UK's relations with Saudi Arabia and Bahrain

SAB 40

Written Evidence from The Foreign and Commonwealth Office

Contents

Page

Why the Gulf Matters 2

The Gulf Initiative 4

Saudi Arabia 4

Bahrain 11

Long-term trends and scenarios 15

FCO resources, capabilities 17
Why the Gulf Matters

1. The Gulf has mattered to the UK for generations . Founded on mutual interests of trade, commerce and security , our relationships there are amongst our most enduring in the world . The Gulf is critical to our foreign policy objectives of security, prosperity and support for UK nationals overseas .

2. Whil e we have many common interests, there are differences between us. The essence of any state to state relationship is respect for each other’s cultures and an ability to deal with difference honestly and frankly. We do not aim to use our relationships with other states to demand that the y mirror us. But we do engage in frank discussion, defend ing and promot ing our own values at all times , and encourag ing other governments towards policies we believe to hav e merit and relevance to them. W hen we disagree with our partners in the Gulf on human rights-related issues, we make our concerns clear to each other. As the Prime Minister said during his visit to the Gulf on 5-7 November "there’s nothing off-limits in any of these relationships, and we discuss human rights, we discuss all of these concerns".

3. It is in our fundamental national interest to see stable and open societies emerge across the Middle East over time. The Arab Spring has confirmed that long-term stability requires legitimacy derived from citizen participation and consent. However it is for each country in the region to develop a model that reflects its own unique historical and social context and gives every citizen a stake in the political and economic life of their countries. It is not for us to dictate change in any country in the region.

4. The UK has long-standing and close partnerships with all the Gulf states. Our cooperation is wide-ranging and reflects the strategic importance of the region, including commerce, defence, energy security and counter-terrorism interests:

Political influence in the wider region : The Gulf states are increasingly influential on the world stage, individually and collectively through the G ulf Cooperation Council (GCC). They have an important role in the wider Middle East, and through the GCC and Arab League have been at the forefront of the international response to events in Libya and Syria. Their support for sanctions on Iran is particularly vital. The GCC initiative delivered the transition process in Yemen. Gulf states provide political and economic support to Afghanistan, as well as basing support to the UK and other ISAF members. The UAE have taken the political lead towards tackling piracy in the region, as well as towards Somalia. Individual states also play an important mediation role. For example, Qatar sponsored the Darfur peace talks, culminating in the signing of the Doha Document for Peace in Darfur. As home of Islam’s Two Holy Mosques, Saudi Arabia has enormous global religious influence;

A secure and affordable energy supply : around one third of global oil supply originates in the Gulf. Although the UK imports very little directly from the region, the Gulf is still of vital importance to the stability of global supply and the market price at which our energy is consumed. UK gas imports from the Gulf have increased dramatically over recent years with around 20% of domestic consumption coming from the region last year. The strategic importance of the Gulf’s energy producers is only likely to grow as global demand increases over the coming decades. This will put further pressure on export routes, particularly the Strait of Hormuz, through which around 35% of seaborne traded oil passes;

C o unter-terrorism : The Gulf states, and Saudi Arabia in particular, are key partners for the UK in the fight against terrorism, especially countering the threat from Al Qaeda in the Arabian Peninsula (AQAP). Qatar, Saudi Arabia and the UAE are all founding members of the Global Counter-Terrorism Forum (GCTF). The UK and UAE co-chair the GCTF’s Countering Violent Extremism (CVE) working group, and are collaborating on the linked CVE Centre of Excellence, to be launched in Abu Dhabi in December;

Counter-proliferation : The Gulf states are also important partners for the UK’s counter-proliferation efforts, including combating nuclear proliferation in Iran;

Prosperity : The Gulf economies are developing rapidly, creating significant opportunities for investment in both directions. With an overall GDP of over $1.3 trillion, they constitute the UK’s seventh largest export market, larger than India, Russia and Mexico combined. Our bilateral trade with the Gulf has increased by 39% over the last two years from £21.5bn to £29.8bn of which £17.5 billion was exports of goods and services. In addition, the Gulf states are home to approximately 27% of the world's sovereign wealth. Their investments in the UK totalled around £2.25bn in 2011. Past investments have traditionally focussed on real estate, but there is increasing interest in UK infrastructure, including for example the recent $1.5bn deal for the Dubai-owned DP World to dev elop the London Gateway project;

Consular/Immigration : The Gulf is home to the UK’s largest expatriate population in the Middle East and North Africa (MENA) region, with over 160,000 British nationals based there and many more visiting each year. 23,000 British Pilgrims took part in this year’s Hajj alone. In 2011, over 250,000 Gulf nationals visited the UK.

