Saudi’s ‘whistleblower law’ to bolster anti-corruption drive

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• Designed to protect whistleblowers
• Rewards for information
• Transparency to attract investors

Saudi Arabia has ramped up its public anti-corruption measures in recent weeks, in a further effort to attract foreign investment and shore up its massive economic reform programme. 

On February 13 cabinet approved a new law intended to protect whistleblowers, a week after the General Authority for Endowments said it would give a reward of up to 5 percent of the value of unauthorised endowments to those who inform via an online portal. 

That followed last month’s shock arrest of Amr bin Saleh bin Abdelrahman Al-Madani, the head of the Royal Commission for AlUla, over corruption by the Oversight and Anti-Corruption Authority known as Nazaha for “abuse of influence and money laundering” – apparently after an anonymous tip. 

“They’re just not tolerating it any more,” a Gulf-based diplomat said, praising the new drive.

• Saudi construction under pressure to deliver on its promise
• Saudi Arabia quadruples FDI figure to $33bn in 2022
• Head of AlUla commission arrested over corruption

Crown Prince Mohammed bin Salman launched an anti-graft campaign in 2017, detaining hundreds of officials, princes and businessmen. The government said this led to reaping SAR400 billion ($107 billion) in assets, including real estate, businesses and cash.

Most of the giga-projects at the heart of the Saudi plan to diversify away from oil revenue were launched following the 2017 crackdown and increasingly technocratic cabinets were formed, with fewer Saudi princes.

The construction sector in particular was plagued by a culture of kickbacks in the past. 

Bidding processes have become more transparent through the government’s online Etimad platform and previously favoured contractors must compete on a level playing field. 

The public prosecutor, Saud bin Abdullah Al-Mujib, said the whistleblower law would increase a sense of “national responsibility” by protecting informants and their families. 

But law professor Saad bin Shaye said he was waiting to see the regulatory statute to clarify details so that whistleblowers and witnesses feel able to come forward. 

Assurances needed

Saudi Arabia is ranked 53 among 180 countries rated for clean business environments by Transparency International. The United Arab Emirates is the region’s highest at 26. 

Kinda Hattar, Transparency International’s regional adviser for the Middle East and North Africa, said the law would need to provide assurances of protection during investigation and in court. 

“The challenge across the region is effective independence,” she said. “How independent are these institutions if they are appointed by the government, or the budget is decided by the government, or there is political influence?”.

The law aligns with the government’s reform policies as it tries to hit an annual foreign direct investment target of $100 billion by 2030. In 2022 the country attracted only $33 billion. 

Since December there has been a new commercial code easing litigation for foreigners, new rules requiring foreign companies to open Saudi offices for access to government contracts worth SAR1 million ($270,000), and foreign diplomats can buy alcohol legally – a possible precursor to allowing alcohol into some luxury hotels.