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Government Defence Anti-Corruption Index 2015

Saudi Arabia


Country Recommendations


Saudi Arabia’s results place it ahead of most other Gulf countries, though the country’s overall GI ranking in Band E places it in a high-risk category for corruption in the defence and security sector. Saudi Arabia’s highest risk area is Operations, followed by Political and Financial, Personnel then Procurement. To reduce corruption risk and build integrity, security sector reforms are urgently needed across the following areas:

Increased transparency and scrutiny in procurement and budgeting

Engagement with the Public



Performance


Overall score Area scores

Assessment


Political01. Is there formal provision for effective and independent legislative scrutiny of defence policy?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: There is no independent legislative body in Saudi Arabia; the 150 members of the Shura Council (Majlis as-Shura or Consultative Council) are appointed by the King, and the institution’s influence is limited by its narrow mandate, which includes: proposing draft laws (which are then forwarded to the King); issuing non-binding interpretations of existing laws; examining annual reports submitted by government ministries and state agencies; issuing guidance to the King; reviewing the annual budget; calling in officials for questioning; and drafting the Kingdom's five-year development plans.

Fahad Nazer, former political analyst at the Embassy of Saudi Arabia in Washington, observed that “the prevailing sentiment among Saudis is that that the Shura is a place for notable Saudis to further increase their prestige and ‘let off some steam,’ … [i]t is not seen as intended to be a real legislative body that represents the interests of the Saudi public.” As early as 2003, members of the Saudi political elite predicted that the Shura Council would transform into an elected body – but there is no sign that this change is imminent.
Assessor SourcesDavid B. Ottaway. 19 June 2013. “The Struggle for Power in Saudi Arabia,”
Foreign Policy. http://www.foreignpolicy.com/articles/2013/06/19/the_struggle_for_power_in_saudi_arabia_abdullah?page=full

“Saudi Shura Council, not so toothless after all?” 29 January 2014. Monitor Global Outlook (part of the Christian Science Monitor group of publications). https://monitorglobaloutlook.com/news-story/saudi-shura-council-not-so-toothless-afterall/

Ellen Laipson, Emile El-Hokayem, Amy Buenning Sturm, and Wael Alzayat. May 2006. “Security Sector Reform in the Gulf.” Washington DC: Henry L. Stimson Center and the U.S. Army’s Dwight D. Eisenhower National Security Series.
Peer Reviewer3934 OpinionAgree with Comments
Peer Reviewer3934 CommentsBy the letter of the scoring system, the Kingdom of Saudi Arabia should receive a score of 0. However, the decision making process for defence policy is more inclusive in Saudi Arabia than it is commonly perceived. The application of the label “Absolute Monarchy” onto the country misrepresents the situation and the expansiveness of those truly involved in the decision making process. As to the Shura Council, the body is 100% appointed by the king and it does not have any formal powers. With that said, the King continues to expand the role of the council, and there is strong evidence that King is highly sensitive to the recommendations of the council. Furthermore, Saudi Arabia has held regional level elections in recent years. Considering all these points, Saudi Arabia’s score of 0 is justified, but there is optimism that formal legislative scrutiny will be possible in the future.

- Anthony H. Cordesman. Saudi Arabia Enters the Twenty-First Century: The Political, Foreign Policy, Economic and Energy Dimensions. Westport, CT: Greenwood, 2003.

- Saudi Women Take Seats in Shura Council.” Al-Jazeera (19 February 2013).

- Anthony H. Cordesman. Saudi National Security and the Saudi-US Strategic Partnership: Part Four: The defence Aspects of Security. Washington, DC: Center or Strategic & International Studies, 2010.
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsI would like to suggest that it be noted that Saudi Arabia doesn't even have an official Defence Doctrine. This is attested by the proposal by Nawaf Obaid of Harvard for a public defence Doctrine in 2014. Obaid worked for Prince Turki al Faisal, former head of Saudi intelligence and ambassador to the US and UK. Given Obaid's close connection with Saudi officials, it can be inferred that the report reflects some of the internal thinking of those in power regarding the regional role of Saudi Arabia. The lack of a formal defence policy goes hand in hand with the lack of an independent legislature, and means that there is little to discuss or criticise by way of official policy.

http://belfercenter.ksg.harvard.edu/files/Saudi%20Strategic%20Doctrine%20-%20web.pdf
Government Reviewer4700 OpinionNot Qualified

Political02. Does the country have an identifiable and effective parliamentary defence and security committee (or similar such organisation) to exercise oversight?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: The Shura Council does include a Committee on Security Affairs, though the council’s membership is appointed by the King and has no formal legislative powers. This committee can question representatives from government agencies and private experts in the course of reviewing draft laws proposed by the King, but the committee can only offer possible amendments, and has no formal control over the outcome.

According to the publicly available agendas detailing the most recent session of the Majlis as-Shura (the second year of its sixth term, corresponding to the 2014 calendar year), the security committee initiated discussion or issued reports on a number of issues related to defence and security, though they are relatively low-level issues, suggesting the ‘real’ matters related to defence and security are treated elsewhere within the government. The impact or content of the reports and discussions is unclear.

They are listed below.
•tDiscussion of the exchange of benefits between civil and military retirement and social security (20 January 2014)
•tCommittee seeking members’ opinions on amending Article VII of the law of internal security forces (Royal Decree No. 30 dated 4.12.1384) (28 January 2014).
•tA report on proposed amendments to Article 32 of Royal Decree No. (M/85) pertaining to the traffic system (various, 4 February through 16 March 2014)
•tReport on a draft agreement on coordinating criminal penalties for individuals convicted in courts in either KSA or Yemen (24 March 2014)
•tReport on memoranda of understanding on the exchange of financial intelligence on money-laundering and the financing of terrorism KSA and Algeria, Montenegro, Turkey, and Afghanistan (6 May 2014)
•tReport of the Committee on Security Affairs on the draft agreement between the KSA and the Government of Comoros (14 May 2014)
•tReport of the Committee on Security Affairs on the draft agreement between KSA and the Government of Poland for cooperation in the field of defence (19 May 2014)
•tThe approval of a fine for individuals that lose or misplace their official permit granting them entry into the kingdom’s restricted military installations (5 June 2014)

Resolutions issued by the Majlis as-Shura related to defence and security included:

1.tDuring the first term (1993–1997):
1.tRequest that the Ministry of defence consider the four additional protocols adopted by the international conference of aviation law of 1975 regarding international air traffic rules.
2.tRequest that H.R.H. the minister of interior approve renaming the “Arab declaration to prevent illegal acts against the safety of civil aviation” to the “Baghdad declaration.”
3.tRequest to the Ministry of defence to join the U.N agreement on climate change.
4.tRequest to Ministry of defence to approve the amendment of article (103) of the officer’s service law to provide housing and food for military officers at home and abroad
5.tRequest to Ministry of defence to join the agreement establishing the U.N center for environment and development for the Arab region and Europe.
6.tRequest of Ministry of defence to amend articles (117-123) of officer’s service law [unspecified]
7.tRequest to Minister of defence to join the U.N convention to combat desertification.

2.tDuring the Second term (1997-2001)
1.tAdding a text to the employee chart of Saudi Arabian Airlines to allow the Minister of defence, the Inspector General, Chairman of the Organization's Board, or whoever is delegated, to dismiss employees without referring the matter to any committee.
2.tResolution approving the annual report of the Ministry of defence for the fiscal year 1997-1998.
3.tResolution approving the agreement of joint defence of the GCC states.

3.tDuring the Third term (2001-2005)
1.tApproval of an MoU for cooperation in the environmental field between the KSA Ministry of defence and the Ministry of Environment and Energy in Denmark
2.tStudy of the unification of procedures for granting visas for heads of foreign military missions
3.tRequest to approve the amendments of articles 95 and 96 of the military officers service law related to sick leave
4.tStudy the report of organizing housing for the families of missing persons, martyrs, and permanently disabled military veterans
5.tStudy MoU between Saudi Arabia and South Africa for cooperation in the military field.
6.tRequest to add an article to the military retirement law for the method of garnishing from pensions and salaries to collect debts.
7.tRequest for explanation of article 24/C of military retirement law.
8.tRequest to approve the renewal of the cooperation agreement between the KSA Ministry of defence and the Ministry of defence in Italy for another 5 years
9.tA request of amendment of article (4) [law unspecified] concerning security classification
10.tApproval of draft agreement for organizing border authorities between Saudi Arabia and Yemen.
11.tRequest to ratify the amendment of article (8) [law unspecified] of joint defence and economic cooperation between the Arab league countries.
12.tReview draft law of military uniforms and equipment

4.tFourth term (2005-2009)
1.tApproval for draft MoU for military cooperation between KSA and Sweden.
2.tApproval for draft military penalties law.
3.tApproval for draft MoU for military cooperation between KSA and Pakistan.
4.tApproval of amendment to Article 122 of the military officers service law and amendment to paragraph (b) of Article 26 of the soldiers service law.
5.tApproval of renewal of cooperation agreement between KSA and Italy in the field of defence.
6.tApproval of the draft cooperation agreement between KSA and France in the fields of internal security and civil defence.
7.tApproval of the draft cooperation agreement between KSA and Spain in the field of defence.
8.tApproval of the draft MoU on military cooperation between the Ministry of defence in Saudi Arabia and the Ministry of defence in Egypt
9.tApproval of the draft agreement on military-technical cooperation between KSA and the Russian Federation

5.tFifth Term (2009-2012)
1.tApproval of the restoration of an MoU on military cooperation between KSA and South Africa

The Council for Political and Security Affairs (CPSA) is another unelected body, and replaced the Saudi National Security Council (SNSC) which was disbanded in early 2015 by the incoming king (the outgoing SNSC permanent Secretary General was Prince Bandar). It is led by the incumbent Crown Prince Mohammed bin Nayif, who has been widely credited with developing the government's successful counterterrorism programme. There were no verifiable indications at the time of writing that the new membership and mandate have led to improved external oversight or internal controls.
Assessor Sources“BAE: secret papers reveal threats from Saudi prince.” 14 February 2008. The Guardian.

Anothony Cordesman. 2009. &quoute;Saudi Arabia: National Security in a Troubled Region.&quoute; Center for Strategic & International Studies, p121

Simeon Kerr, &quoute;Saudi king stamps his authority with staff shake-up and handouts&quoute;, Financial Times, 30 January 2015. http://www.ft.com/cms/s/0/8045e3e0-a850-11e4-bd17-00144feab7de.html#axzz3klYk9un9

Adam Schreck, &quoute;The Saudi Arabian monarchy is bringing up its younger generation,&quoute; Associated Press, 5 Feb 2015. http://uk.businessinsider.com/the-saudi-arabia-monarchy-is-bringing-up-its-younger-generation-2015-2?r=US&IR=T

Simon Tisdall, &quoute;Saudi Arabia shakeup as much about retrenchment as reform&quoute;, The Guardian, 29 April 2015. http://www.theguardian.com/world/2015/apr/29/saudi-arabia-mohammed-bin-nayef-crown-prince

SUSRIS, &quoute;Security and Political Affairs Council Holds Inaugural Meeting&quoute;, 11 February 2015, http://susris.com/2015/02/11/security-and-political-affairs-council-holds-inaugural-meeting/

&quoute;Foreign Reports Bulletin: Saudi Succession Developments&quoute;, Foreign Reports, 28 October 2011. http://www.foreignreports.com/wp-content/uploads/2012/01/Saudi-Succession-Developments.pdf
Peer Reviewer3934 OpinionNot Qualified
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsI would suggest the following Saudi government website which notes that the Committee on Security Affairs is responsible for:

Committee on Security Affairs
This committee is specialized in studying issues related to military and security affairs. Specifically, this committee is in charge of the following:

A. Studying referred issues related to the following sectors:
The Saudi Arabian National Guard (SANG), with all its sectors.
Ministry of defence and Aviation, with all its sectors.
Ministry of Interior, with all its sectors.
General Intelligence.
Military Service Council.
National Security Council.
The General Organization for Military Industries.
Emirates of Provinces.

Studying issues, laws, and bylaws relevant to military, security, and general safety affairs, including:
National security.
defence policies and strategic security.
Civil defence.
Military service.
Passports and Civil Status.
International, regional and bilateral agreements related to security and military aspects.
Any other issues the Council or the Speaker deems necessary to be submitted to the committee.

http://www.shura.gov.sa/wps/wcm/connect/shuraen/internet/committees
Government Reviewer4700 OpinionNot Qualified

Political03. Is the country's national defence policy debated and publicly available?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: The Saudi defence policy has not been debated publicly, and public access appears to be only through infrequent government statements on elements of it. The Ministry of defence & Aviation (MODA) has a five-year plan, as well as an annual budget and procurement plan, but these are not made publicly available. Management of the program is a top-down process, and bureaucrats within the MODA have no effective mechanism for evaluating these plans. Any debate over these plans depends on the personal initiative of members of the ruling elite, who may therefore be able to shift resources between priorities such as procurement, training, base construction, etc. for reasons of personal interest.

The Committee on Security Affairs within the Majlis as-Shura can debate draft legislation, but details of the drafts are not made public, and the final law is only published once it is approved by the King and his Council of Ministers. Some specific policies – such as MoUs on defence cooperation with foreign governments – are brought before the Majlis as-Shura for debate/approval, but the specifics of the agreements themselves are not made public (website of Majlis as-Shura). Other government ministries can bring their concerns over draft legislation to the attention of committee members, which have in the past led to changes in the legislation (Amnesty International).

Nawaf Obaid's proposal for a Saudi Defence Doctrine offers good evidence that a publicly stated one does not currently exist, but that the private thinking of officials falls along these lines. Similarly, the public statements of important Saudi officials like Turki al-Faisal to international media reflect the understanding that the US security pact in the Gulf is drawing down and that Gulf states feel they need to increase spending to compensate for that. Again, the fact that this discussion only happens in international media reflects the lack of domestic public debate on the subject.

Domestic critiques of specific Saudi defence policies are based on the observed practices of the Saudi Government as reported in the media. For instance, individuals may criticize the Saudi government's support for religious extremists fighting the regime of Bashar al-Assad in Syria, but these individuals are aware of this policy because it is reported in the (primarily foreign) press, not because the Ministry of Defence or some government spokesperson issues a formal statement. Saudi Ministers may occasionally make vague statements about specific policies (such as lending “support” to Sunni rebels fighting the regime in Syria), but specifics – such as the type of material or the dollar value of assistance – is not revealed either in official documents or public statements made by members of the government.

High-ranking princes appointed by the King have extraordinary independence in crafting specific defence policies seemingly with minimal input from other monarchical power centers (and certainly without input from the Majlis as-Shura).

One notable exception is the government’s policy on rehabilitating former (and suspected) religious militants. The government has been quite forthcoming about this program, giving formal statements and allowing independent media to tour the related facilities and interview participants.

Finally, a number of Saudi academics and political analysts have criticized the government’s lack of a formal defence doctrine for the armed forces. It is possible that this is evidence that the wider defence policy has not been articulated clearly enough to formulate doctrine. As recently as 2010, the private security contractor Vinnell Arabia LLC (a subsidiary of Northrop Grumman Technical Services) was contracted by Saudi Arabia for the purpose of drafting official military doctrine. However, it is unclear whether this project was completed, and there is no published military doctrine publicly available.

RESPONSE TO PEER REVIEWER 2: Agree with comments. Discussion updated and sources added.
Assessor SourcesKhalil Harb. 16 May 2014. “Does Saudi defence reshuffle signal change in Syria policy?” Al-Monitor. http://www.al-monitor.com/pulse/security/2014/05/saudi-arabia-defence-reshuffle-syria-policy-iran.html##ixzz3UvwZhAYl

Reuters. “Saudi minister defends policy on militants.” 30 August 2009. http://www.reuters.com/article/2009/08/30/idUSLU594154

Ben Gilbert. “'Ex-terrorists' in Saudi Arabia find peace through rehab.” PRI (Public Radio International). http://www.pri.org/stories/2014-04-16/ex-terrorists-saudi-arabia-find-peace-through-rehab

Karen DeYoung. 25 June 2013. “Saudi minister pledges aid for Syrian rebels facing ‘genocide’” The Washington Post. http://www.washingtonpost.com/world/middle_east/saudi-minister-pleges-aid-for-syrian-rebels-facing-genocide-kerry-more-circumspect/2013/06/25/af702f24-ddd4-11e2-b197-f248b21f94c4_story.html

Government of Saudi Arabia. Resolutions by the Majlis as-Shura. http://www.shura.gov.sa/wps/wcm/connect/ShuraEn/internet/Councils+Resolutions

Nawaf Obeid. “Saudi Surge? A New defence Doctrine for the Kingdom.” Center for Strategic & International Studies. 28 May 2014. http://csis.org/multimedia/video-saudi-surge-new-defence-doctrine-kingdom

“Saudi Shopping Spree: A Hardened, Networked National Guard.” 6 May 2014. defence Industry Daily. http://www.defenceindustrydaily.com/the-2006-saudi-shopping-spree-a-hardened-networked-national-guard-02462/

Nawaf Obaid, “A Saudi Arabian defence Doctrine: Mapping the expanded force structure the Kingdom
needs to lead the Arab world, stabilize the region, and meet its global responsibilities.” Belfer Center for
Science and International Affairs, Harvard Kennedy School. May 2014. http://belfercenter.ksg.harvard.edu/files/Saudi%20Strategic%20Doctrine%20-%20web.pdf

Edward Luce, &quoute;Lunch with the FT: Prince Turki al-Faisal&quoute;. Financial Times, March 14, 2014. http://www.ft.com/cms/s/2/9eb2ba0c-a9e0-11e3-adab-00144feab7de.html#axzz3YYDFiYW8

Amnesty International. December 2011. “Saudi Arabia: Repression in the Role of Security,” p7.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsI would again insert Nawaf Obaid's proposal for a Saudi Defence Doctrine as good evidence that a publicly stated one does not currently exist, but that the private thinking of officials falls along these lines.

http://belfercenter.ksg.harvard.edu/files/Saudi%20Strategic%20Doctrine%20-%20web.pdf

Similarly, the public statements of important Saudi officials like Turki al-Faisal to international media reflect the understanding that the US security pact in the Gulf is drawing down and that Gulf states feel they need to increase spending to compensate for that. Again, the fact that this discussion only happens in international media reflects the lack of domestic public debate on the subject.

http://www.ft.com/intl/cms/s/2/9eb2ba0c-a9e0-11e3-adab-00144feab7de.html#axzz3YYDFiYW8

Political04. Do defence and security institutions have a policy, or evidence, of openness towards civil society organisations (CSOs) when dealing with issues of corruption? If no, is there precedent for CSO involvement in general government anti-corruption initiatives?
Score2.0
Assessor CommentsResearcher + Peer Reviewer1332: TI-DSP has had various engagements with Saudi Arabia, including three visits. In 2013, TI-DSP spent a week in Riyadh at the invitation of the then Deputy Minister – this was initiated after a former Procurement Chief in the Ministry of Defence had arranged for a TI-DSP multi-country study on the Codes of Conduct in Defence Ministries and Armed Forces to be translated into Arabic and printed, without any changes from the English version. In 2014, TI-DSP furthermore participated in a counter-terrorism conference organised by the Naif Arab University of Security Sciences (NAUSS), who agreed a research MOU with TI-DSP. Also in 2014, TI-DSP was also invited to address the NAUSS graduation ceremony, which included numerous Saudi security and defence officials. TI-DSP has had a dialogue with Nazaha (the Saudi anti-corruption agency) for a number of years.

The National Strategy to Promote Integrity and Combat Corruption that was passed in 2007 by the Council of Ministers Resolution included language on the involvement of professional associations (for doctors, lawyers, engineers, accountants, etc.) and the kingdom’s chambers of commerce and industry, urging these organizations to submit proposals and recommendations to the government on how to reduce corruption, and in the case of the latter, to prepare programs to sensitize businessmen and tradespeople to the dangers of corruption. There is no mention of the involvement of non-professional CSOs or NGOs whose missions are specifically linked to corruption or good governance. In its 2014 report on progress in implementing the UN Convention Against Corruption/UNCAC, Saudi Arabia reported that it is committed to allowing for the “involvement of business” in the peer review process but does not intend to allow for the “involvement of civil society.” (The UNCAC’s primary enforcement mechanism is peer review by another signatory to the convention; Australia is Saudi Arabia’s designated peer reviewer. I take this to mean that Saudi Arabia will not allow for Australian delegates to meet with Saudi civil society representatives to discuss issues of corruption).

There are few CSOs in Saudi Arabia that deal directly with issues of corruption, due in part to the many restrictions on free assembly and freedom of speech. CSO’s must also confront more immediate restrictions, including invasive monitoring by government functionaries, restrictions on communicating with foreign peer organizations, a practical prohibition on external funding, and bans on political activities or advocacy. Although the government has licensed some professional associations (organizations for lawyers, pharmacists, etc.) and there are a number of groups that focus on relatively benign women’s issues (such as education and entrepreneurship) the handful of truly independent organizations operate under extremely restrictive conditions. Most organizations are formally affiliated with the government through the National Commission for Relief & Charity, the Ministry of Social Affairs, or individual Royal Family members.

A draft law on associations and civil society groups approved by the Majlis as-Shura in 2007 is still awaiting approval; as recently as October 2013, a coalition of civil society organizations issued a call to the government to adopt a new law clarifying their legal and operational standing, but no action has been taken. A small number of bloggers and political activists have highlighted the issue of corruption – but they have been targeted for persecution (not dialogue) by state security services (details below).

One CSO whose members have issued public statements regarding official corruption is the Arabian Civil and Political Rights Association (ACPRA). Mohammad al-Qahtani, one of the organization’s co-founders, has made statements to regional media outlets accusing the kingdom’s princes of profiting from corrupt activities. He is now serving a 10-year prison sentence along with his co-founder Dr. Abdullah bin Hamid bin Ali al-Hamid, both of whom were found guilty in 2013 of a list of charges including breaking allegiance/disobeying the ruler, questioning the integrity of officials, seeking to disrupt security and incite disorder (by calling for demonstrations), disseminating false information to foreign groups and forming an unlicensed organization. Other of ACPRA’s members have also been arrested and harassed by state security forces, including Muhammad Salih al-Bejadi, who was tried in secret proceedings convened by the Ministry of Interior on charges of “membership in a banned association, the possession of prohibited books and the intent to harm the reputation of the country.”

Associations with links to pre-existing international organizations or with influential external backing (to include the Council of Saudi Chambers of Commerce and The Pearl Initiative for Transparency and Accountability) have highlighted private sector corruption as a serious problem in the kingdom, but the official response from the government has been to downplay or reject their criticisms (see response of Nazaha chief below). An investigation undertaken by the Council of Saudi Chambers framed the cost of corruption according to its negative impact on individual Saudi incomes, which was widely reported in the state-owned news media.

Similarly, the Pearl Initiative (developed in coordination with the United Nations Office for Partnerships and based in the UAE) – has focused on corruption and corporate governance in family-owned companies. (Note: neither CSO initiative had anything to do with defence or security institutions). The Pearl Initiative recently convened a joint forum in Riyadh with the Council of Saudi Chambers and the state-run National Anti-corruption Commission (Nazaha) on the issue of combating corruption in family-owned businesses. Although the subject of the forum was the perception of corruption in these businesses, the head of Nazaha gave an interview to official state media that run under the headline “Anti-Corruption Chief: ‘Family businesses corruption-free.’” Though this was not the view of the other convening organizations or the other representatives in attendance.

The fact that such initiatives were allowed to convene events in Saudi Arabia and have their findings reported in state-owned media would suggest that an effort to combat corruption has support within the political elite, but there is no evidence that such initiatives (or the resulting media reports) have translated into discussions between CSOs and anyone with links to the defence or security establishment.

Score 2 selected as defence and security institutions have sought CSO engagement and examples of engagement can be found, including engagement on sensitive issues such as defence.
Assessor SourcesNGO Law Monitor: Saudi Arabia.” 19 March 2012 and 1 July 2014. The International Center for Not-for-Profit Law. http://www.icnl.org/research/monitor/saudiarabia.html

G20 Anti-Corruption Working Group: Accountability Report Questionnaire.” 2014. https://g20.org/wp-content/uploads/2014/12/accountability_report_questionnaire_2014_saudi-arabia.docx

Ana Echague and Edward Burke. June 2009. “‘Strong Foundations’? The Imperative for Reform in Saudi Arabia.” Spain: Fundacion para las Relaciones Internacionales y el Dialogo Exterior (FRIDE). Working Paper 84. P10-12. fride.org/download/WP84_Arabia_Saudi_reform_ENG_jul09.pdf

Expected rise in Saudi per capita income in case of curbing corruption: report.” 10 October 2012. Al-Arabiya. http://english.alarabiya.net/articles/2012/10/10/242875.html

Anti-Corruption Chief: ‘Family businesses corruption-free.’” 1 May 2014. The Peninsula Times. (Saudi Arabia). http://www.peninsulatimes.org/2014/05/01/anti-corruption-chief-family-businesses-corruption-free/

Amnesty International. 11 March 2013 “Saudi Arabia punishes two activists for voicing opinion.” http://www.amnesty.org/en/news/saudi-arabia-punishes-two-activists-voicing-opinion-2013-03-11

Islamic Human Rights Commission. 11 December 2011. Action Alert: Saudi Arabia –Call for the release of activist Muhammad Salih al-Bejadi. http://www.ihrc.org.uk/activities/alerts/9984-action-alert-saudi-arabia-call-for-the-release-of-activist-muhammad-salih-al-bejadi-

UNODC. [undated]. “Thematic compilation of relevant information submitted by Saudi Arabia: Article 6 of the UNCAC.” http://www.unodc.org/documents/corruption/WG-Prevention/Art_6_Preventive_anti-corruption_bodies/Saudi_Arabia.pdf, p1-2
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 Comments&quoute;Saudi Arabia's Basic Law of Governance describes the role of media as educative, unifying and supporting government agendas, but the country does not have a freedom of information law. Thus, Saudi media falls short of providing an accurate picture of the pervasiveness of corruption in the country. Several major media outlets are owned by members of the royal family, and individuals are not permitted to publically criticise the royal family.&quoute;

http://www.business-anti-corruption.com/country-profiles/middle-east-north-africa/saudi-arabia/civil-society.aspx

Political05. Has the country signed up to international anti-corruption instruments such as, but not exclusively or necessarily, UNCAC and the OECD Convention? (In your answer, please specify which.)
Score2.0
Assessor CommentsResearcher + Peer Reviewer1332: Saudi Arabia recently ratified the United National Convention Against Corruption (UNCAC) on 29 Apr 2013, nearly ten years after it originally signed on 9 Jan 2004. However, like many of the signatories to the convention (including the United States), Saudi Arabia does not consider itself bound by paragraph (2) of Article (66) of the Convention, which provides for universal jurisdiction of the International Court of Justice to pursue violations of the convention. In November 2010 the kingdom also signed on to the G-20 Anti-Corruption Action Plan (ACAP), Saudi Arabia is not a member of the OECD and has not signed the OECD Anti-Bribery Convention. The Convention is open to accession by any country which is a member of the OECD or has become a full participant in the OECD Working Group on Bribery in International Business Transactions.


There are no reports from the Implementation Review Group on Saudi Arabia’s progress on implementing the UNCAC on the website of the UN Office on Drugs & Crime (which oversees implementation of the UNCAC). The implementation process includes self-assessments, executive summaries, and full country reports. [Reports are available for many, though by no means all, other signatories]. A country questionnaire completed by Saudi Arabia on implementation of the UNCAC reports that the country plans to submit its self-assessment checklist (SACL) to UNODC by August 2015.
Assessor Sources“United Nations Convention against Corruption Signature and Ratification Status as of 2 April 2014.” http://www.unodc.org/unodc/en/treaties/CAC/signatories.html

United Nations. “Treaty Collection.” (Website of the status of UN treaties, including state-by-state reservations). no date. https://treaties.un.org/pages/viewdetails.aspx?src=ind&mtdsg_no=xviii-14&chapter=18&lang=en#EndDec

“2011 Investment Climate Statement - Saudi Arabia.” March 2011. US Department of State.
http://www.state.gov/e/eb/rls/othr/ics/2011/157351.htm

Website of the UN Office on Drugs & Crime. Country Profiles on Implementation of the UNCAC. [no date]. http://www.unodc.org/unodc/en/treaties/CAC/country-profile/index.html

“G20 Anti-Corruption Working Group: Accountability Report Questionnaire.” 2014. https://g20.org/wp-content/uploads/2014/12/accountability_report_questionnaire_2014_saudi-arabia.docx
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsI would add this link to the G20 country questionnaire:

https://star.worldbank.org/star/sites/star/files/accountability_report_questionnaire_2014_saudi-arabia.pdf
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsThe Kingdom of Saudi Arabia has signed and ratified the United Nations Convention against Corruption.

Political06. Is there evidence of regular, active public debate on issues of defence? If yes, does the government participate in this debate?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: The Arab Spring, the civil war in Syria, and the ratcheting up of anti-Iranian sentiment have pressed issues of national defence and security policy into the public sphere, although it is also true that much of the government’s presence in these debates is designed for external [ie, Western] consumption and does not directly engage with domestic audiences. For example, Prince Turki Al Faisal – the government’s de facto spokesperson on defence and security issues – frequently speaks to US and UK audiences about Saudi foreign policy, sectarian conflict, Iran’s nuclear program, and the Israeli-Palestinian peace process – but rarely directly addresses these issues in Saudi national media. Government messaging that does appear in state-owned media frequently relies on over-simplified sectarian narratives. Such was the case with the government’s response to the recent Shiite protests, which it attributed to Iranian subversion, ignoring the legitimate and long-standing grievances of the country's Shiite communities.

Government-sponsored outlets for civic participation and public debate of official policy (such as the National Dialogue Forums) are primarily focused on internal security, and aim to manage government-clerical relations by co-opting popular Sunni leaders that are critical of the regime and incorporating moderate and loyalist Shia voices. Many hardline clerics (and ordinary citizens) use social media to directly challenge the government’s defence policy, especially with respect to support for neighboring Sunni regimes. The government is commonly criticized for failing to support Saddam Hussein against the US, for failing to support Lebanon’s Sunni-led government against Israel in 2006, and (more recently) for insufficient support of the Syrian rebels and Mohammed Morsi in Egypt. The government’s recent ban on unofficial fatwas was a response to some of these challenges. Aside from such indirect efforts to accommodate and neutralize anti-regime sentiment, the government rarely directly addresses the substance of criticisms of defence and security policy. Members of the Royal Family are more likely to dismiss the claims and demands of hardliners as irrational and irrelevant.

Other fora like the Supreme Economic Council and the National Human Rights Society likewise steer clear of discussing formal defence and security policy. Only a few well-connected regional research organizations, such as the Gulf Research Centre (GRC), host debates or publish independent analyses of Saudi defence and security policy. Critical debates that appear in blogs or foreign media outlets are aggressively blocked by internal censors or have their websites shut down. This was the case with the popular online news site Elaph, which ran a story detailing efforts by Saudi officials to encourage a U.S. attack on Iranian nuclear facilities. National media outlets such as Al Arabiya and the state-subsidized Arabic-language dailies generally do not generally report on defence policy debates.
Assessor SourcesPrince Turki Al Faisal. “A Saudi National Security Doctrine for the Next Decade.” 11 July 2011. Saudi-US Relations Information Service/SUSRIS (sponsored by the Saudi-US Trade Group in Washington, D.C.)
http://susris.com/2011/07/11/a-saudi-national-security-doctrine-for-the-next-decade-prince-turki-al-faisal/

Al-Rasheed, M. 2011. “Sectarianism as Counter-Revolution: Saudi Responses to the Arab Spring.” Studies in Ethnicity and Nationalism. 11(3): 513–526.

Frederic Wehrey. 14 June 2012. “Saudi Arabia Reins in Its Clerics on Syria.”
http://carnegieendowment.org/2012/06/14/saudi-arabia-reins-in-its-clerics-on-syria/bu10

Toby Jones. 2003. “Seeking a ‘Social Contract’ for Saudi Arabia.” Middle East Report. Number 228.
http://www.merip.org/mer/mer228/seeking-social-contract-saudi-arabia

Saudi Arabia: Freedom of the Press, 2013. Freedom House. http://www.freedomhouse.org/report/freedom-press/2013/saudi-arabia#.U7nKxo1dXQk
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsAgain, Nawaf Obaid's recent update on Turki al-Faisal's defence doctrine proposals show that there is internal discussion of defence policy. As mentioned above, this sometimes leaks out to international media, and there is little domestic discussion, except for regarding Saudi military alliances with Egypt, Pakistan and GCC states.

http://belfercenter.ksg.harvard.edu/files/Saudi%20Strategic%20Doctrine%20-%20web.pdf
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsIssues concerning security and defence are only discussed at government official entities.

Political07. Does the country have an openly stated and actively implemented anti-corruption policy for the defence sector?
Score2.0
Assessor CommentsResearcher + Peer Reviewer1332: Saudi Arabia has numerous laws governing corruption and has established bureaucratic agencies and regulations designed to identify and prosecute cases of corruption, but none of this jurisprudence directly targets the defence sector, and evidence of implementation is sparse. However, the issue of government corruption in general has become a much more common theme of public discourse – with more frequent references to corruption in the Saudi media, and with opposition activists focusing increasingly on corruption as a major grievance. [For a list of relevant laws, see the website of the UN Office on Drugs and Crime/UNODC, which has responsibility for the UN Convention Against Corruption, recently ratified by Saudi Arabia].

