Lebanese Republic

Lebanon in the 21st century represents an evolving nation that has had to overcome major political and commercial challenges. Situated in the Levant on the easternmost part of the Mediterranean Sea, Lebanon serves as a busy economic and cultural centre for the region, but one that is underpinned by a relatively small legal market. But, in-house counsel have been playing an important role behind the scenes in supporting businesses across a variety of industries.

It's a no-brainer

High literacy rates, coupled with low operating costs – at least compared to other Middle Eastern countries – have allowed Lebanon to cultivate a thriving business community of both local and foreign corporations. Capitalising on Lebanon’s potential, consulting giant PwC runs its Middle East legal headquarters from Beirut.

‘It is unusual to have multinational enterprises and multinational companies base their legal teams in Lebanon. That's an unusual thing, even though it has worked really well for PwC,’ says Fayez Khouri, general counsel, Middle East at PwC.

‘The majority of legal work conducted by PwC revolves around countries like the UAE and Saudi Arabia. Lebanon is a very small chunk of the work that is being done.’

Being based in one country while also being asked to serve many others can be challenging. Using Lebanon’s capital as a base, Khouri often spends time travelling between the UAE, Saudi Arabia and the UK, and managing a team of 12 people across the Middle East has given rise to its own set of challenges.

‘The difference working in the Middle East is you are working with so many different types of laws. As a legal team, we operate within 17 different legal jurisdictions. Although we cover 12 territories, some territories, like the UAE, have several different jurisdictions.’

While being located in a hub serving many jurisdictions can be difficult, it also means that the human resource available is high quality and oftentimes abundant.

‘Lebanon is reputed for the quality of its human resources, especially in the banking industry,’ says Maya Abboud, head of legal compliance at Banque Libano-Française.

‘The high level of education plays an important role. We are a multicultural country, we speak three languages and we have a huge amount of diversity. This is why many investors see Lebanon as a hub for their business. The banking and finance industry has always been a reliable partner to these investors.’

Another factor making Lebanon an attractive business centre is location: geographically, Lebanon is very well connected to the rest of the Middle East, sitting along the eastern shore of the Mediterranean Sea.

‘First, Lebanon’s geographical location is considered by many investors as an ideal strategic hub. It is said to be the gate to the Middle East, especially in matters of international trade,’ explains Abboud.

‘The link to other countries, flight-wise, is very good. People can fly back and forth if they need to – from an financial point of view it makes sense, from a talent point of view it makes sense,’ adds Khouri.

A confluence of factors make Lebanon’s prospects as a commercial hotbed for the region – both in the near and further future – promising ones. The port of capital Beirut connects Lebanon, Syria, Jordan, Iraq and Iran to the wider Middle East and the world beyond – an already critical shipping nexus, which will be of increasing importance with the eventual reopening of Syria for business and the flow-on effects of China’s Belt and Road Initiative both adding to the port’s necessity.

Does size matter?

The Lebanese legal market is a smaller market compared to other Middle Eastern countries, and, as a result, the in-house legal sector is also significantly smaller.

‘What is unique is that there are not as many multinational in-house lawyers as there would be if you were in Dubai or Riyadh or other GCC (Gulf Cooperation Council) cities,’ says Khouri.

Being based in Lebanon has not slowed down legal operations. The in-house legal team at PwC has still successfully serviced the Middle East whilst being located in a smaller legal market. Instead, what have been challenging are the differences in laws within Lebanon and the Middle East compared with other legal markets, such as the UK.

‘In the Middle East, you are much more of a generalist. A lot of concepts that exist in England do not actually exist in the Middle East. For example, the concept of indemnity is not as common here. We can argue about having it in, or having it out, and what are the repercussions of having it in, or having it out. But, in the Middle East, the concept of indemnity does not really exist,’ says Khouri.

There are a plethora of legal concepts in English law that are yet to be addressed within the Middle Eastern regulatory framework. From a legal perspective, this presents a barrier for in-house counsel working across several jurisdictions. But those who we spoke to for this report say that the region is moving towards implementing stricter and more thorough rules and regulations for businesses to follow.

The devil is in the detail

Khouri believes the key to managing auditing regulations across different jurisdictions is for in-house counsel to be up to date and at the forefront of any regulatory changes. At PwC, audit work is at the core of the business, making compliance a key consideration – and one which must be done to high international standards.

‘The auditing profession is highly regulated, so we have to always be very mindful of what the regulators are saying, and what they are doing, and how they monitor the work we do. That opens us up to a significant amount of inspection and supervision,’ says Khouri.

‘If something should go wrong with one of our clients where we have done an audit, we need to be at the forefront of trying to supply information to regulators.’

The trend toward higher regulation is seen throughout the Middle East, and Lebanon is no exception. For instance, the global movement surrounding the need for more transparency and compliance within the banking and financial sector has gained significant momentum in Lebanon. Abboud’s role as head of legal compliance at Banque Libano-Française reflects a shift in banking process:

‘The central bank of Lebanon requires banks and financial institutions to have a compliance department, which should include a legal compliance division,’ explains Abboud.

‘This trend is not specific to Lebanon, it is widespread across the world. Whenever you have a sector with growing regulations at a very fast pace, you need to be able to handle them properly. You need specialists with a legal background in order to understand and interpret the laws and regulations and work on their proper implementation. That is why the profession is evolving very, very fast.’

In such an active regulatory environment, process becomes key. As general counsel at PwC, Khouri has the responsibility to implement systems that ensure compliance with regulations and allow for requests from regulators to be met quickly and easily.

‘If you know you are going to be asked to produce documentation by a regulator, you have to be very organised: you need to know where all your documentation is kept; you need to be able to access it; you need to have a set-up where you can review the documentation to ensure you are sending the right documentation to the regulators,’ says Khouri.

‘You need to be very internally aware of where things are and who the right people within the organisation are to assist you with getting that information.’

