UAE exploits workers on "arts" island- rights group

(Adds government statement in paragraphs 4, 13-14)

ABU DHABI, May 19 (Reuters) - Human Rights Watch accused the United Arab Emirates on Tuesday of exploiting thousands of Asian workers hired to build museums and art galleries on a showcase island.

Rights groups have criticised conditions in which labourers work in the UAE, a Gulf Arab country whose population has shot up to 4.5 million in recent years due to rapid urban development.

Many workers are housed in shanty camps, work long hours during intense summer heat and humidity, and employers often retain their passports.

The UAE has taken some measures in response to international criticism and a government statement in response to the report faulted HRW for not highlighting them.

"While the UAE government has moved to improve housing conditions and ensure the timely payment of wages in recent years, many labour abuses remain commonplace," the report by the New York-based HRW said.

The HRW report refers to Saadiyat Island which is planned to be the centre of a prestigious "cultural district" in the UAE capital Abu Dhabi. French museum The Louvre and New York's Guggenheim Museum are to open branches there.

The report documents "a cycle of abuse that leaves migrant workers deeply indebted, badly paid, and unable to stand up for their rights or even quit their jobs".

"Workers face the choice of quitting their jobs while still owing thousands of dollars for the unlawful recruiting fees, or continuing to work in exploitative conditions. Virtually all complained of low pay and poor-quality healthcare."

The Tourism Development & Investment Company (TDIC), which is in charge of the development, said construction had not yet begun and special care was being taken over workers' welfare.

A statement said contractors were obliged not to seize passports and encouraged to pay workers promptly. It said it would implement an HRW suggestion to provide contract copies in the language of the workers, not only Arabic and English.

"TDIC has been building the Saadiyat Construction Village, one of the most advanced accommodation and living facilities for construction workers in the Middle East, with the first 5,000 residents to be welcomed in July 2009," it said.

The UAE plans to set up special labour courts, encourage "model" housing, and allow workers to switch jobs if employers delay wages by two months, the state news agency cited senior labour ministry official Humaid bin Demas saying on Tuesday.

A statement by minister of state for foreign affairs Anwar Mohammed Gargash said the lack of reference by HRW to UAE efforts to improve the situation was a sign of the group being "pressured". He did not say who he thought was exerting this pressure. "The report tends towards generalisations in an arbitrary manner...and conceals the true picture," he said.

The UAE is fending off other accusations of rights abuse. This month it detained a member of the ruling family, Sheikh Issa bin Zayed al-Nahayan, over a video aired on U.S. TV networks where he appears to torture an Afghan grain trader.

Concerns over the Sheikh Issa's conduct have been expressed by lawmakers in the United States, potentially stalling a multi-billion-dollar nuclear energy deal with the United States.

Washington has criticised the UAE for human trafficking, including maids and other workers trapped into paying fees while their passports are confiscated.

Reporting by Andrew Hammond; editing by Thomas Atkins