Email to NYU Community on Thoughts on the Report from Nardello & Co. on Construction Labor on Saadiyat Island
Date: Thursday, April 16, 2015
To: THE NYU COMMUNITY
From: NYU President John Sexton
Dear Fellow Members of the NYU Community,
In 2007, NYU and our Abu Dhabi partner set out to create a new academic institution, a world-class, comprehensive, liberal arts research university in Abu Dhabi that would be part of NYU and our network of global academic sites. It would be characterized by having the highest academic standards, attracting the finest students, and recruiting the finest faculty. It was, arguably, an unprecedented effort for a major research university to undertake.
NYU and our partner, Tamkeen, together also sought to take another unprecedented step for an educational institution in that region: to respond to concerns about the treatment of workers by raising the working conditions of those involved in the construction and operation of our new campus on Saadiyat Island.
Since last spring, media accounts and NGO reports have called into question how successfully those standards were applied to the construction site. They cited examples of workers being treated in a way that did not conform to the project’s standards that we expected to be met. And so Nardello & Co, a leading investigations firm led by a former federal prosecutor, was brought in to review the charges that were raised.
But, as I did when the media reports first emerged, I want to address my fellow members of the NYU community directly. Because, as is often the case with something ambitious and innovative, the story is complicated.
The report makes clear that for the majority of workers we succeeded in what we intended: the substantial majority of workers — approximately 20,000 people —benefitted from our standards, receiving higher wages and living in better housing, and were guaranteed benefits including overtime, medical insurance, flights home, and end-of-service benefits.
But it is also clear that there were real lapses: foremost was a de facto policy of allowing exemptions to the standards for contractors with small, shorter-duration contracts. Neither we nor Tamkeen knew about the exemption policy or how widely it was being applied (roughly one-third of the workers — about 10,000 people — worked for contractors deemed exempt from the rules). That is why we were so taken aback by the media accounts and NGO reports of substandard treatment of workers. Both we and Tamkeen commit to ensuring that we will not allow such a compliance gap to occur in the future. There have been — and continue to be — no exemptions in operational contracts, such as food services, transportation, and security.
In addition, the report points out other shortcomings. Even for those construction workers who were covered by the standards, relatively few retained their passports. While many employees covered by the standards said they voluntarily agreed to have their employer hold their passports (and had access to them), such an arrangement conflicted with the publicly stated standard that employees must hold their passport. On recruitment fees, while we did not imagine that we could address the pernicious effects of recruitment fees for all who came into contact with our project, our intent was to ensure that our project did not cause such debt for those who were coming to join it. However, the seemingly reasonable requirements we ultimately set in place for reimbursement – that it would apply to workers who specifically came to join the NYUAD project, and could substantiate payment – produced the unintended result that no construction workers received reimbursement for recruitment fees (though more than 20 operational workers at the campus have).
Relating to the strike action by employees of BK Gulf (one of the subcontractors who worked on the site), the Nardello report says the strike was not directed at conditions on the NYUAD project. In fact, the BK Gulf workers who worked on the NYUAD project received higher wages than they would have received working on other projects. While NYU cannot dictate a nation’s labor laws — striking is illegal in the UAE — we do believe that workers should have a means of having their concerns heard and labor disputes should be resolved in a peaceful manner, and that media reports regarding the treatment of strikers were disturbing in this regard.
The bottom line is that while the media and NGO reports were not representative of the treatment of most workers on the project, they did point to what the Nardello & Co. report identified as an unfortunate reality: approximately one-third of those working on the project, and in particular those workers who were employed by firms that were exempted from the labor standards, did not receive the benefit of the project’s standards.
And while NYU and Tamkeen may not have approved or been aware of the exemption policy, the bottom line is that we both nonetheless must take responsibility for the lapses that occurred and must try to address them.
Let me discuss where we go from here.
- Payment for Employees of Exempt Firms: Those who worked on the construction of our campus and were employed by firms that were exempted from the labor standards will be paid to bring them into line with what they should have received under the project’s labor standards. An independent third party will be appointed to oversee this effort
- Payment for Employees Who Were Covered by the Labor Standards: The report also identified some remaining, isolated cases of workers who were covered by the project’s compliance regime, but did not receive the wages they should have from their employers, and we are committed to rectifying those situations as well
- An Initiative on Recruitment Fees: The recruitment fees charged to workers to obtain jobs in the UAE and elsewhere in the Gulf proved too complicated for any one project to address, our intentions notwithstanding. So, the NYU Abu Dhabi Institute will launch a research initiative to develop greater understanding of this significant issue, as well as identifying and seeking opportunities to implement potential widespread solutions to this transnational challenge.
- Nardello Report Recommendations: The Nardello report has a number of recommendations, which include addressing improved enforcement of the labor standards with no exemption thresholds, passport retention, recruitment fee policies, and ensuring proper accommodation. These recommendations will be studied in depth and, where feasible, we intend to act on them. We are committed to addressing these issues, and we believe that the study of these recommendations and how they can be implemented will lead to better outcomes in the future.
NYU Abu Dhabi was and still remains a large and complex project, a major innovation in the structure of the modern university. The construction of the Saadiyat campus involved 21 buildings totaling some 3 million square feet, accomplished with an admirable record for worker safety. In fact, the safety record on the Saadiyat campus job site exceeded that of even the London Olympics, which was held up as exemplary.
When we and our partner first announced we were putting higher labor standards in place, the reaction was generally positive. And looking back, we can see that we were successful in implementing higher labor standards for the majority of construction workers, and highly successful in implementing them for operational workers at the Downtown Campus and now at the Saadiyat campus. Nonetheless, it is a source of disappointment to us how many workers fell outside our efforts.
Like any new enterprise, NYU Abu Dhabi has its skeptics. But in the academy, we value criticism; it makes us do better. We must also not lose sight of the fact that the heart of NYU Abu Dhabi remains its academic core, and that continues to prove a great success: an excellent center for learning and research, as well as a game-changing approach to the structure of universities—an effort that has greatly enhanced NYU’s global presence and awareness.
We acknowledge the lapses, will learn from them, and will attempt to rectify them. I hope our experience on this project can be a useful lesson not just for NYU but for others, too. For that reason, we think the open publication of this report, with its frank findings, is a valuable, good faith start on that process.