In February 2007 – allegedly in response to widespread and high-profile corruption associated with the Ministry of Defence – the Council of Ministers approved the National Strategy to Promote Integrity & Combat Corruption (Ministerial Decree No. 13), and subsequently established the National Committee to Combat Corruption (aka NCCC, National Anti-Corruption Commission, or Nazaha) to monitor implementation and report directly to the Council of Ministers. It appears to be independent and demonstrating real intent to tackle corruption. The committee includes members of the Cabinet, as well as individuals from the General Auditing Bureau (GAB) and the Institute of Public Administration. However, the legal texts regarding both the strategy and the commission make no mention of the Ministries of Defence or Interior or the Saudi military or police.

The GAB has repeatedly issued public statements bemoaning the lack of follow-up within Saudi ministries to its reports detailing fraud and corruption, and has pointed out that the King ordered the creation of internal review boards within each ministry – but that these do not operate in practice.

Implementation through prosecution of those in the defence and security establishment is extremely rare, and is conducted behind the scenes. There were significant credible reports that King Abdullah launched a ‘behind-the-scenes’ probe into the culture of bribery and kickbacks at the Ministry of Defence in 2011, but this was not part of an openly-stated policy. The handful of reports of sanctions or prosecutions of individuals in the defence and security establishment appear in the non-Saudi press, and are never based on official government statements. The most high profile recent case includes luxury cars and villa rentals provided to members of the Saudi military by a subcontractor of the European defence giant EADS. The French publication Intelligence Online reported that in four months in 2011 six “top-ranking officials” were arrested in relation to this deal, including a key procurement official who negotiated several large defence equipment deals on behalf of the Saudi Ministry of Interior. There have been no official Saudi statements on this case – nor have details appeared in the Saudi media. Prosecutions in non-defence related matters do appear to be on the rise, and are reported on in the national media.

Recent investigations involving the misuse of funds and bribery in the ports authorities, public hospitals, the Saudi Railway Organization, the Petroleum Ministry, the Social Affairs Ministry, and municipal governments, all of which have appeared in the Saudi national press.

RESPONSE TO GOVERNMENT REVIEWER AND PEER REVIEWER: The National Strategy for the Protection of Integrity and Combating Corruption document, issued by the Resolution of the Council of Ministers No. 43 dated 1.2.1428 H (2007 AD) does not seem to contain any defence or security-related provisions:

https://track.unodc.org/LegalLibrary/LegalResources/Saudi%20Arabia/Authorities/National%20Strategy%20for%20the%20Protection%20of%20Integrity%20and%20Combating%20Corruption(ENG).pdf

https://www.nazaha.gov.sa/Library/Document/Publications/Documents/Strategy%20of%20the%20National%20Anti-Corruption%20Commission.PDF

Unfortunately no independent evidence could be found regarding the department for Combating Corruption and Protecting Integrity in the Ministry of Defence either.

Score increased to 2 to reflect the 2011 National Strategy to Promote Integrity & Combat Corruption (Ministerial Decree No. 13). Though there is an openly stated anti-corruption policy, there is a lack of evidence surrounding effective implementation in the defence sector.
Assessor Sources“Legal Resources for Saudi Arabia.” UN Office on Drugs & Crime. http://www.track.unodc.org/LegalLibrary/pages/LegalResources.aspx?country=Saudi%20Arabia.

Text of the National Strategy for Maintaining Integrity and Combating Corruption, including the Royal Order to establish the Anti-Corruption Commission and the Statute of the National Anti-Corruption Commission . [English translation]. 2012.
http://www.maarefah.net/sites/default/files/the_statue_the_strategy_of_the_national_anti-corruption_commission_in_english.pdf

Adnan Al-Shabrawi. 22 May 2011. “GAB unhappy at lack of action over bared violations.” Saudi Gazette. http://www.saudigazette.com.sa/index.cfm?method=home.PrintContent&fa=regcon&action=Print&contentid=20110522101285

“General Auditing Bureau facing several obstacles.” 20 January 2015. Saudi Gazette. [author unknown]. http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20150120231009

“Abdullah’s clean-up operation.” 19 May 2011. Intelligence Online.

Angela Monaghan. 14 August 2012. “EADS faces questions over £2 bn Saudi deal: Q&A.” The Telegraph (UK). http://www.telegraph.co.uk/finance/newsbysector/industry/defence/9476246/EADS-faces-questions-over-2bn-Saudi-deal-QandA.html#disqus_thread

“Contracts: Riyadh rewrites the rules; Saudi Arabia.” September 29, 2011. Intelligence Online.

“Anti-Corruption Chief Threatens to Quite.” Arab News (9 December 2013).

Khalid Al Hamrani and Omar Khattab. “NAZAHA: The Saudi National Anti-Corruption Commission.” Al Tamimi & Co (March 2014).

Business Anti-Corruption Portal – Saudi Arabia country profile. http://www.business-anti-corruption.com/&quoute;
Peer Reviewer3934 OpinionDisagree
Peer Reviewer3934 Suggested Score2
Peer Reviewer3934 CommentsThe Saudi Anti-Corruption Commission (NAZAHA) founded in March of 2011 is a living and breathing entity in Saudi Arabia with articulated goals. There are some concerns that NAZAHA is a symbolic institution to appease international onlookers. However, Mohammed al-Sharief’s 2013 warning that he would quit his job as the NAZAHA Chief if he believed the organization was becoming another bureaucratic entity in the county that was not working properly is an indicator of progress and a real intent to battle corruption.

Additionally, Saudi Arabia ratifying the United Nations Conventions against Corruption (UNCAC) in 2013 is also noteworthy.

“Anti-Corruption Chief Threatens to Quite.” Arab News (9 December 2013).

Khalid Al Hamrani and Omar Khattab. “NAZAHA: The Saudi National Anti-Corruption Commission.” Al Tamimi & Co (March 2014).

Business Anti-Corruption Portal – Saudi Arabia country profile. http://www.business-anti-corruption.com/
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 Comments&quoute;The Civil Service Regulations and the Military Officers Regulations also prohibit public servants and military officers from misusing their positions or using influence, including in connection with accepting bribes, and they may be disciplined or terminated for doing so. But unlike the Bribery Regulations, these regulations do not impose any penalties on anyone other than the public servants of officers.&quoute;

http://globalcompliancenews.com/anti-corruption/anti-corruption-laws-around-the-world/anti-corruption-saudi-arabia/
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score2
Government Reviewer4700 CommentsYes, the National Strategy for Combating Corruption was accredited under the Council of Ministers resolution no. (43) dated (1/2/1428AH), the Strategy includes special topics for security and military sectors. Also, a department for combating corruption and protecting integrity was established by the Ministry of defence in the year of (1435AH).

Political08. Are there independent, well-resourced, and effective institutions within defence and security tasked with building integrity and countering corruption?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: There are no institutions within the defence and security sector tasked with corruption monitoring or oversight.

The Anti-Corruption Commission/Nazaha has completed many evaluations of different Saudi government programs and agencies (including ports authorities, public hospitals, the Saudi Railway Organization, and municipal government bodies) and publicized their findings, but none of these have dealt with the Ministries of Defence or Interior.

The legislation establishing both the National Strategy to Promote Integrity & Combat Corruption and the Anti-Corruption Commission/Nazaha make no mention of the Ministries of Defence or Interior or the Saudi military or police. [text referenced above]. Nor does Nazaha appear to assist with defence corruption cases involving Saudi Arabia that are carried out in other jurisdictions – such as the recent case involving bribes paid to Saudi officials by a subcontractor of the European defence giant EADS in connection with a large contract for the Saudi Arabian National Guard. The only reference to the jurisdiction that the General Auditing Bureau has over the Ministries of Defence or Interior are an exemption granted to the former that extends the time the ministry is allotted for responding to GAB inquiries (from 15 days for other ministries/agencies to three months for the MOD).

Authority over the Ministries of Defence and Interior are typically granted to very powerful senior princes, which might make genuine internal or external oversight difficult.

RESPONSE TO GOVERNMENT REVIEWER: Score increased to 1
Assessor SourcesAngela Monaghan. 14 August 2012. “EADS faces questions over £2 bn Saudi deal: Q&A.” The Telegraph (UK). http://www.telegraph.co.uk/finance/newsbysector/industry/defence/9476246/EADS-faces-questions-over-2bn-Saudi-deal-QandA.html#disqus_thread

“Saudi Arabia politics: Clipping Bandar.” 8 June 2007. The Economist Intelligence Unit. http://viewswire.eiu.com/index.asp?layout=VWArticleVW3&article_id=52264390

Text of the National Strategy for Maintaining Integrity and Combating Corruption, including the Royal Order to establish the Anti-Corruption Commission and the Statute of the National Anti-Corruption Commission . [English translation]. 2012.
http://www.maarefah.net/sites/default/files/the_statue_the_strategy_of_the_national_anti-corruption_commission_in_english.pdf
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsThere are no regulations regarding facilitation payments or commission on arms deals in Saudi Arabia. &quoute;There are no statutory exceptions for, or limitations on” facilitation expenses,” which exempt them from the definition of bribery, either public or private.&quoute;

http://globalcompliancenews.com/anti-corruption/anti-corruption-laws-around-the-world/anti-corruption-saudi-arabia/

Historically, there is much evidence that commission is a fact of life for foreign arms companies in Saudi Arabia, as attested by documentaries like Adam Curtis' The Mayfair Set:

https://www.youtube.com/watch?v=234H8X1-JiA
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score2
Government Reviewer4700 CommentsYes, the Combating Corruption and Protecting Integrity Department at the Ministry of defence.

Political09. Does the public trust the institutions of defence and security to tackle the issue of bribery and corruption in their establishments?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: The public perceives government corruption in Saudi Arabia to be high. The country had a score of 49 out of 100 (with a score of 100 = no corruption) in the latest survey carried out as part of Transparency International’s Corruption Perception Index, which measures the extent of corruption in the public sector, from the perspective of business people and country experts. A non-scientific pole conducted by Al-Mekkah newspaper in Saudi Arabia in 2014 reported that 86 percent of citizens did not yet consider Nazaha (the country's anti-corruption body) as an effective instrument in fighting corruption.

Most of Saudi Arabia’s Gulf neighbors score better on the index, with the exception of Yemen. Saudi-owned businesses are perceived to be slightly less corrupt, according the Transparency International’s Bribe Payers Index, where Saudi businesses scored 7.4 out of 10 (with a score of 10 = no bribery), just ahead of the UAE and Argentina (and behind Turkey, India and Taiwan).

Given that the defence and security sector in particular has been the center of many high-profile corruption inquiries (conducted by foreign entities) it is unlikely that these agencies garner significant public trust in Saudi Arabia.

There is no public polling on domestic attitudes toward the Saudi military. The sort of state sponsored military culture and efforts to promote the armed forces as a national symbol are uncommon in Saudi Arabia, where the regime is more concerned with preventing a military coup.
Assessor SourcesTransparency International. Corruption Perception Index, 2014. https://www.transparency.org/country/#idx99

Transparency International. Bribe Payers Index, 2011. http://bpi.transparency.org/bpi2011/results/

P.K. Abdul Ghafour. “Bandar Says BAE Systems Funds Went to Govt.” 13 June 2007. Arab News. http://www.arabnews.com/node/299623

U.S. Army Colonel Norvell DeAtkine. 18 March 2013. “Western Influence on Arab Militaries: Pounding Square Pegs into Round Holes.” Rubin Center: Research in International Affairs. http://www.rubincenter.org/2013/03/western-influence-on-arab-militaries-pounding-square-pegs-into-round-holes/

Steffen Hertog. 2011. “Rentier Militaries in the Gulf States: The Price of Coup-Proofing.” International Journal of Middle East Studies, 43(3).

“Saudi Arabia flexes its military muscles.” 1 May 2014. RT News (Russia Today). http://rt.com/news/156144-saudiarabia-military-exercise-iran/

Mohammed Al-Aufi. 15 February 2015. “Nazaha’s Challenge.” Makkah Newspaper. [as reported by Arab News in their weekly roundup of columns from Saudi newspapers]. http://www.arabnews.com/columns/news/704521
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsThe popularity of Saudi corruption whistleblower @mujtahidd on Twitter (he has over 1.7m followers) shows that the presence of corruption is a much discussed topic on social media and in private in KSA.

http://www.bbc.com/news/blogs-trending-31840424
Government Reviewer4700 OpinionNot Qualified

Political10. Are there regular assessments by the defence ministry or another government agency of the areas of greatest corruption risk for ministry and armed forces personnel, and do they put in place measures for mitigating such risks?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: The General Auditing Bureau (GAB) does issue annual reports, but these are not made publicly available, and are only accessible to a small number of government officials. The GAB has no leverage over the Ministries of defence or Interior, which are completely unaccountable to any auditing body or authority other than the King. There is likewise no mention of the Anti-Corruption Commission/Nazaha ever having undertaken an investigation of defence ministry activities. The only monitoring to which Ministry of Defence personnel may be subjected is ad-hoc and initiated by the King.

There were significant credible reports that King Abdullah launched a ‘behind-the-scenes’ probe into the culture of bribery and kickbacks at the Ministry of Defence in 2011 in response to both the major BAE and EADS bribery and corruption scandals and the growing demands for transparency and accountability in neighboring states that were part of the Arab Spring. Intelligence Online reported that in four months in 2011 six “top-ranking officials” were arrested, including Saud Al Semari, a key procurement official who negotiated several large defence equipment deals on behalf of the Saudi Ministry of Interior. This same publication reported that – in response to persistent corruption in Defence and Interior – the bidding processes for large government tenders would be directly overseen by professional management and consulting firms – primarily from the US, with the winning bid chosen from a short-list handed over to the royal cabinet. If this is indeed the current strategy for managing defence procurement, it strongly suggests there was never a meaningful internal or external auditing process in either the Ministry of Defence or Interior.

Response to Government Reviewer: The Combating Corruption and Protecting Integrity Department at the Ministry of defence is newly established and there is no publicly available information regarding the department, its role or its assessment of corruption risks.
Assessor Sources“Saudis mount cleanup amid defence scandal.” 10 June 2011. UPI. http://www.upi.com/Business_News/Security-Industry/2011/06/10/Saudis-mount-cleanup-amid-defence-scandal/UPI-73811307725474/

“Contracts: Riyadh rewrites the rules; Saudi Arabia.” September 29, 2011. Intelligence Online. http://www.intelligenceonline.com/government-intelligence/2011/09/29/contracts-riyadh-rewrites-the-rules,93184238-EVE
Peer Reviewer3934 OpinionDisagree
Peer Reviewer3934 Suggested Score1
Peer Reviewer3934 CommentsKing Abdullah launched a behind the scenes probe into kicks backs and bribery taking place in the Saudi Ministry of defence following reports of bribery scandal. In 2011, six high-ranking Saudi officials were arrested, at least one of whom, Saud al-Semari, was linked to the Ministry of defence.
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsAlthough there are regulations which criminalise military officials abusing their position for personal gain, high level corruption around military contracts is often practiced by senior members of the Saudi royal family who do not actually hold positions in the military, but use their informal influence within their family to receive commission payments.
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score1
Government Reviewer4700 CommentsThe newly established department (Combating Corruption and Protecting Integrity Department at the Ministry of defence) will play that role.

Political11. Does the country have a process for acquisition planning that involves clear oversight, and is it publicly available?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: Saudi Arabia’s defence budget is largely dictated by annual oil revenues and politics, not defence strategy or comprehensive planning and actual procurement spending commonly exceeds the amount budgeted if oil revenues exceed projections. Certain acquisition decisions (including large, strategic purchases) can be executed on the personal initiative of single members of the Royal Family, as was the case when Prince Khalid bin Sultan (then-Deputy Defence Minister) made a large purchase of missiles from the Chinese in 2013. The purchase – which was apparently made without the knowledge of other officials in the Defence Ministry – eventually led to his resignation, but it demonstrates the degree to which major decisions are made with very little oversight (Al-Akhbar).

This is a holdover from the early organization of the various security and defence institutions. The first Saudi king distributed the most powerful agencies of government according to factions that developed among his large number of sons. Therefore these agencies (primarily the Saudi Arabian National Guard/SANG and the Ministries of Defence and Interior, but also the major regional/city governorships) evolved into quasi-independent power centers or fiefdoms. These factions have persisted through generations, and as the budgets of these powerful agencies grew, their senior leadership used these budgets and other agency assets to distribute patronage and favors to their respective client bases (Hertog, 2011).

The Ministry of Defence does not appear to exert centralized control over acquisition planning in the various service branches, and so oversight is minimal. Procurement plans are not publicly available, and the details of pending acquisitions frequently change up to the time the contract is signed. The Saudi Arabian National Guard (unlike the regular army) is not governed by the Ministry of Defence and has displayed more streamlined procurement processes (Avascent 2013).

Saudi Government Tenders and Procurement Law stipulates that all procurement must be put up for public tender, but this has certain exceptions, including the direct purchase of military equipment. In such cases the procurement decision is made by a ministerial committee formed by royal decree, which consists of one “chairman” and at least three additional members, who report directly to the King (Dentons Global, 2014).

During his nearly five-decade tenure as Minister of Defence (1963-2011), the late Prince Sultan was personally responsible for many procurement decisions. Although the BAE and EADS scandals prompted some anti-corruption efforts targeting the Ministry of Defence, the frequent rotation of princes in the post of Deputy Defence Minister suggests that the late King Abdullah’s primary concern may have turned to balancing intra-family rivalries more than rooting out malfeasance. Evidence from this period also suggests that senior command officers historically focused on new equipment purchases rather than financing manpower expansions, training, or budgeting for future maintenance and conversion needs.

There is significant coordination with defence officials from the US and UK, and each country has hundreds of civilian defence personnel stationed in Saudi Arabia to assist in acquisition planning (in addition to other tasks, including equipment maintenance and military training). However, these personnel are also expected to promote their home country’s commercial interests – and so are unlikely to advise against purchases (even when potentially redundant). For the US, these agencies are known as Security Assistance Organizations (SAOs) and include agencies such as the US Army Security Assistance Command/USASAC, the Office of the Program Manager, Saudi Arabian National Guard/OPM-SANG, and the US Military Training Mission/USMTM. In the UK, these include the Ministry of Defence Saudi Armed Forces Projects/MODSAP and Saudi Arabia National Guard Communications Project/SANGCOM.

The process for acquisition planning is not publicly available. There are several large foreign contractors that have significant acquisition planning duties on behalf of Saudi Arabia. One example is Vinnell Arabia, a subsidiary of Northrop Grumman Corporation, which is responsible for acquisition planning for the Saudi National Guard (SANG). These contractors are typically subject to the same regulations as US and European contractors. (see job description for Vinnell Arabia). However, other sources highlight that when doing business directly with the Saudi Government there is a degree of arbitrariness. For instance, the procuring agency maintains a high degree of discretion in determining the terms of acquisition despite the existence of uniform bidding processes, and the terms of military procurement tend to be made on a case-by-case basis (See Virginia Economic Development Partnership, 2014). Acquisition planning is still heavily influenced by oil price fluctuations.

RESPONSE TO GOVERNMENT REVIEWER. Military procurement is explicitly exempted from many of the provisions of the Government Tenders and Procurement Law. Discussion updated.
Assessor Sources“Changes in Saudi defence Ministry a matter of family politics.” 27 May 2014. http://www.al-monitor.com/pulse/originals/2014/05/reshufflings-saudi-defence-ministry-abdullah.html#ixzz37I8rIKyR

“Chapter 4: Security Assistance Organizations Overseas.” January 2008. U.S. Defence Institute of Security Assistance Management (DISAM). http://www.disam.dsca.mil/pubs/DR/04%20Chapter.pdf

“Resources, Country Information, Saudi Arabia: MODSAP and SANGCOM.” [updated 20 October 2014]. Campaign Against the Arms Trade (UK). http://www.caat.org.uk/resources/countries/saudi-arabia/modsap.php

“Mohammed bin Salman Succeeds in Removing Khalid bin Sultan.” 22 April 2013. Al-Akhabar (Lebanon). http://www.al-akhbar.com/node/181717

Anothony Cordesman. 2009. “Saudi Arabia: National Security in a Troubled Region.” Washington DC: Center for Strategic & International Studies.

Cross Border Information. [author unknown]. “Profile: Saudi Arabia.” [undated] original site: http://www.crossborderinformation.com/map/middle-east/saudi-arabia#sthash.h3ZPwIDa.dpuf; cached site, accessed 23 March 2015: http://webcache.googleusercontent.com/search?q=cache:SRzciqL1et4J:www.crossborderinformation.com/map/middle-east/saudi-arabia+&cd=1&hl=en&ct=clnk&gl=us#sthash.u28k7MeZ.dpuf

&quoute;Uncovering Opportunity in Saudi Arabia,&quoute; 3 June 2013. Avascent (managment and consulting group). http://www.avascent.com/blog/2013/06/03/uncovering-opportunity-in-saudi-arabia/

Vinnell Arabia, job posting for Manager, Eastern Region Division Support Branch in Riyadh Saudi Arabia http://careers.gijobs.com/riyadh-sau/manager-eastern-region-division-support-branch/70107B685C6B4D7A97282775361FF18C/job/

Virginia Economic Development Partnership. 2014 “Cyber Security Export
Market: Saudi Arabia.” http://exportvirginia.org/wp-content/uploads/2014/02/Saudi-Arabia.pdf

Dentons Global (law firm), 17 September 2014. “Government procurement in the Arabian Gulf region,&quoute; http://www.slideshare.net/DentonsGlobal/government-procurement-in-the-arabian-gulf-region
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsSaudi acquisition planning is only able to be understood in hindsight after deals have been completed and become publicly available when disclosed by the seller country. Recently, KSA signed a $2bn contract for the US PATRIOT missile defence system.

https://www.defenceindustrydaily.com/2007-updates-keeping-patriots-in-shape-02968/

An Italian shipbuilder leaked information in 2014 that KSA and UAE were beginning 'discussions' on acquiring Submarines. German 'government sources' also leaked that KSA is investigating buying German submarines.

http://archive.defencenews.com/article/20140209/DEFREG01/302090013/Industry-UAE-Saudi-Arabia-Plan-Purchases

These facts corroborate the lack of domestic debate and discussion on acquisition policy in KSA.
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score4
Government Reviewer4700 CommentsThere is clear and precise procedures to secure weapons and military equipment, based on the Government Tenders and Procurement Law and its Implementing Regulations.

Political12A. Is there a legislative committee (or other appropriate body) responsible for defence budget scrutiny and analysis in an effective way, and is this body provided with detailed, extensive, and timely information on the defence budget?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: There is a Committee on Security Affairs within the Majlis as-Shura, which can technically question representatives from defence and security agencies. However, the committee does not have responsibilities or privileges relating to these agency budgets. The Majlis as-Shura drafts the kingdom’s five year plans, which theoretically form the basis for the various ministerial budgets, which themselves are negotiated bilaterally between the Ministry of Finance and the relevant ministry (here, the Ministries of Defence and Interior). However, as a purely advisory body, the Majlis as-Shura has little, if any, influence or leverage over defence and security spending.

The investigative arm of the General Auditing Bureau (the Auditing and Investigation Commission) legally has the right to review the documents of other government agencies, but in practice, the Ministries of Interior and Defence are exempt from this and other oversight mechanisms. (Influential princes are tasked with heading defence and security agencies as part of the grooming process prior to being named Crown Prince, so the King is the singular official with any authority over their actions (Winter; US Military Studies)).

The Council for Political and Security Affairs (CPSA) is an unelected body and replaces the Saudi National Security Council (SNSC), which was disbanded in early 2015 by the incoming king. It is unclear what the CPSA's precise mandate is, however it is understood to be the primary body responsible for formulating internal and external security policies that would drive spending. It appears the council is entirely comprised of Royal appointees; its membership replicates the makeup of existing agencies, and includes executives of relevant ministries, military service chiefs, and intelligence officials who are unlikely to check their own power.

RESPONSE TO GOVERNMENT REVIEWER: Unfortunately no evidence could be found to support this.
Assessor SourcesAnthony H. Cordesman and Khalid R. Al-Rodhan. 2006. Gulf Military Forces in an Era of Asymmetric Wars. Washington DC: Center for Strategic & International Studies

Anothony Cordesman. 2009. “Saudi Arabia: National Security in a Troubled Region.” Washington DC: Center for Strategic & International Studies.

Lucas Winter. September 2013. “Saudi Arabia: The Succession is being Tweeted.” U.S. Foreign Military Studies Office. http://fmso.leavenworth.army.mil/OEWatch/201309/Special_Essay_01.html

“NSC Given Wide Powers.” 19 October 2005. Arab News (Saudi Arabia). http://www.arabnews.com/node/274785

Adam Schreck, &quoute;The Saudi Arabian monarchy is bringing up its younger generation,&quoute; Associated Press, 5 Feb 2015. http://uk.businessinsider.com/the-saudi-arabia-monarchy-is-bringing-up-its-younger-generation-2015-2?r=US&IR=T

Simon Tisdall, &quoute;Saudi Arabia shakeup as much about retrenchment as reform&quoute;, The Guardian, 29 April 2015. http://www.theguardian.com/world/2015/apr/29/saudi-arabia-mohammed-bin-nayef-crown-prince

SUSRIS, &quoute;Security and Political Affairs Council Holds Inaugural Meeting&quoute;, 11 February 2015, http://susris.com/2015/02/11/security-and-political-affairs-council-holds-inaugural-meeting/
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsKing Salman's son, Mohammed bin Salman, who was already Defence Minister and head of the Royal Court, has been promoted to deputy Crown Prince, the second in line to the throne. The Defence Minister is one of the chief architects of procurement and defence policy, and his other positions give him immense power within the Saudi hierarchy. The lack of any scrutinising parliamentary committees automatically mean that such officials have the greatest share of control over defence and procurement policy.

http://www.ft.com/cms/s/0/f941e190-ee1e-11e4-987e-00144feab7de.html?ftcamp=crm/email/2015429/nbe/WorldNews/product#axzz3YdJ7suHu
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score4
Government Reviewer4700 CommentsYes, specialized committees at the Ministry of Finance are responsible for discussing and analyzing the budget of the Ministry of defence. These committees are provided with all details concerning the draft budget.

Political12B. Is the approved defence budget made publicly available? In practice, can citizens, civil society, and the media obtain detailed information on the defence budget?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: No, the defence budget is not publicly available, and detailed budget information is not accessible by the public, civil society organizations, or the media. There are currently no laws in Saudi Arabia providing for public access to government information – including ministry budgets.

The government budget published by the Saudi Arabian Monetary Agency/SAMA (Saudi central bank) includes only a top line total for “Defence and National Security” spending, and this figure does not include all purchases of military equipment, construction, and services. SAMA’s annual report of 150+ pages makes no mention of the defence budget beyond a single reference to the top line figure and its proportion of annual government budgetary allocations (30%). Actual defence spending often exceeds the budgeted figures and the government has never reported the actual cash flow it has spent on imports of defence items or on the value of the oil it has bartered as payment in certain arms deals (including the Al Yamamah deal with BAE mentioned elsewhere in the assessment).
Assessor SourcesBusiness Anti-Corruption Portal: Saudi Arabia Country Profile. Produced by Global Advice Network (private consulting firm) and financed by several European Governments (Austria, Denmark, Germany, Netherlands, Norway, Sweden, and the UK). http://www.business-anti-corruption.com/country-profiles/middle-east-north-africa/saudi-arabia/initiatives/public-anti-corruption-initiatives.aspx

Saudi Arabian Monetary Agency – 49th Annual Report. 2013. http://www.sama.gov.sa/sites/samaen/ReportsStatistics/ReportsStatisticsLib/5600_R_Annual_En_49_Apx.pdf, p125.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsThe corruption which is part of Saudi's defence contracts, notably revealed by the BAE Systems scandal in the UK surrounding the al-Yamamah deal, is acutely embarrassing to Saudi Arabia. Hollingsworth and Mitchell's book on corruption in Saudi Arabia notes that 'By early 1996, [al-Yamamah] was an intolerable burden on Saudi finances. The kingdom was struggling to top up the defence budget from oil revenues... Exasperated by the huge commissions raked off by his family, Crown Prince Abdullah tried to cancel al-Yamamah', but he failed, with Prince Sultan arguing that the Kingdom was too dependent on British equipment to change.

This reveals how bribery by foreign arms companies result in a bloated defence budget, and explain why the government is resistant to any scrutiny of it.

https://books.google.com.tr/books?id=NOWX8oreP6EC&pg=RA1-PT97&lpg=RA1-PT97&dq=Saudi+defence+budget+scrutiny&source=bl&ots=jN6VmnhebH&sig=Cul1zO4tJ78VPT7MZvz1MfMeCT0&hl=en&sa=X&ei=Fc5AVcf8Goz0UK_NgYgE&ved=0CDgQ6AEwBQ#v=onepage&q=Saudi%20defence%20budget%20scrutiny&f=false
Government Reviewer4700 OpinionNot Qualified

Political12. Is the defence budget transparent, showing key items of expenditure? This would include comprehensive information on military R&D, training, construction, personnel expenditures, acquisitions, disposal of assets, and maintenance.
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: The Saudi Arabian Monetary Agency (SAMA) publishes figures on the approved government budget, although the defence budget includes only a “top line” total. It is unclear who has formulated the budget, or under what process. Nor does this overall figure include all purchases – such as those made off-budget under oil barter terms – or the costs of construction and services provided by foreign defence personnel (such as those from the UK, who are paid undisclosed ‘management fees’ to oversee multiple large defence and security programs). Actual defence spending often exceeds the budgeted figures and the government has never reported the actual cash flow it has spent on imports of defence items or on the value of the oil it has bartered as payment in certain arms deals.

IHS Janes estimates Saudi defence spending will be $48.7bn in 2015, putting Saudi Arabia on track to become the world’s fifth-largest military spender by 2020, as it boosts its defence budget by 27 per cent over the next five years, despite lower oil prices.

Tenders are available through the websites of the individual service branches (such as the SANG, available here: http://www.sang.gov.sa/Govermentpeper/Pages/default.aspx) and by law tenders must be published in the official gazette (Umm Al-Qura), two local papers, the website of the tendering authority, and be posted for at least 30 days prior to bidding deadline.

A significant portion of military tenders are exempted from these requirements however. Tenders are also available through various fee-based business intelligence sources (such as ME Tenders.com, and tendernews.com) but some sources published within the kingdom consist of a single line item labeled “military equipment” not a breakdown of actual items to be purchased. The most recent government reforms (such as the e- government portal) do not appear to have affected the way military procurement is conducted, as the Ministry of Defence has no presence on the e-government portal.
Assessor SourcesSaudi Arabian Monetary Agency – 51st Annual Report. 2015. http://www.sama.gov.sa/en-US/EconomicReports/AnnualReport/5600_R_Annual_En_51_Apx.pdf, p121

“Resources, Country Information, Saudi Arabia: MODSAP and SANGCOM.” [updated 20 October 2014]. Campaign Against the Arms Trade (UK). http://www.caat.org.uk/resources/countries/saudi-arabia/modsap.php

Crowell.com. 2013. “So you want to do business with the Saudi Government.” Crowell Moring. http://www.crowell.com/files/So-You-Want-to-Do-Business-with-the-Saudi-Government- Crowell-Moring.pdf.
Peer Reviewer3934 OpinionNot Qualified
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsI would add that measures like the IHS Global Trade report give an indication of the quantity of arms being imported by Saudi Arabia as it boosts its defence capabilities in line with the public thinking of spokespeople like Turki al-Faisal, but that because defence contracts are made for services and parts as well as purchases of hardware, it is impossible to get a complete or accurate picture of the total expenditure, largely because there is no parliamentary scrutiny on the matter.

http://www.janes.com/article/49809/saudi-arabia-replaces-india-as-largest-defence-market-for-us
Government Reviewer4700 OpinionNot Qualified

Political13. Are sources of defence income other than from central government allocation (from equipment sales or property disposal, for example) published and scrutinised?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: Sources of defence income other than from central government allocation are not published, although there do not appear to be significant sources of such income. Saudi Arabia does not have a significant defence industrial base that would generate export earnings; it is not a recipient of foreign military aid; its military does not engage in commercial enterprise; and Saudi troops do not generate income through being deployed to conflict zones as peacekeepers or contractors. The government agencies that would have information pertaining to such income – the Ministry of Finance and the General Audit Bureau – have not produced public reports on such income. Nor have members of the Majlis as-Shura singled out the issue in public comments or reported discussions. Nor has the government produced promotional materials on the handful of small-scale military-industrial companies that do exist in Saudi Arabia, which might include figures on export income.

Recently tentative plans for joint defence production with Pakistan were discussed in the local press, but this would primarily be cooperation through Saudi financing and Pakistani production, with Saudi Arabia taking delivery of some of the equipment produced. It would therefore not be a source of income for Saudi Arabia. In the event that exports to third countries generated income down the road, it is likely these earnings would go to Pakistan as a sort of unofficial military assistance from Saudi Arabia.

RESPONSE TO PEER REVIEWER 1: I'm not sure that there actually are any non-central government sources of defence income, which is why I am hesitant to give a score of &quoute;0&quoute;. I do not have a problem with revising the score to &quoute;0&quoute; to reflect the absence of published information. Score changed from 1 to 0.

RESPONSE TO GOVERNMENT REVIEWER: The State Revenue Law (Royal Decree No. M/68, Dated 18/11/1431H) may indeed govern the collection and disposal of such funds, but this question asks whether the details of these funds (including where they came from and how they are spent) is scrutinised by a government agency such as the General Audit Bureau and publicly available for citizens to access. This is most certainly not the case.
Assessor SourcesMatthews, Ron. 2002. “Saudi Arabia: defence Offsets and Development.” In Arming the South: The Economics of Military Expenditure, Arms Production and Arms Trade in Developing Countries. Jurgen Brauer and J. Paul Dunne (eds). New York, NY: Palgrave.