5. We continue to expand our areas of cooperation. For example, we signed a Memorandum of Understanding with the UAE on development issues in March 2012. We encourage students from the GCC to study in the UK and are developing educational and cultural links with several Gulf states.

The Gulf Initiative

6. In recognition of the strategic importance of our relations with the Gulf states, the Foreign Secretary launched the Gulf Initiative in summer 2010 to reinvigorate the UK’s engagement and reverse neglect of the UK’s relationships in the region in previous years. The objective was to re-establish the United Kingdom as a strategic partner and expand our cooperation with the Gulf states.

7. Since then there have been over 160 outward ministerial visits to the region and more than 100 inward visits from senior Gulf interlocutors. Highlights have included State Visits by HM The Queen in November 2010 to Oman and the UAE, and the inward State Visit by HH The Emir of Qatar in October 2010, as well as the forthcoming inward State Visit by HH The Amir of Kuwait in November 2012. The Prime Minister has visited the region on four occasions. The Foreign Secretary regularly meets his GCC counterparts, and they recently agreed to establish a more formal mechanism for taking forward UK-GCC partnership.

8. In addition, we have created working groups such as the UK-UAE Task Force, launched after the Prime Minister’s visit in June 2010, the UK-Oman Joint Working Group, UK-Kuwait Joint Steering Group and a UK-Bahrain Joint Working Group. The Gulf states have welcomed this approach, noting and encouraging our increased diplomatic engagement across the region and often at the most senior levels.

The UK’s foreign policy priorities in its relations with Saudi Arabia and how effectively the Government balances the UK’s interests in defence, commerce, energy security, counter-terrorism, and human rights

9. The UK and Saudi Arabia have a long history of friendship and co-operation. Saudi Arabia is an influential voice in the region and has played a key role in the Middle East Peace Process, Yemen and now Syria. It is the only Arab country to be represented amongst the G20. As the home of Islam’s Two Holy Mosques it has enormous global religious influence.

10. Saudi Arabia has the world’s second largest proven oil reserves, uniquely maintaining significant spare oil production capacity. It has faced its own very serious terrorist threat. We have strong cooperation on counter-terrorism which is essential to the interests of both countries. Furthermore, Saudi Arabia is a fast-developing economy, of the scale of Turkey or Brazil, with significant trade and investment links to the UK.

11. As with all other countries, we raise our concerns about human rights wherever they arise, at all levels in our relationship and in all relevant areas.

Defence

12. The UK-Saudi defence relationship is rooted in shared interests in ensuring regional security and stability for our allies. The relationship underpins the bilateral relationship through a variety of activities involving the Saudi Ministry of Defence, the Saudi Arabian National Guard (SANG) and the Ministry of the Interior. For example, the UK maintains a small British Military Mission (BMM) of British Army personnel on seconded service that trains and advises the Special Security Brigade of the SANG.

13. Defence engagement has strengthened and deepened the UK-Saudi bilateral relationship and is the result of decades of partnership between UK Armed Forces and British defence companies with the Kingdom. In 2007, the Saudi Arabian Government announced an agreement to purchase 72 Typhoon aircraft. So far, the RSAF has taken d elivery of 24 Typhoon aircraft. In addition to the Government-to-Government agreements, UK industry has supplied equipment direct to the Saudi Armed Forces, including communications, vehicles and homeland security equipment. These programmes represent a significant success story for UK industry, sustaining many thousands of jobs and billions of pounds of export orders

Defence Sales

14. The UK Government reacted quickly to events of the Arab Spring in addressing risks related to defence sales by rapidly reviewing licences and revoking those no longer complying with the criteria in line with our obligations under the Consolidated EU and National Arms Export Licensing Criteria. The Government examined all extant export licenses for Saudi Arabia following the limited unrest in the country, and were satisfied that all licences granted for Saudi Arabia remained consistent with the Criteria. To date, there is no evidence that UK-supplied equipment has been used in breach of the Criteria in Saudi Arabia, or in Bahrain where Saudi forces were deployed to protect installations as part of the Peninsula Shield force.

