June 14, 2002
AMEC: Under the Spotlight
By Matthew Richards.
Recent campaigns by environmental pressure groups have exposed the construction industry to a barrage of bad press, with the aim of shaming firms into changing their ways.
A dam that would flood Kurdish villages in Turkey, making thousands homeless. Use of timber from threatened rainforests. Bribery and corruption in poverty-stricken Lesotho. These kinds of activities don't appear in any company mission statements or annual reports. But if you believe Friends of the Earth and Greenpeace, Balfour Beatty has been linked to all three in the last few years.
This is serious news for Balfour Beatty. In this eco-conscious age, clients insist that projects have impeccably green credentials. An environment-friendly reputation is a great asset to construction companies, and pressure groups like Friends of the Earth can take it away from them. As a Bovis Lend Lease spokesperson says: "You certainly need to be on your guard against being targeted."
The more high profile the project, the more it will attract campaigners' scrutiny. After the Jubilee weekend, Greenpeace marred the Palace's reputation by its claims that the #20m Queen's Gallery at Buckingham Palace used timber from endangered African rainforests - although the Palace says there is no proof to support the accusations. Contractor Wates Special Works also denied the claims and was forced on to the defensive, issuing a statement reasserting its commitment to sustainability.
Friends of the Earth campaigner Hannah Griffiths believes the organisation's pressure on construction firms is forcing them to change their policies.
She cites the Ilisu hydroelectric dam planned for south-east Turkey, a project that Balfour Beatty pulled out of last November. "This was a direct consequence of us campaigning for them to pull out," she insists.
Friends of the Earth and Greenpeace have been campaigning against despoilers of the environment for decades, but recently they have been investigating construction. Their scrutiny of the sector began in the late 1990s, when London-based Kurdish groups launched a campaign to stop the Ilisu dam, which they claimed would make thousands of Kurds homeless. The Kurdish activists targeted companies involved in the project, and encouraged other pressure groups to get involved.
Skanska dropped its 24% stake in the project in September 2000, but denied that it was backing down in the face of activist pressure. Balfour Beatty clung on until November 2001, by which stage Friends of the Earth had dug into the firm's worldwide projects and shone a spotlight on its activities from London to Lesotho. Amec received similar treatment: it was involved in Yusufeli, another dam in Turkey. Once Friends of the Earth got wind of that, it went on to campaign against Amec's involvement in various other projects: oadbuilding in Britain, another dam in Belize and paper mills in Indonesia.
The nerve centre for these campaigns is a cramped office in the back streets of north London. Friends of the Earth's headquarters is a narrow, five-storey building in a neighbourhood of warehouses and artists' studios.
On the second floor, amid activist posters and pot plants, members of the Corporates Campaign work on antiquated computers that betray their shoestring budget.
Hannah Griffiths is responsible for targeting construction companies.
She explains: "We start doing some research on a firm's project and find out about others they're involved in. Once you've made it public that you're looking into a company, lots of other non-governmental organisations get in touch and say, for example, 'Amec - they're horrible'. It's mostly other people contacting us."
The campaigners' favourite tactic is to make their targets squirm by subjecting them to bad publicity. At Balfour Beatty's annual meeting in 2000, 15 protesters in specially designed T-shirts lined up to spell out "S T O P T H E I L I S U D A M". This did not have much impact, so the next year they came back armed with #30,000 worth of shares, which entitled them to propose a resolution requiring the company to change its policy on dams. They also gave shareholders a "counter-report" full of meticulously footnoted investigative articles and pictures of an ancient Kurdish village threatened by the Ilisu dam. The report contained a two-page article raising "a range of concerns", including the firm's responsibility for track maintenance at Hatfield at the time of the rail crash, and the fact that Balfour was in a consortium now accused of bribing a Lesotho official.
The Ilisu dam motion was soundly defeated at the annual meeting in May 2001, but almost half the shareholders in the vote broke City convention by abstaining. Friends of the Earth claimed a moral victory. By this stage, Balfour Beatty was taking the group seriously. Just before the annual meeting, Charles Secret, head of Friends of the Earth, had gone to Balfour Beatty's headquarters for a two-hour meeting with chief executive Mike Welton, company secretary Chris Pearson and communications chief Tim Sharp.
Campaigners were jubilant when Balfour Beatty finally withdrew from the project last November. Balfour Beatty denies Friends of the Earth influenced its decision, which it said was based on "commercial, environmental and social issues". Sharp says: "By November, it was clear we couldn't expect any rapid response from our customer, the Turkish government, to our concerns about the dam." The company also says the conditions set by the export credit agencies that were considering funding the project could not have been met without "substantial extra work and expense and considerable further delay".