Bilal Saab. 7 MAY 2014. “The Gulf Rising: defence Industrialization in Saudi Arabia and the UAE.” The Atlantic Council. http://www.atlanticcouncil.org/publications/reports/the-gulf-rising-defence-industrialization-in-saudi-arabia-and-the-uae

Faheem Al-Hamid. “KSA, Pakistan to boost joint ventures in defence production.” 16 February 2014. Saudi Gazette. http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20140216195909
Peer Reviewer3934 OpinionDisagree
Peer Reviewer3934 CommentsThere is no published information regarding defence sources of income beyond governmental funding.
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsYou could argue that commission payments are sources of income related to defence which are not published.
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score3
Government Reviewer4700 CommentsState Revenue Law applies on all sources of income. Therefore, all revenue are collected and deposited in the Ministry of Finance's account, like all government sectors.

Political14. Is there an effective internal audit process for defence ministry expenditure (that is, for example, transparent, conducted by appropriately skilled individuals, and subject to parliamentary oversight)?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: According to the Basic Law of Governance of 1992, each government agency (including the Ministries of Defence and Interior) is subject to an internal auditing process, and there are staff auditors within the Ministry of Defence that review contractor’s financial records and payments made to them by the government. Naturally large foreign contractors (such as BAE and Boeing) employ auditors to ensure compliance with their host countries' laws, notably the FCPA in the US and the UK's Anti-Bribery Law.

However, evidence suggests that government staff auditors may only be active on civilian aviation projects – not military arms sales. Recent reports that the late-King Abdullah had chosen to employ foreign consulting firms to oversee the bidding process for defence contracts suggests that the same may be done with regards to internal reviews, audits and other forms of oversight. As referenced in the 2013 assessment of Saudi Arabia, a US-based firm founded in 2010 called Colorado Accounting & Financial Services claims to have been the lead advisor on a contract to establish an internal auditing body within the Saudi Ministry of Defence. The company’s brochure records the contract details as: “Development of Financial Advisory Department for Ministry of defence and Aviation in Saudi Arabia. The new department was created for effective control of internal auditing, treasury management, budgeting and forecasting and creating training programs for the Ministry of defence accounting staff.”

Given the high level of political autonomy of the senior princes in charge of both the defence and interior ministries, the probability that the ministries are subject to a truly independent audit process is unlikely. Under the above-cited Basic Law of Governance, Article 79: &quoute;All revenues and expenditures of the State, as well as movable and fixed assets, shall be subsequently audited to ensure proper use and management. An annual report to this effect shall be forwarded to the Prime Minister. There is no evidence to suggest that this report is subject to further scrutiny; it is not published and its findings are not made available to the public. Furthermore, the MOD bureaucracy is extremely fragmented while control over the flow of information is highly centralized, so gathering comprehensive information to perform a legitimate audit would be extremely complicated. The General Auditing Bureau (GAB) has long advocated for more powerful internal auditing departments within the various ministries, which their officials claim are practically non-functioning (Saudi Gazette, Emirates 24/7). Any audits that are conducted are not available to members of the Majlis as-Shura; even GAB audits are rarely made available to more than a few high-ranking officials, presumably from the Council of Ministers.

RESPONSE TO PEER REVIEWER 2: Agree with comments. The suggested changes and additions have been made.

RESPONSE TO GOVERNMENT REVIEWER: Although there may be an internal audit department, there is no transparency regarding the process, nor is the report or a summary of its findings made available to any independent government body. Nor is there any report issued by the government detailing any actions taken to address any of the concerns raised during the internal audit process. Score maintained.
Assessor SourcesOnline employment profile of an auditor working for the Saudi Ministry of Defence and Aviation: http://www.indeed.com/rz/Mohammad-A/db5c61535a7035cb

“Abdullah’s clean-up operation.” 19 May 2011. Intelligence Online. http://www.intelligenceonline.com/corporate-intelligence/2011/05/19/abdullah-s-clean-up-operation,90071951-ART-CAN [subscription required].

Website of the firm contracted by the Saudi Ministry of Defence to establish auditing department: http://www.coloradoaccounting.net/resources/CAFS+Capability+Statement.pdf

Adnan Al-Shabrawi. 22 May 2011. “GAB unhappy at lack of action over bared violations.” Saudi Gazette. http://www.saudigazette.com.sa/index.cfm?method=home.PrintContent&fa=regcon&action=Print&contentid=20110522101285

“General Auditing Bureau facing several obstacles.” 20 January 2015. Saudi Gazette. [author unknown]. http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20150120231009

&quoute;Saudi to enforce ‘where from’ anti-corruption law.&quoute; 1 June 2014. Emirates 24/7 (UAE). [author unknown]. http://www.emirates247.com/business/saudi-to-enforce-where-from-anti-corruption-law-2014-06-01-1.551000

2013 Government Defence Anti-Corruption Index, Transparency International, April 2013
http://government.defenceindex.org/sites/default/files/documents/GI-assessment-Saudi-Arabia.pdf
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsBAE Systems seems to employ managers to audit its contracts in Saudi Arabia. For example:

https://www.linkedin.com/pub/naif-bedaiwy/3/b77/ba8

I would add a reference and link to the Basic Law of Governance, Article 79 of which states that:

Article 79:
All revenues and expenditures of the State, as well as movable and fixed assets, shall be subsequently audited to ensure proper use and management. An annual report to this effect shall be forwarded to the Prime Minister.

http://www.shura.gov.sa/wps/wcm/connect/ShuraEn/internet/Laws+and+Regulations/The+Basic+Law+Of+Government/Chapter+Eight/

I would also comment that because there is little legal distinction between the state and the al-Saud family, it is easy to hide expenditure which the government doesn't want audited by having it made as private expenditure by a member of the ruling family. Furthermore, the fact that the audit report is not public and only seen by the PM provides no protection against corruption.

Also update references to King Abdullah by referring to him as 'the late King Abdullah'.
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score3
Government Reviewer4700 CommentsYes, the Internal Audit Department was established to review all disbursement procedures.

Political15. Is there effective and transparent external auditing of military defence expenditure?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: According to the founding charter of the General Auditing Bureau, the military and defence establishment is one of four ‘sectors’ subject to GAB audits (the others are the civil service; publicly-owned corporations; and other public departments and agencies). According to the GAB’s organizational chart, financial audits are carried out on the security sector (Interior Ministry); the defence sector (Defence Ministry) and the National Guard (the SANG). The GAB president has ministerial rank and can only be appointed or dismissed by royal edict; this means the bureau is relatively insulated from retaliation from ministers and members of the Royal Family. However, the GAB also has little or no effective leverage over either the Ministry of Defence or the Ministry of Interior, as the princes that oversee these two ministries in particular have substantial independent power that rivals that of the King. So while the GAB is independent, it is also relatively powerless vis a vis the defence and security institutions. Its leaders complain that their cases go unaddressed by the prosecutorial body in charge (the Prosecution and Investigations Commission) and that their agency reports are answered by mid-ranking bureaucrats, not the leaders of the ministries and agencies concerned, who are ultimately responsible for the functioning of their organizations.

The president of the Anti-Corruption Commission/Nazaha also has the rank of minister. The commission has completed many evaluations of different Saudi government programs and agencies (including ports authorities, public hospitals, the Saudi Railway Organization, and municipal government bodies) and publicized their findings, but none of these have dealt with the Ministries of Defence or Interior. Nor does Nazaha appear to assist with defence corruption cases involving Saudi Arabia that are carried out in other jurisdictions – such as the recent case involving bribes paid to Saudi officials by a subcontractor of the European defence giant EADS in connection with a large contract for the Saudi Arabian National Guard.

Oversight bodies have little authority or influence over any government ministry – but even less over those controlled by the most senior princes, notably the MOD and MOI. Despite the passage of the 2007 National Strategy to Promote Integrity and Combat Corruption, there is no plan to subject government budgets to independent accounting agencies (although the Center for Democracy and Human Rights, a US-based organization, openly advocates for &quoute;an independent national treasury where all national revenues and disbursements are accounted for and open to public scrutiny.)&quoute;

This score has declined from the 2013 GI assessment as there is credible evidence to suggest the Saudi Government has continued to undermine the corruption investigations carried out by foreign governments against their own contractors based in Saudi Arabia.

RESPONSE TO PEER REVIEWER 2: The Prime Minister that views the audits is also the King, and since he is unaccountable to any other government body I'm not sure I would consider this a form of oversight.

Multinational auditing and accounting firms have themselves been implicated in Saudi bribery scandals. On December 30, 2013, the Dutch branch of accounting firm KPMG (KPMG N.V.) reached a €7 million settlement with Dutch authorities for allegedly assisting its client, construction contractor Ballast Nedam, in disguising bribes paid to foreign agents in Saudi Arabia between 2000 and 2003. As part of the settlement, KPMG N.V. agreed to implement additional compliance measures. The three former KPMG N.V. audit partners involved in the scheme are reportedly under investigation. There is no evidence that the Saudi Government used any of the information collected by the Dutch authorities to pursue their own investigation, or that they provided assistance to the Dutch authorities to aid in their investigation.

Although contractor audits in the defence sector may exist, I would argue that they are “fully undermined” by the government. The Saudi government does not appear to cooperate with defence corruption cases that are carried out in other jurisdictions, which is where foreign contractors are likely to be prosecuted for corruption. An example is the recent case involving bribes paid to Saudi officials by a subcontractor of the European defence giant EADS in connection with a large contract for the Saudi Arabian National Guard (Mohaghan 2012).

Angela Monaghan. 14 August 2012. “EADS faces questions over £2 bn Saudi deal: Q&A.” The Telegraph (UK). http://www.telegraph.co.uk/finance/newsbysector/industry/defence/9476246/EADS-faces-questions-over-2bn-Saudi-deal-QandA.html#disqus_thread

Tom Burgis. 28 April 2015. “Ministers cite security in effort to block details of Saudi deal.” The Financial Times.
http://www.ft.com/cms/s/0/ddaebb48-ed78-11e4-a894-00144feab7de.html#ixzz3jNxezumP

“Saudi Arabia politics: Clipping Bandar.” 8 June 2007. The Economist Intelligence Unit. http://viewswire.eiu.com/index.asp?layout=VWArticleVW3&article_id=52264390
Assessor Sources“Kingdom of Saudi Arabia: General Auditing Bureau.” UN Office on Drugs and Crime, Legal Library. [accessed 23 March 2015]. http://www.track.unodc.org/LegalLibrary/LegalResources/Saudi%20Arabia/Authorities/Saudi%20Arabia-General%20Auditing%20Bureau.pdf

Asian Organization of Supreme Audit Institutions. Profile: Saudi Arabia General Audit Bureau. [undated]. http://www.asosai.org/asosai/journal1990/audit_profile_saudi_arabia_general.htm

Business Anti-Corruption Portal: Saudi Arabia Country Profile. Produced by Global Advice Network (private consulting firm) and financed by several European Governments (Austria, Denmark, Germany, Netherlands, Norway, Sweden, and the UK). http://www.business-anti-corruption.com/country-profiles/middle-east-north-africa/saudi-arabia/initiatives/public-anti-corruption-initiatives.aspx [no date].

26 June 2014. “Government departments ‘wasted SR5.6b’ in 2013.” Saudi Gazette. http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20140626209618

Angela Monaghan. 14 August 2012. “EADS faces questions over £2 bn Saudi deal: Q&A.” The Telegraph (UK). http://www.telegraph.co.uk/finance/newsbysector/industry/defence/9476246/EADS-faces-questions-over-2bn-Saudi-deal-QandA.html#disqus_thread

Center for Democracy and Human Rights in Saudi Arabia
http://www.cdhr.info/index.php?option=com_content&view=article&id=76&Itemid=57

Tom Burgis. 28 April 2015. “Ministers cite security in effort to block details of Saudi deal.” The Financial Times.
http://www.ft.com/cms/s/0/ddaebb48-ed78-11e4-a894-00144feab7de.html#ixzz3jNxezumP
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionDisagree
Researcher + Peer Reviewer4322 Suggested Score1
Researcher + Peer Reviewer4322 CommentsAccording to the general law of governance, the audits are viewed by the PM.

http://www.shura.gov.sa/wps/wcm/connect/ShuraEn/internet/Laws+and+Regulations/The+Basic+Law+Of+Government/Chapter+Eight/

As mentioned before, there seem to be auditing managers employed by BAE Systems, so I wonder if you could count this as a form of external auditing.

https://www.linkedin.com/pub/naif-bedaiwy/3/b77/ba8

If foreign companies that have big contracts with KSA do auditing of their contracts, could the score be increased to 1?
Government Reviewer4700 OpinionNot Qualified

Political16. Is there evidence that the country's defence institutions have controlling or financial interests in businesses associated with the country's natural resource exploitation and, if so, are these interests publicly stated and subject to scrutiny?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: As with all Gulf monarchies, Saudi has no distinction between its military and executive branches. Defence institutions in Saudi Arabia do not appear to have controlling or financial interests in businesses associated with the country’s natural resource exploitation, though influential officials and members of the royal family appointed to positions within the defence establishment certainly do have such interests. (See Sabri 2001; this is the only comprehensive work to date on the individual investments of members of the Saudi Royal Family. It shows that members of the Royal Family are invested in military-industrial firms established under the US Peace Shield defence offset program).

Oil has also been directly bartered in the past to finance defence purchases, so the exact relationship between the state’s natural resources and its defence establishment is difficult to explicate. Many members of the Royal Family that work within the Ministries of Defence and Interior have financial stakes in both oil industry operations and firms involved in defence industrial activities like aircraft maintenance and the provision of basic industrial components (like batteries or pipes) used in weapons systems. (Sabri 2001). Parastatal companies and sovereign wealth funds are also shareholders in these small military-industrial enterprises – but none of these companies have clear linkages to the military.

There are no requirements to disclose the assets of Royal Family members – who frequently possess significant financial stakes in semi-public operations over which they have administrative jurisdiction. Currently there are also no regulations requiring asset disclosure by high-level (non-Royal) officials, although the newly-created National Committee to Combat Corruption/Nazaha submitted a request to the late King Abdullah that (if translated into a royal decree) would require asset disclosure by these officials. It would, however, still not extend to the finances of Royal Family members.

RESPONSE TO GOVERNMENT REVIEWER: Because members of the royal family appointed to positions within the defence establishment certainly do have investments in a range of natural resource companies (mining companies, petrochemical companies, etc.), this meets the requirement for a score of “0”. The feature that makes Saudi Arabia unique is the ability of the royal family (including those in official positions in the defence establishment) to treat the resources of the state as their own. The fact that this ownership is at the individual level (as opposed to the institutional level) indicates a system of ownership that is even more arbitrary and prone to abuse than it would be if defence institutions (such as the pension fund or the Military Industries Corporation) were the beneficial owners of natural resource businesses.

There is a code of conduct that includes a prohibition against public employees (of any ministry) engaging in commercial activity, but this does not extend to members of the Royal Family. If it did, this might merit a higher score. A translation of the code of conduct law states that defence and security personnel are not allowed:

“To work in trade or industry directly or indirectly, including financial management, or acting as president or a manager or member of the administrative board, or as a consultant or an employee at a company or a commercial establishment, or to make business transactions or any kind of speculation, or to establish ties with any company or agency, or to undertake any action that contradicts their official job or which could influence their performance of their duty in any way. This does not affect the officer’s right to purchase shares in [private] limited companies.”

Transparency International. 2011. “Codes of Conduct in Defence Ministries and Armed Forces: What makes a good code of conduct?” http://www.ti-defence.org/publications/20-category-publications/publications-dsp/117-dsp-pubs-codes-conduct-defence-ministries-armed-forces.html
Assessor SourcesSharaf Sabri. 2001. The House of Saud in Commerce: A Study of Royal Entrepreneurship in Saudi Arabia. New Delhi: I.S. Publications Pvt. Ltd. Also see Steffen Hertog. 2010. Princes, Brokers, and Bureaucrats: Oil and the State in Saudi Arabia. Ithaca, NY: Cornell University Press.

Matthews, Ron. 2002. “Saudi Arabia: defence Offsets and Development.” In Arming the South: The Economics of Military Expenditure, Arms Production and Arms Trade in Developing Countries. Jurgen Brauer and J. Paul Dunne (eds). New York, NY: Palgrave

Fahd Al-Theyabi. “Nazaha has reined in corruption.” Arab News. 14 November 2013. http://www.arabnews.com/news/477126
Peer Reviewer3934 OpinionAgree with Comments
Peer Reviewer3934 CommentsBased upon the scoring criteria provided, the Kingdom of Saudi Arabia best fits the score of &quoute;0,&quoute; due to the lack of transparency related to these sectors. With that said, Saudi Arabia does not cleanly fit into any of the presented scoring criteria. A score of &quoute;0&quoute; implies that the defence sector of Saudi Arabia has a &quoute;controlling interest&quoute; in the country's natural resource exploitation, which is not accurate. Rather there is a close, near symbiotic, relationship between resource exploitation and defence.
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsThe way I would put this is that since the Saudi state is the only country in the world which is named after a particular family, the House of Saud treats the state as its private property to be exploited for its own benefit. There is no separation of powers between the executive, legislative and judicial branches and official positions mask familial relations that are more important. Therefore, the executive is head of the army and effective owner of the state's raw material wealth, and therefore those who oversee the military also oversee resource allocation. This is just a different formulation of words than saying the defence institutions control resources, because both are controlled by the same family.
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested ScoreN/A
Government Reviewer4700 CommentsThe government reviewer believes this question is not applicable to Saudi Arabia's situation.

Political17. Is there evidence, for example through media investigations or prosecution reports, of a penetration of organised crime into the defence and security sector? If no, is there evidence that the government is alert and prepared for this risk?
Score2.0
Assessor CommentsResearcher + Peer Reviewer1332: Saudi Arabia is a major destination for migrant smuggling and a transit/destination point for drug and wildlife trafficking between Asia and Africa. These flows are primarily managed by organized crime rings that do have a presence on the ground in Saudi Arabia. About 100,000 migrants transit from East Africa into Yemen annually, with about 80,000 of these attempting to continue on to Saudi Arabia. Migrants report that Saudi officials (together with those from East African States and Yemen) are complicit in human smuggling operations; the major form of participation being bribes taken by border guards, but the degree of institutional connections to the defence or security sectors in Saudi Arabia is unclear. A recent survey of personnel working in official anti-corruption bodies conducted by Saudi university researchers found “Trading in work recruitment visas” and “Facilitating drug smuggling” to be among the top-10 most common forms of corruption.

The government has made efforts to formalize and facilitate large-scale migration from East Africa, which would indirectly address the presence of some organized criminal elements, but these efforts have not directly addressed potential complicity by border guards, police, and other defence and security personnel. The government also concluded a migrant labor rights agreement with Ethiopia (where the majority of migrants originate) in 2012, which may make it easier for migrants to identify organized criminal elements and report the collusion of security officials.

Since the 9/11 attacks in the U.S., the Saudi government has initiated a number of laws designed to strengthen their capacity to identify and prosecute money- laundering offences, which may also be linked to organized criminal activity. Illicit arms have also periodically transited through Saudi air bases, which would necessitate at least some form of cooperation on behalf of members of the Saudi civilian and military defence bureaucracy.
Assessor Sources“Transnational Organized Crime in Eastern Africa: A Threat Assessment.” September 2013. United Nations Office on Drugs and Crime. http://www.unodc.org/documents/data-and-analysis/Studies/TOC_East_Africa_2013.pdf

“Desperate Choices: conditions, risks & protection failures affecting Ethiopian migrants in Yemen.” October 2012. Danish Refugee Council (Regional Office for the Horn of Africa & Yemen) with the Regional Mixed Migration Secretariat (RMMS). http://www.refworld.org/pdfid/52401aba4.pdf, p26 and p40.

2 April 2014. “Nepotism tops corruption types in KSA.” Saudi Gazette. http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20140402200561

Andrew Chang. 10 July 2012. “A Changed Market for Arms Smugglers.” ABCNews. http://abcnews.go.com/International/story?id=79911&page=1#.T33s3u2sE00
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsIt depends what you count as organised crime. Many members of the Al Saud family can procure alcohol, prostitutes and drugs without fear of any consequences because of their powerful connections.

http://www.businessinsider.com/saudis-russia-sochi-olympics-terrorism-syria-2013-8

http://www.ft.com/cms/s/0/b8bb98f8-5903-11e2-b59d-00144feab49a.html#axzz3YYDFiYW8
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested ScoreN/A
Government Reviewer4700 Comments

Political18. Is there policing to investigate corruption and organised crime within the defence services and is there evidence of the effectiveness of this policing?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: There is no evidence of policing to investigate corruption or organised crime within the defence services, and no institution formally mandated to carry out this function. it is not yet clear if official anti-corruption efforts will include the defence and security establishment. There are periodic reports o illicit arms transiting through Saudi air bases, the links to Saudi civilian and military defence bureaucracy are unclear.

Since the 9/11 attacks in the U.S., the Saudi government has initiated a number of laws designed to strengthen enforcement capacity to identify and prosecute money- laundering offences, which may also be linked to organized criminal activity.

According to the Government Reviewer, the Public Administration of Central Inspection has the authority to investigate corruption and organised crime within the defence services. Whereas the Combating Corruption and Protecting Integrity Department will address related combating corruption issues. Score therefore increased to 1 to reflect that a policing function exists but there is no evidence of effective enforcement action in the defence sector.
Assessor Sources“Transnational Organized Crime in Eastern Africa: A Threat Assessment.” September 2013. United Nations Office on Drugs and Crime.
http://www.unodc.org/documents/data-and-analysis/Studies/TOC_East_Africa_2013.pdf

“Desperate Choices: conditions, risks & protection failures affecting Ethiopian migrants in Yemen.” October 2012. Danish Refugee Council (Regional Office for the Horn of Africa & Yemen) with the Regional Mixed Migration Secretariat (RMMS). http://www.refworld.org/pdfid/52401aba4.pdf

2 April 2014. “Nepotism tops corruption types in KSA.” Saudi Gazette. http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20140402200561

Human Rights Watch. 10 May 2015. &quoute;Detained, Beaten, Deported: Saudi Abuses against Migrants during Mass Expulsions.&quoute; https://www.hrw.org/report/2015/05/10/detained-beaten-deported/saudi-abuses-against-migrants-during-mass-expulsions
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsIt is not clear how what changes if any have occurred to build effective policing to investigate corruption and organised crime within the defence services. There is no evidence of effectiveness.
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsThe Public Administration of Central Inspection has the authority to investigate any suspicions or irregularities. Whereas Combating Corruption and Protecting Integrity Department will address related combating corruption issues.

Political19. Are the policies, administration, and budgets of the intelligence services subject to effective, properly resourced, and independent oversight?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: As with the military institutions, the policies, administration, and budget of the various intelligence services are not, in practice, subject to oversight from the Committee on Security Affairs (of the Consultative Council); the Prosecution & Investigation Commission (which reports to the Council of Ministers); or the General Auditing Bureau (whose senior members are appointed directly by the king).

Until recently, the Saudi National Security Council, created in 2005 and comprised of the ministers of various defence and security agencies, also had the authority to investigate negligence in the security establishment. However, given the membership of the council, genuinely independent oversight or investigation or prosecution for corruption or other offences is unlikely to have occurred. The council was disbanded in early 2015 by the incoming king and replaced by the Council for Political and Security Affairs. It is led by the incumbent Crown Prince Mohammed bin Nayif, the former interior minister who is credited for the government's successful counterterrorism and counterinsurgency programmes. There were no verifiable indications at the time of writing that the new membership and mandate have led to improved external oversight or internal controls however.

The intelligence budget itself is classified. The Saudi intelligence services have been criticized for their general weakness, which analysts attribute to the prevalence of personal and bureaucratic rivalries within and between the various bodies. This would suggest that the senior princes can utilize the intelligence services under their control to help further their own political ambitions and reward loyal clients, which itself indicates an absence of formal mechanisms for oversight and monitoring. However, the quality and capability of Saudi intelligence agencies are considered to have improved dramatically in recent years, which, combined with reports of (late) King Abdullah’s behind-the-scenes efforts to reduce corruption in the Defence and Interior Ministries, may point to an increase in monitoring. This would nonetheless represent personal initiative exercised by the king and not a legally codified process for accountability and transparency.
Assessor SourcesSimeon Kerr, &quoute;Saudi king stamps his authority with staff shake-up and handouts&quoute;, Financial Times, 30 January 2015. http://www.ft.com/cms/s/0/8045e3e0-a850-11e4-bd17-00144feab7de.html#axzz3klYk9un9

Adam Schreck, &quoute;The Saudi Arabian monarchy is bringing up its younger generation,&quoute; Associated Press, 5 Feb 2015. http://uk.businessinsider.com/the-saudi-arabia-monarchy-is-bringing-up-its-younger-generation-2015-2?r=US&IR=T

Simon Tisdall, &quoute;Saudi Arabia shakeup as much about retrenchment as reform&quoute;, The Guardian, 29 April 2015. http://www.theguardian.com/world/2015/apr/29/saudi-arabia-mohammed-bin-nayef-crown-prince

&quoute;Foreign Reports Bulletin: Saudi Succession Developments&quoute;, Foreign Reports, 28 October 2011. http://www.foreignreports.com/wp-content/uploads/2012/01/Saudi-Succession-Developments.pdf

SUSRIS, &quoute;Security and Political Affairs Council Holds Inaugural Meeting&quoute;, 11 February 2015, http://susris.com/2015/02/11/security-and-political-affairs-council-holds-inaugural-meeting/

Simon Henderson. “King Abdullah Recasts Saudi Intelligence.” 24 October 2005. Washington Institute for Near East Policy.

Anthony H. Cordesman and Khalid R. Al-Rodhan. 2006. Gulf Military Forces in an Era of Asymmetric Wars. Washington DC: Center for Strategic & International Studies, p233.

David Brunnstrom and Mark Trevelyan. 15 December 2006. “Blair defends scrapping of probe into Saudi deal.” Reuters. http://uk.reuters.com/article/2006/12/15/us-bae-saudi-blair-idUKL1578135620061215

Thomas Hegghammer. 25 February 25, 2010 “The Failure of Jihad in Saudi Arabia.” DTIC Occasional Paper Series.

Anthony H. Cordesman and Khalid R. Al-Rodhan. 2006. Gulf Military Forces in an Era of Asymmetric Wars. Washington DC: Center for Strategic & International Studies, p234.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsAs revealed by the 2011 Stratfor Wikileaks cables, the US intelligence services have problems convincing the Saudis to stem the flow of cash to terrorist groups from private Saudi donors. This is likely to be because those donors are part of the Saudi royal family who also control the intelligence services. For this reason, oversight of the security services would be disadvantageous to the Saudi authorities, and create problems for their relationship with the US.

https://wikileaks.org/plusd/cables/09STATE131801_a.html
Government Reviewer4700 OpinionNot Qualified

Political20. Are senior positions within the intelligence services filled on the basis of objective selection criteria, and are appointees subject to investigation of their suitability and prior conduct?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: There is no publicly-available information on the Saudi intelligence service’s appointment or promotion policies. However, the intelligence services makeup is likely to mirror that of the kingdom’s other security and defence agencies, where most senior positions are held by the monarchy’s senior princes. This condition has intensified as the sheer size of the royal family (estimated to include about 15,000 princes and princesses) has increased dramatically. These appointments are made with an eye to balancing competing political claims within the various branches of the Royal Family; clearly not an objective or meritocratic process.

In the lead up to King Abdullah’s death in early 2015, high-level positions in defence and security were increasingly assigned to his closest allies within the Royal Family. Subsequent appointments follow this same pattern. Now that Crown Prince Salman has become King, he appointed his younger son (Prince Mohammed) as defence minister. Prince Mohammad, believed to be in his late-20s/early 30s, lacks experienced in military affairs; has never held a significant official position; and has not studied outside of the kingdom. However, given some of the intelligence service’s more recent successes, its lower-ranking personnel must be appointed (at least partially) based on merit.

The monarchy’s employment of so-called ‘coup-proofing’ strategies also means that defence and security agencies (to include the various intelligence services) have institutional mandates to check the power and influence of rival agencies. The importance of loyalty in maintaining a system like this suggests that suitability, prior conduct, and other objective measures may be secondary concerns in promotion and other personnel decisions. U.S. trainers working with the Saudi military have reported that mid-level leaders are reluctant to perform or submit formal evaluations of their subordinates in order to avoid unpleasant confrontation. Although this observation was not specific to the intelligence services, there is no reason to believe it would be restricted to the military. The only official publication I was able to locate was a 1966 USAID report on Saudi internal security forces training, which reported that personnel issues (salary, rank, etc.) was uniform throughout all the defence and security institutions in the kingdom.

According to the government reviewer special reports are made on officials prior to promotion or appointment in such sensitive positions. Also, security checks are conducted on officials prior to appointment or transfer to these positions. I believe this is probably true in many instances, though no evidence has been provided. However htis is insufficient to increase the score to 4, which requires that, &quoute;Senior positions within the intelligence services are filled on the basis of objective selection criteria without the opportunity for intervention by third parties and there is full investigation of candidates’ suitability.&quoute;
Assessor SourcesStephanie Cronin. 2013. “Tribes, Coups and Princes: Building a Modern Army in Saudi Arabia.” Middle Eastern Studies. 49(1): p3.

Awad Mustafa. 18 May 2014. “Saudi defence Leaders Replaced By Moderates.” defenceNews. http://www.defencenews.com/article/20140518/DEFREG04/305180007/Saudi-defence-Leaders-Replaced-By-Moderates

[author unknown]. “Concerned about Saudi military ties, U.S. focuses on inexperienced prince with huge defence budget.” 18 February 2015. World Tribune. http://www.worldtribune.com/2015/02/18/conderned-saudi-military-ties-u-s-focuses-inexperienced-prince-huge-defence-budget/

Todd Eastham. 9 May 2012. “Yemen ‘underwear bomber’ was Saudi double-agent.” The Independent (UK). http://www.independent.co.uk/news/world/americas/yemen-underwear-bomber-was-saudi-double-agent-7727747.html.

Max Fisher. 1 November 2010. “What We Can Learn From Saudi Intelligence.” The Atlantic. http://www.theatlantic.com/international/archive/2010/11/what-we-can-learn-from-saudi-intelligence/65518/

U.S. Army Colonel Norvell DeAtkine. 18 March 2013. “Western Influence on Arab Militaries: Pounding Square Pegs into Round Holes.” Rubin Center: Research in International Affairs. http://www.rubincenter.org/2013/03/western-influence-on-arab-militaries-pounding-square-pegs-into-round-holes/

Michael McCann and John Means. August 1966. “Survey Report of the Public Security Force of the Kingdom of Saudi Arabia.” Washington DC: US Agency for International Development.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionDisagree
Researcher + Peer Reviewer4322 CommentsI would suggest this reference, as it shows that defence appointments are done at the request of the King.

http://www.washingtoninstitute.org/policy-analysis/view/surprise-rotation-of-saudi-defence-officials

It seems clear that appointments are a gift of the executive, so I feel the score should be 0. While the lack of clarity makes appointments unclear, all evidence points to them being decided by the King or Crown Prince.
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score4
Government Reviewer4700 CommentsSpecial reports are drawn on officials prior to promotion or appointment in such sensitive positions. Also, security checks are conducted on officials prior to appointment or transfer to these positions.

Political21. Does the government have a well-scrutinised process for arms export decisions that aligns with international protocols, particularly the Arms Trade Treaty (ATT)?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: Saudi Arabia does not appear to have a formal process for arms export decisions. When the UN General Assembly adopted the Arms Trade Treaty as a resolution on 2 April 2013, Saudi Arabia was one of 23 nations that abstained, although this was most likely out of concern that the treaty would inhibit exports to Saudi Arabia, not from Saudi Arabia. A series of co-production and technology transfer agreements concluded with US and European defence firms in the 1980s and 1990s did result in the establishment of a small number of industrial enterprises producing basic components for use in weapons systems, although it is unclear whether any of these were exported as spare parts or even incorporated into the kingdom’s own equipment. More recently, the German gun-maker Heckler & Koch licensed production of the G36 assault rifle to the Military Industries Corporation/MIC (owned by the Saudi Ministry of Defence). Although Saudi Arabia is prohibited from exporting the gun as a condition of the licensing agreement, MIC purchased booth space to exhibit the weapon at the International Defence Exhibition (IDEX) in 2013 – a forum that is designed for weapons manufacturers to secure export deals with visiting government delegations.

A speech made by the Saudi head of mission to the UN in 2012 in the leadup to the ATT indicates that Saudi authorities see the ATT's efforts to control the flow of licit weapons completely illegitimate: &quoute;Since brokering activities remain subject to supervision and regulation through national legislation and regulations, it would be sufficient in the scope of any potential ATT to cover the matter of illicit brokerage, as permitted brokerage allowed under national law falls outside any potential scope of an ATT,” p3.

