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German Legal Expertise in the Middle East since 1981

Lobbyism – a ‘conditio sine qua non’ for Successful Business in Saudi Arabia

Guiding Principle

This Article describes lobbyism in Saudi Arabia commonly known as “Sponsor” and in particular the lobbyist in governmental contracts which has a legal background.

A. Lobbyism in Germany

For the general understanding of lobbyism in Germany, please see the websites referred to in the footnotes ,. The comments may be summarized as follows:
Lobbyism is legal and a tool widely used in Germany to turn the attention of decision  makers on the products, services or ideas of individuals, companies,  institutions, associations, parties etc. The addressees are decision makers on  various levels including politicians, members of parliament, big businessmen,  associations, unions etc. Every lobbyist has to develop his own tailor-made  strategy to bring the right attention of the right people to interest of his  principals. The limits of lobbyism are the limits set by the law, e.g. the laws  related to bribery, international (embargo) rules, ethical rules, rules of fair  competition, rules of compliance etc.. Lobbyism is international and has no  borders. Germany’s capital Berlin itself is said to  have 5.000 lobbyists.

B. Lobbyism in Saudi Arabia

Although the structures of the state and of its economy of Germanyand Saudi  Arabia are different and generally rules and practice being common in Germany may not directly be applied in Saudi Arabia, the basic rules of lobbyism as applied in Germany are applied similarly in Saudi  Arabia – subject details. Lobbyism is well established in Saudi Arabia. The Saudi Arabia lobby in the United States is a collection of lawyers, public relation firms and professional lobbyists paid directly by the government of Saudi Arabia to lobby the public and the government of the United  States on behalf of the interests of the government of Saudi Arabia. The Americans are making publicly use of it. In some cases, which were extensively discussed in the international press, the line of compliance with the law has been passed, which gave lobbyism a bad smell. However such malpractices are exceptions to the rule. Lobbyism is not only legitimate but a tool, which is absolutely necessary to do proper business, irrespective whether this is seen for the point of view of the party lobbying, e.g. a government, association, industrial sector or the internationally operating companies etc. or the party being the target of the lobbyists.

However – as explained above – the term “lobbyist” is not commonly used in Saudi   Arabia and replaced by the more ambivalent and versatile word “sponsor”, in particular when the lobbyist is a Saudi national or a fully Saudi owned company. Often foreign companies have to pre-qualify themselves with Saudi Authorities and public organization, to get into a position to bid in tenders from them. Pre-qualifying goes hand in hand with keeping up the dialogue with that organization promoting the services or products, i.e. lobbying has started in line with the law. Lobbyism may take place on different levels: (1) on political level, (2) on economical level and (3) on the level of the involved workforce. Like in Germany in order to be legitimate, lobbyism has to stay in the boundaries set by the prevailing laws.

Since contacts to governmental bodies require an excellent reputation and long years of experiences in the Saudi Arabia market of the respective consultants/lobbyists, to be able to provide contacts to governmental bodies and arranging new business with governmental authorities are highly valuable.

C. The Nationality of the Sponsor/Lobbyist

When the obligation to appoint a Saudi service agent (=  lobbyist) was abandoned in 2001 due to the liberalization of the Saudi economy,  the legal necessity by law for an appointment of a service agent was obolished,  but the need for commercial reasons continued. Although there are many  foreigners in Saudi Arabia  doing business on all levels, the Saudi economy in the end is controlled by  Saudis. Furthermore on governmental level it is common practice, that foreigners  are requested “to speak Arabic” with them. The endeavors of the Saudi  Government to Saudialize the workforce  in the country are also immanent. At the same time there is a clear tendency
that Saudis – whether in the government or elsewhere – generally want  respectively prefer to meet Saudis. Thus it appears natural to look for a Saudi  national and to appoint him as my sponsor/lobbyist, irrespective that the price  may in the end be higher.

October, 2011 Rolf Meyer-Reumann
Meyer-Reumann & Partners -Dubai
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