Insuring the future

The rise of stricter compliance regulations throughout the insurance industry reflects this shift in priorities.

Relative to the size of the country, the insurance and reinsurance industry in Lebanon is surprisingly active.

‘The Lebanese market is ranked as the 70th largest insurance market in the world with a penetration rate of 2.36%, which does constitute a very good performance knowing that Lebanon is only the 112th country in the world in terms of population,’ says Robert Habchi, claims and legal manager at Nasco Re Holding.

Nasco Re Holding is a leading insurance broker in Lebanon and in the Middle East and Northern Africa. Having started his reinsurance career six years ago, Habchi has overseen a surplus of insurance claims.

‘I believe that we have entered into an era in which compliance is starting to dominate our field with strict regulation at all levels, from internal auditors through to the expectations of clients and partners,’ says Habchi.

‘Compliance is becoming further important, particularly in light of the ongoing environment in the Middle East, suffering from regular political crises.’

The Lebanese insurance and reinsurance sector is a very mature industry. There are 51 insurance companies licensed in Lebanon, says Habchi. Therefore, adapting to new industry trends is essential to staying competitive.

‘If you want to survive in such a fierce and competitive environment, you have to question yourself, and adapt to our modern world.’

Team effort

The Middle East as a region does not operate in isolation. As well as grappling with the drivers of regulatory change that come from within the region, in-house counsel based in Lebanon are also required to react to global trends and issues. One of the most significant in recent times has been the introduction of the General Data Protection Regulation (GDPR). Coming into force in 2018, the GDPR is a regulation protecting the privacy of European citizens. It also includes the transfer of personal data outside of the EU.

‘Most recently, the introduction of the GDPR in Europe has been important. Even though it doesn't have a direct effect on the Middle East, there are aspects of it that we need to pay attention to,’ says Khouri.

‘The world is a very small place, it’s not country by country anymore – you are dealing across borders and across jurisdictions. So I think the introduction of the data protection regulations has brought about a lot of changes. We have had to change our standard form contract, we have had to change our policy.’

The effects of the GDPR on Lebanese business practices are a reflection of the rise of digitalisation within the country. In-house counsel in the region are required to adapt to these changes, especially when undertaking cross-jurisdictional activity.

A job to be done

In-house counsel across a variety of industries in Lebanon play an important role in supporting big business. As legal systems evolve, legal advisers remain at the forefront of changing regulations and industry practices. Yet the legal market is still relatively small in Lebanon.

When observing legal practices from a broader view point, Habchi observes key similarities throughout the Middle East.

‘The main difference, I would say, would be on the “emotional side” of Middle Eastern individuals, who have a certain sense of developing personal relationships, with a specific need to meet face to face with their interlocutor.’

The reliance on personal relationships and connections is an important consideration for in-house counsel operating within the Middle East. Yet as the industry continues to change at such a rapid pace, there will always be a place for skilled and talented in-house lawyers within Lebanon. n

Fayez Khouri, PwC

I am originally from Lebanon – I lived there until I was about nine years old. After that, I moved to the UK and have spent the majority of my life in the UK. I am an English-trained solicitor. I qualified with my solicitors practising certificate in 2000. I did my two years of training in London, where I worked up until 2007. Then I moved to Dubai and lived there for five years, before moving to Beirut. Now in Beirut, I have been living here for the last seven years.

Now I am general counsel of PwC in the Middle East. I run a team of 12 people. We have eight team members based in Beirut, we have four in Dubai and we have one in Saudi Arabia.

I deal with a lot of important matters that concern leadership: regulatory matters, litigation matters and company restructuring matters. I spend a lot of time in between Beirut, Dubai and Saudi Arabia in order to carry out my role, which includes managing my team.

The majority of PwC’s work – like many multinational companies – means that although we are based in Lebanon, we deal with legal matters all across the Middle East. In fact, Lebanon is a very small chunk of the work that is being done by PwC. The majority is in Saudi Arabia, but we oversee these matters from both Beirut and Dubai.

PwC operates within a specific business environment. I would say that we deal with a lot of regulatory issues given PwC is primarily known for its auditing work. The auditing profession is highly regulated, so we have to always be very mindful of what the regulators are saying, and what they are doing, and how they monitor the work we do. That opens us up to a significant amount of inspection and supervision.

If something should go wrong with one of our clients – especially when we have done an audit – we are at the forefront of trying to supply information to the regulators. Sometimes we get brought into litigation when a company is in financial difficulties. So we have to be very careful and mindful of how we deal with inspections, questions and queries.

Another thing which is part of the business environment is the way things are done in the Middle East from a contractual point of view. You end up dealing with a lot of government clients and public sector clients. Therefore, there is usually very little flexibility when it comes to negotiating contracts.

One example is when we provide services to governments – we try to use our standard form. But governments in the region do not accept that, they have their own forms they prefer to use. They are also not very open to negotiating terms on their standard form. So you end up having to accept terms that are not ideal for the company. As a result, you have to manage the risk within the organisation. So instead of being able to be protected from a contractual point of view, you have to be extra careful. You always have to manage risk, but you have to manage it even more carefully when the contractual protections are not sufficient. n

Maya Hardini Abboud, Banque Libano-Française

I started my career as a lawyer with diversified experience, before moving to Banque Libano-Française (BLF) in 2007 to start my in-house career as a legal consultant. BLF is a top-tier bank that is well reputed for its strict compliance with laws and regulations. It also owns a financial institution, Libano-Française Finance, which operates on the financial markets. In 2013, I was named head of legal compliance division and given a different set of responsibilities and tasks. My role now is to ensure Banque Libano-Française Group’s compliance with all applicable laws and regulations, whether Lebanese, foreign or international. This means, inter alia, making sure all applicable laws and regulations are duly observed, identifying any non-compliance and remediating it, as well as watching out for new laws and regulations, analysing them, interpreting them, disseminating them to all relevant parties and following up on their implementation.