Saudi Arabia has been a major source of arms transfers – purchasing weapons from third parties to pass on to allied governments or groups that are unable to purchase the weapons themselves, either due to sanctions or a lack of funds. These activities were usually executed in coordination with the United States. In the 1970s, the Saudi Government financed the provision of American-made military hardware for the Afghan mujahedeen; financed an airlift of Moroccan troops to Zaire in support of Mobutu in 1977; and armed the conservative government in Yemen in its fight against southern rebels in 1979. This was also the case throughout the 1980s when Saudi Arabia served as the intermediary for the transfer of large quantities of US-made weapons to Iraq, and after the 1991 Gulf War, when Riyadh also transferred smaller quantities of US-made weapons to Syria and Bangladesh. Decisions regarding these latter transfers were apparently made by Prince Bandar without explicit U.S. approval (despite the fact that they contained U.S. origin technology). More recently, in 2013, Saudi Arabia purchased a large supply of weapons from Croatia on behalf of the anti-government rebels in Syria, and in 2014 financed the purchase of $2 billion in Russian arms on behalf of Egypt’s military-backed government.

There is one known case of Saudi weapons sales (as opposed to transfers). According to an NGO working to stop arms exports to Sudan “Saudi Arabia self-reported a limited amount of arms sales to Sudan in 2005, but Sudan reported having received a [more] significant amount of weapons” and “Saudi Arabia did not explain the nature and extent of its arms sales to Sudan.” The Saudi-made Al-Shibl armored vehicle (manufactured by Military Industries Corporation, under Ministry of Defence ownership) was also deployed by the Yemeni government during the 2011 uprising there, but whether this item was sold or given to the government in Sanaa is unknown.

There are no other relevant instruments to which KSA is a signatory, and nor is there recognition of corruption as an issue in transfers because there is no recognition of the transfers themselves. These were covert arms transfers and hence not subject to parliamentary debate or approval. The extent of discussion of defence issues in the Shura Council limits itself to less sensitive issues such as armed forces pensions and ceremonies for awarding medals.
Assessor SourcesIain Overton. “Death is German: Die Zeit Expose On Heckler & Koch’s Shady Dealings in Mexico.” 7 January 2014. Action on Armed Violence. http://www.anatomyofviolence.co.uk/tag/saudi-arabian-military-industries-corporation-mic/

Steven V. Roberts, Stephen Engelberg and Jeff Gerth. 21 June 1987. “Prop for US policy: Secret Saudi Funds.” New York Times. http://www.nytimes.com/1987/06/21/world/prop-for-us-policy-secret-saudi-funds.html

Murray Waas and Douglas Frantz. 18 April 1992. &quoute;Saudi Arms Link to Iraq Allowed: Mideast: Under Reagan and Bush, U.S. weapons were secretly provided to Baghdad, classified documents show. The White House kept Congress in the dark. Los Angeles Times. http://articles.latimes.com/1992-04-18/news/mn-537_1_saudi-arabia-s-transfers

C. J. Chivers and Eric Schmitt. “Saudis Step Up Help for Rebels in Syria With Croatian Arms.” 25 February 2013. New York Times. http://www.nytimes.com/2013/02/26/world/middleeast/in-shift-saudis-are-said-to-arm-rebels-in-syria.html?pagewanted=all&_r=0

Oren Dorrell. 13 February 2014. “Russia offers Egypt no-strings-attached arms deal.” USA Today. http://www.usatoday.com/story/news/world/2014/02/13/russia-egypt-arms-deal/5459563/

Human Rights First. “Arms Transfers to Sudan, 2004-2006,” p14. [no date]. http://www.humanrightsfirst.org/wp-content/uploads/pdf/CAH-081001-arms-table.pdf.

Images of the Al-Shibl armored vehicle on the streets of Sanaa are accessible here: http://milinme.wordpress.com/2011/10/26/arab-revolts-revolutions-yemen-3-al-shibl-2-yemens-lion-cub/

Speech of HE Ambassador Abdallah Y. Al-Mouallimi. 7 July 2012. “Statement of the Group of Member States in the League of Arab States Before the UN Conference Concerning a Potential Arms Trade Treaty.” http://www.saudimission.org/attachments/063_Armtradetreaty12%20En.pdf
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsWhat about Saudi arms transfers to rebel groups in Syria? There are quite a few articles about this online.

http://www.wsj.com/articles/SB10001424052702304177104577311572820862442
http://www.nytimes.com/2013/02/26/world/middleeast/in-shift-saudis-are-said-to-arm-rebels-in-syria.html?_r=0
http://www.voanews.com/content/saudi-arabia-offers-sophisticated-weapons-to-syrian-rebels/1861892.html
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsYes, joint committees between the Ministry of defence and the Ministry of Foreign Affairs are formed to study the topics of disarmament and related international conventions and treaties.

Financial22. How effective are controls over the disposal of assets, and is information on these disposals, and the proceeds of their sale, transparent?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: There is no public knowledge about the procedures of asset disposal, nor of the controls that might be in place.

Saudi Arabia does not have a formal weapons export industry. When it transfers weapons from its own arsenal, it usually does so for political purposes. The annual report of the Saudi Arabian Monetary Agency (SAMA) only gives a figure for expenditures on the Military Industries Corporation, not its revenues. All funding for defence and security comes from the central government budget (primarily financed with oil revenues), not from disposal of military assets from the armed forces or ministry of defence. There is no information on what is done with decommissioned or “old” weapons and how these are disposed.

There is no evidence of any controls over Saudi weapons transfers beyond what would be enforced by the supplier country for reasons of export of sensitive technologies or exports to regimes under international sanction. [And from the cases outlined in question 21, even these controls are unlikely to be observed]. According to an NGO working to stop arms exports to Sudan “Saudi Arabia self-reported a limited amount of arms sales to Sudan in 2005, but Sudan reported having received a [more] significant amount of weapons” and “Saudi Arabia did not explain the nature and extent of its arms sales to Sudan.” The Saudi-made Al-Shibl armored vehicle (manufactured by Military Industries Corporation, under Ministry of Defence ownership) was also deployed by the Yemeni government during the 2011 uprising there, but whether this item was sold or given to the government in Sanaa is unknown.

In the past, oil was bartered to purchase weapons from Western manufacturers, the Al-Yamamah deal with BAE being one of the largest. This could qualify as a form of asset disposal on behalf of the Saudi Ministry of Defence, which lacked sufficient hard currency to pay for the weapons in cash. There was certainly no independent scrutiny of this deal by either party.

According to the government reviewer, &quoute;there is a procedures manual for selling of government property, it includes, the announcement of a public auction when selling any equipment and tools that are dually used by both civilian and military sectors&quoute;. Score increased to 1 to reflect the criteria that, &quoute;There is little public knowledge about the procedures of asset disposal, nor of the controls that might be in place. The subject is unlikely to be referred to in defence and security documents.&quoute; However there is no evidence to support the government reviewer's selection of score 4: &quoute;There are strong controls over asset disposal. Planned disposals are known in advance and are published publicly. The financial results of disposals are also publicly available.&quoute;
Assessor SourcesSaudi Arabian Monetary Agency – 51st Annual Report. 2015. http://www.sama.gov.sa/en-US/EconomicReports/AnnualReport/5600_R_Annual_En_51_Apx.pdf, p121.

Human Rights First. “Arms Transfers to Sudan, 2004-2006,” p14. [no date]. http://www.humanrightsfirst.org/wp-content/uploads/pdf/CAH-081001-arms-table.pdf.

Images of the Al-Shibl armored vehicle on the streets of Sanaa are accessible here: http://milinme.wordpress.com/2011/10/26/arab-revolts-revolutions-yemen-3-al-shibl-2-yemens-lion-cub/

“Background - Saudi Arabia’s deteriorating financial health.” [undated]. Campaign Against the Arms Trade (UK). http://www.caat.org.uk/resources/countries/saudi-arabia/al-yamamah/documents.php.

“Saudi defence deal probe ditched.” 15 December 2006. BBC. http://news.bbc.co.uk/2/hi/business/6180945.stm
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsI'd also suggest mentioning arms transfers to Syrian rebel groups here.

http://www.voanews.com/content/saudi-arabia-offers-sophisticated-weapons-to-syrian-rebels/1861892.html
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score4
Government Reviewer4700 CommentsThere is a procedures manual for selling of government property, it includes, the announcement of a public auction when selling any equipment and tools that are dually used by both civilian and military sectors.

Financial23. Is independent and transparent scrutiny of asset disposals conducted by defence establishments, and are the reports of such scrutiny publicly available?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: There is no evidence that asset disposals are scrutinised by an oversight body of any form.

There is no indication of independent and/or transparent scrutiny of Saudi arms transfers. Saudi Arabia does not have a weapons export industry, nor do its defence or security institutions enage in income-generating activities. The annual report of the Saudi Arabian Monetary Agency (SAMA) only gives a figure for expenditures on the Military Industries Corporation, not its revenues.

Although the military and defence establishment is one of four ‘sectors’ legally subject to audits by the General Auditing Bureau (GAB), the GAB has little or no effective leverage over either the Ministry of Defence or the Ministry of Interior, as the princes that oversee these two ministries in particular have substantial independent power that rivals that of the King. So while the GAB is independent, it is also relatively powerless vis a vis the defence and security institutions. There is no evidence that the GAB has effectively undertaken an audit of any aspect of the Ministry of Defence, to include asset disposal.

Although the Saudi state has certainly shipped (and on at least one occasion sold) weapons from its own domestic arsenal, it does not supply comprehensive details on these transfers (including income). According to an NGO working to stop arms exports to Sudan “Saudi Arabia self-reported a limited amount of arms sales to Sudan in 2005, but Sudan reported having received a [more] significant amount of weapons” and “Saudi Arabia did not explain the nature and extent of its arms sales to Sudan.” The Saudi-made Al-Shibl armored vehicle (manufactured by Military Industries Corporation, under Ministry of Defence ownership) was also deployed by the Yemeni government during the 2011 uprising there, but whether this item was sold or given to the government in Sanaa is unknown.

In the past, oil was bartered to purchase weapons from Western manufacturers, the Al-Yamamah deal with BAE being one of the largest. This could qualify as a form of asset disposal on behalf of the Saudi Ministry of Defence, which lacked sufficient hard currency to pay for the weapons in cash. There evidence this or subsequent arms deals have been scrutinised by an audit body that is generally regarded as independent. Nor with audit reports that are available to the public within a reasonable time frame.
Assessor SourcesSaudi Arabia does not have a weapons export industry, nor do its defence or security institutions enage in income-generating activities. When it transfers weapons from its own arsenal, it does so for political purposes. [See question 21 for information on known transfers].

Human Rights First. “Arms Transfers to Sudan, 2004-2006,” p14. [no date]. http://www.humanrightsfirst.org/wp-content/uploads/pdf/CAH-081001-arms-table.pdf.

Images of the Al-Shibl armored vehicle on the streets of Sanaa are accessible here: http://milinme.wordpress.com/2011/10/26/arab-revolts-revolutions-yemen-3-al-shibl-2-yemens-lion-cub/

“Background - Saudi Arabia’s deteriorating financial health.” Campaign Against the Arms Trade (UK). [no date] http://www.caat.org.uk/resources/countries/saudi-arabia/al-yamamah/documents.php.

“Saudi defence deal probe ditched.” 15 December 2006. BBC. http://news.bbc.co.uk/2/hi/business/6180945.stm

Saudi Arabian Monetary Agency – 49th Annual Report. 2013. http://www.sama.gov.sa/sites/samaen/ReportsStatistics/ReportsStatisticsLib/5600_R_Annual_En_49_Apx.pdf
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsFor EU member states who sell arms to KSA, there is also little scrutiny about where their arms end up. The money generated by these deals almost always prevails over human rights concerns, though the recent moral stand of Sweden may be the only example to reverse this trend.

http://www.globalresearch.ca/massive-eu-weapons-sales-to-saudi-arabia-contribute-to-fuelling-international-aggression-and-terrorism-in-the-middle-east/29881

http://www.theguardian.com/world/defence-and-security-blog/2015/jan/15/bahrain-human-rights-arms-military

http://www.dw.de/sweden-cancels-saudi-arms-deal-after-human-rights-row/a-18306674
Government Reviewer4700 OpinionNot Qualified

Financial24. What percentage of defence and security expenditure in the budget year is dedicated to spending on secret items relating to national security and the intelligence services?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: The percentage of defence and security expenditure dedicated to secret items is impossible to know; budgets from the Ministries of Defence and Interior do not provide detailed breakdowns of spending. The annual report of the Saudi Arabian Monetary Authority (the Saudi Central Bank) includes information on appropriations for major sectors (education, health, municipalities, etc) and public institutions (one of which is associated with the Ministry of Defence - the Military Industries Corporation), but these figures do not add up to the estimate of total expenditures - so a great deal of budgetary information is obviously missing. Secret defence and security spending may account for a significant portion of this.
Assessor SourcesSaudi Arabian Monetary Agency – 49th Annual Report. 2013. http://www.sama.gov.sa/sites/samaen/ReportsStatistics/ReportsStatisticsLib/5600_R_Annual_En_49_Apx.pdf, p129.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsThere are reports that KSA is using its oil resources as a secret military weapon to cause damage to the economy of rival states like Russia who assist its enemies like Syria's Bashar Assad:

http://www.capx.co/saudi-oil-the-secret-weapon-against-russian-encroachment/

Taking a hit in the price of oil is not military spending, of course, but it's lost revenue for a potentially military purpose.

It would be hard to keep military spending on European arms imports secret, but there has been some suggestion that KSA has been some suggestion that KSA is secretly procuring nuclear materials from Pakistan to make atomic bombs.

http://www.bbc.com/news/world-middle-east-24823846
Government Reviewer4700 OpinionNot Qualified

Financial25. Is the legislature (or the appropriate legislative committee or members of the legislature) given full information for the budget year on the spending of all secret items relating to national security and military intelligence?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: It is unlikely that the Shura Council’s Committee on Security Affairs is given full information on spending on secret items, as breakdowns on other specific areas of the defence budget are not made available to them. Although the committee can question representatives from defence and security agencies, it does not have responsibilities or privileges relating to any ministerial budgets. Budgets are negotiated bilaterally between the Ministry of Finance and the relevant ministry (in this case, the Ministries of Defence and Interior), with little or no input from the Shura Council.

The King most likely does have visibility of most secret expenditures. The Ministries of Defence & Interior also have a great deal of independence from the King, so there is likely some secret spending of which even he does not have knowledge - this structure is a holdover from the early organization of the various security and defence institutions. The first Saudi king distributed the most powerful agencies of government according to factions that developed among his large number of sons. Therefore these agencies (primarily the Saudi Arabian National Guard/SANG and the Ministries of Defence and Interior, but also the major regional/city governorships) evolved into quasi-independent power centers or fiefdoms. These factions have persisted through generations, and as the budgets of these powerful agencies grew, their senior leadership used these budgets and other agency assets to distribute patronage and favors to their respective client bases.

It would be a major goal of the powerful princes in charge of these ministries to maintain some secrecy over their spending for precisely this reason, so as not to reveal their patron-client distribution networks to the King. This is likely why the different agencies (SAMA, GAB, Nazaha) are not given access to these budgets, because they would be become additional sources of institutional knowledge the King could use to exert pressure or oversight over the most senior princes.

There is no reference to budgetary oversight under the list of responsibilities of the Shura Council's Defence and Security Committee. [Majlis website].
Assessor SourcesAnothony Cordesman. 2009. “Saudi Arabia: National Security in a Troubled Region.” Washington DC: Center for Strategic & International Studies.

Shura Council's Committee website: http://www.shura.gov.sa/wps/wcm/connect/shuraen/internet/committees
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsThere is no suggestion on the Shura's Defence and Security Committee mandate that they scrutinise budgets.

http://www.shura.gov.sa/wps/wcm/connect/shuraen/internet/committees
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score4
Government Reviewer4700 CommentsYes, the Ministerial Committee at the Council of Ministers is provided with the annual report of the Ministry of defence.

Financial26. Are audit reports of the annual accounts of the security sector (the military, police, and intelligence services) and other secret programs provided to the legislature (or relevant committee) and are they subsequently subject to parliamentary debate?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: The General Auditing Bureau (GAB) technically has authority to audit the accounts of all government bodies, but these are not provided to the Shura Council’s Committee on Security Affairs or subject to broader debate before the Council. The only reference to the jurisdiction that the General Auditing Bureau has over the Ministries of Defence or Interior are an exemption granted to each ministry extending the time allotted for responding to GAB inquiries (from 15 days for other ministries/agencies to three months for the MOD). The GAB’s annual reports are not made publicly available, and are only accessible to a small number of government officials.

The GAB has no practical leverage over the Ministries of defence or Interior, which are completely unaccountable to any auditing body or authority other than the King. Additionally, the individual sectors of the defence and security establishment are considered the fiefdoms of senior members of the Royal Family (the Saudi National Guard is under the direct control of the King, whereas the next most senior prices are customarily in charge of the various military service branches, internal security services, intelligence services, etc (Hertog, 2011)).

There is likewise no mention of the Anti-Corruption Commission/Nazaha ever having undertaken an investigation of defence ministry activities. The investigative arm of the General Auditing Bureau (the Auditing and Investigation Commission) legally has the right to review the documents of other government agencies, but in practice, the Ministries of Interior and Defence are exempt from this and other oversight mechanisms, and the Board of Grievances, which is tasked with hearing cases brought by the GAB against government ministries, typically refuses to hear about half of these cases. (Influential princes are tasked with heading defence and security agencies as part of the grooming process prior to being named Crown Prince, so the King is the singular official with any authority over their actions).

Response to Government Reviewer, no evidence found that this includes secret programs.
Assessor Sources26 June 2014. “Government departments ‘wasted SR5.6b’ in 2013.” Saudi Gazette. http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20140626209618

“Saudi Arabia politics: Clipping Bandar.” 8 June 2007. The Economist Intelligence Unit. http://viewswire.eiu.com/index.asp?layout=VWArticleVW3&article_id=52264390

Lucas Winter. September 2013. “Saudi Arabia: The Succession is being Tweeted.” U.S. Foreign Military Studies Office. http://fmso.leavenworth.army.mil/OEWatch/201309/Special_Essay_01.html

Steffen Hertog. 2011. “Rentier Militaries in the Gulf States: The Price of Coup-Proofing.” International Journal of Middle East Studies, 43(3): p400.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsThe GAB's reports are supposed to be presented to the PM according to the General Law of Governance

http://www.shura.gov.sa/wps/wcm/connect/ShuraEn/internet/Laws+and+Regulations/The+Basic+Law+Of+Government/Chapter+Eight/
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score4
Government Reviewer4700 CommentsYes, the Ministerial Committee at the Council of Ministers is provided with the annual report of the Ministry of defence.

Financial27. Off-budget military expenditures are those that are not formally authorised within a country's official defence budget, often considered to operate through the 'back-door'. In law, are off-budget military expenditures permitted, and if so, are they exceptional occurrences that are well-controlled?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: There is no evidence of any legislation (Royal Decree, Council Resolution or otherwise) either legalizing or governing the operations of off-budget expenditure. Purchases of weapons and military equipment are exempted from Saudi procurement law, specifically The Government Bids and Procurement Law, issued by Royal Decree in 2006 as part of Saudi Arabia's accession to the World Trade Organisation. As a result, official policy on military expenditure is not well-defined, and procurement is often determined on a “case-by-case basis.” However, substantial off-budget military expenditures have occurred in the past with both France and the UK, including the Sawari deal that provided French equipment to the Saudi Navy, and the £43 billion Al Yamamah oil-for-arms deal signed in the mid-1980s with the UK Government and BAE.

U.S. Department of Defence publications and leaked U.S. State Department cables confirm that ‘most’ or ‘much of’ Saudi defence equipment procurement is conducted “off-budget” and therefore not subject to the typical procedures enshrined in law (such as the procurement law referred to above). A cable sent from the U.S. embassy in Riyadh (obtained by Wikileaks) reported that siphoning funds from ‘off-budget’ projects was widely understood as a mechanism for members of the Royal Family to supplement the official stipends they receive from the state, and that such off-budget funds were not subject to Ministry of Finance oversight or control, and that the majority of such off-budget funds were controlled by the Minister of Defence.

Considering the lack of detail in the publicly available defence budget (a top-line figure) and the reportedly scarce detail provided to members of parliament and auditing agencies, it is likely that off-budget spending is substantial and not subject to sufficient oversight.
Assessor SourcesUnited States Trade Representative, Saudi Arabia, Foreign Trade Barriers, 2012, p338. http://www.ustr.gov/sites/default/files/Saudi%20Arabia_0.pdf

Campaign Against the Arms Trade. Al Yamamah National Archive Documents. [no date]. http://www.caat.org.uk/issues/saudi- tna/saudi-tna-docs.php#refuse

C.A. Woodson. June 1998. “Saudi Arabian Force Structure Development in a Post Gulf War World.” Fort Leavenworth, Kansas (U.S.): Foreign Military Studies Office. http://fmso.leavenworth.army.mil/documents/saudi/saudi.htm

US State Department Cable. November 1996. “Subject: Saudi Royal Wealth – Where Do They Get All That Money?” http://www.wikileaks-forum.com/cablegate/7/wikileaks-cable-saudi-royal-wealth-where-do-they-get-all-that-money/16898/
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsCould you argue that some of the arms transfers to Syria are secret? What about funding for foreign terror organisations like those in Pakistan? Those are not done by the state but the funding likely comes from those intimately connected to it.
Government Reviewer4700 OpinionNot Qualified

Financial28. In practice, are there any off-budget military expenditures? If so, does evidence suggest this involves illicit economic activity?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: The data available on this is quite dated. The Al Yamamah oil-for-arms deal signed in the mid-1980s with the UK Government and BAE was an off-budget deal whihc involved illicit economic activity as per criteria 1. U.S. Department of Defence publications and leaked U.S. State Department cables stated that ‘most’ or ‘much of’ Saudi defence equipment procurement is conducted “off-budget” and therefore not subject to the Ministry of Finance. One cable sent from the U.S. embassy in Riyadh in 1996 (obtained by Wikileaks) also reported that siphoning funds from ‘off-budget’ projects was widely understood as a mechanism for members of the Royal Family to supplement the official stipends they receive from the state, and that the majority of such off-budget funds were controlled by the Ministry of Defence. One of the largest such ‘off-budget’ projects is the Ministry of Defence’s Strategic Storage Project (multi-site storage of refined hydrocarbons) which, according to the U.S. embassy cable was not subject to any oversight by the Ministry of Finance, and was transacted through the National Commercial Bank, which frequently distributes ‘loans’ to Royal Family members with the implicit understanding that these will not be repaid.

However, the late King Abdullah post- Al-Yamamah attempt to reign in off-budget expenditures at the Ministry of Defence. This attempt coincided with a drop in oil prices, and since oil was used to pay the UK for the arms themselves, this generated support for the King’s efforts to bring the Ministry of Defence more under the oversight of the Ministry of Finance. There is no evidence that subsequent major purchases have been off-budget, but since no information on the Saudi defence budget is publicly released, there is not a clear indication either way.
Assessor SourcesCampaign Against the Arms Trade. Al Yamamah National Archive Documents. [no date]. http://www.caat.org.uk/issues/saudi- tna/saudi-tna-docs.php#refuse

C.A. Woodson. June 1998. “Saudi Arabian Force Structure Development in a Post Gulf War World.” Fort Leavenworth, Kansas (U.S.): Foreign Military Studies Office. http://fmso.leavenworth.army.mil/documents/saudi/saudi.htm

US State Department Cable. November 1996. “Subject: Saudi Royal Wealth – Where Do They Get All That Money?” http://www.wikileaks-forum.com/cablegate/7/wikileaks-cable-saudi-royal-wealth-where-do-they-get-all-that-money/16898/

Anthony Cordesman. 20 October 2002. “Saudi Arabia Enters the 21st Century: The Military and Internal Security Dimension, Part VII: The Saudi Air Force.” Washington DC: Center for Strategic & International Studies, p26.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsArms transfers to Syria and the funding of international terrorism or Wahhabi schools which preach intolerance of non-Sunnis amount to a military power projection. There is so little transparency on the budget it is not clear if this is off-budget activity.
Government Reviewer4700 OpinionNot Qualified

Financial29. In law, are there provisions regulating mechanisms for classifying information on the grounds of protecting national security, and, if so, are they subject to effective scrutiny?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: The Saudi document classification system largely mirrors the U.S. system in its various designations, which include Saudi Restricted, Saudi Secret, Saudi Very Secret, and Saudi Top Secret. There are no clear provisions for classifying information - but military analysts and regional observers claim that almost any material vaguely related to military or security matters is classified. This includes information on personnel decisions (transfers, promotions), the Roles of unit officers, unit designations, etc. This is largely done to maintain separateness among the various defence and security branches - as ‘coup-proofing’ (countering the threat of opposition from a politically powerful and cohesive military) is a key concern for all the Gulf monarchies.

There was a recent twitter leak of a handful of classified documents from Saudi ministries – and although none of them contained genuinely sensitive security information (on military operations, etc.) they revealed extensive spying on the private communications of Saudi citizens and high-level communication between cabinet ministers, which would most likely be classified by most states.

Sometime between 2001 and 2005, the Majlis as-Shura reportedly requested an amendment to article (4) [of an unspecified law] related to security classification, though other than this vague reference, not other details are available. It is nevertheless a reasonable assumption that the Council of Ministers and the newly-created Council of Political and Security Affairs have access to classified documents, but that there is probably some effort by the senior princes that oversee the various related agencies (Ministry of Interior, Ministry of Defence, and Saudi Arabian National Guard/SANG) to keep the content of some reports secret from one another.

A review of the existing document classification system would have to come from a government entity that could exert authority over these rival agencies, which would be limited to the King (and even then, the King's authority is not without its limits). There is no evidence that such review is under consideration.

Score 1 selected to reflect that there are informal classifications of information which are justified on the basis of protecting national security, yet there are no legal mechanisms in place to regulate them and in practice there is evidence of individuals or agencies influencing decisions. Government Reviewer asserts that score 2 would be relevant and asserts that information is classified according to its degree of confidentiality. However score 2 criteria requires that there are provisions made in law for the classification of information, none were found.
Assessor SourcesU.S. Department of defence Manual. 24 February 2012. &quoute;DoD Information Security Program: Marking of Classified Information. 5200.01 (2). http://www.dtic.mil/whs/directives/corres/pdf/520001_vol2.pdf

Norvell B. De Atkine. December 1999. &quoute;Why Arabs Lose Wars. The Middle East Quarterly. http://www.meforum.org/441/why-arabs- lose-wars

Government of Saudi Arabia. Resolutions by the Majlis as-Shura. [undated] http://www.shura.gov.sa/wps/wcm/connect/ShuraEn/internet/Councils+Resolutions

Mohamed Nazzal, 28 January 2015. “Saudi Arabia in the Twitter Trap: Classified Security Documents Leaked,” Al-Akhbar (Lebanon). http://english.al-akhbar.com/node/23473. Images of the files themselves are available here: http://www.al-akhbar.com/sites/default/files/pdfs/20150128/doc20150128.pdf
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsInternal security has probably increased in the past few years after the leaks of the Stratfor cables, the Twitter leak in January 2015 and the continued leaks from @mujtahidd which you could also mention:

http://www.bbc.com/news/blogs-trending-31840424
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsYes, information is classified according to its degree of confidentiality.

Financial30. Do national defence and security institutions have beneficial ownership of commercial businesses? If so, how transparent are details of the operations and finances of such businesses?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: The Ministry of Defence owns the Military Industries Corporation/MIC (aka Military Industries Organisation) which operates a few manufacturing enterprises, including the Armored Vehicle and Heavy Equipment Factory (known as AVF); a textile operation that manufactures military uniforms; and a facility that manufactures the Heckler & Koch G36 assault rifle under license from Germany. The annual report of the Saudi Arabian Monetary Agency includes a figure for annual state spending on MIC, which was about $730 million in 2013, a 38% increase from 2012.

There is no public information on the finances or operations of the Military Industries Corporation other than the single figure representing central government expenditures on the corporation, as appears in the annual report of the Saudi Arabian Monetary Agency/SAMA. Because there is no additional information, it is difficult to determine whether MIC functions as a profit-generating enterprise for the armed forces or operates more as a public sector company under the authority of the Ministry of Defence.

There is also no information on the business practices or governance of the MIC, although they have apparently (in the past) employed private sector consulting firms for business purposes. The cached website of “House of National Consulting,” a Saudi financial services and market firm, lists MIC as a client.

RESPONSE TO REVIEWERS: Agree the Saudi situation does not align directly here. As Peer Reviewer 2 has noted, it is the ruling family who control the arms of government as well as the raw material wealth and business interests. There is increased risk that individuals can benefit themselves inappropriately if defence-owned businesses do not uphold the same standards of governance as public commercial companies however, including making details of business operations and finances transparent. Score maintained to reflect lack of transparency and oversight.
Assessor SourcesSaudi Arabian Monetary Agency – 51st Annual Report. 2015. http://www.sama.gov.sa/en-US/EconomicReports/AnnualReport/5600_R_Annual_En_51_Apx.pdf, p121.

Iain Overton. “Death is German: Die Zeit Expose On Heckler & Koch’s Shady Dealings in Mexico.” 7 January 2014. Action on Armed Violence. http://www.anatomyofviolence.co.uk/tag/saudi-arabian-military-industries-corporation-mic/

cached website of “House of National Consulting,” [accessed 26 March 2015]. http://webcache.googleusercontent.com/search?q=cache:W3MoQvlX53cJ:www.hnccom.com/index.xml&hl=en&gl=us&strip=1
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsAs before, I would suggest that the question is phrased wrongly for the Saudi situation (and indeed across the Gulf countries). In all of these states, it is the family who control the arms of government - executive, judicial, legislative and also the raw material wealth and business interests.

You should mention that Saudi Aramco, which operates the worlds largest hydrocarbon network and is the biggest single oil producer in the world, is owned by the Saudi government, and therefore by the House of Saud. In is controlled by the Ministry of Petroleum and Mineral Resources together with the Supreme Council for Petroleum and Minerals.

http://www.resourcegovernance.org/countries/middle-east-and-north-africa/saudi-arabia/overview
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested ScoreN/A
Government Reviewer4700 Comments The government reviewer believes that the question is not applicable to Saudi Arabia's situation.

Financial31. Are military-owned businesses subject to transparent independent scrutiny at a recognised international standard?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: The Saudi Arabian Monetary Agency (Saudi Central Bank) does publish a topline figure for government spending on the Military Industries Corporation, which is under the authority of the Ministry of Defence, though there are no public reports of MIC revenues or other figures, and it does not appear to be a subject of inquiry by the Shura Council or other government bodies (such as the General Auditing Bureau, Nazaha, etc.). Based on the client list of a Saudi-owned financial services firm called HNC Company, both the Military Industries Corporation and the Saudi National Guard have retained the firm’s services, which include internal auditing, although it is unclear whether this was the service for which the company was retained. There is no official reference to audits being required or conducted on MIC or its affiliated operators, including the Armored Vehicle and Heavy Equipment Factory.

Still other companies partially owned by the Saudi Government that participate in defence-related commercial activities could be under the jurisdiction of the Ministry of Defence - but the opacity of the security and defence establishment in Saudi Arabia makes it impossible to know for sure. For instance, the Saudi Government is a major shareholder (along with the other countries of the Arab Organization of Petroleum Exporting Countries) in the Arab Shipbuilding & Repair Yard (ASRY), which does repair work for foreign naval vessels. Though whether ASRY shares are held by the Saudi Ministry of Defence or some other Saudi government body is unclear. ASRY was the subject of a major corruption probe carried out by the Bahraini Government in 2007 in which criminal charges were brought against a number of the shipyard’s executives, although the company also recently initiated an e-Procurement program that was audited by a local affiliate of Ernst & Young, and the company does have an audit division that oversees a range of compliance programs dealing with labor and environmental regulations. (Nonetheless, several multinational auditing firms have been implicated in corruption scandals related to Saudi defence procurement, so retaining the services of an auditing firm is not necessarily an indicator of transparency or good governance).
Assessor SourcesMohammed Fadhel. “Bahrain Seeks to Stamp Out Corruption.” 10 October 2007. Arab News. http://www.arabnews.com/node/304423

“Illustrating the Spirit of Progress.” Cached version of 2009 ASRY annual report, accessed using archive.org. http://web.archive.org/web/20120813082155/http://www.asry.net/media/pdf/2009-Annual-Review.pdf. The report was still available on the company’s website as of January 4, 2013. It is unclear why the reports were removed from the website.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsWhat about ARAMCO? It is monitored by the Ministry of Petroleum and Mineral Resources together with the Supreme Council for Petroleum and Minerals, but of course these are not independent bodies. The problem is that there is no difference between the state as a nation and as a private company effectively controlled by one family.
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested ScoreN/A
Government Reviewer4700 CommentsThere are no companies owned by the military sector.

Financial32. Is there evidence of unauthorised private enterprise by military or other defence ministry employees? If so, what is the government's reaction to such enterprise?
Score2.0
Assessor CommentsResearcher + Peer Reviewer1332: Saudi law technically includes a prohibition against public employees (of any ministry) engaging in commercial activity. A translation of the code of conduct states that defence and security personnel are not allowed:

“To work in trade or industry directly or indirectly, including financial management, or acting as president or a manager or member of the administrative board, or as a consultant or an employee at a company or a commercial establishment, or to make business transactions or any kind of speculation, or to establish ties with any company or agency, or to undertake any action that contradicts their official job or which could influence their performance of their duty in any way. This does not affect the officer’s right to purchase shares in [private] limited companies.”

However, there are a range of circumstances that may weaken this law, including the ability of public employees to accept posts in commercial companies if they are appointed (or seconded) by the government, and if they only engage in part-time work outside official business hours.

