014 and focused on EPP implementation for the main Contractors and the largest Subcontractors. The second and third set of visits were conducted between May and November 2014. These visits focused on the follow-up of issues identified in the previous reviews as well as interviewing additional workers on the site to assess any changes in conditions.

In addition to the monitoring visits, the monitoring team also visited the SAV to review the facility and progress made relating to the living conditions of the workers to assess TDIC compliance with EPP.

Workers InterviewsWorkers interviews were the primary source of information for the monitoring team. Wherever practicable, the monitoring team corroborated observations from interviews through document review (for example, employee records held by Contractors/ Subcontractors) as well as direct observation (for example, physical observation of accommodation facilities) and also informal discussions with workers during the course of our monitoring visits. However, it is important to note that some of the workers’ statements could not be corroborated. This is particularly the case where it was reported that workers found it necessary to pay recruitment fees and relocation costs.

We consider that the number of workers interviews (1,050) conducted are in line with the workers interview sampling approach defined in the Monitoring Programme.

In preparation for the worker interviews, the monitoring team obtained the latest manpower report for the project from the Contractor. This provided information on the number of workers on site, their nationality, language spoken and occupation. PwC selected a sample of workers to be interviewed which was provided to the Contractors/ Subcontractors on the same day of the interviews as it is crucial for the success of the Monitoring Programme that workers should be in a position to respond freely to questions and provide input without interference or intimidation from management.

The sample of workers selected for interview aimed to achieve fair representation from the various nationalities and occupations on the site. Workers selected for interviews included, for example, Masons, Mechanics, Operators, Plumbers, Scaffolders, Steel Fixers, Carpenters, Electricians, Technicians and Time Keepers. The interviews were conducted at the construction sites offices.

of workers interviewed – 1,050 of the total 7,297 total workers on Saadiyat Island in 2014 14.4%


Appendices

ConfidentialityNeither the management of TDIC nor Contractors or Subcontractors played a role in the selection of workers for the interviews. Interviews were not attended by representatives of the Contractors or Subcontractors or TDIC.

Although the Contractors were aware of the names of workers selected for interview, findings from the interviews were aggregated to prevent attribution to any individual worker.

Language and CultureRecognizing the importance of language and cultural issues, interviews were conducted in the workers’ native languages by PwC monitors with the same cultural background. Languages used by workers included: Hindi, Urdu, Punjabi, Bengali, Malayalam and English.

ReportingEach initial and follow-up monitoring visit was concluded with a closing meeting conducted jointly by PwC and a TDIC representative with the Contractor’s and Subcontractor’s Senior Management. These meetings provided initial feedback on the results of the monitoring visit. A final report was then prepared, setting out the monitoring teams’ findings.

The monitoring team issued a total of twelve reports of which one report was in relation to TDIC’s implementation of the EPP, one interim report and the remaining reports were in relation to Contractors and Subcontractors monitoring visits. The results of the reports are aggregated and summarised in this Annual Report.

Contractors were required by TDIC to respond in writing to the findings within an agreed time period.



Details of Monitoring Program Visits

Review Type Month of Visit

Number of workers interviewed

Louvre Abu Dhabi

SBV – Phase 2

Marina District Phase 1 ‘A’

Cultural District Infrastructure

Saadiyat Tunnel

Total

Contractors and Subcontractors first Review

December 2013 – July 2014

350 50 50 450

TDIC compliance with EPP

April 2014 NA NA NA NA NA -

Contractors and Subcontractors first follow up

May – July 2014

200 50 50 300

Contractors and Subcontractors second follow up

August-November 2014

200 50 50 300

1,050


Glossary of Terms

Term Definition

Agent Any sub agent, person or entity that recruits Employees for Contractors.

Basic Wages Monetary consideration given to an Employee in return for his service in terms of his Contract of Employment, which amount is used as a basis from which overtime and benefit calculations are made.

Contact Centre The Call Centre established by TDIC in accordance with the EPP.

Contractor Any company party to the Main Agreement for Construction works with TDIC, and shall be deemed to include all Subcontractors engaged by the Contractor.

CSR Committee Corporate Social Responsibility Committee formed by TDIC to oversee employees’ employment relations practices.

DER Director of Employment Relations, appointed by TDIC or any person designated by him to oversee the implementation of the EPP.

DERP Designated Employment Relations Practitioner, nominated by the Contractors that do not have an ERP, to ensure that this Policy is implemented and complied with.

Employee/Worker All daily, hourly and monthly paid Employees of the Contractor permanently or temporarily assigned to the site by any Contractor.

EPCA Employment Practices Compliances Auditor - Independent Monitor appointed by TDIC who shall assess compliance with the Policy and general employment practices on the TDIC project sites and at the SAV.