The banking and financial sectors are very heavily regulated. The central bank of Lebanon requires banks and financial institutions to have a compliance department comprising of a legal compliance division – independent from the legal department.

We are continuously witnessing changes at a very fast pace in the legal and regulatory environment. Therefore, the biggest challenge is to keep up to date with all relevant laws and regulations, including any amendments that occur, not only at the local level but also internationally. Our bank has subsidiaries in other countries, so we have to stay abreast of any changes in the legal environment in these other countries as well, including case law, as well as the latest regulatory trends. We need to think ahead of such trends and prepare ourselves for the implementation of new regulations.

Another challenge is interpreting international law or foreign laws and regulations and finding ways to comply therewith where necessary, without breaching local laws.

To overcome those challenges, as a legal compliance division, it is essential to have the broadest possible spectrum of knowledge in laws – not only specifically in our field, but also in those that might have an impact on the general business environment. We also need to raise awareness within all levels of the institution as to the importance of compliance and as to non-compliance risks.

It is also very important, as part of the business practice of any legal compliance specialist, to maintain good communication with regulators, one that is based on trust and on dialogue.

We sometimes resort to external counsellors, especially on special issues or for questions related to foreign laws.

With the continuing evolution of regulatory environments in the last years, and the expected evolution in the coming years, the need for qualified legal compliance professionals who are able to properly interpret laws and regulations and to instruct institutions on how to implement them will continue to grow. n

Sultanate of Oman

Since the first shipment of oil out of Oman in 1967, the Sultanate’s economy has been largely driven by oil and gas revenue. While that in itself is far from unique to the region, in some respects, Oman does stand alone. It is the largest oil and gas producer in the Middle East that is not a member of the Organization of the Petroleum Exporting Countries (OPEC), and has the longest-serving ruler in the Middle East, Sultan Qaboos bin Said Al Said, who has been in power since 1970.

Strategically located at the mouth of the Persian Gulf, Oman has been labelled as the Switzerland of the Middle East. The country has managed to maintain a peaceful outlook, despite sharing a border with war-torn Yemen, and being situated between powerful rivals, Saudi Arabia and Iran.

Oman also overlooks one of the most important oil and gas shipping lanes in the world, the Strait of Hormuz. In 2018, an average of 21 million barrels of oil were transported through the Strait every day according to the U.S. Energy Information Administration, accounting for a fifth of the world’s oil and linking crude producers in the Middle East with markets across the world.

‘The Middle East is heavily dependent on oil revenue, so whenever oil prices are high then, largely speaking, countries in the Middle East are doing well – although the reverse is true as well,’ explains Richard McLaughlin, general counsel of Oman Oil Company Exploration and Production (OOCEP). OOCEP, a subsidiary of the Oman Oil Company, focuses its activities towards upstream and midstream investments in Oman and abroad.

Growing pains

Oman’s oil and gas exports play a crucial role in driving the country’s economy. In a bid to maintain industry growth, the Omani government is introducing new laws aimed at encouraging private, international companies to continue to invest.

For example, a new law, labelled the Foreign Capital Investment Law, was revealed in July 2019, and will come into force at the start of 2020. It includes a raft of changes, all with the express purpose of making the Sultanate more attractive for foreign investment. The new regulations removed minimum capital restrictions on foreign investment, and allow for overseas investors to retain 100% ownership over their investments.

‘Everybody understands that you cannot rely on oil all the time. It will be depleted, and then the question is how you diversify your business. So Oman is following the UAE and Qatar and other countries who are doing that. So that is interesting in a sense that they are welcoming foreign investment,’ says one in-house counsel working in the oil and gas sector.

‘Foreign entities have limited options at present, for example, they can enter into joint venture agreements with local entities. So we join with foreign companies and enter into joint venture agreements with investors. Currently, in Oman, there's a lot of investment from Korea, China and, to a certain extent, France and other European companies.’

Though it is generally felt by in-house counsel across the region that this is a step in the right direction, if Oman is going to be successful in attracting larger pools of foreign capital, there will be further legislative shifts required.

State owned, state controlled

The oil and gas sector in Oman, as in most regions across the Middle East, is heavily regulated by the government. Unsurprisingly, that influence changes the way in-house counsel across the region must operate.

‘It brings a different dynamic – there is a lot of interaction with government, especially when it comes to oil and gas – and different government agencies have different drivers. Although you are a commercial entity, there are a lot of factors to consider. I think that’s something you need to learn pretty quickly when you are working in a government-dominated sector, because it’s not just the commercial interests that you have to consider all the time,’ says McLaughlin.

‘For example, if a company was thinking about releasing a drilling rig as it no longer needs it, the associated personnel that might have been employed to use it will also be no longer needed. A commercial company would say that it no longer needs that drilling rig anymore and it would terminate the contract and move on. In a government agency, employment is a big factor to consider. They may decide that the best option is actually to keep the drilling rig, and ensure all of those people remain employed.’

Balancing between government objectives and commercial obligations is key to success for in-house counsel working in Oman and across the Middle East.

Crudely opaque

The nature of the industry impacts everything, from the kinds of partnerships being entered into to the minutiae of the legal team’s day to day.

‘Although we are part of a larger group, we have our own autonomous structure. We have numerous joint ventures inside and outside of Oman,’ says McLaughlin.

‘We also have a lot of joint ventures with a lot of the big industry players: Shell, BP, Eni, Total Occidental, etc – so quite a range. In particular, we have acted on many transactions over the past few years, some of which were amongst the biggest in the sector.’

Working for a government authority lends itself to further considerations. When representing Oman, Orpic – a downstream business line for the oil and gas sector – has to ensure it legally complies with laws in other nations.