There is no public information on penalties for military personnel found to be engaged in unauthorized private enterprise specifically. According to Law of the Internal Security Forces issued by Royal Decree No. 30 dated 4.12.1384 (part 9) disputes (regarding pension entitlements, appointment, promotion, transfer, etc.) and violations by military personnel, are not under the jurisdiction of the Board of Grievances, but are subject to internal military disciplinary boards. These boards are granted the power of independent judicial boards with jurisdiction to try internal security personnel for any offences or crimes they may commit. (This is true for both military personnel and internal security personnel). The accused does have the right to appeal the disciplinary board’s ruling to the Board of Grievances.

There is evidence of unauthorized private enterprise by defence personnel in the form of intermediary or ‘consultant’ services provided to commercial defence firms. The EADS case involving military and civilian personnel in the Saudi National Guard is the most recent case. Additionally, some military officers benefit financially from participation in private commercial projects linked to arms sales. Brigadier General Ibrahim Mishari is a former project officer for the US- Saudi Peace Shield Deal and current head of the Economic Offset Secretariat (EOS), which acts as a liaison between the Saudi government, foreign defence contractors and the Saudi private sector. When Mishari retired from the military in 1999, he founded his own company called Aquad for Commerce, which currently owns large stakes in two offset-generated ventures: the Arabian Shrimp Company, in which Mishari owns 18.3%, and the Saudi Communications Development Company, in which he owns 50%. Mishari also owns a 45% stake in DevCorp, a private venture capital firm that manages a $35 million investment fund financed by offset obligations incurred by the defence firms Raytheon and Thales. Mishari’s shares in these companies may not be technically illegal, and they may have been “authorized” by the government, but it is difficult not to see a conflict of interest.

Many individual members of the Royal Family, including those at the Ministries of Defence and Interior, have large financial stakes in a range of commercial firms involved in defence activities like aircraft maintenance and the provision of basic components (such as batteries or pipes) used in weapons systems. There are no requirements to disclose the assets of Royal Family members - who frequently possess significant financial stakes in semi-public and commercial operations over which they may have significant influence through their appointments within the government. Nazaha, the anti-corruption body, has drafted regulations that would require ministers to disclose their assets, however at the time of research this legislation was awaiting approval by the King.

Available information comes primarily from fee-based business intelligence publications. One large regional business database (Zawya) shows dozens of Saudi princes, including current and former MOD and MOI officials, with financial stakes in large conglomerates, petrochemical companies, mining operations, service sector operations, etc. Among these is an aviation services company whose shareholders include BP and Kamal Adham, the former director of the General Intelligence Directorate of the Ministry of Interior. Other entities such as Saudia, the national air carrier that until recently was under the formal jurisdiction of the Ministry of Defence and Aviation and whose chairman was the late defence Minister Prince Sultan, also have shares in operations that are semi-commercial. Saudia has a 10% share in the Aircraft Accessories & Components Company, whose other shareholders include the Boeing Industrial Technology Group and BAE, as well as a 25% share in Alsalam Aircraft Company, whose other shareholders include the Boeing Industrial Technology Group, and which does significant contracting work for BAE.

Score selected to reflect the criteria that there is some evidence of unauthorised private enterprise. The government outlaws such unauthorised private enterprise, but there is evidence that the sanctions for breaking these laws are weak or often not enforced.
Assessor SourcesTransparency International. 2011. “Codes of Conduct in Defence Ministries and Armed Forces: What makes a good code of conduct?” http://www.ti-defence.org/publications/20-category-publications/publications-dsp/117-dsp-pubs-codes-conduct-defence-ministries-armed-forces.html

Robert Thoms and Sultan Al-Hejailan. &quoute;Getting the Deal Through - Anti-Corruption Regulation 2010: Saudi Arabia.&quoute; Law Business Research Ltd.

Zawya profiles. www.zawya.com. (a business intelligence database covering firms in the Middle East and North Africa).

Sharaf Sabri. 2001. The House of Saud in Commerce: A Study of Royal Entrepreneurship in Saudi Arabia. New Delhi: I.S. Publications Pvt. Ltd.

Zawya profiles. www.zawya.com. (a business intelligence database covering firms in the Middle East and North Africa).

Fahd Al-Theyabi. 14 November 2013. “Nazaha has reined in corruption.” Arab News. http://www.arabnews.com/news/477126.

Angela Monaghan. 14 August 2012. “EADS faces questions over £2 bn Saudi deal: Q&A.” The Telegraph (UK). http://www.telegraph.co.uk/finance/newsbysector/industry/defence/9476246/EADS-faces-questions-over-2bn-Saudi-deal-QandA.html#disqus_thread

Dr. Ayyoob bin Mansoor A-Jarboo’. [undated] “Authorities of the Board of Grievances as an Administrative Judicial Panel Comparative Analytical Study between the Board of Grievances Laws for 1402 and 1428 AH.” http://adlm.moj.gov.sa/ENG/attach/226.pdf, p198-199.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsWhile I technically agree with the score, it perhaps paints the legal framework in Saudi in a more positive light than it deserves.

Is there an issue that many of those who take commission payments on arms deals are not in fact part of the military structure but are just high ranking members of the Saudi aristocracy who act as agents, and are therefore not subject to any regulations?
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested ScoreN/A
Government Reviewer4700 Comments

Personnel34. Do the Defence Ministry, Defence Minister, Chiefs of Defence, and Single Service Chiefs publicly commit - through, for example, speeches, media interviews, or political mandates - to anti-corruption and integrity measures?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: No evidence was found of statements made by Defence Ministry personnel in relation to corruption, with the exception of Prince Bandar’s statement proclaiming his innocence in relation to the Al-Yamamah bribery scandal. It is very likely that officials from the MOD purposefully avoid any reference to corruption, as the kingdom’s largest bribery scandals have emanated from the MOD (primarily the £1 billion+ in bribes emanating from the decade-long Al-Yamamah arms deal with BAE as detailed in the Guardian news article above).

Former Crown Prince and Defence Minister Salman (now King) did meet with officials from anti-corruption bodies on at least one occasion, but these were officials from the Maldives, no details on the meeting were provided, and the meeting was not said to pertain to Salman’s position as Minister of Defence. Representatives of the defence establishment have also distanced themselves from even the most innocuous anti-corruption activities. This is evident from cases such as a conference on ‘administrative’ corruption convened in 2013 by the Institute for Public Administration, which included pre-prepared comments/papers from the Ministries of Interior, Justice, Finance, Civil Service, and Culture and Information (as well as representatives from numerous NGOs and official anti-corruption agencies) – but made no mention of the MOD or defence at all.
Assessor Sources“Prince Salman receives Anti-Corruption Commission chairman in Maldives.” 4 February 2014. Saudi Gazette. http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20140205194751

“IPA Holds a Symposium on Administrative Corruption in Saudi Arabia and Discusses Anti-Corruption Efforts.” 3 December 2013. Website of the Institute for Public Administration. http://www.ipa.edu.sa/English/Media/News/Pages/news8.aspx

David Leigh and Rob Evans. 5 February 2010. &quoute;BAE and the Saudis: How secret cash payments oiled £43bn arms deal,&quoute; The Guardian. http://www.theguardian.com/world/2010/feb/05/bae-saudi-yamamah-deal-background
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsI could also not find any obvious anti-corruption statements, though it's possible that they are made in Arabic for domestic consumption and unavailable online. This is in contrast to the situation in Bahrain, where defence officials are more PR aware and do periodically make statements and superficial initiatives on anti-corruption.
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score4
Government Reviewer4700 CommentsYes, there is a public commitment to take measures against corruption and to accredit the Career Code of Conduct through the establishment of specialized department at the Ministry.

Personnel35. Are there effective measures in place for personnel found to have taken part in forms of bribery and corruption, and is there public evidence that these measures are being carried out?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: Saudi Arabia does have a code of conduct governing both civilian government employees and members of the military. The code contains provisions concerning bribery of military members, including prohibiting serving members from taking part in equipment procurement activities or serving as a consultant or an employee for a commercial company [translation of lengthy code is included in Q47].

However, in practice there are very few recorded cases of Saudi defence or security personnel being involved in corruption investigations, and only one where personnel were prosecuted on bribery charges. The only cases I could find were a 1978 case involving Hyundai where the military general disclosed the bribe and so was not penalized [details below] and the 2011 SANG-EADS case [also below] which was only reported in one French publication.

In 1978, a Saudi Army General reported the intent of two Hyundai executives to bribe him in exchange for securing Hyundai’s bid to work on construction of a Saudi military base. The executives were intercepted with two suitcases containing $1 million in bribe money, which the Saudi military general was allowed to keep because he reported the bribe to one of his superiors before the exchange was made. (The two Hyundai executives were sentenced to two years in jail). (Kirk, 1994)

The single reported case of actual Saudi officials from defence or security being punished for bribery-related offences is that in 2011, six officials from the Ministry of Interior (including a high-ranking official in charge of much of the ministry’s equipment procurement, including that related to infrastructure security for Aramco and other Saudi parastatals) were arrested as the result of a behind-the-scenes corruption investigation launched at the behest of the late King Abdullah. However, after a few initial reports there was no further mention of these arrests, including whether they faced trial and/or any punishment. Furthermore, these officials were from the Ministry of Interior and conducted procurement for the Saudi Arabian National Guard/SANG – they were not part of the Ministry of Defence. The latter ministry, which was ruled by the powerful Prince Sultan from 1963-2011, would have been beyond the jurisdiction even of the King except in the most exceptional circumstances.

There are plenty of reports of high-ranking ministry officials having been involved in bribery – see the Barclays case; the BAE-Al Yamamah case; and Lockheed Martin case - though none of these appear to have resulted in prosecutions.

Article 21 of the Anti-Bribery Law (Royal Decree M/36, 1992) requires that the Ministry of Interior announce and publish verdicts resulting from corruption and bribery prosecutions, however I was unable to find any verdicts related to military or security personnel, and reports in the non-Saudi press are never based on official government statements issued by the Ministry of Interior or other government branches.
Assessor Sources“Corruption costs state SR55 billion a year.” 2 January 2014. Saudi Gazette. http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20140103191362

Elizabeth Dickinson. 14 September 2012. “Former Saudi mayor jailed over bribes.” The National (UAE). http://www.thenational.ae/news/world/former-saudi-mayor-jailed-over-bribes#ixzz38luOWOwp

Reuters. 30 May 2012. “Men jailed for bribes after deadly Saudi floods.” http://www.reuters.com/article/2012/05/30/us-saudi-corruption-jeddah-idUSBRE84T0YK20120530

Cross Border Information. [author unknown]. “Profile: Saudi Arabia.” [undated] original site: http://www.crossborderinformation.com/map/middle-east/saudi-arabia#sthash.h3ZPwIDa.dpuf; cached site, accessed 23 March 2015: http://webcache.googleusercontent.com/search?q=cache:SRzciqL1et4J:www.crossborderinformation.com/map/middle-east/saudi-arabia+&cd=1&hl=en&ct=clnk&gl=us#sthash.u28k7MeZ.dpuf

[author unknown]. 2 January 2014. “Corruption costs state SR55 billion a year.” Saudi Gazette. http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20140103191362

Transparency International. 2011. “Codes of Conduct in Defence Ministries and Armed Forces: What makes a good code of conduct?” http://www.ti-defence.org/publications/20-category-publications/publications-dsp/117-dsp-pubs-codes-conduct-defence-ministries-armed-forces.html

Angelo Young. 13 May 2013. “Did Barclays Pay The Son Of Saudi King Abdullah Bribes For Market Access?” International Business Times. http://www.ibtimes.com/did-barclays-pay-son-saudi-king-abdullah-bribes-market-access-1254211

Donald Kirk. 1994. “Korean Dynasty: Hyundai and Chung Ju Yung” New York: M.E. Sharpe Inc, p87-88.

“Abdullah’s clean-up operation.” 19 May 2011. Intelligence Online.
Peer Reviewer3934 OpinionDisagree
Peer Reviewer3934 Suggested Score3
Peer Reviewer3934 CommentsThere are three separate cases in the past six years where corrupt Saudi Arabian officials in different facets of the government have been tried and convicted of corruption. The late Saudi Arabian King Abdullah initiated several crackdowns against corruption in the country including the formation of the Anti-Corruption agency NAZAHA. However, consistency in the implementation and prosecution of the anti-corruption laws remain in question.
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsAgain, although the score you've given is technically accurate, I think it gives too positive an impression of the strength of anti-corruption bodies and laws. As in other Gulf states, the existence of bodies dealing with corruption doesn't mean anybody is ever actually prosecuted. UNODC lists the following bodies which have some responsibility for anti-corruption investigation.

www.track.unodc.org/LegalLibrary/LegalResources/Saudi%20Arabia/Authorities/Saudi%20Arabia-Anti%20Corruption%20related%20Authorities.pdf

This is another useful link:

http://www.globalsecurity.org/military/world/gulf/sa-corruption.htm
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsYes, they will be subject to investigation, and if they were involved, appropriate sanctions will be placed upon them by the Military Court, Board of Grievances and other specialized courts.

Personnel36. Is whistleblowing encouraged by the government, and are whistle-blowers in military and defence ministries afforded adequate protection from reprisal for reporting evidence of corruption, in both law and practice?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: The protections offered to whistle-blowers through the country’s main anti-corruption body – Nazaha – are very weak, and there are no regulations or protections written specifically for whistleblowers within the MOD. Although Nazaha does operate a ‘hotline’ that citizens can use to report violations, complainants must issue a signed statement along with evidence of their allegation. Because Nazaha does not report on the content of the complaints it receives, there is no way of knowing if the hotline has ever been used to report on corruption within the Ministry of Defence. There are certainly no [publicly known] instances of an employee from the Ministry of Defence reporting a violation to Nazaha or any other government body.

The primary method of appeal against retaliation for whistleblowers is to submit a complaint to the Prosecution and Investigation Commission and have judgments issued by the Board of Grievances. But this is an after-the-fact remedy, and so is unlikely to encourage reporting. Some large parastatal firms in Saudi Arabia (such as the Saudi Basic Industries Corporation, which is 70% owned by the government) have relatively robust statutes pertaining to whistleblower protection, but these are the exception, and do not appear to extend to those working within government ministries.

The US State Department 2013 Human Rights Report raises concerns that although complainants are required to self-identify, Nazaha requires that the individual who files the complaint not make his or her accusation public or cause it to be reported in the media, claiming this can hurt the reputation of the individual accused. This gives the commission a great deal of discretion in terms of pursuing complaints, and when individuals do make such accusations public, the repercussions can be severe. In 2013 a man from Jazan province who accused a deputy governor of corruption was sentenced to a three-year prison term and a four-year travel ban for “distorting the reputation” of the Deputy Governor, who the man alleged failed to pay promised compensation to citizens dislocated by fighting along the border with Yemen.

Despite the lack of protections, Nazaha’s head reported that his agency receives about 100 calls per day. The Law for Combatting Bribery (which established Nazaha) also provides for monetary compensation for those who report violations. Corruption allegations can also be reported to the Board of Grievances within the Ministry of Justice, and abuse by security forces can be reported at police stations or to the government’s Human Rights Commission. The researcher considers it unlikely that citizens would report police abuse to the police themselves. The researcher has also identified risk associated from the practice of distributing compensation for victims of disasters, accidents, violence, and even government malfeasance to petitioners at regular meetings held by local officials and members of the Royal Family.

Finally, evidence suggests that the public has little trust in Nazaha's capacity. Anonymous comments voiced in online platforms about the efficacy of Nazaha indicate that citizens see it as a potential tool for rival businessmen to target one-another, or to highlight just enough cases of small-scale bribery to relieve some pressure on the government. In a comment board for a story on road construction in Saudi Arabia that appeared in the Iraq-based newspaper Al-Shorfa, a reader states “they [Saudi Arabia] have established an anti-corruption agency called Nazaha “integrity” in order to prosecute the small spoilers or their potential competitors.” A non-scientific poll conducted by Al-Mekkah newspaper in Saudi Arabia in 2014 reported that 86 percent of citizens did not consider Nazaha as an effective instrument in fighting corruption.
Assessor Sources2 January 2014. “Corruption costs state SR55 billion a year.” Saudi Gazette. http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20140103191362

“2013 Human Rights Reports: Saudi Arabia” 27 February 2014. United States Department of State.
http://www.state.gov/j/drl/rls/hrrpt/2013/nea/220374.htm

[no author]. 13 February 2014. “Saudi Arabia begins al-Qassim road projects.” Al-Shorfa (Iraq).
http://al-shorfa.com/en_GB/articles/meii/newsbriefs/2014/02/13/newsbrief-14

Mohammed Al-Aufi. 15 February 2015. “Nazaha’s Challenge.” Makkah Newspaper. [as reported by Arab News in their weekly roundup of columns from Saudi newspapers]. http://www.arabnews.com/columns/news/704521

Nazaha. “Performance Summary Report Of The National Anti-Corruption Commission 2011-2014,” p7.

Fahd Al-Theyabi. “Nazaha has reined in corruption.” Arab News. 14 November 2013. http://www.arabnews.com/news/477126

News page of the Anti-Corruption Commission. “NAZAHA Declares The Daily Received Reports Statistics Through Its Contact Channels with the Whistleblowers.” 9 May 2012. http://www.nazaha.gov.sa/en/Media/News/Pages/News108.aspx

Human Rights Watch. 10 May 2015. &quoute;Detained, Beaten, Deported: Saudi Abuses against Migrants during Mass Expulsions.&quoute; https://www.hrw.org/report/2015/05/10/detained-beaten-deported/saudi-abuses-against-migrants-during-mass-expulsions

Mazen Faris Rasheed. 1994. &quoute;Assessment of Constitutional and Statutory Protection of Whistleblowers in the Federal American Public Sector.&quoute; (see section on 'implications for Saudi Arabia', p20-22). faculty.ksu.edu.sa/mazen/Documents /PUBLICATIONS/Whistle.pdf
Peer Reviewer3934 OpinionDisagree
Peer Reviewer3934 Suggested Score2
Peer Reviewer3934 CommentsThere is legislation and mechanisms in place for the reporting of corruption. The Saudi Anti-Corruption agency NAZAHA is the central agency responsible for this process, and it has a hotline where people can report corruption. However, the requirement of NAZAHA that those issuing complaints must sign a statement does not encourage whistle-blowing, nor do some of the other practices in place surrounding defamation.
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsThe BBC's interview with @mujtahidd is important in this context, especially this revealing question:

BBC: Are you worried about your identity being exposed?
@mujtahidd: I'm not afraid. Not because I've taken precautions but because I'm almost certain that the government knows who I am. But they don't want to reveal my identity in fear of a scandal.

BBC: Do you have no fear because you are from the royal family as some suggest?
@mujtahidd: No comment.

http://www.bbc.com/news/blogs-trending-31840424
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsYes, there are several ways of reporting corruption to the National Anti-corruption Commission (by phone, fax or Internet). The Commission will secure the legal coverage and the complete confidentiality of the whistleblower's information.

Personnel37. Is special attention paid to the selection, time in post, and oversight of personnel in sensitive positions, including officials and personnel in defence procurement, contracting, financial management, and commercial management?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: The criteria for assignments, including promotion and demotion are not publicly available, and it is unclear whether personnel are rotated regularly, how they are vetted, or if they are subject to independent oversight. Many significant defence procurement decisions are taken unilaterally by influential individuals whose positions are based purely on lineage and have nothing to do with merit or background. Such was the case with then-Deputy Defence Minister Prince Khalid bin Sultan, whose conclusion of independent arms deals with the Chinese government for the Silkworm Missile System (made without consulting former Defence Minister Prince Salman or the late King Abdullah), combined with the poor performance of troops under his command in skirmishes with Houthi rebels, are believed to have led to his dismissal after less than two years in office (Al-Akhbar).

The Saudi Royal Family, like the other Gulf monarchies, has used various tactics - including appointments in the defence and security establishment - to balance the influence of various factions within the Royal Family and to keep the military from becoming a potent actor in domestic politics. However, a few factors have led to some improvement in personnel decision-making, including sustained interaction with international military forces, the increasing prestige of military service for members of the Royal Family and non-Royal elite families, better quality military colleges within the Kingdom and the increasing number of military officials educated in top U.S. and European defence universities.

However, according to recent reports the persistence of corruption scandals within the MOD and MOI led the late King Abdullah to employ foreign consulting firms to oversee the bidding process for defence contracts, suggesting that appointment and oversight of personnel in defence procurement, contracting, financial management, and commercial management is insufficient. Apart from this, there is no evidence of recognition that certain positions may be at more risk of corruption.
Assessor Sources“Mohammed bin Salman Succeeds in Removing Khalid bin Sultan.” 22 April 2013. Al-Akhabar (Lebanon). http://www.al-akhbar.com/node/181717

“Abdullah’s clean-up operation.” 19 May 2011. Intelligence Online.

“Mohammed bin Salman Succeeds in Removing Khalid bin Sultan.” 22 April 2013. Al-Akhbar (Lebanon). http://www.al-akhbar.com/node/181717

Anothony Cordesman. 2009. “Saudi Arabia: National Security in a Troubled Region.” Washington DC: Center for Strategic & International Studies.
2015-03-27
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsI suggest updating this to reflect the death of Abdullah and the changes made by King Salman, firstly in January when he became king:

http://www.theguardian.com/world/2015/jan/23/king-salman-appointments-signal-change-saudi-arabia

And then more recently with the appointment of his own son (already Defence Minister and Royal Court minister) as Deputy Crown Prince, and Mohammed bin Nayef as Crown Prince ahead of his half brother Muqrin (who is said to be ineffective):

http://www.reuters.com/article/2015/04/29/us-saudi-politics-idUSKBN0NK05W20150429

This is both about family precedence and locking in a stable succession between the sons of Ibn Saud and his grandsons.
Government Reviewer4700 OpinionAgree

Personnel38. Is the number of civilian and military personnel accurately known and publicly available?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: No recent official figures were found during research. Information on manpower within many of the kingdom’s defence and security institutions is classified, and therefore not available to the public.

A number of experts have produced similar estimates generally regarded as accurate. Active duty troops are believed to number approximately 224,500, with an additional 100,000+ in the Saudi National Guard (SANG). The number of secret police and intelligence personnel is also classified, and not publicly available. Figures on the number of employees within the Ministry of Interior vary, but the estimated number of police officers, security agents and informants is 600,000; when one includes civilian bureaucrats within the Ministry of Interior the figure rises to 750,000. There are believed to be about 20,000 religious police in the kingdom. This force is widely considered to be overstaffed, and academics have also noted a strong opinion that the mutawwa’in provides a government jobs program for the vast number of unemployed religious conservatives [Cordesman & Al-Rohan, 2007, p242]. As a previous peer reviewer noted for the 2013 Index, the creation of 60,000 new jobs in the security forces was announced by the King during the Arab Spring uprisings, which may also give some clue as to the size of the internal security sector.
Assessor SourcesAnthony H. Cordesman, Bryan Gold. January 2014. “The Gulf Military Balance: The Conventional and Asymmetric Dimensions: Volume I.” Washington DC: Center for Strategic & International Studies, p39.

Anthony H. Cordesman and Khalid R. Al-Rodhan. 2007. Gulf Military Forces in an Era of Asymmetric Wars. Washington DC: Center for Strategic & International Studies, pp77,233,242.

Steffen Hertog. 2011. “Rentier Militaries in the Gulf States: The Price of Coup-Proofing.” International Journal of Middle East Studies, 43(3): p400.

Yezid Sayigh. 2011. “Agencies of Coercion: Armies and Internal Security Forces.” International Journal of Middle East Studies, 43(3): p403.

Jason Benham and Amena Bakr. 19 March 2011. “Handouts dash Saudi king's &quoute;reformer&quoute; reputation.” Reuters.

Transparency International, 2013 Government Defence Anti-Corruption Index, 2013
http://government.defenceindex.org/sites/default/files/documents/GI-assessment-Saudi-Arabia.pdf
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsI think it might be worth putting a link to a website that lists figures as well as hard copy publications, so that people reading the report can see a reference without having to buy a book. Perhaps this one:

http://www.globalfirepower.com/country-military-strength-detail.asp?country_id=saudi-arabia
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score1
Government Reviewer4700 CommentsYes, accurately known.

Personnel39. Are pay rates and allowances for civilian and military personnel openly published?
Score2.0
Assessor CommentsResearcher + Peer Reviewer1332: Pay rates and allowances are recorded in the Saudi Government’s National Center for Documents & Archive (NCDA), and are frequently referenced in the state-owned media in the context of arbitrary pay hikes and allowance increases, although such figures are not exhaustive. However, it remains unclear what specific salary information (or information for what range of employees) is available, because the records are not electronic, only housed on-site in the NCDA. The website links go to guidelines for personnel issues related to promotion, retirement, etc. but do not include salary data.

The website of the NCDA is currently under construction, but previous images of the civil service regulations page (which include links to information on promotion rules, retirement guidelines, Saudization regulations and other personnel and workforce-related issues) is available through web archive services.

Information on promotion, training and salaries of individual personnel is housed in the Ministry of Interior’s National Data Center (also called the National Information Center), which maintains some private sector employment records as well.
Assessor SourcesNational Center for Documents & Archive. http://www.ncda.gov.sa/Detail.asp?InSectionID=1743&InTemplateKey=Homepage
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsSince you mention pay rises being reported, include some references, like:

http://www.arabianbusiness.com/saudi-arabia-raise-wages-for-most-military-345848.html

http://www.theguardian.com/world/2015/apr/29/saudi-arabia-mohammed-bin-nayef-crown-prince

&quoute;Also on Wednesday, the official SPA news agency announced that the king was decreeing a one-month salary bonus for all military and security personnel in “appreciation of their efforts” – and perhaps to secure their loyalty.&quoute;

http://www.independent.co.uk/news/world/middle-east/saudi-arabias-king-salman-announces-major-cabinet-reshuffle-and-new-heirs-to-throne-10212407.html

Government Reviewer4700 OpinionAgree

Personnel40. Do personnel receive the correct pay on time, and is the system of payment well-established, routine, and published?
Score3.0
Assessor CommentsResearcher + Peer Reviewer1332: In technical terms, the system of personnel payment is routine. Many Saudi Government ministries employ multinational government services firms to design systems for payroll processing and other administrative functions.

The Ministry of Interior contracted with TCS (Tata Consultancy Services), which utilizes the well-known Oracle E-Business Suite of applications to administer payroll and other personnel management tasks.
The system of payments is not published however, other than through the promotional literature produced by corporations that administer the payroll program. It is unclear what (if any) similar service is utilized by the MOD. However, given the importance of the police and military to the security of the regime, it is extremely unlikely that they would be willing to risk their loyalty through improperly administering the payroll system.

On the other hand, there are effectively significant pay disparities between officers of similar rank, as there is a substantial minority of the officer corps comprised of princes that receive large monthly stipends in addition to their regular salary. In this way, there may be said to be a degree of inconsistency and a lack of transparency in the pay system. No media reports of late payments have been found, making it likely that payments are generally received on time.
Assessor SourcesBusiness Prospectus for Tata Consultancy Services. 2013. http://www.tcs.com/SiteCollectionDocuments/Case%20Studies/Saudi-Arabia-MoE-IT-Enterprise-0713-1.pdf
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsSaudi Arabia has a particular interest in keeping their salary payments regularised, and in fact there are frequent bonuses on top of normal pay, such as when new King Salman took over in January:

http://www.arabnews.com/news/696661

http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=2010090182530

http://www.reuters.com/article/2015/04/29/saudi-military-bonuses-idUSL5N0XQ1S020150429
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsYes, the payment of the Ministry employee salaries are done in a specific day of each month.

Personnel41. Is there an established, independent, transparent, and objective appointment system for the selection of military personnel at middle and top management level?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: Many of the highest positions in the officer corps and civilian defence administration are held by princes, a condition that has intensified as the sheer size of the royal family (estimated to include about 15,000 princes and princesses) has increased dramatically. Clearly these appointments are neither independent nor objective, though it is true that members of the Royal Family are likely to have access to better education (including military education). In the lead up to King Abdullah’s death in early 2015, high-level positions in defence and security were increasingly assigned to his closest allies within the Royal Family. Subsequent appointments follow this same pattern. Now that Crown Prince Salman has become King, he appointed his young son (Prince Mohammed) as defence minister. Prince Mohammad, believed to be in his late-20s/early 30s, is inexperienced in military and government affairs; has never held a significant official position; and has never studied outside of the kingdom.

Although many scholars note that tribal and family connections remain a very real factor in recruitment and promotion throughout the ranks, mid-level positions in the armed services are less dominated by princes and senior command positions require meeting a uniform set of training and educational standards (Cordesman). The two branches of the military with the largest princely presence are the Royal Saudi Air Force and the Royal Saudi Land Forces. Although the majority of senior generals are from outside the Royal Family, these positions are still largely held by individuals from prominent families with a history of loyalty to the royal family. The Saudi Royal Family, like the other Gulf monarchies, has used personnel decisions to balance the influence of various factions within the Royal Family as well as between the palace and influential non-Royal elite families.

Beyond meeting basic qualifications for appointments, personnel decisions are frequently based on patronage - and many promotions are likewise awarded according to personal loyalty rather than merit. Under Prince Sultan’s tenure, he and his closest advisors were said to have had near-absolute discretion over military appointments, while the senior princes in charge of the various defence and security establishments have authority over appointments within their particular spheres of influence. Personal relationships with these princes are the real source of authority for individual officials, rather than the formal duties assigned to their position.
Assessor SourcesStephanie Cronin. 2013. “Tribes, Coups and Princes: Building a Modern Army in Saudi Arabia.” Middle Eastern Studies. 49(1): p3.

Awad Mustafa. 18 May 2014. “Saudi defence Leaders Replaced By Moderates.” defenceNews. http://www.defencenews.com/article/20140518/DEFREG04/305180007/Saudi-defence-Leaders-Replaced-By-Moderates

[author unknown]. “Concerned about Saudi military ties, U.S. focuses on inexperienced prince with huge defence budget.” 18 February 2015. World Tribune.

Anthony Cordesman. 30 October 2002. &quoute;Saudi Arabia Enters the 21st Century: Part III. Politics and Internal Stability. Washington DC: Center for Strategic & International Studies.

Anthony Cordesman and Nawaf Obaid, “The Saudi Security Apparatus: Military and Security Services – Challenges and Developments,” p9. Paper presented at the Workshop on &quoute;Challenges of Security Sector Governance in the Middle East&quoute;, Geneva 12-13 July 2004, organized by the DCAF Working Group on Security Sector Governance and Reform in the Middle East and North Africa.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsConsider this quote from Cordesman:

&quoute;Promotion and retention in the Saudi high command tends to reward longevity, conservatism and personal loyalty rather than performance. Many senior commanders are from families with long ties to the Saudi royal family, and many mid-level officers come from families and tribes that are traditionally loyal to the al-Saud family

And consider including this online link where you can read this section of his book:

https://books.google.com.tr/books?id=CGEJvqjn-1MC&pg=PA47&lpg=PA47&dq=Saudi+Arabia+mid-level+military+positions&source=bl&ots=1A8pRc_G4v&sig=2P6zSsYeV8jZKczgVjk2sS7SQzM&hl=en&sa=X&ei=5PpBVdnFK4OBU77XgdAK&ved=0CCwQ6AEwAg#v=onepage&q=Saudi%20Arabia%20mid-level%20military%20positions&f=false
Government Reviewer4700 OpinionAgree

Personnel42. Are personnel promoted through an objective, meritocratic process? Such a process would include promotion boards outside of the command chain, strong formal appraisal processes, and independent oversight.
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: There is no evidence of independent oversight of defence and security personnel promotion. Although there are substantial written regulations pertaining to promotion (including the calculation of seniority, etc.) from the most basic ranks, Laipson et al have pointed out these are not publicly available and furthermore, there are no published criteria for higher-level promotion decisions.

Evidence shows that promotions for high-ranking military and civilian defence and security officials are decided by the Military Service Council, composed of the King, the Ministers of Interior, Defence, and Finance, as well as the General Intelligence Chief and the Secretary General of the Council for Political and Security Affairs (all senior princes and royal appointees), in addition to three non-Royal Family members, who are also appointed by royal decree.

Under Prince Sultan’s tenure, he and his closest advisors were said to have near-absolute discretion over important military appointments, while senior princes in charge of the various defence and security establishments have authority over appointments within their particular spheres of influence (Cordesman). Analysts have cited slower-than-normal promotion and turnover rates as a persistent problem, possibly owing to the persistence of nepotism and corruption in the decision-making process.

