As a result of the current conflict in the Middle East, key infrastructure hubs have been struck, airspace is largely closed, and maritime traffic through the Strait of Hormuz has been severely disrupted.

But regional conflicts and crises do not only disrupt economies. They systematically weaken the protections workers have in place, and the workers with the least power bear the most cost.

The ILO estimates that over 24 million foreign workers live and work across the Gulf, and forms the majority of the workforce in every member state. Millions are now stranded: caught between missile strikes, shuttered worksites, and the prospect of unpaid wages. The Philippines, whose nationals run an estimated 50% of health and service capacity in the Emirates, has activated mandatory repatriation plans, its Interior Secretary warning the consequences could be 'devastating' for both countries.

The conflict has come at a time of immense transformation as States within the region build their green economies. Can the labour governance underpinning that transition hold under the pressure of conflict? What is being tested is not the quality of existing frameworks on paper. It is whether frameworks built for normal conditions can survive conditions that are anything but.

A pattern written in history

This is not the first time the Gulf's foreign workforce has been caught in a regional conflict. When Iraq invaded Kuwait in 1990, more than a million workers fled within weeks. Around a million Yemenis were expelled from Saudi Arabia because their government had backed Saddam Hussein's regime. After the war, workers returned to conditions that had not improved.

Each regional crisis since 2003, the Arab Spring, Yemen, the Houthi campaign against Red Sea shipping, has cascaded into the Gulf labour market in ways ESG frameworks never reliably captured. Projects halt, restart under new contractors, and whatever welfare progress had accumulated is reset.

What the current conflict reveals

Worker welfare issues have been accumulating long before the current conflict began. What conflict adds is scale, urgency, and a specific normative trigger.

IFC Performance Standard 2 and the Equator Principles treat worker welfare as integral to project delivery. But these frameworks were designed for stable operating environments. When a project is suspended and a contractor invokes force majeure, do wage obligations survive? When a grievance mechanism is administered by a company whose operations have halted, can workers still access it?

The UNDP and UN Working Group on Business and Human Rights have published a guide on Heightened Human Rights Due Diligence for Business in Conflict-Affected Contexts, grounded in the UN Guiding Principles on Business and Human Rights (UNGPs).

The UNGPs are built on proportionality: the higher the risk, the more sophisticated the due diligence required. In a conflict-affected area, heightened due diligence is not optional. It is the baseline expectation.

Recommendations

None of the following recommendations require new legislation. They require project sponsors, lenders, and monitoring bodies to treat existing standards as enforceable commitments rather than aspirational guidance, in conflict conditions, now.

Activate heightened due diligence. The UNGP framework is unambiguous: conflict triggers a heightened standard. Sponsors and lenders must conduct conflict analysis, update human rights impact assessments, and verify that supply-chain labour protections remain operative on active, suspended, and mothballed sites. Workers on halted projects are more vulnerable, not less. The obligation does not pause when construction does due to conflict.

Require fee audit and reimbursement as a condition of contract award and project resumption. Both UAE law and Saudi regulation prohibit recruitment fees. Evidence from named projects shows universal non-compliance across subcontracting chains. Developers and lenders must mandate independent fee audits, require reimbursement where fees are found, and trace labour brokers across all tiers. Recruitment debt is the foundation of the control that makes every other issue possible.

Build wage continuity into force majeure clauses, not just monitoring infrastructure. The WPS and Saudi wage protection programmes identify when wages have not been paid. They do not ensure workers receive wages when a contractor's cash flow collapses under a force majeure declaration. Financing agreements should include escrow, bonding, or direct lender disbursement provisions to protect worker wages during project suspension.

Verify grievance mechanism operability under conflict conditions. IFC PS2 requires grievance mechanisms accessible to all workers in the supply chain. Sponsors must verify mechanisms remain accessible on suspended sites and that complaints can be raised without triggering loss of accommodation, wages, or legal status.

Use the IFC Sustainability Framework review to close the conflict and subcontracting gaps. The IFC launched a formal review of its Sustainability Framework in April 2025, due to conclude around 2028. Through the Equator Principles, its standards govern over 130 financial institutions and trillions in private lending. The review should codify heightened due diligence obligations for conflict-affected contexts and extend IFC PS2 obligations explicitly to multi-tier subcontracting chains. The Gulf transition is the largest live test of whether those standards have teeth.

The Gulf energy transition will resume. Projects will restart, contractors will remobilise, and capital will return. The question is what conditions workers return to. If this conflict follows the pattern of 1990, the answer will be the same as it was then: worse than before, with whatever progress had been made quietly reset. Changing that outcome requires project sponsors and lenders to treat labour safeguards not as a compliance exercise to be revisited at financial close, but as a live obligation that holds through suspension, conflict, and resumption alike. The frameworks to do that already exist.