Throughout the world, the construction industry has the potential to generate much needed employment and to contribute to economic development. Despite this, the industry has to struggle with a poor image, due to the construction of low quality buildings as well as the particular nature of the work, which is often difficult and dangerous. Flexible labour practices have increased due to outsourcing practices that are now the norm in most countries. The Russian construction industry has seen a significant growth after the financial crisis in 1998. Most of the construction companies are now private, employing around 5 million workers. A significant number are migrant workers, among them many without a legal residence or a work permit. They are particularly vulnerable to labour exploitation and coercive labour practices.

The purpose of this report is to assess possibilities to improve labour practices in the Russian construction industry. In particular, the report covers the following subjects:

• Situation of the Russian construction industry, including industry trends, social partners and employment issues
• Migration trends in the Russian Federation and the situation of migrant workers in the construction sector
• Analysis of Russian and international practices on self-regulation in light of the situation in the construction industry
• Presentation of employers’ perspective based on a non-representative survey of 74 companies as well as 34 expert interviews

The report should be seen as an initial attempt to analyse labour conditions in Russia’s construction sector and to discuss the feasibility of using the elements of corporate responsibility as tools to address some of the deficiencies, especially related to labour rights and the exploitation of migrant workers.

In particular, the report assesses the feasibility of adopting a sector-wide corporate code of conduct as one of the means to improve labour practices in the construction industry, protect vulnerable migrant workers, and increase awareness and self-regulation among employers, employers’ organizations and other stakeholders in the Russian Federation. In addition such a code could provide EBRD and other financing institutions and investors with a practical tool to reduce the risk of exploitation of migrant workers occurring in the construction phase of projects financed or sponsored by such institutions.

The report is structured as follows: In the first part, an overview of the Russian construction sector with a focus on use of migrant labour is provided; the second part discusses the development of the Russian migration law and policy framework. This background provides an overall context in which employers in the construction industry operate. Part three looks at linkages between the employment of migrant workers and the structure of the construction sector more specifically. Finally, an overview of international good practice examples in the area of corporate social responsibility is given and discussed with regards to issues identified in the context of the Russian construction sector. The last chapter also contains information on stakeholder consultations that were carried out in the preparation of this report as well as recommendations for further action.

To read the full report click here.