RESPONSE TO PEER REVIEWER 1: Agree with comments, although it is important to note that no recent verifiable evidence could be found in the public domain and it appears that the system continues to allow appointments to be bestowed for reasons other than merit. Discussion updated. Score changed from 0 to 1.
Assessor Sources17 January 2012. &quoute;Cabinet okays restructuring of Military Service Council.” Saudi Gazette. http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentID=20120117115726

Anthony Cordesman. 30 October 2002. &quoute;Saudi Arabia Enters the 21st Century: Part III. Politics and Internal Stability. Washington DC: Center for Strategic & International Studies

&quoute;Security Sector Reform in the Gulf.&quoute; Ellen Laipson, Emile El-Hokayem, Amy Buenning Sturm, and Wael Alzayat. May 2006. Henry L. Stimson Center and the U.S. Army's Dwight D. Eisenhower National Security Series, p15. http://mercury.ethz.ch/serviceengine/Files/ISN/26449/ipublicationdocument_singledocument/b8d5997c-afb9-4965-807c-add08caffa91/en/StimsonSSRGulf.pdf
Peer Reviewer3934 OpinionDisagree
Peer Reviewer3934 Suggested Score1
Peer Reviewer3934 CommentsThere are written regulations that pertain to promotion in the Saudi Arabian military indicating, in theory, formal processes for promotion through merit.
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsYou can also put the online link to Cordesman's book here:

https://books.google.com.tr/books?id=CGEJvqjn-1MC&pg=PA47&lpg=PA47&dq=Saudi+Arabia+military+positions+promotion&source=bl&ots=1A8pRc_K9r&sig=dMZbaOGGISSwYpqoTHvbstvbF0c&hl=en&sa=X&ei=ovxBVaOtOYbSUd6MgKAG&ved=0CC0Q6AEwAw#v=onepage&q=Saudi%20Arabia%20military%20positions%20promotion&f=false

Or this one which could be better:

http://csis.org/files/media/csis/pubs/saudimilbook_02.pdf
Government Reviewer4700 OpinionAgree

Personnel43. Where compulsory conscription occurs, is there a policy of not accepting bribes for avoiding conscription? Are there appropriate procedures in place to deal with such bribery, and are they applied?
ScoreN/A
Assessor CommentsResearcher + Peer Reviewer1332: There is no conscription. Conscription was periodically proposed during the second half of the 20th Century to alleviate manpower problems, but the military’s loyalty to the ruling regime is based in large part on the tribal and religious makeup of the armed forces. Conscription would mean the inclusion of Shiites, reactionary neo-Wahhabi elements, and individuals from geographic areas that have long standing grievances against the Al-Saud monarchy, and is therefore unlikely to be implemented.
Assessor SourcesStephanie Cronin. 2013. “Tribes, Coups and Princes: Building a Modern Army in Saudi Arabia.” Middle Eastern Studies. 49(1): p5.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsThe CIA world factbook also notes the lack of conscription:

https://www.cia.gov/Library/publications/the-world-factbook/geos/sa.html
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsThere is no compulsory conscription.

Personnel44. With regard to compulsory or voluntary conscription, is there a policy of refusing bribes to gain preferred postings in the recruitment process? Are there appropriate procedures in place to deal with such bribery, and are they applied?
ScoreN/A
Assessor CommentsResearcher + Peer Reviewer1332: As there is no conscription in Saudi Arabia, either compulsory or voluntary, this question scores an N/A.

In terms of postings for enlisted recruits in general however, it must be noted that they are not necessarily based on objective criteria. Postings in different branches of the military and security services are often based on tribal identity, such as an elite group within the Saudi National Guard (the Royal Guard Regiment) that is drawn primarily from a small number of tribes, notably the Otaiba and Qahtani - both from the Nejd region.

Those families that were forcibly integrated into the new kingdom under Ibn Saud are generally not allowed to enlist in the Saudi National Guard. Identity-based assignments guarantee loyalty and prevent the rise of a cohesive military identity that might present a viable threat to the royal family. Preferred postings are likely awarded to recruits from prominent families. Service in certain branches - especially the Saudi National Guard - generates a sort of reciprocity from the Royal Family, and individuals that have served in these units are more likely to enjoy access to special privileges and royal favours subsequent to their service.
Assessor SourcesStephanie Cronin. 2013. “Tribes, Coups and Princes: Building a Modern Army in Saudi Arabia.” Middle Eastern Studies. 49(1).

Anthony Cordesman. 30 October 2002. &quoute;Saudi Arabia Enters the 21st Century: Part III. Politics and Internal Stability. Washington DC: Center for Strategic & International Studies.

Nadim Hasbani. March 2006. &quoute;The Geopolitics of Weapons Procurement in the Gulf States defence & Security Analysis. 22(1): 73-88.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsThere is no voluntary or mandatory recruitment.

Personnel45. Is there evidence of 'ghost soldiers', or non-existent soldiers on the payroll?
Score3.0
Assessor CommentsResearcher + Peer Reviewer1332: There is no evidence of ‘ghost soldiers’ or other non-existent soldiers on the payroll. The government has indicated that the existence of ghost soldiers is not possible as the Ministry of defence assigns all new employees and soldiers a number during the appointment or recruitment process that is linked to their national ID number, and that individual salaries are deposited directly by the Ministry of Finance. It is not clear what specific payroll system is in place, however many Saudi ministries employ multinational government services firms to design systems for payroll processing and other administrative functions. The Ministry of Interior contracted with TCS (Tata Consultancy Services), which utilizes the well-known Oracle E-Business Suite of applications to administer payroll and other personnel management tasks.

Although the size of the Saudi military is large by Gulf standards, it is still quite small, with only around 225,000 active duty troops and an additional 100,000+ in the Saudi National Guard (SANG). It would be difficult for large numbers of ‘ghost soldiers’ to go unnoticed in such a small force, especially given the rivalries and mutual surveillance that operates between the different defence and security bodies. The Saudi Royal Family has traditionally kept a tight reign on the military – creating corporate and technological divides (such as incompatible communications networks) between the various branches in order to prevent them from becoming independent centres of political power and breeding grounds for anti-regime sentiment. Additionally, the individual sectors of the defence and security establishment are considered the fiefdoms of senior members of the Royal Family (the Saudi National Guard is under the direct control of the King, whereas the next most senior prices are customarily in charge of the various military service branches, internal security services, intelligence services, etc). It is likely that each senior member keeps close tabs on the size of the services under the control of family rivals, which would also make the phenomenon of ghost soldiers difficult to hide.

RESPONSE TO GOVERNMENT REVIEWER: Comments accepted. Discussion updated however as the number of civilian and military personnel is not accurately known a score of 4 is not possible.
Assessor SourcesAnthony H. Cordesman, Bryan Gold. January 2014. “The Gulf Military Balance: The Conventional and Asymmetric Dimensions: Volume I.” Washington DC: Center for Strategic & International Studies, p39.

James T. Quinlivan. Autumn 1999. “Coup-Proofing: Its Practice and Consequences in the Middle East.” International Security 24(2): 131-165.

Steffen Hertog. 2011. “Rentier Militaries in the Gulf States: The Price of Coup-Proofing.” International Journal of Middle East Studies, 43(3): p400.

Company Prospectus for Tata Consultancy Services. 2013. http://www.tcs.com/SiteCollectionDocuments/Case%20Studies/Saudi-Arabia-MoE-IT-Enterprise-0713-1.pdf
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsYou could compare Saudi Arabia to the situation in Yemen, where there were historically reported problems with ghost soldiers due to the patronage system which balanced the power of different tribes and religious elements by paying generals large sums based on their reported number of soldiers under command, which they therefore had an incentive to overestimate. Due to the different tribal power structure in Saudi Arabia, this is not the case there.
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score4
Government Reviewer4700 CommentsThere is no such evidence, because the appointment/recruitment process at the Ministry of defence is only made through linking the number of the national ID with the employee/soldier number, therefore the existence of ghost soldiers is impossible, where salaries are deposited directly by the Ministry of Finance.

Personnel46. Are chains of command separate from chains of payment?
Score3.0
Assessor CommentsResearcher + Peer Reviewer1332: Although there is no government-wide published policy on payment systems that indicates separation between chains of command and payment, given the importance of the police and military to the security of the regime, it is extremely unlikely that they would be willing to risk the loyalty of these individuals by trusting their compensation to the arbitrary behaviour of individual officers and managers (Hertog, 2011; Quinlivan, 1999).

The system of personnel payment appears routine throughout most of the government. Many Saudi ministries employ multinational government services firms to design systems for payroll processing and other administrative functions. The Ministry of Interior contracted with TCS (Tata Consultancy Services), which utilizes the well-known Oracle E-Business Suite of applications to administer payroll and other personnel management tasks. According to Government Reviewer's comment sin other questions that electronic payment system is used in the MOD also - further reducing this risk.
Assessor SourcesCompany Prospectus for Tata Consultancy Services, 2013. http://www.tcs.com/SiteCollectionDocuments/Case%20Studies/Saudi-Arabia-MoE-IT-Enterprise-0713-1.pdf

Steffen Hertog. 2011. “Rentier Militaries in the Gulf States: The Price of Coup-Proofing.” International Journal of Middle East Studies, 43(3).

James T. Quinlivan. Autumn 1999. “Coup-Proofing: Its Practice and Consequences in the Middle East.” International Security 24(2): 131-165.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsEXARO notes that the payment systems of the Saudi Arabian National Guard was overhauled in response to the BAE scandal, but there is no mention of whether the Saudi MOD reformed their systems:

http://www.exaronews.com/articles/4758/how-ministry-of-defence-was-forced-into-sangcom-admission
Government Reviewer4700 OpinionNot Qualified

Personnel47. Is there a Code of Conduct for all military and civilian personnel that includes, but is not limited to, guidance with respect to bribery, gifts and hospitality, conflicts of interest, and post-separation activities?
Score2.0
Assessor CommentsResearcher + Peer Reviewer1332: Saudi Arabia does have a fairly robust code of conduct governing both civilian government employees and members of the military [defined in the law as ‘serving individuals,’ though translated elsewhere as ‘law enforcement officials’]. The Saudi Government has, at various points, confirmed that this law applies to members of the military. A translation of the code of conduct states that defence and security personnel are not allowed:

“To work in trade or industry directly or indirectly, including financial management, or acting as president or a manager or member of the administrative board, or as a consultant or an employee at a company or a commercial establishment, or to make business transactions or any kind of speculation, or to establish ties with any company or agency, or to undertake any action that contradicts their official job or which could influence their performance of their duty in any way. This does not affect the officer’s right to purchase shares in [private] limited companies.”

“To take part in the procurement of missions, requirements and military equipment, as well as government properties and real estate for the purpose of speculation or for personal gain.”

“To accept any work that falls outside the scope of their military work with any member of any trade establishments, whether [the work is to be carried out] in person or through an agent or deputy.”

“To carry out any work, paid or unpaid, for another party, including outside business hours, except with special formal authorisation by the Chief of the General Staff.”

Shortcomings of the code of conduct are primarily in its implementation (as demonstrated by the recent EADS scandal involving the bribery of an officer of the Saudi National Guard). Other lacunae include rules governing asset disclosure, which are only applied to some government officials. According to the head of Nazaha, those in senior positions (to include ministers) are only subject to disclosure requirements if they “deal with public funds and make decisions related to public funds.” Nor are post-separation activities restricted through the application of a ‘cooling off period’ or other similar regulation. There was also no information available on whether the code was distributed officially among military members, nor how widely. Lastly, observers that witness violations are only directed to report these to their immediate supervisor, not to an independent ombudsman or other external agency, making oversight scattered.

In 2013, TI-DSP spent a week in Riyadh at the invitation of the then Deputy Minister – this was initiated after a former Procurement Chief in the Ministry of Defence had arranged for a TI-DSP multi-country study on the Codes of Conduct in Defence Ministries and Armed Forces to be translated into Arabic and printed, without any changes from the English version.
Assessor SourcesResults of Questionnaire administered by the United Nations Crime and Justice Information Network. “Questionnaire on the Code of Conduct for Law Enforcement Officials including the Basic Principles on the Use of Force and Firearms by Law Enforcement Officials.” http://www.uncjin.org/Standards/Conduct/ccl/ksaudar.pdf

Transparency International. 2011. “Codes of Conduct in Defence Ministries and Armed Forces: What makes a good code of conduct?” http://www.ti-defence.org/publications/20-category-publications/publications-dsp/117-dsp-pubs-codes-conduct-defence-ministries-armed-forces.html

Fahd Al-Theyabi. “Nazaha has reined in corruption.” Arab News. 14 November 2013. http://www.arabnews.com/news/477126
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsConsider this link from the UN Crime and Justice Information Network:

http://www.uncjin.org/Standards/Conduct/ccl/ksaudar.pdf

However, this only pertains to law enforcement officials.
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsThe Career Code of Conduct is now being prepared and it is in the final stages of approval and accreditation.

Personnel48. Is there evidence that breaches of the Code of Conduct are effectively addressed ,and are the results of prosecutions made publicly available?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: Prosecution for violations of the code of conduct by those in the defence and security establishment is extremely rare. The handful of reports of sanctions or prosecutions of those in the defence or security establishment appear in the non-Saudi press, and are never based on official government statements (except to allow members of the Royal Family to proclaim their innocence, as was the case with Prince Bandar and the Al-Yamamah scandal).

Recent cases include luxury cars and villa rentals provided to members of the Saudi military by a subcontractor of the European defence giant EADS. Intelligence Online [subscription required] reported that in four months in 2011 six “top-ranking officials” were arrested, including Saud Al Semari, a key procurement official who negotiated several large defence equipment deals on behalf of the Saudi Ministry of Interior. There have been no official Saudi statements on this case – nor have details appeared in the media. Intelligence Online also reported that – in response to persistent corruption in Defence and Interior – the bidding processes for large government tenders would be directly overseen by professional management and consulting firms – primarily from the US, with the winning bid chosen from a short-list handed over to the royal cabinet. If this is indeed the current strategy for managing defence procurement, it strongly suggests that violations of the code of conduct are not meaningfully addressed in the Ministries of Defence or Interior.

Prosecutions in non-defence related matters appear to be on the rise, and are reported on in the national media. Recent investigations involving the misuse of funds and bribery in the ports authorities, public hospitals, the Saudi Railway Organization, the Petroleum Ministry, the Social Affairs Ministry, and municipal governments have all appeared in the Saudi national press. According to article 21 of the anti-bribery law (Royal Decree M/36, 1992), the Ministry of Interior is required to announce and publish the verdicts resulting from corruption and bribery prosecutions.
Assessor SourcesAngela Monaghan. 14 August 2012. “EADS faces questions over £2 bn Saudi deal: Q&A.” The Telegraph (UK). http://www.telegraph.co.uk/finance/newsbysector/industry/defence/9476246/EADS-faces-questions-over-2bn-Saudi-deal-QandA.html#disqus_thread

“Contracts: Riyadh rewrites the rules; Saudi Arabia.” September 29, 2011. Intelligence Online. http://www.intelligenceonline.com/government-intelligence/2011/09/29/contracts-riyadh-rewrites-the-rules,93184238-EVE [subscription required].

Asmahan Al Ghamidi, 12 May 2014. “Nazaha: Land ports are suffering crowdedness and bad services which are not compatible with the Kingdom's image,” Alriyadh. http://www.sauress.com/en/alriyadhen/935139

[no author]. 23 June 2013, “Nazaha uncovers 460 faltering health projects” Arab News. http://www.gulfinthemedia.com/index.php?m=politics&id=654058&lim=40&lang=en&tblpost=2013_06.

[no author]. 8 July 2013. “Nazaha cites poor state of MoH hospitals,” Arab News.
http://www.arabnews.com/news/457385.

Hussein Hazzazi, 14 January 2010, “Fired accountant claims corruption cover-up at Al-Amal Hospital,” Saudi Gazette.

Marie Sophia. 4 June 2014. “Saudi’s Shoura Council Seeks Probe Into Haramain Rail Project Delays,” Gulf Business. http://gulfbusiness.com/2014/06/saudis-shoura-council-seeks-probe-haramain-rail-project-delay/#.VSViGRDF9O8

[no author]. 17 June 2014. “Top official to stand trial in Jeddah floods.” ArabNews. http://www.arabnews.com/news/587916
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsAlthough there is considerable evidence that the Saudi state wants to project an image that it takes corruption seriously and is fighting it in line with Sharia practices, there is never any mention of cases in which corruption has actually been prosecuted. For example:

http://www.unafei.or.jp/english/pdf/RS_No77/No77_14PA_Khalaf.pdf

It is telling that Prince Bandar himself admitted that corruption occurred, but due to his position he faced no consequences other than being later sidelined for important government roles. See his admission here:

https://www.youtube.com/watch?v=hBu0asPX5k0
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsYes, when accrediting the Career Code of Conduct.

Personnel49. Does regular anti-corruption training take place for military and civilian personnel?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: The 2007 Combatting Corruption Bill did include increased funding for training and technology for &quoute;all agencies&quoute; tasked with investigating and prosecuting corruption, as well as providing a framework for state support to academic institutions to carry out research on corruption in the kingdom and for religious institutions to incorporate anti-corruption themes in their public outreach campaigns. The Institute of Public Administration, which is responsible for the training of state employees, implements an anti-corruption training curriculum developed by the Anti-Corruption Commission.

However, there is no indication that such training is undertaken on a regular or consistent basis. Police training does not include anti-corruption elements, according to the instruction list for Civil Defence Institute within MOI (available at http://www.moi.sa/).

Ad-hoc workshops have been organized for employees of the Ministry of Interior, including a 2014 workshop on implementing the recently ratified UN Convention Against Corruption. However, there is no evidence that military personnel or civilian employees within the Ministry of Defence have participated in such activities, or that such public campaigns and research funding channels have specifically targeted defence personnel.

TI-DSP has had various engagements with Saudi Arabia, including three visits. In 2013, TI-DSP spent a week in Riyadh at the invitation of the then Deputy Minister – this was initiated after a former Procurement Chief in the Ministry of Defence had arranged for a TI-DSP multi-country study on the Codes of Conduct in Defence Ministries and Armed Forces to be translated into Arabic and printed, without any changes from the English version. In 2014, TI-DSP furthermore participated in a counter-terrorism conference organised by the Naif Arab University of Security Sciences (NAUSS), who agreed a research MOU with TI-DSP. Also in 2014, TI-DSP was also invited to address the NAUSS graduation ceremony, which included numerous Saudi security and defence officials. TI-DSP has had a dialogue with Nazaha (the Saudi anti-corruption agency) for a number of years.
Assessor SourcesUnited Nations Office on Drugs & Crime. Newsletter. June 2014. Issue 8. http://www.unodc.org/documents/corruption/Newsletter/CEB_ACU_ISSUE8_2014.pdf

UNODC. [undated]. “Thematic compilation of relevant information submitted by Saudi Arabia: Article 6 of the UNCAC.” http://www.unodc.org/documents/corruption/WG-Prevention/Art_6_Preventive_anti-corruption_bodies/Saudi_Arabia.pdf, p1-2

Text of the National Strategy for Maintaining Integrity and Combating Corruption, including the Royal Order to establish the Anti-Corruption Commission and the Statute of the National Anti-Corruption Commission . [English translation]. 2012.
http://www.maarefah.net/sites/default/files/the_statue_the_strategy_of_the_national_anti-corruption_commission_in_english.pdf
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsI would suggest the following link:

Professor Hough leads training course for Saudi Arabian National Anti-Corruption Commission
&quoute;Professor Hough visited the capital of Saudi Arabia, Riyadh, from 5-9 April 2015, where he led a professional development course for 25 members of Nazaha. &quoute;
http://www.sussex.ac.uk/broadcast/read/30137
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsWork is underway to set up a training program for the employees of Combating Corruption and Protecting Integrity Department.

Personnel50. Is there a policy to make public outcomes of the prosecution of defence services personnel for corrupt activities, and is there evidence of effective prosecutions in recent years?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: According to article 21 of the anti-bribery law (Royal Decree M/36, 1992), the Ministry of Interior is required to announce and publish the verdicts resulting from corruption and bribery prosecutions. In practice, the handful of reports of sanctions or prosecutions of those in the defence or security establishment that appear are published in the non-Saudi press, and are never based on official government statements (except where members of the Royal Family have stated innocence, as was the case with Prince Bandar and the Al-Yamamah scandal).

Recent cases include luxury cars and villa rentals provided to members of the Saudi military by a subcontractor of the European defence giant EADS. Intelligence Online reported that in four months in 2011 six “top-ranking officials” were arrested, including a key procurement official who negotiated several large defence equipment deals on behalf of the Saudi Ministry of Interior. There have been no official Saudi statements on this case – nor have details appeared in the media. This case was unprecedented - there is no evidence pointing to other incidents involving the arrest of anyone prominent from the MOI or MOD either before 2011 or since.
Assessor SourcesAngela Monaghan. 14 August 2012. “EADS faces questions over £2 bn Saudi deal: Q&A.” The Telegraph (UK). http://www.telegraph.co.uk/finance/newsbysector/industry/defence/9476246/EADS-faces-questions-over-2bn-Saudi-deal-QandA.html#disqus_thread

“Contracts: Riyadh rewrites the rules; Saudi Arabia.” September 29, 2011. Intelligence Online. [subscription required] http://www.intelligenceonline.com/government-intelligence/2011/09/29/contracts-riyadh-rewrites-the-rules,93184238-EVE

&quoute;&quoute;According to the legislation establishing the anti-corruption commission (Nazaha) in 2007, “Court judgments shall be published at the request of the attorney general and with the consent of the ruling judge.&quoute; - Text of the National Strategy for Maintaining Integrity and Combating Corruption, including the Royal Order to establish the Anti-Corruption Commission and the Statute of the National Anti-Corruption Commission . [English translation]. 2012.
http://www.maarefah.net/sites/default/files/the_statue_the_strategy_of_the_national_anti-corruption_commission_in_english.pdf
Peer Reviewer3934 OpinionDisagree
Peer Reviewer3934 Suggested Score3
Peer Reviewer3934 CommentsThis is a challenging question to score for Saudi Arabia given the scoring options available, and I understand the rationale for assigning a score of &quoute;0.&quoute; With that said, the fact that there is a policy, arcticle 21 of the anti-bribery law (Royal Decree M/36, 1992), requiring the Ministry of the Interior to publish verdicts of corruption and bribery cases necessitates, in my opinion, a score of three. There is no available evidence that the Saudi Arabian government is suppressing cases of this sort, but there is good reason to believe that they would, and likely have.
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsThe following case from 2014 does not seem to have been investigated by Nazaha, or there is no record of their having published any report of an investigtion:

http://www.ft.com/cms/s/0/ded13116-5090-11e4-8645-00144feab7de.html#axzz3YYDFiYW8

One recent case reports that Nazaha 'may' investigate ex-officials:

http://www.arabnews.com/news/724766

The Deputy Chairman of Nazaha said that &quoute;Speaking to a local publication, he said it is not Nazaha’s responsibility to hold the officials accountable, however they are charged with collecting data and information in cases of corruption before referring it to the investigation bodies.&quoute;
Government Reviewer4700 OpinionNot Qualified

Personnel51. Are there effective measures in place to discourage facilitation payments (which are illegal in almost all countries)?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: The Code of Conduct for Civil Servants (to include military and police personnel) prohibits the acceptance of gifts if there is the intent to bribe, though measures to discourage this are clearly ineffective. Civil servants are likewise legally required to report gifts, regardless of their value.

Surveys of individuals doing business in the kingdom report widespread use of agents and facilitation payments – though these payments are likely to be disguised as ‘consultancy fees’ or payments for marketing or other services rather than facilitation payments. Privately-published business guides report that anti-bribery statutes are generally not enforced with respect to facilitation payments.
Assessor SourcesResults of Questionnaire administered by the United Nations Crime and Justice Information Network. “Questionnaire on the Code of Conduct for Law Enforcement Officials including the Basic Principles on the Use of Force and Firearms by Law Enforcement Officials.” http://www.uncjin.org/Standards/Conduct/ccl/ksaudar.pdf, p6-8.

Trust Law country profile: http://www.trust.org /trustlaw/country-profiles/good-governance.dot?id=d8f340e0-8849-4e3b-9c8d-97292748753e

Business Anti-Corruption Portal. 2013. http://www.business-anti-corruption.ru/country-profiles/middle-east-north-africa/saudi-arabia/show-all.aspx

Robert Thomas and Sultan Al-Hejailan. &quoute;Getting the Deal Through - Anti-Corruption Regulation 2010: Saudi Arabia.&quoute; Law Business Research Ltd.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsHistorically, facilitation or commission payments were seen by British arms traders as part of Saudi 'culture'. It is difficult to eliminate this structural predisposition to see this type of corruption as normative solely through legal mechanisms. Adam Curtis' Mayfair Set documentary provides good evidence for this:

https://youtu.be/234H8X1-JiA?t=27m52s
Government Reviewer4700 OpinionNot Qualified

Operational52. Do the armed forces have military doctrine addressing corruption as a strategic issue on operations?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: The armed forces do not address corruption as a strategic issue. To date, no high-ranking officer or member of the upper echelons of the civilian defence and security bureaucracy has mentioned corruption in the context of operational effectiveness or doctrine. Indeed, they do not issue public statements on the issue corruption at all.

Since the conclusion of the previous GI assessment for Saudi Arabia in 2013, there have been no government initiatives that targeted corruption in the defence establishment, with the exception of a behind-the-scenes effort by the late King Abdullah to wrest control over procurement away from officials at the Ministry of Defence and entrust it to private consultants hired to oversee the process. In any case, the Kingdom lacks a formal defence doctrine, and so it is even less likely that corruption would make its way into formal training or planning documents.
Assessor Sources“Contracts: Riyadh rewrites the rules; Saudi Arabia.” September 29, 2011. Intelligence Online.

Nawaf Obeid. 28 May 2014. “Saudi Surge? A New defence Doctrine for the Kingdom.” Center for Strategic & International Studies. http://csis.org/multimedia/video-saudi-surge-new-defence-doctrine-kingdom

Transparency International, Government Defence Anti-Corruption Index 2013, Saudi Arabia assessment, government.defenceindex.org/sites/default/files/documents/GI-assessment-Saudi-Arabia.pdf
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsSince Saudi operations (at least in other territories) are quite a new phenomenon, there is likely to be as yet little evidence of corrupt practices. However, this may change in light of operations in Yemen, and with a possible operation against Assad in Syria on the horizon, as attested by the following report:

http://www.huffingtonpost.com/2015/04/12/saudi-arabia-turkey-syria_n_7012268.html

However, Russia has said it will back up Syria in such an eventuality, so it remains to be seen whether KSA would risk such an escalation.
Government Reviewer4700 OpinionAgree

Operational53. Is there training in corruption issues for commanders at all levels in order to ensure that these commanders are clear on the corruption issues they may face during deployment? If so, is there evidence that they apply this knowledge in the field?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: The 2007 Combatting Corruption bill did include increased funding for training and technology for the relevant government agencies tasked with investigating and prosecuting corruption, as well as providing a framework for state support to academic institutions to carry out research on corruption in the kingdom and for religious institutions to incorporate anti-corruption themes in their public outreach campaigns.

There is no evidence that military personnel or civilian employees within the Ministry of Defence have participated in such activities, or that such public campaigns and research funding channels have specifically targeted defence personnel. Regular police training does not include anti-corruption elements, according to the instruction list for the Civil Defence Institute within MOI (the Civil Defence Institute is the disaster and emergency response force, though their instructional training seems to mirror the major aspects of police work, available at http://www.moi.sa/). I could only find evidence of one instance of such training, which was an ad-hoc workshop organized for employees of the Ministry of Interior in 2014 on implementing the recently ratified UN Convention Against Corruption. It was held in coordination with the United Nations Office on Drugs & Crime.

Futhermore, given the extent and scale of several very high profile bribery scandals that have taken place in the MOD, it is a reasonable assumption that military commanders are aware of the problem and are turning a blind eye to it. This is further supported by the fact that there have been no cases of prosecution of any individuals from the MOD (other than the 2011 reports of arrests of individuals that handled defence equipment procurement for the MOI).
Assessor SourcesUnited Nations Office on Drugs & Crime. Newsletter. June 2014. Issue 8. http://www.unodc.org/documents/corruption/Newsletter/CEB_ACU_ISSUE8_2014.pdf
Kingdom of Saudi Arabia, Ministry of Interior website, http://www.moi.sa/
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsNazaha's Deputy Chairman reported:

&quoute;Speaking to a local publication, he said it is not Nazaha’s responsibility to hold the officials accountable, however they are charged with collecting data and information in cases of corruption before referring it to the investigation bodies.&quoute;

http://www.arabnews.com/news/724766

Is it certain that Nazaha has no authority over members of the military, or does their mandate extend to investigating military corruption?
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsAn educational training plan in combating corruption and protecting integrity is being prepared for the employees of the Ministry of defence, that also includes commanders

Operational54. Are trained professionals regularly deployed to monitor corruption risk in the field (whether deployed on operations or peacekeeping missions)?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: There is no evidence of any defence or security professionals being trained to monitor corruption risk. Corruption and bribery that takes place at the border in relation to import/export customs, human trafficking, wildlife smuggling, etc. would be the natural place to look for trained officials observing the behavior of border guards, as these are not politically sensitive forms of exchange in the way that defence procurement is. These are also likely to involve petty bribes and low-to-mid ranking officials, not the large sums captured by influential elites involved in defence contracts. Nonetheless, I see no indication that corruption monitoring by trained professionals takes place in this or any other context.The single exception is an ad-hoc workshop in 2014 organized for employees of the Ministry of Interior on implementing the recently ratified UN Convention Against Corruption.
Assessor SourcesBusiness Anti-Corruption Portal. 2013. http://www.business-anti-corruption.cn/country-profiles/middle-east-north-africa/saudi-arabia/show-all.aspx

United Nations Office on Drugs & Crime. Newsletter. June 2014. Issue 8. http://www.unodc.org/documents/corruption/Newsletter/CEB_ACU_ISSUE8_2014.pdf
Peer Reviewer3934 OpinionAgree with Comments
Peer Reviewer3934 CommentsWith the presence of NAZAHA, professional workshops following the ratification of UNCAC, and King Abdullah crackdown against corruption in the last couple of years it stands to reason that professionals are deployed to monitor out in the field. However, it is unclear whether or not any such professionals are used in Saudi Arabia at this time, at a minimum we know that no high profile cases have resulted from such monitoring.
Researcher + Peer Reviewer4322 OpinionAgree
Government Reviewer4700 OpinionNot Qualified

Operational55. Are there guidelines, and staff training, on addressing corruption risks in contracting whilst on deployed operations or peacekeeping missions?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: There is no evidence of any guidelines or staff training on addressing corruption risks in contracting whilst on deployed operations or peacekeeping missions. The only evidence of any personnel training relevant to defence or security personnel under any conditions is an ad-hoc workshop in 2014 organized for employees of the Ministry of Interior on implementing the recently ratified UN Convention Against Corruption.
Assessor SourcesUnited Nations Office on Drugs & Crime. Newsletter. June 2014. Issue 8. http://www.unodc.org/documents/corruption/Newsletter/CEB_ACU_ISSUE8_2014.pdf
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree
Government Reviewer4700 OpinionNot Qualified

Operational56. Private Military Contractors (PMCs) usually refer to companies that provide operational staff to military environments. They may also be known as security contractors or private security contractors, and refer to themselves as private military corporations, private military firms, private security providers, or military service providers.
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: There are a large number of PMCs employed in Saudi Arabia. The most well-known is the U.S.-based firm Vinnell, which has had a contract to train the Saudi National Guard (SANG) for more than two decades. (Vinnell trainers went into battle with the SANG at Khafji during the first Gulf War, and the SANG contract is the company's most lucrative operation.) Other PMCs with Saudi Government contracts include Aegis; Booz Allen Hamilton (Saudi Marine Corps, Saudi Armed Forces Staff College); Braddock, Dunn and McDonald Inc. (Saudi Air Force); Cassidian (Saudi border guards); Dyncorp (Royal Saudi Land Forces); G4S (providing security during annual pilgrimage); General Dynamics (Royal Saudi Land Forces); Military Professional Resources Inc.; O'Gara Protective Services (personal protection for late Prince Sultan and other Royal Family members); SAIC (Saudi Royal Navy and Saudi Royal Air Defence); and Shield Risk Consulting. Saudi Arabia has ratified the International Convention against the Recruitment, Use, Financing and Training of Mercenaries (adopted 4 December 1989 by UN General Assembly; into force 20 October 2001). However, critics observe that the 31 states to sign and/or ratify the convention are those which host substantial PMC operations (not the countries where the PMCs are legally incorporated); the convention pertains primarily to traditional freelance mercenaries - not the large, organizationally sophisticated firms that comprise the sector today; and the convention includes no monitoring or enforcement mechanisms.

Saudi Arabia has also provided financing for the deployment of private military contractors to conflict zones, including funds to send Military Professional Resources Inc. to train Bosnian Muslim troops in order to secure the latter's support for the peace accords (MPRI is the same PMC that trained the Croatian troops that committed atrocities against Bosnian Muslims). Some large, high-profile contracts are under some form of monitoring, but not from the Saudi government. In the case of Vinnell and the Saudi Arabian National Guard, this oversight comes from the U.S. Government, which solicited Vinnell for the contract on behalf of the Saudi Government.

Existing anti-corruption legislation (including the anti-bribery law and the law establishing the anti-corruption commission) does not pertain to the activities of private companies, but only to the complicity of public officials. Violations by private companies would be prosecuted as breaches of contract.

The Saudi Ministry of Interior (MOI) does have one law germane to PMSCs - the Law of Civilian and Private Security Guards, although it primarily pertains to labor regulations. The law - adopted by the Council of Ministers in 2005 - requires that expatriates serving as guards be replaced with Saudi nationals within 90 days. However, this law applies primarily to the large number of individuals hired to act as security guards for private sector firms and high-profile businessmen, not for government ministers or members of the royal family. For example, it is unlikely that the above-mentioned O'Gara contract (which provides protective services to high-ranking Royal Family members) would be subjected to the Law of Civilian and Private Security Guards. These PMSCs are likely subject to the authority of whatever ministry or government agency hired them (in the case of the SANG - Vinnell would be responsible to King Abdullah; the various military branches, to the Minister of Defence, and internal security organizations to the Minister of Interior).

This being said, no evidence has been found of any known case of corruption in relation to any of the above-listed entities in Saudi Arabia.
Assessor SourcesFabien Mathieu and Nick Dearden. November 2006. &quoute;Corporate Mercenaries: The threat of private military and security companies. London: Campaign Against Arms Trade (CAAT)

War on Want. Leslie Wayne. 13 October 2002. America's For-Profit Secret Army. New York Times.http://www.nytimes.com/2002/10/13/business/america- s-for-profit-secret-army.html?pagewanted=all&src=pm

William D. Hartung. April 1996. &quoute;Mercenaries, Inc.: How a U.S. Company Props Up the House of Saud. The Progressive.

