Memo from the Arab Contractors Union Regarding the Development of the Union’s Work and the Challenges It Faces, Submitted to the Secretariat of the Arab Economic Unity Council
The Arab Contractors Union aims to support the activity of Arab construction, develop its capabilities, and elevate it to serve the comprehensive Arab economic development. It also seeks to activate all mechanisms that aim to increase the ways of Arab integration in the contracting sector to strengthen the bonds of joint cooperation in one of the most important economic fields. Additionally, the union undertakes to provide various means to support the Arab contractor, enabling them to play an effective role in the implementation of all development projects in Arab countries and to achieve the aspirations and hopes of the Arab peoples for progress and prosperity.
From this standpoint, we believe:
First: Development
To develop the tools and means of the union in a way that achieves the above-mentioned goals, the following is required:
1. Completion and Adoption of a Unified Classification:
One of the most important means of developing the union’s work is to establish and adopt unified foundations for classifying contractors in Arab countries. This is for several important reasons, including standardizing the rules of professional practice in Arab countries, providing a complete database for Arab governments and funding institutions about contractors qualified to implement major Arab projects outside their own countries, and facilitating the work of construction companies in Arab countries without obstacles or organizational issues that arise from differing classification levels between Arab countries. It also aims to activate the Arab Free Trade Area and establish the Arab Common Market, which requires unified principles for the qualification and classification of Arab contractors. Therefore, the union has, since its inception, paid great attention to preparing unified principles for classifying contractors in Arab countries, and it has communicated with all the unions and contractors’ syndicates in Arab countries to provide them with the classification standards and criteria used within each Arab union, in preparation for creating a unified Arab classification, and to adopt it in selecting the Arab contractor who will supply their services for executing projects at the Arab and international levels.
2. Giving Preference to Arab Contractors in Project Implementation:
The Arab region has a large system of institutions and funding funds. To optimally benefit from these Arab institutions and adopt policies to support and encourage Arab contractors and protect them from foreign companies, the Arab Contractors Union has addressed the Arab League and the Arab Council of Ministers of Housing and Construction to include a preference percentage for Arab contractors in tenders offered and funded by Arab funding bodies or Arab governments. This would enhance their chances of obtaining such works, enabling them to compete fairly with foreign companies that receive substantial support from their countries. It also seeks to benefit from all the expertise and technical capabilities of our national companies and maximize them so that they can efficiently carry out the tasks of development and reconstruction in the Arab countries affected by various crises.
3. Activating the Role of the Arab Contractor:
The Arab Contractors Union constantly urges all governments and Arab organizations to activate and increase the participation rates of Arab companies in executing major Arab development projects, especially the reconstruction projects in Arab countries that have been affected by recent political events. This participation can provide more job opportunities for Arab workers of all specialties in light of the continuous population growth, save foreign currency instead of spending it on foreign companies that burden Arab economies by draining project profits abroad, and reduce unemployment rates among Arab citizens.
4. Establishing a Database for Arab Projects:
The Union sees the importance of establishing specialized information centers based on trusted sources to create an Arab database dedicated to the construction industry, providing unified and detailed data on the sector at the Arab region level. This should include information about all projects currently available or planned to be offered in the Arab markets, the funding sources for each project, their equipment and material needs, as well as all laws and regulations related to the profession, classification systems, regulations in each country, transport networks, movement of people and capital, customs systems, construction material prices, and labor costs.
The union will contact its members to communicate with their governments and entities offering reconstruction and other development projects to provide them with the necessary project data, enabling them to distribute it to all contractors’ unions in the Arab countries. This will give their members the opportunity to participate in these tenders and provide a database that includes all the projects to be implemented in all sectors in each Arab country, with details on project values, types, work areas, conditions, and facilities available for contractors.
5. Training Centers for Contractors:
One of the key tasks of the union is to adopt an Arab training strategy that keeps pace with global changes and developments in modern construction technologies. This will provide human resources and specialized skills, raise the efficiency of companies and skilled labor, and qualify Arab companies to compete regionally and internationally, enabling them to execute projects with high efficiency. Thus, the union coordinates with the contractors’ bodies in Arab countries to establish certified training centers for contractors wishing to benefit from the union’s experiences in training. So far, three training centers have been established in Egypt, Morocco, and Bahrain to benefit from their significant expertise in training and providing skills that upgrade national companies. The union is also participating in the Professional Mediator Certificate program, which is the first Arab program that includes basic principles in mediation science, professional mediator skills, settlement agreements, and their enforceability, organized by the International Academy for Mediation and Arbitration.
