Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF), has facilitated and benefited from human rights abuses, Human Rights Watch said in a report released today.
The 95-page report, "The Man Who Bought the World: Rights Abuses Linked to Saudi Arabia's Public Investment Fund and Its Chairman, Mohammad bin Salman," found that Saudi Arabia's vast fossil fuel-derived state wealth is effectively controlled by one person, Crown Prince Mohammed bin Salman. Human Rights Watch found that the crown prince wields this enormous economic power in a largely arbitrary and highly personalized manner rather than for the Saudi people's benefit and that the PIF is used to whitewash the Saudi government's abuses.
"Saudi Crown Prince Mohammed bin Salman has unchecked control over the country's nearly trillion dollar Public Investment Fund," said Joey Shea, Saudi Arabia researcher at Human Rights Watch. "The crown prince has used the Saudi sovereign wealth fund's economic power to commit serious human rights violations and whitewash the reputational harm from these abuses."
Sovereign wealth funds are funds accumulated by a government, often consisting of government revenue, trade surpluses, and reserves, and are invested domestically and abroad. Many have been built on oil wealth.
The report is based on a review of government statements, Saudi court documents; Saudi laws and government decrees; documents released during court proceedings in Canada and the United States; company records and reports; investigations and analyses by journalists financial experts, and academics; as well as interviews with Saudi activists and dissidents, journalists, experts, and lawyers with long experience in Saudi Arabia.
The PIF has benefited directly from serious human rights abuses linked to its chairman, Crown Prince Mohammed bin Salman, also known as MBS. This includes the crown prince's 2017 "anti-corruption" crackdown that consisted of arbitrary detentions, abusive treatment of detainees, and the extortion of property from Saudi Arabia's elite.
The PIF has facilitated serious human rights violations linked to MBS through companies it owns and controls, such as the 2018 murder of Saudi journalist Jamal Khashoggi, a key critic of the anti-corruption crackdown. Sky Prime Aviation, one of the companies transferred to the PIF during the crackdown, owned the two planes used in 2018 by Saudi agents to travel to Istanbul, where they murdered Khashoggi.
MBS overhauled the PIF's governance framework and concentrated an immense degree of control and oversight of the fund into his own hands, enabling him to unilaterally direct enormous sums of state wealth to megaprojects that do little to realize economic, social, or cultural rights in Saudi Arabia.
Saudi Arabia's most marginalized people-migrant workers, rural communities, and poor and working-class residents-have borne the brunt of abuses stemming from the fund's projects. Capital from the PIF has been used for projects that have forcibly evicted residents, razed neighborhoods, subjected migrant workers to serious abuses, and silenced communities.
Human Rights Watch also found violations linked to some of the PIF's most high-profile megaprojects, including the NEOM region, an economic zone and new city on the Red Sea that is being erected from scratch, as well as the Jeddah Central Project, an urban development project in Jeddah.
Saudi authorities forcibly evicted members of the Huwaitat tribe, who have for centuries inhabited the Tabuk province, in the planned NEOM area, arrested those who protested their evictions, and killed one protesting resident. Two residents received sentences of 50 years in prison, and three received death sentences for resisting the forced evictions.
The wholly-PIF-owned Jeddah Central Development Company, which is carrying out the Jeddah Central Project, forcibly evicted large numbers of middle and lower-class Saudis, foreigners, and migrant workers from their homes in Jeddah's previously vibrant working-class neighborhoods to transform the area into a luxury shopping and tourism district.
Under internationally recognized human rights norms, the Saudi government should progressively realize economic, social, and cultural rights to the maximum of available resources, including those the PIF controls. According to the United Nations Economic and Social Commission for Western Asia, Saudi Arabia has the highest poverty headcount rate for nationals in the GCC at 13.6 percent, meaning that poverty affects nearly "one in seven nationals in Saudi Arabia." This figure does not include all Saudi residents, particularly migrant workers who make up approximately 42 percent of the population.
The PIF under MBS operates with little transparency and accountability, raising concerns over whether these funds are ultimately invested and managed in a way that satisfies these international norms.
The existence of a centrally controlled stream of revenue, such as oil revenue, can exacerbate an undemocratic ruler or governing elite's abuses and misrule by providing the financial wherewithal to entrench and enrich itself without any corresponding accountability. These problems are clearly present in Saudi Arabia and raise significant risk that MBS is using the PIF to entrench his de facto rule by providing him with direct access and control to nearly a trillion dollars of Saudi Arabia's wealth, Human Rights Watch said.
Human Rights Watch did not find evidence that PIF-funded projects advanced the government's obligations to fulfill economic, social, and cultural rights of its people. The Saudi government does not define or disclose basic data on poverty, or set a poverty line, making it likely that the poverty rate is much higher than the UN figure, especially affecting groups that are economically marginalized and vulnerable to systematic labor abuses.
PIF investments in the United States, the United Kingdom, and elsewhere in the world have been used as a tool of Saudi soft power and influence. These investments include sports such as the LIV golf tour, the FIFA 2034 World Cup, and Premier League football club Newcastle United, in the UK, are a cornerstone of Saudi Arabia's influence operations abroad. These investments which seek to garner uncritical foreign support for MBS's agenda, spread disinformation about the country's rights record, neutralize scrutiny, silence critics, and undermine institutions seeking transparency and accountability, Human Rights Watch found.
As a state entity, the PIF has an obligation to uphold Saudi Arabia's international human rights commitments. Businesses have a responsibility to avoid causing or contributing to human rights harm. In line with these responsibilities, businesses should conduct thorough and independent human rights due diligence prior to any engagement with the PIF and should refrain from activities that would bolster the reputation of government entities or officials recently and credibly accused of serious abuses. When serious adverse human rights impacts stemming from engagement with the PIF are unavoidable, businesses should suspend their engagement with the PIF.
"Businesses with ties to the Saudi Public Investment Fund have a responsibility to end their engagement with it if serious human rights violations connected with the PIF are unavoidable," Shea said.
