PwC UK scrutinised over bid for major Saudi Arabia contract

PwC’s UK wing has found itself at the heart of a storm regarding Saudi Arabia’s human rights reputation, following a bid which the firm reportedly tabled for a contract to facilitate the modernisation of the nation’s military. While campaigners have urged PwC to rethink its position, however, the UK Government has confirmed there is no legal basis for blocking any potential deal.

The Kingdom of Saudi Arabia is currently engaging in a historic programme of social and economic reforms. As part of Deputy Crown Prince Mohammed bin Salman’s Vision 2030 scheme, the Saudi regime is working to push through a number of controversial reforms in the next few years, as the country attempts to wean itself from its long-standing dependence on fossil fuels to underwrite its economic performance, and while these include a degree of social liberalisations, including allowing women to drive, and opening up public cinemas, the reforms have been criticised by human rights groups as a distraction from a consolidation of power by the government.

So far, the reforms in question have been implemented while the Crown Prince has also rounded up potential opponents and activists, including women's rights campaigners and an increasingly bloody war inflicted on Yemen by the Saudi state shows no signs of ending. With this in mind, consulting firms engaged by the Saudi Government to assist with its transformation programme have come under fire in recent months. These have included the foundation of ex-Prime Minister Tony Blair, which reportedly received a $10 million payment for consulting work on behalf of Saudi Arabia, and now, Big Four heavyweight PwC.

According to reports first appearing in the Guardian, PwC has been negotiating with Saudi Arabia to land a major contract to help streamline and modernise Saudi Arabia’s military, prompting ire from human rights campaigners and campaign groups across Britain. This is because, while PwC already has a presence in Saudi Arabia, it is the company’s UK operation that is understood to be behind the defence project. The first phase of the work is expected by experts to focus on how to reshape recruitment, resourcing, performance management and strategic workforce planning in the Saudi military, as well as how to manage and communicate change.

Reports in the UK press confirmed PwC is part of an “on-going tender process with a number of participants pitching for work”, which will be part of a wholesale modernisation of Saudi Arabia’s defence ministry, and is designed to better equip and support its frontline forces. In preparation for the tender, PwC has reportedly launched a “call for resources” across its organisation, asking specialists and consultants in London if moving to Riyadh to start the work interests them, as, the consultancy said, it is “currently finalising the deal”.

Should PwC’s bid prove successful, it could be worth millions to the company, but the plans have been pilloried by campaign groups condemning Saudi Arabia’s involvement in the conflict in Yemen, claiming its airstrikes have killed civilians and allegedly amounted to war crimes. According to the latest figures from the UN, the conflict has led to more than around 80% of the Yemeni population – upwards of 22 million people – requiring humanitarian aid.

Urging PwC to rethink its application for the role, Peter Frankental, Amnesty International UK’s Economic Affairs Programme Director, said, “Like any company, international accountancy firms should ensure that they avoid contributing to human rights violations in their operations, or being directly linked to them by their business relationships. We’d like to know what due diligence the company has done. The United Nations guiding principles on business and human rights make it clear that a company may be viewed as complicit if they are seen to benefit from abuses committed by another party.”

Anna Macdonald, Director of the Control Arms Secretariat, a global coalition working for international arms control, added, “British companies should be very cautious indeed in what they are supporting. Yemen is the world’s worst humanitarian crisis and getting worse by the day. The UK government and UK companies are fuelling this in continuing to supply bombs and military equipment to Saudi Arabia and its coalition partners. Ordinary Yemenis need access to water, to humanitarian aid and, most pressingly of all, for the incessant bombing of their schools, hospitals, markets and funerals to stop.”

Yemen

Contrastingly, the UK Government has offered little in the way of protest about the conduct of Saudi Arabia regarding Yemen, and has not put formal measures in place to prevent trade between Britain and the lucrative Gulf state. Commenting on the furore regarding PwC, a spokesperson for the Department for Business, Energy and Industrial Strategy said firms had to operate by UK and international law, and there was no restriction on accountancy services in Saudi Arabia.

This line has further been championed by the Saudi Government itself. Earlier in the year, Saudi Foreign Minister Adel al-Jubeir, asserted the conflict was legal. Speaking to the BBC he elaborated, “[Opposition groups] criticise us for a war in Yemen that we did not want, that was imposed on us… They criticise us for a war in Yemen that is a just war, that is supported by international law.”

The war in Yemen was born from a failed political transition in Yemen following an Arab Spring uprising that forced its long-time authoritarian president, Ali Abdullah Saleh, to hand over power to his deputy Abdrabbuh Mansour Hadi, in 2011. When this transition was plagued by problems, Houthi rebels were able to garner enough public support to take the nation’s capital of Sana'a, sending the Hadi administration into exile. Saudi Arabia intervened against the rebels, as it asserted they were backed by regional power Iran, which practices Shia, rather than Sunni, Islam.

Jamie McGoldrick, the UN’s humanitarian coordinator in Yemen, has since described the conflict as “an absurd and futile war”, condemning “mounting civilian casualties caused by escalated and indiscriminate attacks throughout Yemen.”

Related: Putting people before profit helps businesses tackle human rights abuse.