BY THE time this review appears, it’s possible that Santiago Sierra’s new installation will have attracted far more press attention than is usual for a show in a commercial space. Concerned about the possible controversy, the Lisson Gallery refused to reveal any details about the project before its opening.

The work was created by spraying ten men and women with polyurethane — a poisonous liquid plastic that hardens quickly in contact with air. What makes this piece so controversial is the fact that all the ten hired participants were Iraqis. The themes, then, are the Iraq war, chemical warfare and the torture of Iraqi prisoners.

Despite being toxic, polyurethane is commonly used for household insulation, so it has connotations of both safety and danger — a nice metaphor for the combination of defence and aggression that motivated the invasion of Iraq.

A video projection documents the entire process. Lined up in groups, jets of polyurethane spattering over their backs, the participants have to wear chemically resistant clothing — whole body suits that leave only the eyes visible behind goggles — and a thick sheet of plastic draped over their backs and heads. Given the context, it comes across as a kind of militarised, updated version of the veil, that most stereotypical of ciphers for Islam, emblematic of a range of Western anxieties about the Middle East. It isn’t hard to imagine the angle a controversy-hungry press might take — the awful exploitation of immigrant workers for the sake of some loony art stunt.

Sierra’s work is exploitative. He has often hired workers from vulnerable or marginalised groups. They move concrete cubes across floors, or simply sit for hours inside cardboard boxes. In one piece, a single continuous red line was tattooed across the backs of six men from Havana. All unemployed, they received just $30 (£16) in exchange for permanent disfigurement. By exploiting his participants’ poverty in order to make works of conceptual art, Sierra raises questions about an art business which, as part of a capitalist system, colludes in its exploitation of labour.

Although hired workers are used in his latest work, the piece is purely sculptural. The polyurethane has solidified into beautifully gnarled and twisted shapes, like petrified lava. The Iraqi workers are evoked only by their absence, where the plastic hardened flat against their backs. It’s a microcosm of how capitalism works: like any commodity, this sculpture is of greater worth than the labour involved in its manufacture.

In contrast to these impeccably aesthetic forms, the rest of the gallery floor is scattered with rubbish: empty canisters, sheets of black plastic, discarded spray-gun nozzles and bits of polyurethane shrapnel. It feels like a stage set. Or maybe something more sinister; the scene of a crime, perhaps, or a debris-littered battlefield. There is a sense of past violence, of something obscene — a hidden horror that remains unseen, off-stage.

What is hidden, as regards capitalism, is the issue of exploitable labour. A parallel can be drawn here with the hidden atrocities of warfare: war crimes and torture. The idea is that war, and certainly the Iraq war, is a continuation of capitalism’s inherent violence. Sierra also makes us aware that, as consumers of aesthetic objects, it is violence in which we are complicit.

• Santiago Sierra, Lisson Gallery, Bell Street, London, NW1 (020-7724 2739). To Aug 21.

  GABRIEL COXHEAD