‘One legal challenge we have is to ensure that we comply with the applicable foreign laws as we extend our footprint abroad. Currently, Orpic has established offices in Turkey, India, Singapore, and China. Therefore, it is more critical for us to understand the laws in each country,’ says Elina Mohamed, general counsel of Orpic.

‘On the commercial law side, there are anti-corruption, antitrust and money laundering, laws for example, which can extend beyond your local jurisdiction. So those are what we call in law, “laws with extraterritorial effect”. This means that these laws can affect you, even though your principal business is based in Oman.’

In a bid to ensure legal obligations remain consistent across the business, Mohamed plays a key role in overseeing compliance protocols across Orpic: ‘As part of our compliance initiative, we make it a practice to have a face-to-face meeting with our advisers and lawyers in foreign countries. We are also trying to improve our compliance function internally, as compliance becomes more important as you start going abroad and expanding your business outside Oman.’

It is imperative that laws focused on preventing bribery and corruption, especially those which extend across jurisdictions, are complied with. Even if a transaction is deemed legal in Oman, it also needs to be deemed legal in the jurisdiction the business is associated with. Understanding these differences is essential for in-house counsel working in the Middle East and can present a steep learning curve for those who trained outside of the region.

Lorenzo Bruttomesso, head of legal at LNG LLC, started his career in his native South Africa, before moving to Oman in 2008 following eight years spent in private practice.

‘The essential difference, from a legal practice perspective, is that South Africa is a common law jurisdiction, whilst Oman is a civil law jurisdiction. In addition, there is no doctrine of judicial precedent in Oman.’

‘Agreements concluded between Omani and international entities are thus governed by predominately English law, with dispute resolution by arbitration, usually to be held in London, Paris or Singapore.’

Another factor is that despite the volume and size of commercial transactions, Oman has a small legal market compared to other countries in the Middle East, so in-house counsel have less choice when seeking the assistance of external legal advisers.

‘There are not that many international law firms here, so that reduces options at a local level, whereas, say, if you were in Dubai, that really would not be an issue. So that is quite different, but not a huge issue. It’s meant that we are not massively reliant on external counsel,’ explains McLaughlin.

Watts next

Fluctuating oil prices have long been a contentious issue across the Middle East. A combination of a prolonged global downturn and steady resource depletion has forced Oman to refocus its economic agenda.

The Oman Power and Water Procurement Co (OPWP) is a governmental body and the sole procurer of electricity and water capacity for the Sultanate, and is expressly aiming for Oman to become a regional leader in sustainable energy. Launching several major projects, OPWP hopes that as much as 30% of the Oman’s energy demands will be filled by renewable energy by 2030.

To meet this target, the OPWP announced in a 2019 press release the launch of its latest solar energy projects: ‘In line with Oman’s vision to diversify fuel sources through the use of clean energy for power generation, Oman Power and Water Procurement Company… is pleased to announce the launch of two solar Independent Power Projects (IPPs) in Oman. This launch follows the successful tendering of OPWP’s first utility scale solar IPP.’

‘With Oman’s continuous growth, implementation of wider scale solar power projects based on the IPP model will allow OPWP to achieve its objectives of sustainably providing power generation capacity.’

The Authority for Electricity Regulation Oman (AER) – Oman’s power sector regulator – has also taken steps towards encouraging homeowners in Oman to install rooftop solar panels. Its 2018 annual report outlines specific subsidies received by homeowners who have installed solar panels:

‘Article (18) of the Sector Law implements a mechanism through which the Ministry of Finance provides electricity Subsidy calculated by the Authority to licensed suppliers on an annual basis.’

In particular, the report highlights the Sahim 1 and Sahim 2 projects, which encourage large households and businesses to install solar panels: ‘During the first phase of the Sahim project customers that installed rooftop PV solar systems, at their own cost, were allowed to be compensated for PV electricity exported to a licensed system at the relevant approved Bulk Supply Tariff.’

Improving on the system, the AER implemented further allowances by enabling the privatisation of the energy sector. Oman’s shift towards renewable energy coincides with a global movement towards green energy, explains Mohamed: ‘Because of various issues worldwide, everybody is conscious of the fact that everybody has to be disciplined in terms of health, safety and environment.’

The road ahead

With a population of only 4.4 million people, Oman has transformed itself into an oil and gas trading hub. Regardless of its geographic location, the country has remained a safe and secure business and commercial centre.

‘As a country, Oman is very safe and secure. In fact, the 2019 Expat Insider survey, which was released by InterNations, ranked Oman at the top on the list of both the safest and the friendliest countries in the world for expatriates to live and work,’ outlines Mohamed.

‘But, at the same time, it also has its own challenges in terms of raising funds and attracting foreign investment.’

Nevertheless, in-house counsel in the region have witnessed continued efforts by the government to diversify Oman’s revenue streams – from law changes, to boosting foreign investment, and to increasing renewable energy initiatives.

‘Working as in-house counsel in Oman, there are both pros and cons. Specifically, some of the legal frameworks and regulations in Oman are still being developed and there are a lot of areas that require clarification,’ summarises Mohamed.

‘The flip side, of course, is that it also gives room for lawyers to argue on the interpretation of the existing law.’

Oman is an emerging market and, as such, provides opportunities to lawyers that would not be available in less developed markets. As Oman develops as a country, in-house counsel across the nation are exposed to unique and varied issues, challenges and opportunities. n

Lorenzo Bruttomesso, Oman LNG LLC

I am a multi-discipline corporate, commercial, projects (including financing), compliance, and oil and gas lawyer and I strive to be a trusted partner, guardian and team member to the organisation, management team and board of directors for legal and compliance support. My role is head of legal at Oman LNG LLC, thus leading, managing and developing an effective legal team to cater for the needs of the company.