Matthew J. Gaul. 1998. &quoute;Regulating the New Privateers: Private Military Service Contracting and the Modern Marque and Reprisal Clause. 31(4). Loyola of Los Angeles Law Review.

“Security guards complain of low pay and no fringe benefits.” 9 November 2013. Saudi Gazette. http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20131109186139

Robert Thoms and Sultan al-Hejailan. &quoute;Saudi Arabia.&quoute; In &quoute;Getting the Deal Through: Anti-corruption Regulation in 44 Jurisdictions Worldwide,&quoute; Edited by Homer E. Moyer Jr. London: Law Business Research Ltd, p211.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsIt is easy to find job postings online for PMCs in KSA. On www.privatemilitary.org the company Vinnell Arabia is listed with the comment:

&quoute;• Vinnell Arabia. In simple words, Vinnell Arabia runs the Saudi Arabian National Guard Modernization Program&quoute;

http://www.privatemilitary.org/private_forces.html

Vinnell's website states that: &quoute;Vinnell Arabia is the leader in U.S. military doctrine-based training, logistics, and support services inside Saudi Arabia.&quoute; They have &quoute;over 1,250 highly experienced employees Kingdom-wide, over half of whom are Saudi nationals&quoute;.
Government Reviewer4700 OpinionNot Qualified

Procurement57. Does the country have legislation covering defence and security procurement and are there any items exempt from these laws?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: Saudi Arabia does have legislation covering government procurement, specifically the Government Bids and Procurement Law, issued by Royal Decree in 2006 as part of Saudi Arabia's accession to the World Trade Organisation, and became party to the WTO’s Government Procurement Agreement in 2007, which covers issues related to transparency and fair bidding practices. However, purchases of weapons and military equipment are explicitly exempted from these procurement laws, according to Article 47, which states:

“Weapons and military equipment and their spare parts by direct purchase from manufacturers [are exempted from public tender]. The best offer serving public interest shall be selected by a ministerial committee formed for this purpose by a royal decree of at least three members in addition to its chairman. It shall then bring its recommendations before the President of the Council of Ministers for approval.”

As a result, official policy is not well-defined, and military procurement is often determined on a “case-by-case basis. Major procurement decisions can be executed on the personal initiative of single members of the Royal Family, as was the case when Prince Khalid bin Sultan (then-Deputy Defence Minister) made a large purchase of missiles from China in 2013. The purchase – which was apparently made without the knowledge of other officials in the Defence Ministry – eventually led to his resignation, but it demonstrates the degree to which major decisions are often not part of a formal process

There is, however, legislation that prohibits the use of agents or intermediaries in defence procurement, Council of Ministers Resolution No. 1275 (1975). However, reports are that this is not strictly observed in practice. Nearly all surveys of individuals doing business in the kingdom report widespread use of intermediaries and facilitation payments, and US Government publications advising commercial entities doing business in the kingdom indicate that the Saudi Ministry of Commerce employs a very narrow definition of what constitutes “armaments” - allowing for the participation of agents in a variety of defence and security-related contracts. Furthermore, only civil servants can be prosecuted for influence peddling - which may explain why the most infamous arms brokers in Saudi Arabia were private citizens (such as Adnan Khashoggi, Wafic Said, and Ghaith Pharaon) not government functionaries.

Even in the case of non-military procurement, the process retains major shortcomings. The government does not use a centralized system for procurement, which allows individual procuring agencies a high degree of control over the acquisition process, and special tendering and direct contracting are common.
Assessor SourcesUnited States Trade Representative, Saudi Arabia, Foreign Trade Barriers, 2012, p338. http://www.ustr.gov/sites/default/files/Saudi%20Arabia_0.pdf

Saudi e-Government Program. Best practices of IT procurement. 2009.
http://www.yesser.gov.sa/en/Methodologies/Pages/best_practices_government.aspx

Saudi Arabia: Agency and Distribution. Date unknown. Law Office of Howard L. Stovall. http://www.stovall-law.com/images/GMB_Chapter_revised_Sau_.pdf

Saudi Arabia Investment and Business Guide. [no author]. 2011. Washington DC: International Business Publications, p99.

“Mohammed bin Salman Succeeds in Removing Khalid bin Sultan.” 22 April 2013. Al-Akhabar (Lebanon). http://www.al-akhbar.com/node/181717
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsI would suggest this reference, which is a good summary of a lot of what you have written here:

http://www.lexisnexis.com/legalnewsroom/international-law/b/commentry/archive/2013/02/21/military-tenders-and-procurement-in-saudi-arabia-guidelines-for-the-payment-of-commissions-success-fees-and-agency-fees.aspx
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsThe Government Tenders and Procurement Law was developed to achieve greater justice and transparency in the defence sector procurement.

Procurement58. Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: The Ministry of Defence has a five-year plan, as well as an annual budget and basic procurement plan, but these are not made publicly available, and there is no public disclosure law (or right to information law) that requires such information to be made public. Actual defence procurement spending commonly exceeds the amount budgeted if oil revenues exceed projections, and important acquisition decisions (including large, strategic purchases) are often made informally. These features make it unlikely that any procurement plan or process - even if disclosed - would mirror what actually took place.

Major procurement decisions can be executed on the personal initiative of single members of the Royal Family, as was the case when Prince Khalid bin Sultan (then-Deputy Defence Minister) made a large purchase of missiles from the Chinese in 2013. The purchase – which was apparently made without the knowledge of other officials in the Defence Ministry – eventually led to his resignation, but it demonstrates the degree to which major decisions are often not part of a formal process.
Assessor Sources“2013 Human Rights Reports: Saudi Arabia” 27 February 2014. United States Department of State.
http://www.state.gov/j/drl/rls/hrrpt/2013/nea/220374.htm

“Mohammed bin Salman Succeeds in Removing Khalid bin Sultan.” 22 April 2013. Al-Akhabar (Lebanon). http://www.al-akhbar.com/node/181717
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsPerhaps you should mention the Procurement Law here also and its exemption:

&quoute;Under Article 47(a) of the Procurement Law, direct purchase from manufacturers of weapons, military equipment and their spare parts is exempt from the Procurement Law.&quoute;

http://www.lexisnexis.com/legalnewsroom/international-law/b/commentry/archive/2013/02/21/military-tenders-and-procurement-in-saudi-arabia-guidelines-for-the-payment-of-commissions-success-fees-and-agency-fees.aspx
Government Reviewer4700 OpinionNot Qualified

Procurement59. Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: There is no indication of any defence procurement oversight operating in Saudi Arabia. The Shura Council does include a Committee on Security Affairs, though the council’s membership is appointed by the King and has no effective control over defence activities, including procurement oversight. The only reference to the jurisdiction that the General Auditing Bureau has over the activities of the Ministries of Defence is an exemption that extends the time the ministry is allotted for responding to GAB inquiries (from 15 days for other ministries/agencies to three months for the Ministry of Defence).

As referenced in the previous GI assessment of Saudi Arabia, a US-based firm founded in 2010 called Colorado Accounting & Financial Services claims to have been the lead advisor on a contract to establish an internal auditing body within the Saudi Ministry of Defence. The company’s brochure records the contract details as: “Development of Financial Advisory Department for Ministry of defence and Aviation in Saudi Arabia. The new department was created for effective control of internal auditing, treasury management, budgeting and forecasting and creating training programs for the Ministry of defence accounting staff.” However, there is no additional evidence of this department currently operating within the Ministry of Defence.

According to the Basic Law of Governance of 1992, each government agency (including the Ministries of Defence and Interior) should be subject to an internal auditing process, and there are staff auditors within the Ministry of Defence that review contractor’s financial records and payments made to them by the government. Evidence suggests that these staff auditors may only be active on civilian aviation projects however – not military arms sales.

Saudi Government Tenders and Procurement Law does stipulate that all procurement must be put up for public tender, with certain exceptions, which includes the direct purchase of military equipment. In such cases the procurement decision is made by a ministerial committee formed by royal decree, which consists of one “chairman” and at least three additional members, who report directly to the King (Dentons Global, 2014).

Recent reports that the late King Abdullah has chosen to employ foreign consulting firms to oversee the bidding and procurement process for defence contracts suggests that existing oversight mechanisms are nonexistent or inadequate. This is likely due to the fact that leadership in the Ministries of Defence and Interior are typically granted to very powerful senior princes, and thus the ministries’ activities (especially procurement) are unlikely to be subject to genuinely independent internal or external oversight.

RESPONSE TO GOVERNMENT REVIEWER: Unfortunately there is not enough evidence that demonstrates this to raise the score.
Assessor SourcesColorado Accounting & Financial Services LLC. 1 September 2010. &quoute;Capability Statement&quoute;. Website of the firm contracted by the Saudi Ministry of Defence to establish auditing department: http://www.coloradoaccounting.net/resources/CAFS+Capability+Statement.pdf

Online employment profile of an auditor working for the Saudi Ministry of Defence and Aviation: http://www.indeed.com/rz/Mohammad-A/db5c61535a7035cb

“Abdullah’s clean-up operation.” 19 May 2011. Intelligence Online. [subscription required]. http://www.intelligenceonline.com/corporate-intelligence/2011/05/19/abdullah-s-clean-up-operation,90071951-ART

Transparency International, Government Defence Anti-Corruption Index 2013, Saudi Arabia assessment, government.defenceindex.org/sites/default/files/documents/GI-assessment-Saudi-Arabia.pdf

Dentons Global (law firm), 17 September 2014. “Government procurement in the Arabian Gulf region,&quoute; http://www.slideshare.net/DentonsGlobal/government-procurement-in-the-arabian-gulf-region
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsThe law firm Dentons produced a briefing stating that defence procurement is specifically excluded from the Government Tenders and Procurement law. This shows that there is legal avoidance of publicly visible oversight of defence procurement:

http://www.slideshare.net/DentonsGlobal/government-procurement-in-the-arabian-gulf-region
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score3
Government Reviewer4700 CommentsYes, the defence sector procurement contracts are subject to supervisory practices of relevant authorities.

Procurement60. Are actual and potential defence purchases made public?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: The Government Bids and Procurement Law of 2006 requires government authorities to announce the results of public tenders and procurement if their value exceeds one hundred thousand riyals, but the same law states that “[p]rocurement of arms, ammunition, military equipment and ordnance as well as procurement relating to internal security and national defence shall be exempted from announcement.”

The Ministry of defence & Aviation (MODA) has a five-year plan, as well as an annual budget and procurement plan, but these are not made publicly available, and there is no public disclosure law (or right to information law) that requires such information to be made public. Some tenders are available through the websites of the individual service branches, as well as through various business intelligence sources (such as ME Tenders.com and tendernews.com ), but some sources published within the kingdom often consist of a single line item labeled “military equipment” not a breakdown of actual items to be purchased. Further, the information available through these fee-based intelligence sources frequently changes up to the time the contract is signed, so clearly even well-connected individuals with government contacts do not have access to authoritative information.
Assessor Sources“2013 Human Rights Reports: Saudi Arabia” 27 February 2014. United States Department of State.
http://www.state.gov/j/drl/rls/hrrpt/2013/nea/220374.htm

Anthony Cordesman and Khalid R. Al-Rodhan. 28 June 2006. &quoute;The Gulf Military Forces in an Era of Asymmetric War: Saudi Arabia. Washington, DC: Center for Strategic & International Studies. csis.org/files/media /csis/pubs/060728_gulf_saudi.pdf
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsUsually big deals with major contractors of arms to KSA are disclosed by the seller company in line with their domestic laws:

http://www.middleeasteye.net/news/saudi-arabia-1295679323

Saudi Arabia is also 'widely reported' to be the unnamed Middle Eastern country which has just purchased Raytheon's PATRIOT missile defence system:

http://www.wsj.com/articles/poland-opts-for-raytheons-patriot-air-and-missile-defence-system-1429635701

This shows that even some Western arms suppliers try to keep their clients secret.
Government Reviewer4700 OpinionNot Qualified

Procurement61. What procedures and standards are companies required to have - such as compliance programmes and business conduct programmes - in order to be able to bid for work for the Ministry of Defence or armed forces?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: According to anecdotal evidence, contractors must sign a statement declaring that no intermediary is involved and that the price paid does not include any commissions to be paid to any such intermediaries. Bids are also prohibited from individuals who have been imprisoned for criminal acts in the course of contracting or those that have declared bankruptcy (minors and persons not legally competent are also prohibited from submitting bids, as are government employees, with certain exceptions) according to article 13 of the Government Procurement Implementing Regulations (2004).

I was able to locate a company prospectus for a logistics firm (Bahri Shipping) that had recently been contracted by the Saudi Ministry of Defence to transport military equipment. The prospectus lists some details of the contract, including reasons that the contract might be revoked. The prospectus states that: “MoD may terminate the agreement in the event that it is found that the Company (directly/indirectly) offered a bribe to an official employed by the MoD.” This language seems very narrow – as it obviously does not cover the private citizens that may be hired to act as ‘fixers.’ It is these individuals (see examples above) that have traditionally been the biggest beneficiaries of corrupt payments. In the case of Bahri Shipping, furthermore, it could be seen as unusual that a member of the shipping company’s board of directors also sits on the board of the insurance company that is contracted by the shipping firm to provide coverage for its military cargo.

Nonetheless, nearly all surveys of individuals doing business in the kingdom report widespread use of intermediaries and facilitation payments, and U.S. Government publications advising commercial entities doing business in the kingdom indicate that the Saudi Ministry of Commerce employs a very narrow definition of what constitutes “armaments” - allowing for the participation of agents in a variety of defence and security-related contracts. Nor are defence companies required to secure bank guarantees in order to be awarded contracts with the Saudi Ministry of Defence – which is a unique exemption, as other companies that sell to the government must secure financial backing.
Assessor SourcesM. A. Bajaber and M. A. Taha. November 2012. “Contractor Selection in Saudi Arabia.” World Academy of Science, Engineering and Technology. Volume 6: p974.

Company prospectus for Bahri Shipping (logistics firm): http://www.bahri.sa/Bahri_English_Prospectus.pdf, p172.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsLexisNexis notes that although 'local laws are often overlooked', &quoute;the lesser known Council of Ministers Resolution No. 1275, dated 12/9/1395 H., corresponding to 18/9/1975 (Resolution 1275), which remains in force, governs sales of armaments and military equipment. Resolution 1275 provides that no company that has concluded a contract with the Saudi Arabian government for the supply of armaments or military equipment may pay any sum as commission to any intermediary, sales agent, representative, or broker, regardless of whether the contract has been concluded between the foreign entity and the Saudi Arabian government directly or via a third-party State.&quoute;

http://www.lexisnexis.com/legalnewsroom/international-law/b/commentry/archive/2013/02/21/military-tenders-and-procurement-in-saudi-arabia-guidelines-for-the-payment-of-commissions-success-fees-and-agency-fees.aspx

Furthermore,

The Certificate of Conformity is not requested for the following shipments:
 Imports of all sectors of the military forces, such ammunitions, arms, equipment, military means of transport and parts thereof, and any other materials

This certificate is required by the Saudi Conformity Assessment Programme for most imports.

http://www.s-ge.com/de/filefield-private/files/60412/field_blog_public_files/22080
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsThere are precise conditions in the Government Tenders and Procurement Law and its Implementing Regulations for companies wishing to engage in the implementation of the Ministry's works tenders.

Procurement62. Are procurement requirements derived from an open, well-audited national defence and security strategy?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: Saudi Arabia does not really have a coherent national defence and security strategy from which discrete procurement requirements could be derived. Saudi academics and political analysts often criticize the government’s lack of a formal defence policy, and as recently as 2010, the private security contractor Vinnell Arabia LLC (a subsidiary of Northrop Grumman Technical Services) was contracted by Saudi Arabia for the purpose of drafting its official military doctrine. There is no parliamentary or other representative body with even nominal independence that is able to audit any such strategic documents, regardless of where or how they may be drafted.

The Ministry of defence does has a five-year plan, as well as an annual budget and procurement plan, but these are not made publicly available, and there is no public disclosure law (or right to information law) that requires such information to be made public. Some tenders are available through the websites of the individual service branches, as well as through various business intelligence sources (such as ME Tenders.com and tendernews.com ), but some sources published within the kingdom often consist of a single line item labeled “military equipment” not a breakdown of actual items to be purchased. Further, the information available through these fee-based intelligence sources frequently changes up to the time the contract is signed, so clearly even well-connected individuals with government contacts do not have access to authoritative information.

The military's arms budget itself is dictated by annual oil revenues, not defence strategy or comprehensive budgetary planning, and actual spending commonly exceeds planned expenditure if oil revenues exceed projections. It has long been conventional wisdom that major purchases are executed more for their political benefit than their strategic value. Large purchases appear to provide a way of solidifying a range of alliances with important foreign partners such as the US and UK, which provide security guarantees and diplomatic support in return for continued Saudi defence spending.
Assessor SourcesNawaf Obeid. 28 May 2014. “Saudi Surge? A New defence Doctrine for the Kingdom.” Center for Strategic & International Studies. http://csis.org/multimedia/video-saudi-surge-new-defence-doctrine-kingdom

“Saudi Shopping Spree: A Hardened, Networked National Guard.” 6 May 2014. defence Industry Daily. http://www.defenceindustrydaily.com/the-2006-saudi-shopping-spree-a-hardened-networked-national-guard-02462/

Steffen Hertog. 2011. “Rentier Militaries in the Gulf States: The Price of Coup-Proofing.” International Journal of Middle East Studies, 43(3).

“2013 Human Rights Reports: Saudi Arabia” 27 February 2014. United States Department of State.
http://www.state.gov/j/drl/rls/hrrpt/2013/nea/220374.htm

Anthony Cordesman and Khalid R. Al-Rodhan. 28 June 2006. &quoute;The Gulf Military Forces in an Era of Asymmetric War: Saudi Arabia. Washington, DC: Center for Strategic & International Studies. csis.org/files/media /csis/pubs/060728_gulf_saudi.pdf
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsAs before, there probably is a Saudi Defence Doctrine known to the leading members of the al-Saud family. Now that the King's son is Defence Minister, it is likely that the military policy is tightly controlled by Salman's branch of the family, although Obaid's proposal for a Defence Doctrine is mostly influenced by Turki al-Faisal, the go-to spokesperson in the West and former head of the Intelligence Services.

http://belfercenter.ksg.harvard.edu/files/Saudi%20Strategic%20Doctrine%20-%20web.pdf

It can be inferred that procurement is therefore derived from the need to maintain its long border with Yemen and Iraq, where it fears the influence of Iranian proxies, and of patrolling the Strait of Hormuz.
Government Reviewer4700 OpinionAgree

Procurement63. Are defence purchases based on clearly identified and quantified requirements?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: The Ministry of Defence does have a five-year plan, as well as an annual budget and basic procurement plan, but these are not made publicly available, and there is no public disclosure law (or right to information law) that requires such information to be made public. Actual defence procurement spending commonly exceeds the amount budgeted if oil revenues exceed projections, and important acquisition decisions (including large, strategic purchases) are often made informally. These features make it unlikely that any procurement plan or process - even if disclosed - would mirror what actually took place.

Research indicated that defence purchases are very likely to be determined by the dynamics of inter-family rivalries or security guarantees and alliances with Western states rather than clearly identified defence requirements. Senior princes have used the procurement budgets of the defence and security agencies over which they have control to limit and check one another’s influence, often resulting in redundant acquisitions and limited interoperability of weapons systems. Large procurement budgets are also a major source of patronage for senior princes, who may design their purchases to maximize the commissions they are able to dole out to their influential political clients (Hertog, 2011).

This is a holdover from the early organization of the various security and defence institutions. The first Saudi king distributed the most powerful agencies of government according to factions that developed among his large number of sons. Therefore these agencies (primarily the Saudi Arabian National Guard/SANG and the Ministries of Defence and Interior, but also the major regional/city governorships) evolved into quasi-independent power centers or fiefdoms. These factions have persisted through generations, and as the budgets of these powerful agencies grew, their senior leadership used these budgets and other agency assets to distribute patronage and favors to their respective client bases.

It is conventional wisdom that defence acquisition decisions are derived more from political calculations than strategic value. Large purchases are seen as a way of solidifying alliances with a range of important foreign partners which provide security guarantees and diplomatic support in return for continued Saudi defence spending. Even marketing and consulting firms recognize this as the impetus for procurement decisions. In a recent report aimed at aerospace and defence companies, IHS Global Insight (part of the Janes Defence Group of Companies) stated, “Gulf states have historically bought friendships and support through materiel acquisition….[w]arming ties with new suppliers (e.g. India, South Korea and Singapore) plus Eastern powers (Russia, China) point to broadening supplier relations as global power balance shifts.” And continues with, “Materiel procurement is typically used as a means of cementing relations and achieving broader aims. Political alignment is therefore vital for successful business.”
Assessor Sources“Doing Defence Business In The Gulf: Five Things You Need To Know.” IHS White Paper, 2013, http://www.ihs.com/pdfs/IHS-White-Paper-Doing-Defence-Business-In-The-Gulf-Five-Things-You-Need-To-Know.pdf

Steffen Hertog. 2011. “Rentier Militaries in the Gulf States: The Price of Coup-Proofing.” International Journal of Middle East Studies, 43(3).

Cross Border Information. [author unknown]. “Profile: Saudi Arabia.” [undated] original site: http://www.crossborderinformation.com/map/middle-east/saudi-arabia#sthash.h3ZPwIDa.dpuf; cached site, accessed 23 March 2015: http://webcache.googleusercontent.com/search?q=cache:SRzciqL1et4J:www.crossborderinformation.com/map/middle-east/saudi-arabia+&cd=1&hl=en&ct=clnk&gl=us#sthash.u28k7MeZ.dpuf

“2013 Human Rights Reports: Saudi Arabia” 27 February 2014. United States Department of State.
http://www.state.gov/j/drl/rls/hrrpt/2013/nea/220374.htm
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsIt is currently difficult to tell whether large increases in defence spending in the Gulf states are more to do with the bloated patronage systems that have developed in the royal families of the region, or whether they are a response to reduced US military presence in the region. It may be that the increase reflects both of these trends.

http://www.defencenews.com/story/defence/policy-budget/budget/2015/03/22/saudi-uae-influence-grows-with-purchases/25013385/

Cordesman and Obaid however believe that

&quoute;Outside critics have often exaggerated the level of waste and corruption in Saudi arms deals and military procurement. The following sections show that the Kingdom has generally bought the right arms and got a highly effective mix of weapons for its money.&quoute;

http://www.mafhoum.com/press7/226P13.pdf
Government Reviewer4700 OpinionAgree

Procurement64. Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: Some elements of the process are suggestive of a degree of competition, but these seem largely superficial. For example, tenders are available through the websites of the individual service branches (such as the SANG, available here: http://www.sang.gov.sa/Govermentpeper/Pages/default.aspx) and by law tenders must be published in the official gazette (Umm Al-Qura), two local papers, the website of the tendering authority, and be posted for at least 30 days prior to bidding deadline. However, a significant portion of military tenders are exempted from these requirements, and the commercial advisory agencies of foreign governments that sell large quantities of defence material to Saudi Arabia advise their national firms that military procurement is exempted from competitive regulations that govern non-defence procurement, and that decisions are typically made on a case-by-case basis.

There is no reference to competition in the legislation that deals specifically with military procurement. Saudi Arabia does have legislation covering government procurement, specifically the Government Bids and Procurement Law, issued by Royal Decree in 2006 as part of Saudi Arabia's accession to the World Trade Organisation, and became party to the WTO’s Government Procurement Agreement in 2007, which covers issues related to transparency and fair bidding practices. Purchases of weapons and military equipment are explicitly exempted from these procurement laws according to Article 47, which states, “Weapons and military equipment and their spare parts by direct purchase from manufacturers [are exempted from public tender]. The best offer serving public interest shall be selected by a ministerial committee formed for this purpose by a royal decree of at least three members in addition to its chairman. It shall then bring its recommendations before the President of the Council of Ministers for approval.” As a result, official policy is not well-defined, and military procurement often appears to be determined on a case-by-case basis. There is no mention of competition. Given that defence procurement is exempted from the basic law on government procurement outlined above, it is unsurprising that it is not referenced in the competition regulations.

Even in the case of non-military procurement, the process retains major shortcomings. The government does not use a centralized system for procurement, which allows individual procuring agencies a high degree of control over the acquisition process, and special tendering and direct contracting are common.

RESPONSE TO GOVERNMENT REVIEWER: Unfortunately no evidence was found to support this. For example, to award score 4, the questionnaire requires clear evidence that less than 10% of the total value of Saudi Arabia's defence contracts was single-sourced. Score maintained.
Assessor SourcesCrowell.com. 2013. “So you want to do business with the Saudi Government.” Crowell Moring. http://www.crowell.com/files/So-You-Want-to-Do-Business-with-the-Saudi-Government- Crowell-Moring.pdf.

United States Trade Representative, Saudi Arabia, Foreign Trade Barriers, 2012, p338. http://www.ustr.gov/sites/default/files/Saudi%20Arabia_0.pdf

Saudi Arabia National Guard (SANG) website, http://www.sang.gov.sa/Govermentpeper/Pages/default.aspx

Saudi e-Government Program. Best practices of IT procurement. 2009.
http://www.yesser.gov.sa/en/Methodologies/Pages/best_practices_government.aspx

&quoute;Saudi Arabia Launches Huge Arms Buying Spree; France to Net Most Orders.&quoute; [no author]. 22 July 2006. defence Aerospace.com. http://www.defence-aerospace.com/article-view/feature/71654/%3Cstrong%3Esaudi-arabia-to-buy-142-french-helicopters,-tankers-in-huge-arms-deal%3C%C2%A7strong%3E.html

Peter Smith. 20 October 2014. &quoute;Transparency International reports on Military Single-Source Procurement.&quoute; Transparency International. http://public.spendmatters.eu/2014/10/20/transparency-international-reports-on-military-single-source-procurement/
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsIn the past, the difference between who won contracts was largely influenced by commission payments (bribes). Now, although this practice still likely continues, it may be hidden or incorporated into offset agreements which benefit the economic interests of powerful members of the Saudi royal family.

http://www.mckinsey.com/insights/public_sector/defence_offsets_from_contractual_burden_to_competitive_weapon
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score4
Government Reviewer4700 CommentsThe tenders are open to more than one source, as well as there are several sources for procurement.

Procurement65. Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: Each agency has its own tendering authority – and there do not appear to be any regulations governing them beyond the general code of conduct that covers all civil servants (generally interpreted as including military personnel). There is no central tender board, which might exercise oversight over individual agency boards, nor does the General Auditing Bureau or Nazaha appear to have investigated any tendering board or procurement decision made by a defence of security agency.

The tenders themselves are typically available through the websites of the individual service branches (such as the SANG website) and by law tenders must be published in the official gazette (Umm Al-Qura), two local papers, the website of the tendering authority, and be posted for at least 30 days prior to bidding deadline. Tenders are also available through various fee-based business intelligence sources (such as ME Tenders.com, and tendernews.com) but some sources published within the kingdom consist of a single line item labeled “military equipment” not a breakdown of actual items to be purchased.

A significant portion of military tenders are exempted from even these requirements, and purchases of weapons and military equipment are wholly exempted from The Government Bids and Procurement Law of 2006. The exemption (Article 47) states, &quoute;Weapons and military equipment and their spare parts by direct purchase from manufacturers [are exempted from public tender]. The best offer serving public interest shall be selected by a ministerial committee formed for this purpose by a royal decree of at least three members in addition to its chairman. It shall then bring its recommendations before the President of the Council of Ministers for approval.”

Clearly there are major shortcomings in the conduct of tender boards, as the publication Intelligence Online reported that the late King Abdullah was transferring responsibility for managing the bidding processes for large defence tenders to foreign consulting firms, with the winning bid chosen from a short-list handed over to the royal cabinet.
Assessor SourcesCrowell.com. 2013. “So you want to do business with the Saudi Government.” Crowell Moring. http://www.crowell.com/files/So-You-Want-to-Do-Business-with-the-Saudi-Government- Crowell-Moring.pdf.

“Contracts: Riyadh rewrites the rules; Saudi Arabia.” September 29, 2011. Intelligence Online. [subscription required] http://www.intelligenceonline.com/government-intelligence/2011/09/29/contracts-riyadh-rewrites-the-rules,93184238-EVE

Saudi Arabia National Guard (SANG) website, http://www.sang.gov.sa/Govermentpeper/Pages/default.aspx
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsThe General Law of Governance states that audits shall be reviewed by the PM. Clearly this does not count as independent oversight.

http://www.shura.gov.sa/wps/wcm/connect/ShuraEn/internet/Laws+and+Regulations/The+Basic+Law+Of+Government/Chapter+Eight/
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsYes, when accrediting the Career Code of Conduct.

Procurement66. Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: Competition Regulations were issued by Royal Decree on 22 June 2004 (entering into force on 31 December 2004); and the decree also established the Competition Protection Council (CPC), housed within the Ministry of Commerce and Industry. However these regulations make no mention of defence procurement. Given that defence procurement is exempted from The Government Bids and Procurement Law of 2006, it may in practice also be exempted from this competition law, which allows for exemptions at the discretion of the CPC.

Article 47 of the Government Bids and Procurement Law states, &quoute;Weapons and military equipment and their spare parts by direct purchase from manufacturers [are exempted from public tender]. The best offer serving public interest shall be selected by a ministerial committee formed for this purpose by a royal decree of at least three members in addition to its chairman. It shall then bring its recommendations before the President of the Council of Ministers for approval.”

Practices that are specifically prohibited under the 2004 competition decree (in Article 4.6 and 4.7) include colluding in tenders or ‘bid-rigging.’ Declared joint bids are allowed, so long as the intent is not to violate the principle of competition. Punishments include fines of $1.3 million for each violation, up to $6.5 million. However, anecdotal evidence from non-defence contracts suggests that it is common practice for large contractors to establish temporary subcontractors under the names of local agents or employees, and use these to bid for projects. These temporary contractors then assume liability for any violations of the contract terms, leaving the large contractor unscathed in the event of complications. This is certainly a form of collusion that is difficult to identify or punish.

There is likewise a requirement that consortia or partnerships between firms submitting a bid for a government tender must have been in existence prior to their submission of a bid - which could also discourage collusion. Thus far, the CPC has pursued a small number of cases, including several cases against medical supply companies - but none involving defence contracts. There is no evidence of collusion in defence procurement. Although the language of the decree states that the law “shall apply to all entities operating in the Saudi markets and various activities thereof,” the law also provides for exemptions at the discretion of the CPC.
Assessor SourcesMusaed al-Otaibi. October 2010. “Does the Saudi Competition Law Guarantee Protection to Fair Competition? A Critical Assessment,” p80-81. PhD Thesis: University of Central Lancashire.

“KSA blacklist threat looms for 1,500 contractors.” 10 July 2014. Arab News. http://www.arabnews.com/news/599676. See comment thread.

Website of the Saudi Arabian Council Of Competition Protection. (Ministry of Commerce & Industry). http://www.ccp.org.sa/en/page/list_all/4
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree
Government Reviewer4700 OpinionNot Qualified

Procurement67. Are procurement staff, in particular project and contract managers, specifically trained and empowered to ensure that defence contractors meet their obligations on reporting and delivery?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: The Ministry of Defence has - for several decades - employed a large number of international consultants and commissioned a large number of studies designed to evaluate the efficiency and cost effectiveness of their various projects (particularly defence-related construction). Many of the Kingdom's defence contracts are government-to-government agreements that are administered by civilian defence officials from the U.S. and U.K. stationed in the Saudi Ministry of Defence and act as primary contract monitors. On the U.S. side, the Joint Advisory Division (JAD) of the U.S. Military Training Mission (USMTM) provides U.S. personnel that serve as principal assistants to Saudi personnel in the Foreign Procurement Department. On the U.K. side, similar services (including contract monitoring) are performed by several hundred personnel under the U.K. Ministry of Defence Saudi Arabian Projects Office (MODSAP) and the Saudi Arabia National Guard Communications Project/SANGCOM. They supply information to the Saudi MOD staff in the MOD's Foreign Procurement Department (FPD) and the Planning, Budget and Follow-up (PBF) Department.

The Kingdom maintains a large number of technical and vocational schools that train Saudi citizens in areas like contract management and procurement, and many individuals employed by the Saudi Government have completed similar courses through the US International Military Education & Training program. Despite these formal training programs, there is no evidence that Saudi procurement staff have ever lodged complaints against defence contractors that resulted in punishment or sentences for the contractors or defence officials that may have been colluding with them.

According to reports (sources above), in 2011 the (late) King Abdullah overhauled the bidding processes for large government tenders in response to persistent corruption in Defence and Interior. Instead of being handled by these ministries, the bids would be directly overseen by professional management and consulting firms – primarily from the US, with the winning bid chosen from a short-list handed over to the royal cabinet. If corruption was endemic to the bidding process, there is no reason to expect that Saudi contract monitors in the Ministries of Defence or Interior were better equipped to keep corruption out of the contract implementation and monitoring process. Senior Saudi officials certainly have sufficient leverage to hold defence contractors to account, but they are more likely to use such leverage for personal enrichment.

It is more likely that complaints against contractors are settled informally, such as appeared to be the case with the UK MOD’s official offset liaison office. This office claimed to have completed the required offset projects according to the provisions of the Al Yamamah arms deal concluded in the mid-1980s. However, after informal protests by unnamed Saudi officials, the UK’s offset office claimed to have come to “a gentleman’s agreement” with the Kingdom that “the program will continue to run and run.”