Trade and Investment

15. Saudi Arabia is the UK’s largest market in the Middle East and 18 th globally, with UK exports of goods and services valued at £6bn in 2011 (around 20% of UK trade in the region). We estimate that there are over 6,000 UK companies actively exporting to Saudi Arabia. In 2011, UK exports of goods were valued at £3.25bn, a 3% increase on 2010. Exports are rising overall, although UK exports of services saw a decrease from £3.1bn in 2010 to £2.76bn in 2011.

16. The UK is the second largest cumulative foreign investor in Saudi Arabia, after the US, with approximately 200 UK/Saudi joint ventures. UK companies are active in infrastructure, aviation and petrochemicals, including the diversification of the petrochemical industry. Major companies present in the market include BAES, Rolls Royce, Shell, HSBC, Harvey Nichols and Tate & Lyle. The Saudi Arabian Government is focussing a large part of its spending plans on developing social infrastructure and an ambitious industrial diversification strategy, including the creation of new Economic Cities and industrial clusters. This investment has created opportunities for high-value projects in a range of sectors; transportation infrastructure, healthcare, waste and water, and petrochemicals.

Counter-Terrorism

17. Saudi Arabia is our key operational partner on CT in the region and a strategic partner in our global efforts. As Custodian of the two holiest places in Islam, HM King Abdullah, along with the Saudi religious authorities, have an important role to play in countering the violent Salafi-Jihadism that Al Qaeda espouses. The Saudi authorities have been unequivocal in condemning AQ terrorism.

18. Our regional focus is on disrupting and degrading AQAP based in Yemen. Saudi Arabia is a key ally for the Yemeni Government in its struggle against AQAP, making Yemen a safer country for its citizens and reducing the threat to the UK and our allies. British-Saudi collaboration has resulted in the foiling of AQAP terrorist attacks, which would have caused substantial destruction and loss of life, including the provision of information to protect British interests. An example of this cooperation was the discovery at East Midlands airport of a ‘printer bomb’ onboard a US bound flight in October 2010. The initial alert came from the Saudi authorities, who have been quick to provide information to protect British interests on many other occasions.

19. Our counter-terrorism partnership in recent years has also allowed us to promote our values and help improve human rights in Saudi Arabia. For example, giving the Saudi authorities greater forensic expertise will give them greater capability for evidence-based prosecutions, which will be admissible in court. While we believe we have made some progress in advancing our values through counter-terrorism cooperation, NGOs, such as Amnesty International, have criticised Saudi counter-terrorism efforts as being the cause of human rights violations. They allege the Saudi authorities have employed the counter-terrorism law for the detention of political opponents, torture, solitary confinement, and excessive pre-charge and pre-trial detention. The British Embassy in Riyadh has registered our concerns about arbitrary detentions with the Ministry of Interior and the Ministry of Justice, and has been permitted to attend a counter-terrorism trial in the future. It is important that the Saudi authorities take the necessary action to instil confidence within Saudi society and internationally that the Saudi judicial process is a humane one. However we continue to believe that the UK’s ability to influence reform and best practice will be most effective if we are cooperating on counter-terrorism.

Energy Security

20. The UK has a strong, historical energy relationship with Saudi Arabia. A formal Ministerial UK-Saudi Energy Dialogue takes place annually and was last held in Riyadh in May 2012. In recent years British-Saudi joint efforts have led the way in establishing the International Energy Forum, the leading organisation for transparency in energy markets and consumer-producer dialogue, whose 89 member countries now represent around 90% of global oil and gas production and consumption.

21. Saudi Arabia has a vital role in securing the reliable and affordable energy supply that is needed to underpin global economic recovery. It is the world’s largest oil exporter and is the only country where capacity to extract and export oil exceeds to a meaningful degree the level at which it chooses to do so. This spare capacity gives it the unique ability to provide additional market supply to mitigate disruption elsewhere. This was graphically illustrated in 2011 when Saudi Arabia was able to pump an additional million barrels per day to compensate for the reduction in global supply caused by the conflict in Libya, thereby helping to ensure that the market remained relatively stable during a period of reduced supply and heightened tension in a key oil producing region.