Our challenges are including, but not limited to:

  • the implementation of robust compliance procedures to ensure that we are dealing and transacting with third parties who do not pose risk to Oman LNG and our stakeholders from a sanctions, bribery and corruption perspective;
  • adherence to the latest business practices and ISO standards, including ISO 45001;
  • keeping abreast of and complying with international laws and regulatory frameworks applicable to our international transactions, including retaining international legal counsel who have branches or offices within the jurisdictions where our trading partners conduct business, including anti-competition regulations;
  • the legal department being an integral part of the decision-making process.

Leading, managing and developing a small but effective legal team necessitates interacting and collaborating with external counsel, especially in matters of complex international finance transactions, multi-package plant construction projects, international acquisitions and mergers, and complex litigation and international arbitrations. External counsel also serve as the first port of call in relation to any legal and regulatory changes impacting the industry or jurisdictions where the company’s business is conducted, such counsel being local and international, depending on the needs.

Having been a practising attorney, notary and conveyancer for two decades prior to moving in-house has been very beneficial in my in-house roles, and is reflected in my relationship with and how I interact with various external legal counsel.

Having worked in South Africa previously, the essential difference, from a legal practice perspective, is that South Africa is a common law jurisdiction whilst Oman is a civil law jurisdiction. In addition, there is no doctrine of judicial precedent in Oman. Agreements concluded between Omani and international entities are thus governed by, predominantly, English law with dispute resolution by arbitration, usually to be held in London, Paris or Singapore.

Situated outside the Persian Gulf, Muscat is a business- and family-oriented city, with associated amenities. The Sultanate is home to diverse environments and topography, namely mountains, valleys, deserts and coasts, and flora and fauna unique to the Arabian Peninsula. The diversity and uniqueness of these environments are important with respect to sustainable growth and development, and they attract visitors, tourists, working professionals and families alike. Oman is often referred to as the Switzerland of the Middle East due to the fostering of neighbourly and peaceful relations. n

Richard McLaughlin, Oman Oil Company Exploration and Production

Oman, like many countries in this region, is highly dependent on oil revenues. Oman produces about a million barrels of oil per day, and about 80% of it is exported, mainly to China. The rest is exported into the local market to make petrol and aviation fuel.

Oman Oil Company Exploration and Production is only about 10 years old. It acts as both operator and non-operator in Oman and overseas. When the government issues exploration and production blocks here in Oman, the government often reserves for itself the ability to ‘back in’ to the development later. So they allow the foreign entity, usually, to invest and look for oil or gas and then if there is a successful development, the government can ‘back in’ at that point. We have been the de-facto recipient of those back- in rights, so we work very closely with the Ministry of Oil and Gas, either as a partner to incoming investors or as a party to these agreements.

My role is broad and covers the spectrum of general counsel, work and this includes significant commercial activities and transactions. A key challenge with large transactions is timing and resourcing them properly, because at times we have had numerous transactions happening simultaneously – so that can be a stretch, resource wise.

In Oman and the Middle East more widely, government entities are very influential. So if you look at Saudi Arabia, the United Arab Emirates, Kuwait and Oman as examples, government-owned entities are highly visible. That is different from other places I have worked and brings with it a different dynamic.

There is a lot of interaction with the government and numerous other agencies as a result. Different government agencies have different drivers which have to be taken into account. Although you are a commercial entity, there are a lot of factors to consider. I think something you have to learn pretty quickly when you’re working in a government-dominated sector is that it is not always solely about commercial interests – and that’s quite different for many counsel.

Most of what we do is done in-house because we are specialist oil and gas lawyers. But we do seek external help from time to time. The usual things we seek external assistance on are either large transactions where we are looking for additional resource or large disputes.

Most oil and gas transactions, financings and partner agreements are governed by English law, but we often need a combination of English law and local law advice. The local law elements tend to be less significant in the overall context, but nevertheless they need to be checked. n

State of Qatar

The State of Qatar is an independent emirate located along the western coast of the Arabian Gulf. Among its vast shale and crude oil stockpiles, the country is known to have the third largest natural gas reserve in the world. Since becoming independent in 1971, Qatar has used its considerable natural resources to transform itself into an economically flourishing nation in the Gulf.

In a bid to become less vulnerable to the boom and bust cycles of oil and natural gas prices, Qatar has shifted its focus from the energy sector towards developing a robust financial industry and infrastructure portfolio.

In recent times, however, geopolitical pressures have forced the country to diversify its economy. In 2017, the United Arab Emirates, Bahrain, Saudi Arabia and Egypt cut diplomatic trade ties with Qatar, claiming – among other allegations – it supported terrorism. Although these claims have been vehemently denied by Qatar, a land, sea and air blockade remains in place today.

Despite the blockade, Qatar has maintained steady economic growth. According to Nasser Al Taweel, chief legal officer of Qatar Financial Centre Authority (QFCA), there are positives to be derived from the incident.

‘It was a major event that happened in the State of Qatar, but speaking about it three years after the blockade, it was a very good thing that it happened to us, simply because it was a wakeup call,’ explains Al Taweel.

‘It made us think a lot more about the future, thinking about cost efficiency in terms of whatever goods or services we need. It forced us to think about building our financial sector in a more robust manner and to think about depending less on others.’

Compared to neighbouring nations, Qatar has been slow to develop its now thriving economy. Making up for lost time, Qatar’s rich history has enabled it to adopt a uniquely global outlook as it continues to develop at a rapid pace.

‘The country has only become rich in the last 20 years. That has resulted in very quick changes, not just in the business environment, but to the economy and the look and feel of the city,’ says Christopher Berlew, chief legal officer of Qatari Diar.

As a result, in house counsel have been playing a crucial role behind the scenes to assist and facilitate such rapid change.

The build up

A major driver for change occurred in 2010, when Qatar won its bid to host the 2022 FIFA World Cup. The decision secured Qatar’s place in history as the first Middle Eastern country to host the event, while refocusing the nation’s infrastructure development agenda.