In some cases the training institutes that offer courses in contract management to Saudi public servants are also affiliated with the kingdom's major defence suppliers, and there is a great deal of back-and-forth movement between private sector defence contractors and government agencies. (So there is opportunity for conflicts of interest to develop). For example, under a previous offset commitment incurred by BAE, the company set up the Saudi Development and Training Company to train Saudi citizens in management and other areas to prepare them for government and private sector jobs. The company is today 100% owned by BAE. The Saudi Government also (apparently) employs overseas labor recruiters to locate personnel to work in procurement on behalf of the Ministry of Defence. This is suggested by the website of a Filipino recruiting agency called East Transglobal Manpower Consultants, Inc., which publicized a job in Saudi Arabia regarding defence procurement (although this may be on behalf of a private contractor operating in the country).

There is no evidence of staffing or rotation in the Saudi MOD's Foreign Procurement Department (FPD) or the Planning, Budget and Follow-up (PBF) Department.
Assessor Sources“Resources, Country Information, Saudi Arabia: MODSAP and SANGCOM.” Campaign Against the Arms Trade (UK). http://www.caat.org.uk/resources/countries/saudi-arabia/modsap.php

Tony Smith, UK Ministry of defence British Offset Office on the status of the Al Yamamah offset program, April 2007. Reported in Countertrade & Offset Newsletter. 9 April 2007. 25(7).

Andrew Feinstein. 2012 The Shadow World: Inside the Global Arms Trade. New York: Picador, p15-16.

“Saudis mount cleanup amid defence scandal.” 10 June 2011. UPI. http://www.upi.com/Business_News/Security-Industry/2011/06/10/Saudis-mount-cleanup-amid-defence-scandal/UPI-73811307725474/

“Contracts: Riyadh rewrites the rules; Saudi Arabia.” September 29, 2011. Intelligence Online. [subscription required] http://www.intelligenceonline.com/government-intelligence/2011/09/29/contracts-riyadh-rewrites-the-rules,93184238-EVE

[no author]. February 2014. &quoute;The full story of the Saudi arms gift to Lebanon.&quoute; Al-Monitor. http://www.al-monitor.com/pulse/security/2014/02/fully-story-saudi-lebanon-army-france-grant.html
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsCordesman and Obaid note that:

&quoute;The Saudi National Guard has a much better reputation within the Kingdom and among its foreign advisors for promoting on the basis of merit, for setting training standards and insisting that they be met, and for avoiding corruption. Budget control is tighter, and the National Guard does not make the vast purchase of advanced weapons technology that complicate the planning and budgeting problems of the regular armed forces.&quoute;

www.dcaf.ch/content/download/33692/522601/version/1/file/ev_geneva_04071113_Cordesman.pdf

As with other Gulf states, the inner workings of the domestic police are more transparent than those of the national army.
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsContracts are only made with companies whom are assessed from the financial, technical and security aspects to ensure the implementation of its contractual obligations.

Procurement68. Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
Score2.0
Assessor CommentsResearcher + Peer Reviewer1332: The Board of Grievances (BOG) has jurisdiction over contract disputes where a public sector entity (like the Ministries of Defence or Interior) is party to the contract. Anecdotal evidence (primarily case lists on the websites of law firms operating in Saudi Arabia) demonstrates that foreign defence contractors regularly pursue disputes through the BOG, and that these cases have been decided in the contractor's favor. (Although none of these cases indicated that corruption or bribery were the basis for the complaint - even with a high-profile defence corruption case such as the Al-Yamamah scandal, there is no evidence of a complaint being filed with the BOG).

However, firms pursuing complaints involving defence contracts or other similarly sensitive forms of procurement may not be afforded the same rights at the BOG as firms engaged in non-defence procurement. In one case, a legal team reported that their client (a non-defence contractor) was unable to review documents submitted as evidence by the complainant (a government agency) because they were considered ‘internal government documents’ that should not be available for ‘public’ view. The legal team expressed surprise at this limitation, which they expected only in cases that involved the Ministry of Defence or other similarly ‘sensitive’ agencies.

In addition to the BOG, plaintiffs can petition the King directly to hear their complaint (or seek to have a senior prince bring up the issue with the King). Although rare, this avenue has been used by a small number of very large contractors, and anecdotal evidence indicates that these disputes can be resolved to the contractor's benefit. In theory, contractors can also appeal to the King if they feel the BOG decision was in error, in which case the King forwards the appeal to the Council of Ministers, which decides whether to ask BOG to re-hear the case. This appeal process is rarely invoked. BOG decisions are published, but are not widely disseminated.

Various indices still report that contractors find the dispute resolution process cumbersome. Furthermore, Saudi government entities are prohibited from using arbitration to resolve disputes with private contractors unless they get special permission from the Council of Ministers (a result of a negative ruling against the government in a dispute with the Arab American Oil Company/ARAMCO in the 1960s). In practice, several government contracts have included arbitration clauses at the recommendation of the Council of Ministers.
Assessor SourcesU.S. Government Accountability Office. Opinion Agency: Department of the Army Disposition. Alsalam Aircraft Company, B-401298.4, January 8, 2010. www.gao.gov/decisions/bidpro/4012984.pdf

Hassan Mahassni and Neal F. Grenley. 1987. “Public Sector Dispute Resolution in Saudi Arabia: Procedures and Practices of Saudi Arabia's Administrative Court.” International Lawyer. 21(3): p838

Website of the Law Firm of Hassan Mahassni, which sites: &quoute;Counsel to the Saudi Arabian affiliate of a U.S. defence contractor in three actions against a Saudi ministry for reimbursement of amounts paid to subcontractors under a major military procurement contract.&quoute; http://www.mahassni.com.sa/prc_litigation.htm. [accessed 8 April 2015].

Website of the Law Firm of Mohammed Al-Ghamdi In Association with Norton Rose Fulbright US LLP, which states, &quoute;Counsel to one of world's largest aerospace and defence contractors in connection with a continuing Saudi Board of Grievances case regarding its Saudi joint venture limited liability company and application of the Saudi Companies Law and corporate governance practices.&quoute; http://www.nortonrosefulbright.com/people/90185/mohammed-al-ghamdi [accessed 8 April 2015].
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsSuggested reference:

The Board of Grievances in Saudi Arabia
David E. Long
Middle East Journal
Vol. 27, No. 1 (Winter, 1973), pp. 71-75
http://www.jstor.org/stable/4325022?seq=1#page_scan_tab_contents
Government Reviewer4700 OpinionAgree with Comments
Government Reviewer4700 CommentsThere are procedures set out in the Government Tenders and Procurement Law that ensure companies their right to issue complaints.

Procurement69. What sanctions are used to punish the corrupt activities of a supplier?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: According to the Government Procurement Law of 1966, companies that are found to be in violation of bribery statutes (or have employed an intermediary in armaments contracts) will have their contract suspended and be prohibited (temporarily or permanently) from bidding on future government contracts. Provisions are also made for a five year blacklist following findings of deceit, fraud or manipulation. However, I have not been able to find any cases where this penalty was enforced in defence contracts, despite numerous cases where bribery and the use of intermediaries was later revealed in corruption investigations carried out in other jurisdictions.

The only evidence of these punishments is in relation to non-defence contracts and suppliers. For example, Tyco – a major oil and gas services supplier registered in Delaware and headquartered in the UAE – was found guilty in 2012 of paying nearly $500,000 in bribes to several employees of Saudi Aramco. Although Tyco was assessed fines and penalties of $26 million by the US Department of Justice (which carried out the investigation and prosecution) the only penalty the company faced in Saudi Arabia – where it had executed $42 million in contracts with Aramco over the period in which the bribes were paid – was a temporary suspension from conducting business. Just a year after the case was decided, the firm (renamed Pentair) was again signing major service contracts with Aramco.

In another recent case, Saudi municipal employees and one businessman were given jail time after being found guilty of a kickback scheme involving defective building materials that exacerbated the damage from major flooding in 2009 and 2011. Historically, the Saudi Government has prohibited domestic suppliers from providing parts for use in Saudi defence and/or security equipment.

defence contractors that have been convicted of corruption in deals with Saudi Arabia in non-Saudi courts (usually in the country where their operations are headquartered) have not paid fines or faced other disciplinary actions from the Saudi Government. However, the Saudi judicial system has apparently been used to pursue claims against suppliers for inadequate payment of commissions to middlemen.

According to a 2002 report by Transparency International, &quoute;Corrupt payments in the form of commissions were so institutionalized in defence procurement in Saudi Arabia that allegations of insufficient payment of commissions were the subject of a 1997 High Court Writ (A No. 1828). Aerospace Engineering Design Corporation (with reputed Saudi interests but incorporated in Panama) sued Rolls Royce plc for their alleged failure to pay contracted commissions on the sale of aero-engines to the Royal Saudi Air Force. The writ (which was strenuously defended and subsequently withdrawn) alleged that commissions had only been paid up to 8% of the whole price whereas the contracted commissions were at a rate of 15% up to certain base prices and 100% on prices above base.

RESPONSE TO GOVERNMENT REVIEWER: The only provisions found in this law are listed in Paragraph 1 and all available evidence has indicated these are rarely applied in practice. Score maintained.
Assessor SourcesGovernment Procurement Law of 1966, Articles 53(a), 77-78.

“KSA blacklist threat looms for 1,500 contractors.” 10 July 2014. Arab News. http://www.arabnews.com/news/599676

&quoute;Business Ethics and Anti-Bribery Policies in Selected Middle East and North African Countries. MENA Task Force on Business Integrity and Combating Bribery of Public Officials. MENA-OECD Investment Programme. Catherine Courtney. &quoute;Corruption in the Official Arms Trade. April 2002. Policy Research Paper 001. Transparency International (UK)
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsIt seems unlikely that the companies working for the big three countries in KSA (US, UK, France) would complain about the corrupt practices of each others' officials. They all understand how the rules of contracting work, and the defence agreements are signed by the countries involved, not the companies. The companies are then contracted by the countries, acting as power projection extensions of their foreign policy.

Source: Interview with Campaign Against the Arms Trade researcher.

However, investigations into bribery like the SFO investigation in the UK of BAE Systems may have reduced some blatant corruption, or regularised it as offset agreements.

&quoute;The US investigation into Al Yamamah resulted in the conviction of the prime contractor (BAE Systems) for dubious conduct in that and other arms deals. In particular, “the actions of BAE Systems impeded U.S. efforts to ensure international trade is free of corruption”

http://deceptioninhighplaces.com/the-ministry-of-defence-and-detecting-bribery-in-saudi-arms-deals/
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score4
Government Reviewer4700 CommentsThere are procedures set out in the Government Tenders and Procurement Law to address such cases.

Procurement70. When negotiating offset contracts, does the government specifically address corruption risk by imposing due diligence requirements on contractors? Does the government follow up on offset contract performance and perform audits to check performance and integrity?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: There is no due diligence on offsets required by the Saudi Government, and offset policy is characterized by concepts like &quoute;best-endeavours” clauses. In response to independent inquiries regarding the fate of an offset-generated shrimp farm, the Saudi offset authority reported that it maintained only “minimum information” on projects after their initial startup, and directed further inquiries to the project's commercial backers, which include the defence firm Raytheon (which in turn suggested contacting the Saudis) and the investment firm DevCorp, which did not respond (inquiry conducted by author of “The Art of Selling Weapons: defence industry”). Contractors and foreign government officials routinely complain of non-responsiveness on the part of Saudi Arabia's offset bureaucracy, the Economic Offset Program (EOP). In these instances, contractors and foreign officials report that they ordinarily proceed with the proposed offset project without specific Saudi Government approval.

The process is made more problematic by the successful efforts of defence firms to have offset agreements characterized as proprietary business contracts and thus protected from disclosure or meaningful reporting requirements.

The Saudi government certainly has, in the past, followed-up on offset contract performance, although probably not with formal audits (Smith, 2007). For example, the UK MOD’s official offset liaison office claimed to have completed the required offset projects according to the provisions of the Al Yamamah arms deal signed in the mid-1980s. However, after informal protests by unnamed Saudi officials, the UK’s offset office claimed to have come to “a gentleman’s agreement” with the Kingdom that “the program will continue to run and run.”

Because offset-generated financing and/or technology transfer benefits are likely to go to parastatal industries or to the commercial enterprises of elites with close ties to the royal family, the government does have a built-in incentive to monitor performance and maximize offset-generated benefits - even if these benefits accrue to regime cronies, not the broader economy.

Although Saudi Arabia does have provisions to penalize contractors for non-fulfillment of offset agreements, no such penalties have ever been imposed. Additionally, contractors' projections of the economic impact - especially in terms of jobs for Saudi nationals - have proven extremely inflated, though this does not seem to have caused the government to reassess its approach to offsets.

Saudi Arabia previously focused its offset projects on civilian production, but (like the other GCC states) has recently revived its efforts to increase domestic production of defence material using technology and equipment transferred under its offset program. This policy change may increase the government's commitment to oversight of the program. However, the majority of previous offset-generated investment has gone to finance non-defence related commercial enterprises for the benefit of influential merchants and large conglomerates. Some arms brokers - including Wafic Said - admit to having made their fortunes under the auspices of the Saudi offset program.
Assessor SourcesShana Marshall. 2012 “The New Politics of Patronage: The Arms Trade and Clientelism in the Arab World.” Brandeis University: Crown Center for Middle East Studies, Working Paper.

Shana Marshall. 2009. “Money for Nothing? Offsets in the U.S.–Middle East defence Trade. International Journal of Middle East Studies.

“The Art of Selling Weapons: defence industry.” 17 June 2013. http://www.alphabetics.info/international/2013/06/17/how-to-sell-weapons-the-defence-industry/#respond

Stephen Fidler and Michael Peel. 1 July 2007. “Web of payments proves a sticky issue.” The Financial Times.

Tony Smith, UK Ministry of defence British Offset Office on the status of the Al Yamamah offset program, April 2007. Reported in CTO Newsletter. 9 April 2007. 25(7).
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsI agree that offset agreements may be convenient ways to hide commission payments. They certainly seem to be being demanded more by KSA.

http://www.middleeasteye.net/news/saudi-arabia-1295679323

http://www.mckinsey.com/insights/public_sector/defence_offsets_from_contractual_burden_to_competitive_weapon
Government Reviewer4700 OpinionNot Qualified

Procurement71. Does the government make public the details of offset programmes, contracts, and performance?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: The Saudi government is known to be involved in offset contracts and programmes, but does not make any details of them transparent. The government used to maintain an official website that contained details of previous offset programs, and the government’s offset bureaucracy has previously released reports detailing figures (such as the number of jobs created, the dollar value of offset-generated projects, etc.) on an ad-hoc basis. However, there is no annual reporting requirement, and the website is no longer active.

There is some information available through a website maintained by the British Offset Office, which profiles some projects in Saudi Arabia funded through the office's Project Financing Initiative, which is capitalized by BAE in fulfillment of its offset obligations. However, these profiles are only updated to 2012, after which the website only provides news items related to regional conferences on project finance and related topics. The most recent project profile is here: http://www.britishoffset.com/global-pipe-company/

As detailed in the previous question, it appears that the government does not collect information on the subsequent performance of offset projects after they are established (much less make such details public) - note too that the above site, rather than being a Saudi government website, is a promotional site maintained by the UK's MoD. The Saudi government website, where (presumably) they would include details such as the rules governing investment is still 'coming soon,' which I believe has been the case for several years now: http://www.offset.org.sa/

A Saudi academic was able to get details on projects directly from the Saudi Economic Offset Office, though this is only current through 2005.
Assessor Sources“The Art of Selling Weapons: defence industry.” 17 June 2013. http://www.alphabetics.info/international/2013/06/17/how-to-sell-weapons-the-defence-industry/#respond

&quoute;British Offset recently received Final Approval from the Saudi Offset Committee for the Global Pipe Company project.&quoute; (2012). http://www.britishoffset.com/global-pipe-company/

M.A. Ramady. 2005. &quoute;Components of technology transfer: a comparative analysis of offset and non-offset companies in Saudi Arabia&quoute;, World Review of Science, Technology and Sustainable Development. Volume 2(1). http://www.environmental-expert.com/Files%5C6471%5Carticles%5C6402%5Cf761025943128111.pdf.

Website of Saudi Economic Offset Program (remains under construction): http://www.offset.org.sa/
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsThe non-renewal of the website mentioned above provides (in my opinion), good circumstantial evidence for the idea that offsets are being used to hide commission payments. This needs more research by groups like CAAT to prove, but the burden should be on the UK, US, French and other states with bid defence contracts to prove that their offsets are not subject to corrupt practices.
Government Reviewer4700 OpinionNot Qualified

Procurement72. Are offset contracts subject to the same level of competition regulation as the main contract?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: There is no indication that offsets are subject to any regulation beyond very basic non-performance penalties (and there is no evidence of actual enforcement of this principle). However, offset contracts may be an increasingly decisive factor in the procurement decision-making process itself, as many contracts are based on political rationales to begin with, and access to sensitive technologies that come along with licensed or collaborative production of defence material is of increasing importance to Saudi Arabia. Witness the recent coproduction element included in the Eurofighter Typhoon deal with BAE, in which Saudi Arabia was willing to pay a much higher contract price in exchange for a commitment by BAE to establish domestic facilities for the production of spare parts and performance of basic maintenance and upgrades.

However, as Saudi Arabia’s offset requirements are understood to be extremely arbitrary (beyond the 30% contract value requirement) and there is little available information on offset performance, it is difficult for firms to compete on the basis of offsets. Pre-production offsets (where potential bidders perform offsets in the hopes of gaining preferential consideration of their bids) have become a common feature of defence sales to the Gulf, which indicates that offsets are indeed a critical part of the procurement decision-making process. The application of offset ‘multipliers’ by Saudi Arabia and other Gulf states (wherein firms are granted additional credit toward satisfying their offset obligations in exchange for agreeing to collaborate in sectors the procuring country deems preferable) also indicates the increasing importance of offsets in the overall procurement process. This increasing importance has not been met with more rigorous regulation.
Assessor SourcesSouhail Karam. “Saudi Arabia opens military supply to local firms.” 7 February 2010. Reuters. http://www.reuters.com/article/2010/02/07/idUSLDE616043

&quoute;The Report: Saudi Arabia.&quoute; 2010. Oxford Business Group, p37-38.

Shana Marshall. 2009. “Money for Nothing? Offsets in the U.S.–Middle East defence Trade. International Journal of Middle East Studies.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsA recent paper on Trends in Offset Agreements states:

&quoute;Saudi Arabia’s market is expected to create the biggest cumulative value of military offset obligations, totalling $62.63 billion by 2021.

http://www.sipri.org/research/armaments/milex/ICES2013/papers/archive/ungaro-trends-in-the-defence-offsets-market

BAE Systems' website notes that &quoute;Our internal audit function may also audit offset agreements and confirm compliance with internal policy or regulatory requirements such as the UK Bribery Act.&quoute;

http://www.baesystems.com/our-company-rus/corporate-responsibility/working-responsibly/how-our-business-works/offset;baeSessionId=3G0LJ0Z3hb7aPvY3-XpuCpX__Sae-DgsWGAEpyMaaiLZ4-RmKfl_!1226310415?_afrLoop=515867420166000&_afrWindowMode=0&_afrWindowId=null#!%40%40%3F_afrWindowId%3Dnull%26_afrLoop%3D515867420166000%26_afrWindowMode%3D0%26_adf.ctrl-state%3Das03i4jcx_4
Government Reviewer4700 OpinionNot Qualified

Procurement73. How strongly does the government control the company's use of agents and intermediaries in the procurement cycle?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: Although the use of agents and intermediaries in defence procurement is explicitly illegal in Saudi law, all evidence points to the widespread use of intermediaries that are extremely well-compensated.

Saudi Arabian Royal Decree M/2 (1978) mandated the use of domestic Saudi agents by foreign firms while also expressly prohibiting the agents in defence-related sales. This law (commonly known as the Service Agents Law) was repealed in its entirety in 2001, which would seem to indicate that the prohibition against the use of agents in defence procurement was no longer in effect. However, Council of Ministers Resolution No. 1275 (1975) also explicitly bans the use of agents or commissions in agreements to provide defence-related goods or services to the Saudi government, and this law has not been repealed.

Resolution 1275 further states that any company that has concluded a defence contract with the Saudi government is prohibited from paying any commission to any intermediary, sales agent, representative, or broker, regardless of whether the contract has been concluded between the foreign entity and the Saudi Arabian government directly or via a third-party state. Such firms must file a form with the Ministry of Commerce attesting to the fact that their contract deals with armaments, that no intermediary is/was involved, and that the contract price does not include any commissions to be paid to any such intermediaries.

If they are proven to have paid any such commissions, existing law demands that they refund the amount paid to these brokers to the Saudi Government (since presumably the cost of these commissions was passed on to the Government). However, various court cases heard outside Saudi Arabia indicate that this is rarely (if ever) enforced in contracts for armaments or any other types of government procurement. The only compliance programmes likely to impact such companies are those imposed by their own home governments or foreign governments that have some jurisdiction over their business operations (such as the US FCPA or the recently passed UK bribery act).

Nearly all surveys of individuals doing business in the kingdom report widespread use of intermediaries and facilitation payments, and US Government publications advising commercial entities doing business in the kingdom indicate that the Saudi Ministry of Commerce employs a very narrow definition of what constitutes “armaments” - allowing for the participation of agents in a variety of defence and security-related contracts. Furthermore, only civil servants can be prosecuted for influence peddling - which may explain why the most widely publicised brokers in Saudi Arabia were private citizens (see examples above) not government functionaries. In place of procuring an agent, it is common for foreign defence firms to establish branch offices by obtaining a license from the Foreign Capital Investment Committee in the Ministry of Industry & Commerce. (This form of local operation is only available to defence firms).

The most well-known intermediaries are private citizens, though princes are probably the largest beneficiaries of arms deals in dollar terms. There is evidence that much of the Royal Family’s wealth comes from re-directing a small percentage of the state’s procurement contracts. For example, in the long-running BAE inquiry, it was revealed that the head of the Saudi air force, Prince Turki bin Nasser (along with his relatives and business associates) ran up over £60m in charges for shopping, plane tickets and vacations, paid by BAE. A Saudi intermediary related the process to a Guardian newspaper journalist in 2012: in which the broker claims that on his Saudi deals he gives more than half of the contract price back in bribes.

There is some evidence that King Salman may be cracking down on the use of foreign intermediaries, though this does not necessarily reflect a crackdown on Saudi intermediaries. An arms shipment to Lebanon from France (financed by Saudi Arabia) was delayed over concerns about a French company that Saudi officials characterized as an intermediary.

RESPONSE TO GOVERNMENT REVIEWER: Unfortunately this provision is outlining exemptions where the government may bypass standard competitive tendering requirements, rather than establishing controls over the use of agents or brokers. Score maintained.
Assessor SourcesCouncil of Ministers Resolution No. 1275 (1975)

Saudi Arabia: Agency and Distribution. Date unknown. Law Office of Howard L. Stovall. http://www.stovall-law.com/images/GMB_Chapter_revised_Sau_.pdf

John Balouziyeh. 21 February 2013. “Military Tenders and Procurement in Saudi Arabia: Guidelines for the Payment of Commissions, Success Fees, and Agency Fees.”

Thomas W. Hill, Jr. November 1989. &quoute;Foreign Representatives: Saudi Law and the Foreign Corrupt Practices Act (FCPA). Arab Law Quarterly. 4(4). Samir Shamma and William D. Morrison. 1977. &quoute;The Use of Local Representatives in Saudi Arabia. International Lawyer. 11(3).

Saudi Arabia Investment and Business Guide. 2011. Washington DC: International Business Publications, p99.

See Said K. Aburish. 2005. &quoute;The Rise, Corruption, and Coming Fall of the House of Saud.&quoute; London: Bloomsbury Publishing, p195-196.

See David Leigh and Rob Evans, 9 June 2007, BAE's secret money machine, The Guardian (UK). http://www.theguardian.com/world/2007/jun/09/bae

Andrew Feinstein, 16 August 2012. “The Saudi-GPT deal inquiry must not be another whitewash,” The Guardian. http://www.theguardian.com/commentisfree/2012/aug/16/serious-fraud-office-arms-trade

See Thomas Hubert. September 4 2014. “France and Saudi Arabia edge closer to massive arms deal for Lebanon,” France 24. http://www.france24.com/en/20140903-france-saudi-arabia-weapons-lebanon-hollande-salman.
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsI would note here that the simple explanation for why &quoute;local laws are often overlooked&quoute; (Balouziyeh, 2013) is that Saudi Arabia is the private enterprise of one family, the al-Saud. As such, it is their private fiefdom and while laws may apply to the majority of citizens, they are easily overlooked when the individual concerned is a high-ranking member of the al-Saud family. The appearance of state bureaucracies and other institutional structures masks the fact that KSA is not a 'state' in the Westphalian, Eurocentric view of the term.

http://www.lexisnexis.com/legalnewsroom/international-law/b/commentry/archive/2013/02/21/military-tenders-and-procurement-in-saudi-arabia-guidelines-for-the-payment-of-commissions-success-fees-and-agency-fees.aspx
Government Reviewer4700 OpinionDisagree
Government Reviewer4700 Suggested Score4
Government Reviewer4700 CommentsThe Government Tenders and Procurement Law stated in article number (47/A) that all weapons, military equipment and its spare parts would be purchased directly from manufactures.

Procurement74. Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: No financing details dealing with defence procurement are released by the Saudi Government, either before or after the signing of contracts. Details on offset-related financing or co-production terms may be made available through government-sponsored promotional materials (such as those produced by the PR and communications firm Marcopolis; see source above). Such package details are often viewed as forms of foreign direct investment and publicized as examples of economic diversification and other positive developmental milestones. But this is not mandated by Saudi law or procurement regulation, and is completely arbitrary. Financing details (such as the oil barter terms that accompanied the Al Yamamah deal) are either only available from the selling country government or reported in arbitrary detail in fee-based industry intelligence publications. Much of the Saudi Government's procurement takes the form of very large contracts that morph into open-ended government-to-government purchasing agreements that continue for years as agreements over spare parts, maintenance, upgrades, and other details are added. This was the case with most of the kingdom's purchases from the U.S. and U.K. (such as the Peace Shield deals, Al Yamamah, and now Al Salaam).
Assessor Sources“Typhoon Repair in Saudi Arabia.” 24 July 2014. Marcopolis. http://www.marcopolis.net/typhoon-repair-in-saudi-arabia-2407.htm
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsAll reports on huge arms deals with Saudi Arabia note things like:

&quoute;The talks between the U.S. and Saudi Arabia have been widely known for months, but many new details are only now coming into focus. These include the number and type of aircraft involved, how much the Saudis intend to spend in an initial installment, and the ongoing negotiations to also upgrade the kingdom's navy and missile defences.&quoute;

http://www.wsj.com/articles/SB10001424052748704621204575488361149625050

This article also quotes Cordesman:

'Anthony Cordesman, a scholar at the Center for Strategic and International Studies, said the deal is so large and so complex, that changes are inevitable.

&quoute;The actual contract often is renegotiated because the Saudis are always going to push, we're always going to push, the Congress is going to push, the manufacturer is going to push. This is not the kind of negotiation where you've really agreed on the final details until you actually have put the final contract out&quoute;'
Government Reviewer4700 OpinionNot Qualified

Procurement75. Does the government formally require that the main contractor ensures subsidiaries and sub-contractors adopt anti-corruption programmes, and is there evidence that this is enforced?
Score0.0
Assessor CommentsResearcher + Peer Reviewer1332: Saudi government procurement law holds contractors accountable for the performance of their subcontractors, but there is no evidence that subcontractors must sign the same “no bribery” affidavit that is required of prime contractors. Anecdotal evidence from non-defence contracts suggests that it is common practice for large contractors to establish temporary subcontractors under the names of local agents or employees, and use these to bid for projects. These temporary contractors then assume liability for any violations of the contract terms, leaving the large contractor unscathed in the event of complications. There is certainly no evidence that such anti-corruption programmes actually operate in the defence sector.
Assessor Sources“KSA blacklist threat looms for 1,500 contractors.” 10 July 2014. Arab News. http://www.arabnews.com/news/599676. See comment thread.

John Balouziyeh. 21 February 2013. “Military Tenders and Procurement in Saudi Arabia: Guidelines for the Payment of Commissions, Success Fees, and Agency Fees.”

Thomas W. Hill, Jr. November 1989. &quoute;Foreign Representatives: Saudi Law and the Foreign Corrupt Practices Act (FCPA). Arab Law Quarterly. 4(4). Samir Shamma and William D. Morrison. 1977. &quoute;The Use of Local Representatives in Saudi Arabia. International Lawyer. 11(3).

Company prospectus for Bahri Shipping (logistics firm): http://www.bahri.sa/Bahri_English_Prospectus.pdf, p172. [accessed 8 April 2015].
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsThe signing of the huge Typhoon jet deal by BAE and Saudi Arabia is a good case in point. In 2014, Prince Charles visited KSA and the deal was announced the day after.

&quoute;Announcing the deal last Wednesday, Ian King, chief executive of BAE, manufacturer of the jets, said the public was &quoute;never going to know&quoute; how much the Saudis would pay for them.

Mark Pyman a director, said: &quoute;Too often in the past, deals like this have been shrouded in secrecy and beset with allegations of corruption. BAE Systems and the Saudi and British governments should have nothing to hide.&quoute;.

Information about the deal should also be made available to oversight bodies and the public, Pyman says. That must include transparency in the offsets arrangements, and the use of subsidiaries, subcontractors, and agents.&quoute;

http://www.theguardian.com/uk-news/defence-and-security-blog/2014/feb/24/arms-gulf-prince-charles

Procurement76. How common is it for defence acquisition decisions to be based on political influence by selling nations?
Score1.0
Assessor CommentsResearcher + Peer Reviewer1332: It is conventional wisdom that defence acquisition decisions are based more on politics than objective defence requirements. One retired U.S. military officer states this explicitly, “[Saudi Arabia] maintain[s] an inventory of many types of Western equipment, really a mishmash of equipment, often purchased based more on political rationale, or for corrupt personal reasons”. There is an evident tendency to purchase large numbers of duplicative weapons systems, such as operationally similar fighter jets from the US and UK (the Typhoon and the F-15), and similar armored personnel vehicles from Canada, Serbia and Germany. The SIPRI trade register shows the US, France, UK and Germany to be the largest suppliers of arms to Saudi Arabia for the past 3 decades.

The assessor's analysis is that defence purchases are seen as a way of solidifying alliances with a range of foreign partners such as the US, UK and France, which have been the kingdom’s largest arms suppliers (and who also provide security guarantees and diplomatic support in return for continued Saudi defence spending), but also increasingly with smaller weapons-producing states such as Germany, Canada, and Spain. This spread of purchasing may also be driven by a desire to hedge against future shifts of global politics.

Marketing and consulting firms have also identified this as the impetus for procurement decisions. In a recent report aimed at aerospace and defence companies, IHS Global Insight (part of the Janes Defence Group of Companies) stated, “Gulf states have historically bought friendships and support through materiel acquisition….[w]arming ties with new suppliers (e.g. India, South Korea and Singapore) plus Eastern powers (Russia, China) point to broadening supplier relations as global power balance shifts.” And continues with, “Materiel procurement [in the Gulf states] is typically used as a means of cementing relations and achieving broader aims. Political alignment is therefore vital for successful business.”
Assessor SourcesU.S. Army Colonel Norvell DeAtkine. 18 March 2013. “Western Influence on Arab Militaries: Pounding Square Pegs into Round Holes.” Rubin Center: Research in International Affairs. http://www.rubincenter.org/2013/03/western-influence-on-arab-militaries-pounding-square-pegs-into-round-holes/

IHS Janes. 8 March 2015. “Saudi Arabia replaces India as largest defence market for US.”
http://www.janes.com/article/49809/saudi-arabia-replaces-india-as-largest-defence-market-for-us

Steffen Hertog. 2011. “Rentier Militaries in the Gulf States: The Price of Coup-Proofing.” International Journal of Middle East Studies, 43(3).

Alastair Sloan. 25 March 2014. “Gulf states among world's largest arms importers.” Middle East Monitor.
https://www.middleeastmonitor.com/articles/middle-east/10510-gulf-states-among-worlds-largest-arms-importers

“Doing Defence Business In The Gulf: Five Things You Need To Know.” IHS White Paper, 2013 http://www.ihs.com/pdfs/IHS-White-Paper-Doing-Defence-Business-In-The-Gulf-Five-Things-You-Need-To-Know.pdf

Stockholm International Peace Research Institute Trade Register. http://armstrade.sipri.org/armstrade/page/trade_register.php
Peer Reviewer3934 OpinionAgree
Researcher + Peer Reviewer4322 OpinionAgree with Comments
Researcher + Peer Reviewer4322 CommentsThis is a historical question, and the influence especially of the US and UK in Saudi Arabia, and their competition for arms contracts cannot be understood without a historical perspective of the US and UK's engagement and support for KSA. For the US, this began in 1945 when Roosevelt met Ibn Saud and began the security agreement between the two states which has lasted until the present. Although this is now being threatened by US engagement with KSA's regional rival Iran, it is still clearly in operation, though for how long, nobody can tell. Adam Curtis' Bitter Lake documentary gives a good explanation of this historical perspective:

http://www.dailymotion.com/video/x2hdcji

The fact that defence contracts are between KSA and the US and UK directly, not with arms companies, is telling in this respect.