Education

22. Saudi Arabia faces two major challenges in education and training: increasing the number of places at all levels of education in response to the high birth rate, and the creation of an indigenous work force equipped with the necessary skills to meet the requirements of the modern global economy. This situation presents an opportunity for partnership and the promotion of British values. There are around 22,000 Saudi students in the UK, nearly one third of whom are women and many of whom are funded by the King Abdullah scholarship programme. Not only do they receive an excellent education here, but they also develop a better understanding of the UK and our values.

Healthcare

23. The Saudi Arabian Ministry of Health has allocated $100bn additional spending to a five-year healthcare development programme, with the intention of drawing on international best practice to help provide top class, universal healthcare to its population. The UK is well-positioned to support the Ministry, drawing on NHS and private sector expertise. In April 2011 the Department of Health and the Ministry of Health signed a Memorandum of Understanding (MoU) to enhance cooperation. Since then, UKTI and the Department of Health have organised a series of commercial, clinical and official exchanges to identify areas for cooperation and strengthen bilateral links. These include a scheme to train Saudi postgraduate medical trainees in the UK and establishing clinical partnerships between UK and Saudi institutions.

Human Rights

24. Saudi Arabia has a poor human rights record, and as such, is designated an FCO Country of Concern. The human rights position in Saudi Arabia reflects widely-held conservative social values. Many of our human rights concerns regard punishments prescribed by Islamic Sharia law. There are indications that the Saudi Government is slowly encouraging Saudi society to open up. The Interfaith Initiative is a good example of this, but many Saudis are not supportive. We must, therefore, work with those in Saudi society who are advocating reform, in order to build support for full application of human rights standards. The broad range of interests that the UK and Saudi Arabia share and the importance of our partnership to the wider MENA region enable us to engage across the full range of issues. We raise our concerns with Saudi Arabia, bilaterally and through multilateral institutions, such as the EU and UN. Some of our main concerns are:

Women’s Rights: Women’s rights in Saudi Arabia are principally affected by the Guardianship system, under which women’s freedom to participate in society is greatly restricted. The views of Saudi women on their rights are mixed, particularly on the pace of reform. Nevertheless, reform is underway. King Abdullah announced last year that more women would be appointed to the Shura Council (Parliament) in 2013, and there will be female participation in the 2015 municipal elections, as candidates and as voters, for the first time. At the London 2012 Olympics female Saudi athletes competed for the first time. Women’s employment opportunities are increasing and Saudi women can now travel freely within the Gulf Cooperation Council area without the need to be accompanied by a male guardian. However, gender segregation is still commonplace and many rights, such as the right to drive, have yet to be realised. Women’s rights will continue to be an area of focus in our human rights work in Saudi Arabia.

The Death Penalty: The UK Government opposes the death penalty in all circumstances. There was a sharp increase in the number of executions in Saudi Arabia to 77 in 2011 from 27 in 2010. Over the past five years, there has been a reduction in overall numbers of executions. Saudi Arabia is one of only four countries in the world to carry out public executions by beheading. We welcome the lead King Abdullah has shown on this issue, encouraging families to show clemency by waiving their private right under Sharia Law to have their relative’s killer executed.

Torture: Torture is unacceptable in all circumstances. The United Kingdom attaches great importance to preventing torture and tackling impunity for those who torture. We have heard allegations of torture from NGOs and from some individuals held in detention in Saudi Arabia, but these are difficult to verify. Some of these allegations involve the extracting of "confessions" using torture, which are then used as evidence at trial. The Saudi Justice Minister has publically stated that any accusations relating to torture would be fully investigated. Transparent and accountable systems of care for those in detention are central to addressing these allegations. The UK Government is establishing a method of engagement with the Saudi Ministry of Justice to support its justice sector reform programme. To date, the Saudi Government has invested at least £1.2bn on new court houses, technology, and judicial training, with specialist courts envisaged in family, commercial and labour law. The Saudi Appeal Court and new Supreme Court have also increased access to justice.

25. The full range of concerns and our actions are set out in the FCO Annual Human Rights Report 2011 and quarterly updates for 2012. We discuss human rights frankly and in detail with the Saudi authorities at all levels, and in all areas of cooperation. Ministers raised a range of human rights concerns with the Saudi Minister of Justice in April 2012 when he visited the UK, as did Alistair Burt, FCO Minister for the Middle East, when he visited Riyadh in May 2012.