Leading legal operations for the property development branch of the State of Qatar’s sovereign wealth fund, Qatari Diar, is Christopher Berlew.

‘As part of the state sovereign wealth fund, we are quite a large player in the market here and we are playing an integral part to the preparations for the 2022 World Cup,’ he says.

‘We are building the Lusail City project, which is an enormous new city just north of Doha, which will become the new administrative capital of Qatar.’

The development will hold numerous sports arenas, five training fields and will be the location of the main stadium for the 2022 World Cup. Construction plans also include 22 hotels with fully equipped facilities to host teams, spectators and visitors.

‘We are ramping things up to get the key parts of the Lusail City project finished and operating by the time of the World Cup. The pace will continue to pick up until 2022 – the games are sort of at the end. We are targeting for everything we are building to be ready in the middle of summer, this time in three years.’

With the construction of several major stadiums and housing developments under way, Qatar has made a significant investment into upgrading its infrastructure networks. As the general counsel overseeing these developments, Berlew believes acting on behalf of a sovereign wealth fund gives rise to its own set of challenges and considerations.

‘What makes it uniquely interesting and challenging is: a sovereign wealth fund is not purely an economically rational actor. It doesn’t just chase the highest returns. It does not behave like a purely private investor. Although it has an interest in making good returns on the State’s money, it is interested in getting some perhaps non-monetary returns from some of its investments – whether that be diplomatic or charitable.’

On the right track

Experiencing similar challenges is Stephen Hibbert, general counsel of Qatar Rail, a state-owned and operated enterprise. Joining the team in 2012, Hibbert was tasked with the legal challenge of overseeing the construction of Qatar’s multibillion-dollar rail network.

‘In terms of the legal challenges, they were setting up and running a company and drafting all of the contracts from square one,’ he says.

“What makes it uniquely interesting and challenging is: a sovereign wealth fund is not purely an economically rational actor.”

‘This is not like Sydney Trains or National Rail, where you’ve got suites of contracts and you’ve got a library of technical specifications. Actually, nothing existed. You’re starting from a blank sheet of paper.’

The rail network is comprised of three major projects: the Doha Metro, the Lusail Tram, and the Long Distance Rail, which will connect to a wider rail network.

‘The legal challenges were primarily concerned with the drafting of big, complex contracts for an environment which had never seen this type of work before, and for contractors coming from overseas, many of whom had never worked in Qatar before.’

From a legal standpoint, the sheer management of such an endeavour would be a challenge for any in-house lawyer. Drawing from his past railway work in Australia and Asia, Hibbert explains that the key to success is providing support on every level.

‘We put people inside with government agencies, payment organisations, within the department of environment and we engage with them directly with the supply chain at various points, to make sure that our contractors were successful.’

Making financial cents

In addition to major infrastructure developments, Qatar has worked to strengthen its economy by building a robust and steady financial sector.

‘The financial sector in Qatar has been very stable. It’s one of the more stable financial sectors I think regionally, and I think it would be fair to say in the world. The financial sector is strong and is growing,’ explains Nasser Al Taweel, chief legal offer of Qatar Financial Centre Authority (QFCA).

The QFCA is a platform within which investors and business owners can set up a company in Qatar. It consists of an independent regulator, as well as an independent judiciary – which includes a civil and commercial court, in addition to a regulatory tribunal.

‘The QFCA has its absolute autonomy when it comes to regulations, when it comes to establishing businesses, when it comes to issuing licences,’ explains Al Taweel.

‘The role of chief legal officer at QFCA, in addition to the normal ins and outs that chief legal officers do – like ensuring contracts are drafted and reviewed, providing legal advice, managing legal matters and defending their organisations against any litigation – we have the role of the regulator.’

QFCA provides an independent legal and business framework that promotes the development of a capital market. Al Taweel believes an autonomous system that serves the interests of both regional and international investors will only strengthen Qatar’s economy.

‘For the system to work, what we need to do is have our own laws and regulations. Putting in these laws and regulations is the responsibility of the legal department. Therefore, we spend a lot of time basically drafting these regulations, making sure that they work, which is a completely different beast altogether compared to drafting a contract,’ says Al Taweel.

‘When I draft a contract, it’s a bilateral agreement, or sometimes multilateral. But when you have unidentified parties when you draft a law, it’s completely different, it’s a completely different set of skills.’

Although building a parallel and separate financial body is a challenge, it is an essential element needed in order to keep up with – and further promote, particularly internationally –Qatar’s economic growth story.

‘Since our financial sector is developing so rapidly, a lot of the development of that is a legal development. So, we are talking about amending laws, amending regulations and hence forth. I am involved in a number of committees, a number of engagements outside the boundaries of the QFCA, mainly to try and assist in basically upscaling the financial sector in the State of Qatar,’ says Al Taweel.

‘It’s not easy to make changes and improvements in any system, let alone the financial system, which is normally hard to amend and change because there are so many interests involved.’

A hotel takeover

In addition to establishing a secure financial sector, the State of Qatar has developed an enviable property portfolio – which is only set to expand in coming years. Overseeing part of this growth story is legal director of Katara Hospitality, Kushagra Priyadarshi.

‘Katara Hospitality is owned by the sovereign wealth fund of Qatar, which is the Qatar Investment Authority. They hold almost all of the luxury real estate in almost four continents. They also have a huge portfolio of luxury real estate in this country, which is Qatar,’ explains Priyadarshi.

Qatar’s property portfolio is currently valued at over USD$15bn and includes iconic hotels such as the Plaza in New York, the InterContinental Amstel Amsterdam, The Savoy in London, Raffles Hotel Singapore and The Peninsula Paris – just to name a few.

“Qatar is full of opportunities, endless opportunities. Every day you have something new. We are a very vibrant country, with a very young leadership.”