EPP Employment Practices Policy developed by TDIC to be applied by all its Contractors and Subcontractors.

ER Employment Relations, comprising all Employment and Employment Relations policies, practices and procedures of the Contractor to be applied on the site.

ERG Employment Relations Group, constituted to communicate, promote and coordinate general employment practices in terms of the EPP.

ERM Employment Relations Manager, appointed by TDIC to co-ordinate ER policies, practices and procedures of the Contractor. For the purpose of the EPP the ERM reports directly to the DER.

ERP Employment Relations Practitioner, appointed by all Major Contractors to ensure that the EPP is implemented and complied with.

Executive Committee Group of directors appointed to act on behalf of, and within the powers granted to them by, the board of directors. The Executive Committee is chaired by TDIC’s Managing Director.

Appendices


Term Definition

Independent Compliance with the fundamental principles set out in the Code of Ethics for Professional Accountants, issued by the International Ethics Standards Board for Accountants (“the IESBA Code”). It is not intended to imply that this report is an assurance report, or that PwC has complied with all of the ethical requirements applicable to assurance engagements, as set out in sections 290 and 291 of the IESBA Code.

Law Any UAE law, regulation, directive, decree, ministerial decision or order, or guideline issued by the relevant authorities where the work is performed.

Main Agreement The agreement between TDIC and the Contractor of which this EPP forms part of.

Project Any project commissioned by TDIC on Saadiyat Island.

PwC PricewaterhouseCoopers (Abu Dhabi Branch)

Recruitment Fee Any recruitment monies or fees payable to an Agent or third party with regard to an Employee’s assignment to the site.

SAV Saadiyat Accommodation Village (formerly Saadiyat Construction Village). The Village was officially rebranded late 2012 to the new name.

Service Provider A Contractor engaged by TDIC to provide services on Saadiyat Island other than Contractors/Subcontractors engaged for construction projects.

Site The location, layout and boundaries of the Project as identified in the main agreement. Reference to “site” shall include any place where a Service Provider renders a service to the Client.

Site Assignment Agreement

The agreement that Contractors are required to enter into with Employees who are assigned to the site.

Subcontractor Any third party appointed by a Contractor to perform any part of the Works on the site, and includes any person or entity that supplies labour to the Contractor or subcontractor.

Temporary Employee All Employees who are assigned to the site for less than 30 days accumulatively over the duration of the Works.

TDIC Tourism Development & Investment Company.

WPG Work Place Group which is established by the Contractors and Subcontractors in respect of its Employees in terms of the EPP.

WPS The Wage Protection System is an electronic salary transfer system that allows institutions to pay workers’ wages via banks, bureaux de change, and financial institutions approved and authorised to provide the service. The system, developed by the Central Bank of the UAE, allows the Ministry of Labour to create a database that records wage payments in the private sector to guarantee the timely and full payment of agreed-upon wages.

Appendices

Disclaimer1. This document has been prepared in

accordance with our Agreement with the Tourism Development and Investment Company (TDIC), and has been prepared for TDIC only. To the extent permitted by law, PricewaterhouseCoopers, Abu Dhabi does not accept or assume any liability, responsibility or duty of care for any use of or reliance on this document by anyone, other than (i) the intended recipient to the extent agreed in the Consultancy Agreement for the matter to which this document relates (if any), or (ii) as expressly agreed by PricewaterhouseCoopers, Abu Dhabi at its sole discretion in writing in advance. Accordingly, regardless of the form of action, whether in contract, tort or otherwise, and to the extent permitted by applicable law, PwC accepts no liability of any kind and disclaims all responsibility for the consequences of any person acting or refraining to act in reliance on the contents of this report or for any decisions made or not made which are based upon the contents of this report.

2. Unless required by law, no extract from this report is to be distributed to Third Parties without our prior written consent. We may at our discretion, grant or withhold our consent or grant our consent subject to conditions.

3. No oral or written reference to the contents of this report may be made to any Third Parties without our prior written consent. We may, at our discretion grant or withhold our consent or grant it, subject to conditions.

4. The work we performed did not constitute a review in accordance with generally accepted auditing standards or attestation standards. Accordingly, we do not provide an opinion, attestation or other form of assurance with respect to our work.

5. We did not plan and perform our work with the objective of preventing or discovering fraud or misrepresentation by TDIC, Contractors, Subcontractors and the workers interviewed by us.

6. This report contains information obtained or derived from a variety of sources as indicated within the report, including TDIC, Contractors, Subcontractors and the workers interviewed by us. PwC has not sought to establish the reliability of those sources or verified the information so provided. Accordingly no representation or warranty of any kind (whether express or implied) is given by PwC to any person (except to TDIC, under the relevant Consultancy Agreement) as to the accuracy or completeness of the report.

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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