Strong-arm tactics reported in construction business

Public sector contracts allegedly given to shady foreign companies

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Questionable practices are increasingly being reported in resolving financial disputes in the construction industry, says Kyösti Suokas, deputy chairman of the Finnish Construction Union.
      According to Suokas, underpaid employees and even their families have been threatened in situations in which the workers have demanded payment of back wages. The workers in question are typically immigrants.
      The union has received dozens of complaints about such intimidation. Suokas believes that the trend is linked with the surging “grey economy” in the construction business.
      “When illegal activities start at one edge, they bring in other types of illegal practices as well”, he says.
     
The disputes are not limited to conflicts between employers and workers. Disagreements over invoices can strain relations between different contractors as well.
      The investigative television programme MOT aired on the Finnish Broadcasting Company (YLE) on Monday reported on a case in which a contractor hired an Estonian man to run over a house manager with his car.
     
An Estonian man said that he had demanded payment of late wages last year in 92 different cases.
      Hannu J. Mäkinen, regional director of the Confederation of Finnish Construction Industries, says that in recent times a few cases have come to light in which a subcontractor has demanded payment from the main contractor of bills that are clearly without foundation.
      Such demands are accompanied by threats of initiating bankruptcy proceedings.
     
Only a small percentage of cases of intimidation come to the attention of the police.
      Markus Terenius, head of the economic crime department of the National Bureau of Investigation (NBI), says that methods to enforce payment of invoices have included threats, flashing a weapon, or even physical assaults.
      Nevertheless, the number of cases actually investigated by the NBI is relatively small.
     
One big reason behind rising tensions at construction sites is the practice of trading in false receipts, which companies buy as a way of avoiding payment of VAT.
      Trade in receipts has brought organised crime figures into the construction business, leading to an increase in the risk of violent crime, blackmail, and intimidation, Terenius says.
     
Suokas of the Construction Union says that more supervision of construction sites is needed.
      He also says that clients should not accept suspiciously cheap offers for contracts, because they generally involve shady practices. He is especially critical of the public sector.
      “The state and municipalities give clearly underpriced contracts to foreign companies”, he says.
     


Previously in HS International Edition:
  Reverse VAT planned for construction industry (20.11.2009)
  Recession brings more economic crime to Helsinki (30.3.2009)

Links:
  Confederation of Finnish Construction Industries
  The Finnish Construction Trade Union

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