Saudi Arabia as a foreign policy partner for the UK, particularly with regard to Iran and Syria and as members of international and regional organisations

26. Saudi Arabia and the UK work together on many of the challenges facing the Middle East, particularly Syria, Iran and Yemen. The UK shares Saudi Arabia’s concern about the violence in Syria and welcomes Saudi Arabia’s continuing support for a united response by the UN Security Council . We have a regular dialogue about Iran and share many concerns about the Iranian nuclear programme and Iranian interference in the region. The UK and Saudi Arabia are co-chairs of the Friends of Yemen initiative, conceived to co-ordinate international support for Yemeni efforts to stabilise and regenerate the country. We also co-chair the Transition Fund under the Deauville Partnership.

27. Saudi Arabia provide s substantial amounts of financial support to a number of regional causes. The International Monetary Fund records Saudi Arabia as having pledged $17.9bn since the Arab Spring began to countries most affected by unrest. In addition to this, Saudi Arabia provides money for the Occupied Territories through international organisations, such as $5m to the UN Relief and Workers Agency in June 2012.

The implications of the Arab Spring for UK foreign policy in its relations with Saudi Arabia

28. Aspirations for a greater stake in society were limited in Saudi Arabia in the early days of the Arab Spring. Small-scale protests occurred in a number of locations across the country in early 2011, though primarily centred on some Shia communities in Eastern Province. In March 2011, the Government responded by introducing a country-wide economic package worth $137bn to boost public spending on infrastructure, housing, unemployment and public sector salaries.

29. Following the arrest and wounding of Shia Sheikh, Nimr Al Nimr, on 8 July in the Qatif region a wave of protests and violent clashes began between demonstrators and security forces resulting in five fatalities (four civilian, one police officer) and injuries on both sides. Since last October, fourteen demonstrators and three security personnel have been killed in the Eastern Province. The number of deaths and injuries so far has raised questions as to whether or not the use of force was deployed in accordance with international standards. We have a number of human rights concerns relating to these demonstrations, including restrictions on freedom of expression and freedom of peaceful assembly, and the right to a fair trial that meets international standards of justice - it is still taking too long to bring those arrested to trial. We raise these concerns with the Saudi authorities.

30. Despite the turbulence in the region and unrest within Saudi Arabia, the UK’s relationship with Saudi Arabia remains strong, as demonstrated by the Prime Minister’s recent visit to Saudi Arabia. We continue to work closely with the Saudis on regional issues, particularly Syria and Yemen.

How the UK can encourage democratic and liberalising reforms in Saudi Arabia , including its power to effect improvements

31. We have been clear that in Saudi Arabia, as elsewhere in the region, it is not for Britain to dictate the pace or nature of any reform. However, we support the Saudi Government’s gradual steps towards long-term reform, which gives citizens, particularly young people and women, a greater stake and interest in the political and economic life of their country. We encourage these reforms through regular official and ministerial contacts particularly ministerial visits; developing stronger links in a wide range of sectors, for example, strengthening parliamentary relations through the forthcoming visit to the UK of the Chairman of the Shura Council at the invitation of the Speakers of both Houses; encouraging cooperation in the justice sector, which allows for discussion on human rights issues; and outreach to Saudi society, for example the PM’s recent visit to Saudi Arabia during which he met female law students at the Dar Al Hekma college in Jeddah to hear their views on the aspirations of Saudi women.

The UK’s foreign policy priorities in its relations with Bahrain and how effectively the Government balances the UK’s interests in defence, commerce, energy security, counter-terrorism, and human rights

32. A group of 33 islands with a total area and population size the same as Merseyside, Bahrain is a Constitutional Monarchy headed by King Hamad bin Isa Al Khalifa. The Al Khalifa royal family has ruled Bahrain since 1783. The population is approximately 1.2million, half of which is made up of expatriates (a majority of whom originate from sub-continent Asia) who make up at least 70% of the workforce. There are no confirmed figures on the sectarian make-up of the Bahraini population and estimates vary, but the general consensus puts the Shia/Sunni split at about two-thirds majority Shia.

33. The UK and Bahrain share deep historical ties dating back over 200 years. In 1820 Bahrain became a British protectorate, gaining independence in 1971. The UK’s long-term engagement in defence, trade and investment, and counter-terrorism has enabled us to support human rights and reform in Bahrain.