But the environmental campaign was not over for Balfour Beatty. The company found itself in the firing line again on 10 April this year, when Greenpeace pulled a publicity stunt against another of its projects - the new Cabinet Office building in Whitehall. The government had said it would use only timber from sustainable sources, but Greenpeace claimed the doors were made from sapele, an endangered tree from the central African rainforest.
Volunteers posing as site workers tried to remove the doors and replace them with environmentally sound alternatives. They put up signs declaring the site a "forest crime scene". The stunt was widely reported. An embarrassed government claimed it had specified sustainable timber, and it and Balfour Beatty are investigating.
Greenpeace is taking a different approach to Friends of the Earth. Although it is not targeting contractors as a group, it has succeeded in changing the way many operate. It reports regular phone calls from anxious construction companies asking what sort of timber they can and cannot use, and it says the volume of calls has increased since the Cabinet Office episode. Contractors must be hoping to avoid making an enemy of Greenpeace, whose record in direct action includes sailing into the path of the French navy to stop it testing nuclear weapons in the Pacific Ocean.
Environmental issues are not the only concern: the industry also faces criticism from Transparency International, an anti-corruption organisation. Although it does not use direct action, this pressure group shamed the sector in its Bribe Payers Index 2002, a survey that claimed construction was the world's most corrupt industry.
The Lesotho case is a prime example of such corruption. On 20 May, Masupha Sole, former chief executive of the largest civil engineering project in Africa - a series of dams in Lesotho - was convicted of accepting #3m in bribes from consortiums of foreign construction companies bidding for work. British firms in the consortiums were Balfour Beatty, Kier International and Sir Alexander Gibb & Partners (now known as Jacobs Gibb). Lesotho's director of public prosecutions, LL Thetsane, told Building last week (8 June, page 13) that he plans to prosecute the three British firms, provided Lesotho can meet the legal costs. Balfour Beatty and Kier said last week that neither had been charged and added that previous charges against the consortiums were dropped in 1999.
All of this means that construction firms are becoming increasingly aware of the need to be careful what they get involved with, and to consider social and environmental issues at all times. "Companies like us are going a long way to meet campaigners' concerns and be good corporate citizens," says an Amec spokesperson. Amec published its first sustainability report this year, detailing its credentials on a host of issues. Balfour Beatty expressed similar sentiments by holding a top-level meeting with Friends of the Earth and publishing an environmental report.
But Friends of the Earth's Griffiths is not satisfied. She says Amec's sustainability report was a good start, but such a report "has to be honest; it has to address your trouble spots and failings as well as the good thing you've done. If you looked at their report and the stuff we've published on them, you'd think they were about two different companies". She is unmollified by her targets' attempts to placate her and her fellow campaigners.
She says: "They are keen to have a dialogue, but we're still miles apart."
Once the campaigners have decided to target your firm, it is hard to shake them off. There is little evidence that Amec and Balfour Beatty are any worse than other construction firms, but they have been singled out for opprobrium.
"Some of the material circulated about us was untrue, and one always resents that," says Sharp. "During the campaign we were demonised, there's no question."
How a TV comic made Amec squirm
When Friends of the Earth targeted Amec's annual meeting in central London on 8 May, their not-so-secret weapon was Mark Thomas (above, centre).
A unique individual who tries to combine the roles of comedian, investigative journalist and political activist, Thomas was one of a group of self-appointed referees who blew whistles and held up red cards whenever they felt the board had given an unsatisfactory answer.
"Mark Thomas clearly hadn't gone to ask questions," says an Amec spokesperson.
But some of the protesters had, and after the rowdy contingent left, the remainder spent two-and-a-half hours questioning chief executive Sir Peter Mason and chairman Sydney Gillibrand. Amec described the occasion as "a model of discussion and dialogue". But Friends of the Earth's Hannah Griffiths says:
"There were moments when they were really squirming; we knew more about some specific projects than the board of directors did." Friends of the Earth brought a catalogue of complaints about Amec's projects.
Top of the list was the Yusufeli dam. Like the Ilisu (see main article), this dam is planned for eastern Turkey, and Friends of the Earth say it will make 15,000 people homeless.
Amec withdrew from the project in March, saying its involvement was not commercially viable. But it has a 46% stake in French firm Spie, which remains committed to the project. Griffiths asks: "If it's not commercially viable for Amec, why is it for Spie?" Amec has hinted that Spie will withdraw from the project if, as expected, Amec buys the remainder of Spie later this year.
Since Friends of the Earth found out about Yusufeli, they have been attacking Amec on several fronts. Other projects they object to include an environmental impact assessment for the Chalillo dam in Belize and a series of pulp mills in Indonesia, for which Amec has conducted feasibility studies. Closer to home, they are unhappy that Amec is building the Birmingham northern relief road and the A650 bypass in Bingley, Yorkshire.
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