6. Activating the Arab Arbitration Chamber:
The union, in collaboration with the Arab Engineers Union and the Arab Lawyers Union, contributed to the creation of the Arab Arbitration Chamber for engineering contracts to resolve disputes amicably. Therefore, it is important to activate the role of this chamber and provide the appropriate environment for carrying out its work.
7. Partnerships and Alliances Between Arab Construction Companies:
The Union emphasizes the importance of creating partnerships and alliances between Arab construction companies to implement reconstruction and major infrastructure projects. This will take advantage of geographic proximity to open Arab markets to one another, remove obstacles preventing contractors from working in different Arab countries, improve transport links between Arab countries, reduce economic costs, and conclude more bilateral and trilateral agreements within the framework of the Arab Economic Unity Council, activating these alliances under the umbrella of the Arab Contractors Union to benefit from the union’s experiences and expertise in drawing up work plans required to meet the partnership demands quickly.
8. Unified Arab Reference for Dealing with Foreign Construction Companies:
The union sees the need to create a unified Arab reference for dealing with foreign construction companies, both regarding their participation shares with local contractors and requiring them to employ Arab labor and use local building materials in their projects within Arab countries. This is particularly important as foreign companies already have a significant share of projects offered in the Arab world.
Second: Challenges
Despite the decision issued by the Council of Ministers of Housing to assign the technical secretariat of the council to generalize the Union’s important recommendation to include a percentage preference for Arab contractors in Arab countries, and despite the continuous follow-up by the union to activate this issue, nothing has been done to date. Therefore, we hope that the Arab League and the Arab Council of Ministers of Housing and Construction will take the necessary steps to approve the preference percentage in tenders offered and funded by Arab funding bodies or governments. This would enhance the Arab contractor’s chances of securing these works and ensure the protection of the Arab construction industry, which would ultimately lead to substantial economic benefits for Arab countries and contribute to achieving comprehensive sustainable development.
Although the union took actual steps in 2005 to establish unified principles and controls for classifying contractors qualified to work outside their home countries and formed a committee to receive classification requests from Arab contracting companies, there has been no significant progress on this issue due to objections from some Arab countries. It has not yet been approved by the Arab Ministers of Housing Council, which decided to postpone the matter until further notice.
There are still obstacles facing the union’s strategy to activate Arab contractors’ participation in reconstruction projects, including convincing Arab governments to allocate part of the reconstruction shares for Arab contractors only, differences in work systems and classification systems, obstacles in the movement of individuals, equipment, capital, and building materials, tax and customs fees on equipment and machinery, security risks facing companies in unstable Arab regions, and financial and credit challenges, among other issues that are directly related to providing a stable environment for contractors and activating their role in implementing the desired sustainable development projects in the Arab world.
The Arab Arbitration Chamber has not been activated.
There is a lack of real will from the governments of member countries to implement the union’s decisions and recommendations that contribute to the development and achievement of the goals for which it was established.
Like all international and regional organizations, the union does not have binding authority over its members in executing its recommendations, and only those members who agree to the decisions are responsible for complying with them. This lack of conditionality regarding commitment to joint work is a significant reason for the union’s inactivity.
Although there are contractors’ unions and organizations in all Arab countries, some of them are irregular in attending meetings and participating in the Arab Contractors Union’s activities, while some have not participated at all. This negatively affects the performance of the Arab Contractors Union and hinders the development of its activities and future plans. Despite the multiple attempts made by the union and communications with some unions that are reluctant to participate, there has been no response or encouraging signs. Therefore, we believe that this matter requires intervention by the Arab Economic Unity Council and the Arab Council of Ministers of Housing to urge these unions to participate and actively contribute to achieving the desired Arab integration in the contracting sector.
The financial aspect is one of the biggest obstacles and challenges facing the union, as some members fail to regularly meet their financial obligations, accumulating arrears that hinder the union’s activities and its ability to take the necessary actions to achieve its objectives, sometimes crippling its ability to function. This is especially true in the absence of economic activities on which the union can rely to cover the financing shortfall due to non-payment of annual subscriptions.
The union does not have any authority over members’ compliance with its recommendations, as it has no powers after issuing its decisions and lacks a way to pressure members into fulfilling their financial commitments.