‘Most of the legal work happens from the head office where I am stationed. My work includes any transactional plus legal and compliance work that relates to all our properties and portfolios, which are basically under my oversight,’ says Priyadarshi.

‘My job here includes a whole spectrum of hospitality and luxury real estate work, which includes overseeing any mergers and acquisitions, any and all sorts of financing which relates either to deposit financing, corporate financing, acquisition financing, treasury matters and all of that. Then any litigation disputes.’

Katara Hospitality manages over 75 subsidiaries, which are spread all across the world. Managing these jurisdictions has been one of the biggest challenges, explains Priyadarshi.

‘One of the key challenges is the interaction between all of these different jurisdictions. Since all of it is being managed through the central location here from the head office [Doha], we need to have an overview of all jurisdictions and how they interact with each other to come up with a comprehensive legal strategy of compliances and conformity across these jurisdictions.’

Financing the future

Considerable oil and gas reserves, wise infrastructure investments, and a strong financial sector have secured Qatar as one of the wealthiest countries in the world on a per capita basis, and general counsel have played a vital role behind the scenes advising and assisting upon the nation’s continued growth.

‘I think a country that is undergoing a major development and a major improvement of their systems – for that country there will always be a role for in-house counsel,’ explains Al Taweel.

‘Qatar is full of opportunities, endless opportunities. Every day you have something new. We are a very vibrant country, with a very young leadership that is ambitious, that wants to change for the better and that is very well educated.’

The opportunities available to general counsel are also a reflection of Qatar’s outward-facing business agenda. Hosting the 2022 FIFA World Cup is not only a breakthrough for the Middle East, but strengthens Qatar’s global outlook.

‘I think the World Cup is going to change the map,’ says Al Taweel. ‘It’s going to change the way people are looking at business and the State of Qatar. I think a lot of people are now encouraged, compared to before Qatar was hosting the World Cup.’ n

Christopher Berlew, Qatari Diar

Qatar is quite a small country, but because of its wealth and strategic importance, not to mention a World Cup coming up, it has a much more global outlook than would normally be the case for such a small country, and such a small market.

I work as the chief legal officer of Qatari Diar, which is the property development arm of the State of Qatar sovereign wealth fund. We are wholly owned by the Qatar Investment Authority, which is the main sovereign wealth fund – and we engage in real estate property development and some investment, both here in Qatar – which is a big part of our operations – but also around the world.

Now we, as part of the state sovereign wealth fund, are quite a large player in the market here. We’re an integral part of the preparations for the 2022 World Cup, because we are building the Lusail City project. This is an enormous new city we are building just north of Doha (the existing capital), which will become the new administrative capital. It is also the home of the main stadium – the lead flagship stadium for the World Cup – which is where both the ceremonies and the final game will be played. We’re building a lot of the infrastructure that will be used as part of the 2022 World Cup, too.

We’re currently investing – and have already invested a huge amount of money – in Lusail, and we are really ramping things up to get it finished, but it is very much a work in progress. There are key parts of the Lusail City project that have been identified as priorities, that need to be finished and operating by the time the World Cup commences. So are a lot of things that go on with that. In terms of challenges, it really is to mobilise and get the necessary plans done, get the contractors mobilised and ensure that everything is finished in time.

The World Cup was awarded to Qatar back in 2010. Since then it has contributed in a major way to the process, which was already going on. Qatar is a very small country and began to develop quite late – even later than some of its neighbours here in the region.

The country only become wealthy in the last 20 years. That has resulted in very quick changes – not just in the business environment, but to the economy as well as the look and feel of the city. The options that are available to people, the size and composition of the population, have all changed, so it’s been a massive shift – not just to the business environment, but in all aspects of Qatar.

What you have is a country where the leadership is trying very hard to make up for lost ground and develop quickly into a modern country that can eventually sustain itself without relying so heavily on petrol dollars for its income. That means massive investment in infrastructure, education and housing. It means building a modern city with a modern outlook, and everything to take the country past and beyond the years after the World Cup.

The pace will continue to pick up until 2022. We are targeting for everything we are building to be ready in the middle of summer in three years’ time. Inevitably there will be delays, but the pace will continue to pick up until then. n

The imagination gap

‘… the more human activities disrupt the climate, the greater the risks of severe, pervasive and irreversible impacts for people and ecosystems, and long-lasting changes in all components of the climate system.

… we have the means to limit climate change and its risks, with many solutions that allow for continued economic and human development. However, stabilizing temperature increase to below 2°C relative to pre-industrial levels will require an urgent and fundamental departure from business as usual. Moreover, the longer we wait to take action, the more it will cost and the greater the technological, economic, social and institutional challenges we will face.’*

*IPCC [Intergovernmental Panel on Climate Change] 2014: Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Core Writing Team, R.K. Pachauri and L.A. Meyer (eds.)]. IPCC, Geneva, Switzerland, 151 pp.

Rising temperatures and sea levels, shrinking ice sheets and sea ice, extreme weather events. They’re all mainstays of today’s news cycles with a worrying – and intensifying – frequency.

‘The more you read about the shape of our planet and the state of our biodiversity, it’s inevitable that you become concerned, it’s inevitable that you want to do something. The only way I think you can exist nowadays in an unengaged way, as a non-activist if you will, is by shutting yourself off completely from all this information,’ says Jasper Teulings, general counsel of Greenpeace International.

But concern no longer lies solely with environmental organisations. Hand in hand with alarming predictions for food and water supply, health and the survival of masses of animal and plant species constitute a range of potential – and in some cases, current – shocks to the global economy, financial systems and corporate world.

In September 2015, Mark Carney, governor of the Bank of England, gave a landmark speech to Lloyd’s of London in which he detailed the ‘mega risk’ to financial stability that climate change poses. Carney laid out what he called ‘the tragedy of the horizon’ – the implications for carbon emitters and extractors, insurers, investors and other actors of failing to take a longer-term view:

‘The horizon for monetary policy extends out to two-three years. For financial stability it is a bit longer, but typically only to the outer boundaries of the credit cycle – about a decade. In other words, once climate change becomes a defining issue for financial stability, it may already be too late.’

