Illegal worker exodus: how will it affect the construction industry?

With around 50,000 illegal construction workers seeking amnesty, Monika Grzesik questions the impact their departure to their home countries will have on an industry already grappling with a severe labour shortage.

An illegal construction worker collects his emergency certificate at a makeshift amnesty centre in Dubai. (Valeriano Handumon/ITP Images)
An illegal construction worker collects his emergency certificate at a makeshift amnesty centre in Dubai. (Valeriano Handumon/ITP Images)

Last month, the UAE government declared a three-month amnesty offering all illegal residents in the country the opportunity to either adjust their status or leave without facing a penalty.

The amnesty ends on 30 September 2007, after which any illegal resident still found to be living in the UAE will face prosecution and deportation.

According to the Ministry of Labour, there are an estimated 300,000 illegal workers currently living in the UAE.

And it's no secret that a substantial number of these illegal workers are employed in the construction industry.

Since the amnesty was declared, embassies and consulates have reported that illegal Asian workers have thronged to seek repatriation to their home countries, of which the majority are construction workers. BS Mubarak, labour consul, Indian Consulate said: "Last week, the consulate received 20,490 applications for emergency certificates, around 70% of which work in the construction sector." And that number is still rising.

So, as thousands of illegal construction workers rush to grab the first ticket home, what will the effect of the amnesty be on an industry already struggling to meet chronic labour demands?

There appears to be no doubt that the mass departure of thousands of workers will impact projects.

"With the amnesty taking place - this will mean the exodus of around 50,000 workers. These people have been here for three to five years. This will be a challenge, as people going back home will retard the construction process," said Sanjeet Joher, group chief operating office of KM Holding in Dubai. According to Ani Ray, country director, Simplex Infrastructure, the smaller firms are likely to be the ones who will suffer the most.

"It will not have much impact on the main contractors, but it will definitely impact subcontractors, because most of them, unfortunately, use a lot of illegal workers."

But this in turn will have an impact on larger projects. "The industry is like a chain, and when these people go back it will definitely end up impacting the main contractors and the projects," adds Ray.

Most would agree that the amnesty is a positive step by the government towards tackling the problems of illegal immigration. Illegal immigrants are often underpaid, live in appalling conditions and face no way out of the situation.

"Like anywhere in the world, illegal workers are the most exploited workers," said Ray. "They don't get their salary on time, they are made to live in very subhuman types of accommodation, and the basic standard of living is not there. They don't have any rights and because these people are illegal, they cannot complain. They fear going to the authorities, so this needs to be improved. Somehow it has to stop."

By removing illegal workers from the system, and heavily penalising companies that employ illegal workers, the government will allow the industry to progress (after the amnesty, companies will face penalties of up to a month in jail and a fine of some US $13,613 (AED 50,000) for each illegal worker).

"Until the entire system is regularised, the system will not be able to improve," adds Ray. "When the illegal workers are cleaned out of the system, whether you make them legal or you send them back, then you will all be on the same footing. While there are illegal workers in the market you cannot increase salaries because it won't be competitive. This is a very good effort. True, it will affect the industry in the short term, but it will allow the industry to improve working and salary conditions."

There are efforts being made to encourage workers to stay in the UAE. Companies are targeting the illegal residents at embassies and consulates, encouraging them to apply for jobs here and get their status legalised.

"The smaller construction companies and labour supply companies are now trying to target those seeking amnesty by going and visiting them at consulate premises such as the Indian consulate," said Manoj Gopinath, HSEQ representative, Murray & Roberts.

The authorities have adopted a lenient approach towards illegal workers.

They have stated that the illegal immigrants will not be banned but are free to re-enter the country and take up employment with the correct paperwork. But, unfortunately for the construction industry, it could be the case that many workers choose not to come back.

Salaries and working conditions in workers' home countries are increasing, particularly in India where the economy and the construction sector is booming, leaving less incentive for them to return to the UAE.

"Most of the workers who turn up seeking amnesty are determined to go home," said Gopinath.

"They were probably looking forward to some sort of amnesty in order to be able to go back to their country.

"Most of them would be suffering in some manner here, and from the way the country is growing back in India, there are a lot of opportunities back home.

"If the people are looking into balancing the possibilities back here against those in India I should imagine they would stay in India, and they would get better opportunities there."

The full scale of the impact on the construction industry will not be known until the amnesty ends on 30 September.

"It will definitely affect the industry but it's very difficult to estimate how much," said Ray. "But at least in the short term and the medium term, there will definitely be no doubt of the impact it is going to have."

Amnesty update

The Consulate General of India has warned that all Indian passports are the property of the Indian Government and should be returned to the holders wishing to avail of the amnesty.

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