Skanska has cited the lack of commitment shown by other construction companies to social and environmental guidelines on dam building as a reason for its decision to pull out of the hydropower plant building business for the time being.
The Swedish multinational says it has tried to persuade other companies to join it in adopting the November 2000 recommendations of the World Commission on Dams, which said firms should develop and adopt voluntary codes of conduct that take account of the social and environmental impact of their activities.
But Skanska says it has been disappointed at the lack of corporate support for the WCD report. ‘We couldn’t find any consensus in the international community on dams and that leaves room for the cowboys,’ said Axel Wenblad, senior vice president of sustainability at Skanska. ‘Although dam building makes up less than one per cent of our business, the risk was too much.’
Skanska has not ruled out the possibility of becoming involved in a future dam project. However, Wenblad said it was important to get support for the dam guidelines from other firms because such large projects are nearly always run by consortia.
‘The world dam guidelines were the right way ahead, but were not accepted by the sector,’ he said. ‘The reaction from most companies has been "why do we have to do this, it will be a problem for us".’
UK-based construction company Balfour Beatty said: ‘It’s difficult to judge the level of commitment from companies for the WCD guidelines, but we have said we will take them into account.’
An industry source believed the guidelines needed further development before firms would formally commit to them.
Wenblad added Skanska felt let down by the NGO community, which was equivocal in its support when the company backed tighter social and environmental controls. ‘The NGOs didn’t say we were doing something bad, but they didn’t say we were doing good either. Only when we told them we had decided to withdraw did they come to us to say: "Can’t you wait a bit because we wanted to use you as an example of a company doing well in this area?"’
Investors were also wary of Skanska’s adoption of the guidelines, Wenblad said. ‘People in the financial community said: "Are you sure you know what you’re doing?"’ Skanska, which has 76,000 staff and a turnover of $15billion (£9.5bn), is the only company to have officially endorsed the WCD report on the WCD’s website.
The commission was set up by the World Bank and the World Conservation Union to make dam building more sustainable, with help from a number of construction firms. At the time of the report’s launch, Skanska pledged to apply the guidelines to all its hydropower projects, and ‘to actively strive toward these guidelines being accepted among stakeholders’. Its code of conduct says it will refrain from activities with ‘unacceptable environmental and social risks’.
Training on the code is being rolled out across the group this year.