Trade and Investment

34. Bahrain has the smallest but most open economy in the Gulf. Around 95 British companies have branches there. UK exports of goods to Bahrain have increased by 35% to £163m so far this year, and in 2011 the UK exported £293m of services. After a flat 2011, UK imports from Bahrain have increased this year to £195m, largely in petroleum-related products. Future opportunities for British businesses are expected to result from Bahrain’s re-development plans, which include using the $10bn GCC development fund.

Defence

35. Bahrain is critical to the protection of Gulf shipping lanes (through which 17 million barrels of oil are shipped per day) and global energy supplies. It is home to the UK Maritime Component Command (UKMCC), for which Bahrain provides onshore basing, giving the Royal Navy the ability to operate not only in the Gulf but well beyond to the Red Sea, Gulf of Aden and North West Indian Ocean. Bahrain also provides vital basing for four UK mine-hunters in Al-Mina port, stationed in the Gulf to keep the Strait of Hormuz clear and contributes approximately 100 personnel in support of US forces in ISAF in Afghanistan.

36. The UK routinely hosts Bahraini-funded students at Sandhurst, Cranwell and Dartmouth and provides in-country UK Officer Training Programmes to the same high standards received by UK armed forces, which helps ensure professionally-trained armed forces and raises awareness of human rights. The Government firmly believes that continued engagement provides the opportunity to support reform within the Bahraini military and beyond.

Defence sales

37. The Government considers export licence applications for all defence equipment carefully against the Consolidated EU and National Arms Export Licensing Criteria Shortly after the start of the Arab Spring, the Government reviewed all existing export licences for military and dual-use equipment for all countries in the Middle East, and in the case of Bahrain recommended revoking 23 individual export licences and removing the country from 18 open licences. The licences revoked covered equipment which could be used for riot control destined for end users including the Police, Ministry of Interior, the Bahrain National Guard and th e Bahrain Defence Force (BDF). Licences which were not revoked included goods such as aircraft components for the BDF.

Bahrain as a foreign policy partner for the UK, particularly with regard to Iran and Syria and as members of international and regional organisations

38. We regularly discuss Iran with Bahrain, both at ministerial and official level. Bahrain shares our concerns about Iran’s nuclear programme and Iranian interference across the region, and has been a partner in implementing sanctions against the Iranian regime.

39. Bahrain co-sponsored the 3 August UN General Assembly resolution on Syria, which voted overwhelmingly to demand that the Syrian regime ended violence and for all parties to implement the UN and Arab League’s political transition plan.

The implications of the Arab Spring for UK foreign policy in its relations with Bahrain

40. From 14 February 2011 until martial law and a State of Emergency were imposed by HM King Hamad in mid-March 2011, demonstrations demanding socio-economic and political reform took place in Bahrain. More than 35 people were killed, thousands arrested and many lost their jobs. Following a request from the Bahraini Government, Gulf Co-operation Council troops and police entered Bahrain on 14 March under operation ‘Peninsula Shield’ to safeguard installations and infrastructure points. In response to international condemnation and pressure, the State of Emergency was lifted in June. A ‘National Dialogue’ was launched in July 2011 to bring together various segments of Bahraini society to discuss areas of reform in political, social, economic and human rights issues. FCO Minister for the Middle East Alistair Burt said on 29 July 2011 ‘We welcome this month’s National Dialogue which has been a first step as the Bahraini people seek to overcome Bahrain’s challenges. Its long-term success, however, will depend on how the government and parliament takes forward its recommendations. Effective implementation of those recommendations that were agreed, with the active participation of Bahrain’s communities, will be vital in ensuring reconciliation, stability and prosperity. So too will be further genuine reform which addresses the broader issues which have been raised by the Bahraini people. Ensuring an ongoing and inclusive process will be crucial and we continue to urge all parties to remain engaged.’

41. King Hamad commissioned an independent investigation to look in to human rights abuses that took place during the events of February and March, known as the Bahrain Independent Commission Inquiry (BICI). This was the first time that any government in the region had set up an international investigation into allegations of state abuse. The BICI reported its findings on 23 November 2011. The Commission found the authorities to be severely at fault. In particular, it said the use of torture and excessive force was "systemic and systematic". King Hamad promised to implement reforms based on the Commission’s recommendations and hold to account those responsible for committing human rights abuses. The BICI found no evidence that GCC Peninsula Shield forces had been involved in human rights abuses.

