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For most businesses, implementing a robust ethics policy in Northern Europe is one thing, but applying the same rigours to other regions is quite another.
Swedish construction company Skanksa knows that reality all too well. With extensive business operations in South America, a region historically beset with human rights challenges, it has found that maintaining world class ethical standards on the continent is often demanding. But it decided long ago that doing so was worth the effort, not only because it is good for the region, but because it benefits the business too.
Skanska began operating in South America in 1999, when it bought the Argentinian company Sade. Since then it has developed its business in other countries in the region, and the Skanska Latin America Business Unit is particularly active as a subcontractor for the oil and gas sector. Construction projects include the Cerro Verde mine in Peru, a nitrogen plant in Mexico, the Gaby mine project in Chile, a hydropower plant at Ponte de Pedra in Brazil, and the Camisea Gas plant in Peru.
With such an array of operations, Skanska has needed to adopt a policy of regional social responsibility that is geographically consistent and fits in with its global code of conduct. Individual companies have been improving human rights and working conditions in South America, but racketeering, black-market economies, discrimination and unlawful employment practices remain widespread in some areas, particularly in the construction industry.
Skanska, however, believes it has found a way to provide a region-wide approach to human rights: by using the SA8000 workplace standard. Drawn up a decade ago by the US-based Social Accountability International organization with the aim of developing standards and systems to address human rights in the workplace, SA8000 is particularly useful for companies such as Skanska that operate in countries where overall governance is poor. Supported by auditing and a verification system, SA8000 sets out standards for supplier factories on discrimination, health and safety, freedom of association, child labour, collective bargaining and working hours. In countries where there is little law on such matters and even less enforcement of that law, Skanska believes SA8000 is not only a natural extension of the company’s own code of conduct, but a valuable tool for setting standards in an area where it has at least some influence.
‘We’d been looking for a standard that would help everyone who works in the industry to meet the basic principles of decent working conditions and workers’ rights,’ says Noel Morrin, senior vice president of sustainability at Skanska. ‘We had our own internal policies, but felt that a recognized international standard would help differentiate between companies that comply with guidelines and those that don’t.’
Differentiation is just one reason why Skanska became accredited to the standard; Morrin says SA8000 has also become a benchmark for improving standards, and not solely among Skanska’s own employees, subcontractors and suppliers. Other companies also use SA8000, so it is relatively easy to judge how Skanska is doing in comparison to them. And because Skanska will sometimes share suppliers with other multinationals, it can exchange information on them and implement joint action with contractors.
‘It would be exaggerating to speak about actually changing a country’s human rights conditions as a result of our actions,’ explains Alfredo Andrade, regional manager for quality, health, safety and environment at Skanska’s Latin America Business Unit. ‘But we feel proud that we’ve instigated some positive changes in subcontractors’ work practices. Suppliers implement improvements because they feel an incentive to do so when working on Skanska projects.’ Andrade firmly believes that encouraging subcontractors to adopt best practice ‘is like planting a seed in each place where Skanska builds and operates projects in the region’.
Application of SA8000 in South America varies tremendously from country to country, with 91 facilities certified in Brazil compared with only five in Bolivia. However, as a focus for improving social justice and living conditions, Skanska believes that working with the standard is ‘highly effective’ where it is in operation. Using the one standard also means that Skanska can work in eight Latin American countries and operate to the same principles throughout.
Skanska’s use of SA8000 has helped workers and their families to get a better deal, and it also benefits the company. The standard’s emphasis on health and safety, says Andrade, has made the company a popular choice with national and global clients. Occupational health and safety at work is a significant qualifying factor for construction companies and service contractors wishing to work with large corporations, he believes. ‘We have never been excluded from a bid because of lack of credentials in this matter. Those who select us know that they can rely on Skanska’s expertise.’
While SA8000 is therefore a pivotal part of Skanska’s human rights efforts, Andrade explains that aside from using the standard, the company also seeks to improve human rights in three other ways. ‘Firstly, there are our own actions, which involve negotiations with employees and making sure our dealings with subcontractors and suppliers are fair, open and unrestricted,’ he says. ‘Secondly, the company can help to improve the living standards of our workers’ families, for example through the provision of equipment for schools, which we have done in various places, including in Neuquen, Comodoro Rivadivia, Santa Cruz and Mendoza. And thirdly, we can have a wider positive impact on communities in areas around construction projects that we are involved in. That means helping NGOs to improve the welfare not simply of our own workforce but of everyone else.’
A number of projects undertaken recently by Skanska have had this goal to the fore. As part of its work on the Camisea project in the Cusco region of Peru, for example, Skanska has donated beds, kitchen equipment and even complete sanitation plants to the local population.
Elsewhere, in Ecuador, the company has provided sewing machines and training to local women, who have been able to earn extra money by working for companies operating in the area.
Through these community involvement efforts, and with SA8000 operating as the backbone of its South American human rights programmes, Andrade believes that Skanska is now getting to grips with a thorny issue that has proved so problematic for other companies. It is still early days, but the signs are promising.
