EMPLOYING LOCALS IN INFRASTRUCTURE PROJECTS

Feb 17, 2013 Features / Columnists, Peeping Tom

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A major justification for large scale physical infrastructural projects is the employment generated. These projects are often pursued simply for the stimulus they create within the economy, especially the jobs they provide for local workers.
Many of these projects such as railways, roads, hospitals and schools are not profitable for private sector investment and especially their impact on job-creation, particularly blue-collar jobs – these projects are pursued despite their lack of profitability.
After the financial crisis hit home in the United States, President Obama resorted to a Keynesian strategy to provide an economic stimulus to the economy. This stimulus took the form of major infrastructural works. The idea was to boost public spending on projects that would create jobs.
In Guyana, the same logic applies. The government has consistently promised to create thousands of jobs for Guyanese workers through the major infrastructural projects. The government has always argued that the infrastructural projects- Amaila Falls, Marriott Hotel, specialty hospital and the cable that is being run from Brazil – will create thousands of jobs, both directly and indirectly.
Experience in the developing world has confirmed that large projects have created jobs for locals, but there have also been many problems associated with large scale infrastructural projects which have to be implemented with foreign expertise. The two main ones are the absence of adequate levels of technology transfer in the execution of these projects and the failure of some of these projects to employ sufficient quantities of labour from the areas in which the project is being implemented.
The failure of contractors to employ persons from the areas in which the project is being implemented has led to discontent and political fallout. Local leaders have complained that enough of their people are not being employed and that often labour is drawn from outside of the region.
There have been some attempts to address this problem, but with limited success. At one time, some governments stipulated that the contractor must employ a certain number of persons from within the community in which the project is taking place. But most contractors often find it difficult to comply with these requirements, simply because the skills may not be available and when they are, they may not be as efficient as those which the contractor can call from outside the catchment area
Some contractors have good workers they can rely on, and whenever they obtain a new contract to undertake a project, they prefer to take these workers with them. These workers would have become experienced and proficient, and thus could be relied upon to do a good job.
Some of the workers that are attached to contracting firms also see their jobs as a permanent form of employment. They know that if they continue to work hard and efficiently, they will always gain employment all year round from the contractor. This is how many of them make their livelihood; they are attached to contracting firms and wherever there is work to be done, they are taken on by their employers.
Contractors some to rely and value these employees, and it would present a serious problem if they are asked to sacrifice them just so that some person from within the community can be employed.
To ask the contractor to employ someone from the local community, simply to be able to ensure that the local community benefits directly from the project, may be asking too much of contractors.
Contractors as such do not like to be told who to employ. They often do not entertain prescriptions on their contracts which dictate who they must employ and from where.
The common law also respects the right of employers to determine whom they should employ. The contractor cannot be dictated to as to who to employ.
In many foreign contracts signed between governments, the contract specifies that the contractors must be drawn from the donor country. It is the same with consultancy contracts which are funded by foreign grants. The donor country insists that the consultants be contracted from amongst their nationals.
These foreign contractors often require that certain positions be filled by persons from overseas. It is the same thing with foreign firms operating in local jurisdictions; the foreign firms negotiate terms to the effect that regardless of whether the skills are available locally, they want their persons holding strategic positions. Local contractors do not claim that these contracts entered into with foreign firms violate their right to work.
However, when it comes to large scale infrastructural projects that are funded by taxpayers, it is imperative for governments to insist on a guaranteed quota of locals being employed. It cannot be right for taxpayers’ monies to be used to build a major infrastructural project, but yet locals are excluded.
It is wrong for the government to not insist on this, and it is inexcusable for work permits to be granted to foreign workers when there may be locals who are capable of doing the same job.

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