42. A National Commission was established to advise the Government of Bahrain on implementation of the BICI recommendations; when that closed in March 2012 a ‘BICI Follow Up Unit’ was set up under the patronage of the Justice Minister to oversee implementation of reforms. Many reforms based on the outcomes of the National Dialogue and BICI have been introduced over the last 12 months, most notably:

· constitutional amendments that give the Council of Representatives increased authority and strengthened their supervisory role over the work of the Cabinet;

· a Special Investigations Unit has been established to determine the accountability of those who committed unlawful or negligent acts resulting in the deaths, torture or mistreatment of civilians;

· an independent Ombudsman in the Ministry of the Interior has been established to receive complaints and grievances and to oversee and conduct investigations;

· new Police Code of Conduct introduced based on international best practice;

· audio-visual recording equipment has been installed in prison and detention centres;

· all charges relating to freedom of expression have been dropped;

· convictions and sentences that were handed out by a Special Military Tribunal have been/will be reviewed in civilian courts; and

· a Victims Compensation Fund has paid out $2.6m to victims and their families (at time of submission).

43. While much has been achieved, we have made clear to the Bahraini authorities that much remains to be done including to implement the BICI recommendations in full. For example:

· more steps should be taken to relax censorship and allow the opposition greater access to media outlets in country;

· investigations by the Special Investigations Unit have only resulted in the conviction of three police officers so far, the highest at Lieutenant Colonel level, and accountability remains a contentious issue;

· the rebuilding of Shia mosques destroyed during the unrest is still very much work in progress;

· despite the announcement of the recruitment of 1000 community police officers from mixed backgrounds, there remains a lack of integration and mixed sect recruitment across the security forces in Bahrain.

44. In May 2012, Bahrain underwent its second Universal Periodic Review in the UN Human Rights Council. It accepted 145 recommendations in full, and 13 partially, and voluntarily undertook to produce an interim report to update the Council on progress made before the next review in four years’ time.

45. We still have concerns about human rights violations not covered by the BICI and will continue to press the Government to fulfil its commitment of full implementation of reforms based on the Commission’s recommendations. This is one of the reasons is why Bahrain is considered under the FCO’s newly-created quarterly review system on human rights indicating the level we feel appropriate given our concerns and in view of the current trend.

How the UK can encourage democratic and liberalising reforms in Bahrain , including its power to effect improvements

46. As a friend and ally, the UK has and will continue to support Bahrain’s steps towards reform. From the outset of protests, we made clear our concerns to the Government about the heavy-handed treatment of protestors. We supported the establishment of the BICI, and welcomed the King’s agreement to implement all its recommendations in full. We have pressed all sides to engage and met frequently with major opposition groups such as Al Wefaq, while urging the Government to uphold its commitments and obligations.

47. The unrest saw the increased politicisation of the Sunni community, existing political societies re-energised and the emergence of splinter groups across the political spectrum. With more political actors on the scene, engaging in an inclusive and constructive dialogue is proving more difficult than ever before. There are also certain extremist groups, such as the 14 February Youth Coalition, who are continuing with a strategy of violence and disruption, and some within Government who are opposed to further reform; this severely undermines attempts for reconciliation. The increase in violent protests, particularly since April of this year, is further exacerbating the divisions in society and making progress on political dialogue more difficult. On 13 June two bomb-making factories were discovered by the Bahraini authorities. According to them, the nature of the explosives found indicated they were ready for use in co-ordinated and simultaneous attacks that would have resulted in mass casualties and damage. On 5 November five improvised explosive devices were planted, which resulted in the death of two civilians and seriously injured another.

48. Further to the human rights reforms agreed under the BICI and UPR discussions, we have made clear that there needs to be dialogue on reform between the Government and all political societies in Bahrain, including representatives from all community groups. The solution must be agreed by Bahrainis and for all Bahrainis, and we encourage and press all parties to begin a dialogue process without preconditions. The UK continues to offer to share our experience in negotiations with the Government and parties of Bahrain.

