After last year’s Primark on the Rack, BBC Panorama has been investigating labour standards again. This time the BBC exposé focuses on the conditions of migrant workers building luxury estates in Dubai. Dubai is a by-word for 1^st world seven-star living, with developments endorsed by footballer Michael Owen, cricketer Andrew Flintoff and celebrity chef Jamie Oliver. But behind the façade migrant workers face 3^rd world wages and conditions.

Eighty percent of Dubai’s population are migrants, mainly from the Asian sub-continent, lured to Dubai by employment agents selling the dream of making good money of 1500 dirham (£277.54) a month. But, on arrival, the dream rapidly becomes a nightmare. Wages are less than half the promised level, Panorama exposed workers being paid £120 per month, working 12 hour shifts, six days a week. At these rates workers could only afford to eat meat two or three times a month. And it gets worse, Panorama also found workers working unpaid to repay the £2000 ‘transit fees’ they owe to the employment agency for getting them the ‘dream job’ in the first place.

In labour camps belonging to Arabtec Construction, a sub-contractor to the Jumeriah Golf Estates, Panorama found workers accommodation overflowing with sewage and persuaded a recruitment agent to tell her story

And things are getting worse, the global financial downturn has led to thousands of workers losing their jobs and being sent back to their home countries prematurely. Not only do they often still owe the employment agents their ‘transit fee’, but their home economies are suffering from the reduction in remittances being sent back on a monthly basis.

Impactt’s own experience in Dubai underlines that migrant workers’ jobs are very poor quality.  Far from being better off than they would be at home, the balance has tipped and a migrant job is often the gateway to poverty and despair.   

Clearly something must be done, and we believe that it is possible to make change. There are cost-effective ways for companies using migrant labour to have an impact on basic conditions for workers, particularly in accommodation standards, payment of transit fees and working hours. All that is needed is the determination to change the current business model.

As a first step, it is vital to establish an industry-wide dialogue to harness the power of the construction giants, the contractors and the UAE government to create a new framework for managing migrant labour in Dubai. This should recognise the mutual dependency that exists between the industry and the workers, and be a vehicle for tackling the issues highlighted by the Panorama programme.

The Impactt Middle East and North Africa office opens in Dubai next week and will be constantly surrounded by migrant workers – in fact we overlook two buildings which are under construction. You can expect regular updates on the conditions these workers face and our efforts to improve them.

Last year, Bangladesh exported garment products worth $10.69 billion (£6.03bn). However, while the industry continues to grow, the 2 million workers, mostly women who are at the heart of its boom have not been touched by the benefits of this growth.

Increasing prices of essential goods, salaries well below ‘living wage’ levels and limited trade union action are some of the main reasons behind the growing worker unrest which threatens the industry.

On 12 April, over 20,000 workers rioted in Dhaka, demanding higher wages. Police used tear gas and batons to break up the protests and at least 50 workers were injured. A key issue that led to the protests was the rising price of rice which has doubled in the past year. Households are estimated to spend nearly 70% of their income on food.

On 13 Aug, over 5,000 workers staged a demonstration in Dhaka demanding a pay rise. When their demands were ignored, they ransacked the factory, clashed with factory officials and blocked one of the main highways for 3 hours.

Violent protests such as these are not one-off incidents, but seem to have been woven into the fabric of the Bangladeshi garment industry. While the search for solutions continues, so does the blame game. According to ‘Sammilito Garment Sramik Federation’, a platform of garment factory workers, the agitation is caused due to rising prices of essential commodities. Opposing this view, many factory owners claim that administrative failures of the government, ‘conspirancies’ from the outside and poor implementation of law and order are to blame.

The list of causes seems to be endless and there are obviously no easy answers. But it is important that the debate and efforts do not lose sight of the key issue: prices are soaring; the minimum wage is not enough to meet basic needs and the plight of garment workers in Bangladesh continues unabated.

For the past couple of weeks the media has been full of stories about food inflation and its devastating impact on the developing world.  

Last week the World Bank and the IMF released reports indicating that we are facing a potential ‘food price crisis’ and thousands of people may starve.

There have been riots in Bangladesh, Cameroon, Egypt, Ethiopia, Haiti, Indonesia, Mexico and the Philippines. In Bangladesh 10,000 garment workers rioted on Saturday, vandalising factories and smashing cars in anger at low wages and high food prices. This could be an indication of more trouble to come.

Robert B Zoellick, President of the World Bank warned last week that “33 countries around the world face potential unrest because of the acute hike in food and energy prices.” He went on to estimate that the food price surge could mean the loss of 7 years in the fight against global poverty. At the same event, Dominique Strauss-Kahn, Head of the IMF, warned of mass starvation and dire consequences if food prices continued to rise.

In recent months across the developing world the prices for food staples such as rice, corn and wheat have all reached record highs. In the last two months alone the price of rice has skyrocketed, rising by about 75% globally. Wheat has risen by 120% in the last year.

The impacts have been uneven, but it seems East Asia has been hit the hardest. In Bangladesh the real price of rice reached a 19 year high as it rose by 70% this year. China, India, Vietnam and Cambodia have already responded by imposing tariffs and export bans, leading economists to predict worse to come.

The situation has been blamed on a number of factors, including:

• Rising cost of fuel and fertilisers;
• Climate change, drought and unpredictable weather patterns;
• Increased demand for biofuels, which leads to competing pressures for land;
• Changes in the diets of people in China and India, as the wealthy switch from carbohydrates to meat, which is more expensive and resource intensive to produce.

Of course, it is the poor across the developing world who are suffering the most. According to the World Bank, the poor spend as much as 75% of their income on food. Juan Jose Daboub, a senior Director at the World Bank, has said “In virtually every East Asian country, high food prices are…contributing to a significant decline in the real incomes of the poor.”

Unfortunately many of the workers in the supply chains of western multinationals, whilst perhaps not being the poorest of the poor in their communities, are struggling to maintain their livelihoods. The rioting in Bangladesh confirms that garment workers are suffering under the pressure.

Impactt has been looking at whether minimum wage provisions around the world constitute a ‘Living Wage’. For the 88 countries we investigated, we concluded that in only 23 countries did the Minimum Wage constitute a ‘Living Wage‘.

Food inflation on staple foods such as rice and wheat is running at such a level in some developing countries, that even massive and regular increases in the minimum wage are not enough to meet workers needs, and make something as vital as basic foods affordable. Wage increases that match, or exceed, inflation rates, or even food inflation rates, are only making up for past increases and are not tackling the continuing issue of increased prices.

Companies, NGOs and audit agencies should be aware that minimum wage provisions are increasingly unlikely to support workers’ livelihoods. It is more important than ever that workers earn a living wage and that wages stay ahead of inflation.

Companies should be responding directly to the crisis by implementing living wage programmes and looking to purchasing practices to help alleviate the pressure on workers. Buyers must be aware that the price paid for their last order, may not be sufficient for the next.