Swedish construction company Skanksa knows that reality all too well. With extensive business operations in South America, a region historically beset with human rights challenges, it has found that maintaining world class ethical standards on the continent is often demanding. But it decided long ago that doing so was worth the effort, not only because it is good for the region, but because it benefits the business too.
Skanska began operating in South America in 1999, when it bought the Argentinian company Sade. Since then it has developed its business in other countries in the region, and the Skanska Latin America Business Unit is particularly active as a subcontractor for the oil and gas sector. Construction projects include the Cerro Verde mine in Peru, a nitrogen plant in Mexico, the Gaby mine project in Chile, a hydropower plant at Ponte de Pedra in Brazil, and the Camisea Gas plant in Peru.
With such an array of operations, Skanska has needed to adopt a policy of regional social responsibility that is geographically consistent and fits in with its global code of conduct. Individual companies have been improving human rights and working conditions in South America, but racketeering, black-market economies, discrimination and unlawful employment practices remain widespread in some areas, particularly in the construction industry.
Skanska, however, believes it has found a way to provide a region-wide approach to human rights: by using the SA8000 workplace standard. Drawn up a decade ago by the US-based Social Accountability International organization with the aim of developing standards and systems to address human rights in the workplace, SA8000 is particularly useful for companies such as Skanska that operate in countries where overall governance is poor. Supported by auditing and a verification system, SA8000 sets out standards for supplier factories on discrimination, health and safety, freedom of association, child labour, collective bargaining and working hours. In countries where there is little law on such matters and even less enforcement of that law, Skanska believes SA8000 is not only a natural extension of the company’s own code of conduct, but a valuable tool for setting standards in an area where it has at least some influence.
‘We’d been looking for a standard that would help everyone who works in the industry to meet the basic principles of decent working conditions and workers’ rights,’ says Noel Morrin, senior vice president of sustainability at Skanska. ‘We had our own internal policies, but felt that a recognized international standard would help differentiate between companies that comply with guidelines and those that don’t.’
Differentiation is just one reason why Skanska became accredited to the standard; Morrin says SA8000 has also become a benchmark for improving standards, and not solely among Skanska’s own employees, subcontractors and suppliers. Other companies also use SA8000, so it is relatively easy to judge how Skanska is doing in comparison to them. And because Skanska will sometimes share suppliers with other multinationals, it can exchange information on them and implement joint action with contractors.
‘It would be exaggerating to speak about actually changing a country’s human rights conditions as a result of our actions,’ explains Alfredo Andrade, regional manager for quality, health, safety and environment at Skanska’s Latin America Business Unit. ‘But we feel proud that we’ve instigated some positive changes in subcontractors’ work practices. Suppliers implement improvements because they feel an incentive to do so when working on Skanska projects.’ Andrade firmly believes that encouraging subcontractors to adopt best practice ‘is like planting a seed in each place where Skanska builds and operates projects in the region’.
Application of SA8000 in South America varies tremendously from country to country, with 91 facilities certified in Brazil compared with only five in Bolivia. However, as a focus for improving social justice and living conditions, Skanska believes that working with the standard is ‘highly effective’ where it is in operation. Using the one standard also means that Skanska can work in eight Latin American countries and operate to the same principles throughout.
Skanska’s use of SA8000 has helped workers and their families to get a better deal, and it also benefits the company. The standard’s emphasis on health and safety, says Andrade, has made the company a popular choice with national and global clients. Occupational health and safety at work is a significant qualifying factor for construction companies and service contractors wishing to work with large corporations, he believes. ‘We have never been excluded from a bid because of lack of credentials in this matter. Those who select us know that they can rely on Skanska’s expertise.’
While SA8000 is therefore a pivotal part of Skanska’s human rights efforts, Andrade explains that aside from using the standard, the company also seeks to improve human rights in three other ways. ‘Firstly, there are our own actions, which involve negotiations with employees and making sure our dealings with subcontractors and suppliers are fair, open and unrestricted,’ he says. ‘Secondly, the company can help to improve the living standards of our workers’ families, for example through the provision of equipment for schools, which we have done in various places, including in Neuquen, Comodoro Rivadivia, Santa Cruz and Mendoza. And thirdly, we can have a wider positive impact on communities in areas around construction projects that we are involved in. That means helping NGOs to improve the welfare not simply of our own workforce but of everyone else.’
A number of projects undertaken recently by Skanska have had this goal to the fore. As part of its work on the Camisea project in the Cusco region of Peru, for example, Skanska has donated beds, kitchen equipment and even complete sanitation plants to the local population.
Elsewhere, in Ecuador, the company has provided sewing machines and training to local women, who have been able to earn extra money by working for companies operating in the area.
Through these community involvement efforts, and with SA8000 operating as the backbone of its South American human rights programmes, Andrade believes that Skanska is now getting to grips with a thorny issue that has proved so problematic for other companies. It is still early days, but the signs are promising.
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