49. Throughout 2012 we have hosted a number of high-level delegations including HM The King, HRH The Crown Prince, and the Ministers for Justice, Human Rights and the Interior. Continuous high-level engagement allows us to have frank and honest conversations. We frequently lobby the Bahraini Government on issues that concern us, particularly human rights. Bahrain has taken the first steps on a long-term process of reform and the Government assures us it has made efforts to address mistakes made and to try guarantee they are never repeated. But much more remains to be done. We strongly urge the Bahraini Government to continue on this path of reform to achieve the long-term stability which is in the interest of all the Bahraini people.

50. The difficult relationship between Bahrain and Iran is underpinned by suspicion and Bahraini claims of Iranian interference in their domestic affairs through links with the Bahraini Shia community. Since the Arab Spring began, the Government of Bahrain has claimed that Iran is providing support to dissident groups and promoting violence. It has been difficult to substantiate these claims and we note that the BICI report on the events of spring 2011 found no evidence to support them. However, we are concerned that Iran and other foreign actors have moved from exploiting the political and propaganda opportunities offered by continuing unrest in Bahrain to offering more direct support to some radical Bahraini Shia opposition elements which are pursuing increasingly violent tactics.

The long-term trends and scenarios in the region for which the FCO should prepare, and the extent to which it is doing so

51. Through MENA Research Analysts (MENARG) and FCO Policy Unit, the FCO regularly engages in horizon-scanning and trend analyses to inform the UK’s political and economic work in the region. As outlined in the FCO’s 2011 report to the Foreign Affairs Committee, ‘British Foreign Policy and the Arab Spring: The Transition to Democracy’ such policy work led to the creation of the UK’s Arab Human Development initiative before the Arab Spring . This has subsequently been renamed the Arab Partnership and support s projects that promote a more open societies and economies in the Middle East.

52. The Gulf states are not homogenous: the precise combination of challenges for each state, the urgency with which action is needed, and the strategies adopted to deal with them vary considerably. Countries in the Gulf, as elsewhere in the world, will need to find ways to adapt to the changing demands of their people. As the Prime Minister said during his recent Gulf visit "We should recognise that all countries are different, that they have different pathways, different histories, different cultures, and we should recognise in many of our strong Gulf partners… you have the growth of what I call the building blocks of open societies and democracies."

53. Since the beginning of 2011, all the Gulf states have increased their spending on measures such as food and fuel subsidies, public sector wages and investments in housing and infrastructure. For many Gulf states, this will be unsustainable in the longer-term. Gulf states will face the common challenge of maintaining financial discipline in the face of rising public sector spending. Further challenges will include the need to continue diversifying their economies and reducing dependence on hydrocarbon revenues and vulnerability to energy price fluctuations. In addition, the Gulf states need to create productive employment opportunities, in particular in the private sector, for increasing numbers of young nationals entering the jobs market each year. Crucially, they need to invest in high quality education to provide young people with the skills they need to take advantage of these opportunities, thereby also reducing their dependence on expatriate labour.

54. Gulf states will also need to manage issues of identity and tackling sectarianism. The unrest in Bahrain has taken on an increasingly sectarian nature, driven by the political and economic grievances of the Shia majority. Continuing low-level unrest in parts of Saudi Arabia’s Eastern Province also has a strong sectarian dimension, and sectarian tensions have been exacerbated in Kuwait.

55. The Government believes that it is firmly in the UK’s interest for the Gulf states to address these challenges successfully and that we have a role, as a long-standing friend and ally, in helping them do so.

The extent to which the FCO has the resources, personnel and capacities required for effective policy in the region

56. To achieve the FCO’s policy goals, we need the right workforce with the right skills in the right places. The 2012 Strategic Workforce Plan has ensured we are deploying the right staff where they are needed, including locally-engaged staff who are so essential to our work in the Gulf and across the network. Reflecting the increase in our work in the Gulf, we have increased our staffing in the region, with the creation of four new UK-based slots across the Gulf. We have also increased our local staffing where required.

57. Through the Diplomatic Excellence programme we are strengthening core policy-making skills, expanding economic and commercial diplomacy expertise across the FCO and increasing our language profic iency, particularly in Arabic. In 2011/12, we have designated a further six UK-based roles in the Gulf network as Arabic speaker slots to ensure that we have the right language skills in place.

19 November 2012

Prepared 7th January 2013