He identified three ways in which climate change could disturb financial stability:

‘First, physical risks: the impacts today on insurance liabilities and the value of financial assets that arise from climate- and weather-related events, such as floods and storms that damage property or disrupt trade;

‘Second, liability risks: the impacts that could arise tomorrow if parties who have suffered loss or damage from the effects of climate change seek compensation from those they hold responsible. Such claims could come decades in the future, but have the potential to hit carbon extractors and emitters – and, if they have liability cover, their insurers – the hardest;

‘Finally, transition risks: the financial risks which could result from the process of adjustment towards a lower-carbon economy. Changes in policy, technology and physical risks could prompt a reassessment of the value of a large range of assets as costs and opportunities become apparent.’

When facing down the physical, investment, regulatory and transition risks inherent as the world adjusts to the reality of a changing environment, lawyers are situated at the heart of corporate, government and regulatory life, and are therefore uniquely situated to support and deliver the systemic change likely to occur.

Teulings is clear about the value lawyers can bring to the climate change table:

‘What is required for us to effectively combat climate change is a systemic change, and a lot of lawyers are in very influential positions in very influential companies, and in government positions – and that’s where they can contribute to the systemic change that we need,’ he says.

‘In terms of government roles, it means supporting regulation that reduces our emissions and supporting any form of regulation that speeds up the energy transition that is needed. Also, I think it’s about shifting money that is currently still in a disproportionate amount invested in fossil fuel infrastructure or exploration and development. There are still more subsidies going into fossil fuels at the global level than into renewable energy. That’s bizarre.’

James Thornton, CEO of ClientEarth – a charity composed of lawyers and environmental experts who use the law to hold governments and other organisations accountable over climate change, nature loss and pollution – is also passionate about the importance of legal professionals, especially those in-house.

‘General counsel are among the most important actors in the whole financial system in moving society towards proper action about climate change,’ he says.

‘Because of their trusted position as advisers to senior management and boards, they are in a remarkable position to say, “I’ve understood the legal implications of the financial risk of climate change, and here’s how we need to manage for them”. They can either be enablers or blockers.’

But work remains to be done to translate an awareness of climate change risk into readiness for it. Earlier in 2019, the Dutch Association of In-House Counsel (NGB), in conjunction with Dutch law firm Houthoff, approached nearly 3,500 in-house counsel. Despite nearly half of respondents claiming to see climate change risks, only around 15% said they were ‘prepared’ or ‘very well prepared’ for them. In addition, only 7% of them saw themselves as a ‘pioneer’ within their organisation in this area (figures taken from Climate Change and the Role of the In-house Counsel, Houthoff).

Some corporate counsel find themselves in a different set of circumstances, however. For those lawyers, climate change is such an inexorable fact that their organisations have made a mission statement out of avoiding it, building the company around products or services that aim to fight it.

Bills into mills

Ecotricity is one such enterprise. Founded in 1996, it was the world’s first green energy company, and it generates a substantial amount of its supply of green energy rather than buying it on the market. The company builds its own generation assets, like wind turbines and solar parks, supplying electricity and gas to around 200,000 domestic and business customers.

Ecotricity has irons in many (fossil-free) fires, including a wind turbine manufacturing and maintenance company called Britwind, and Ecotalk, a green mobile deal that uses customers’ bills to buy land previously used for intensive farming and turn it into havens for nature. Last year it launched a vegan food company, Devil’s Kitchen, which supplies plant-based food to schools and colleges around the UK. Ecotricity also established and now runs one of the UK’s largest electric car charger networks.

‘That’s part of our ethos,’ says head of legal, Elspeth Vincent. ‘Bills into mills: whatever we receive by way of income, it’s ploughed straight back into all kinds of green initiatives, including building and maintaining renewable assets in order to power green electricity into the grid.’

‘We’re taking the plants directly and turning them into meat.’

Unusually, the company also has its own professional football club: Forest Green Rovers. The club has electric car chargers, solar panels and even a solar-powered robot lawnmower. In 2018, it was presented with a ‘Climate Neutral Now’ award by the UN.

‘There are three principles that we hold as core to our business as being as green as we can be – food, transport and energy, and the football club has those aims at its heart as well. The pitch is organic, and the food is all vegan, which can be quite contentious sometimes for your average football fan that comes travelling here,’ says Vincent.

Outside of sporting greatness, Ecotricity’s goal is to find new ways to bring the green agenda to business and commerce. But cuts to renewable subsidies in the UK pose a challenge to the company’s asset-building model, because despite falling costs for producing wind and solar power, the scale at which viable projects need to be built can be prohibitive for operators, amounting to what Vincent terms a ‘harsh renewable landscape’.

Every little bit helps

Corporate counsel supporting companies with a green mission have an obvious role to play in battling climate change, and for those who want to contribute to environmental sustainability in the most direct way, the time is nigh, as many companies are innovating solutions in a wide range of sectors.

‘There are increasingly a lot of interesting companies out there that are attracting investment and having success with building more sustainable ways for us to conduct ourselves as a civilisation – whether that’s our dietary practices, our energy sources, our transit systems – that need good lawyers to help them succeed. Of course, companies don’t have a monopoly – there are regulatory organisations and non-profits – and if you’re interested in working in this field it is probably the best time in recent memory to go out and find an interesting opportunity,’ says Wagner.

But even for legal departments in companies without a direct green mandate or involvement in regulating those that do, there is scope for making changes to reduce adverse climate impact. Reducing paper use, rethinking policies for corporate travel, investment in technology and providing pro bono advice to NGOs or non-profits can all have an impact, as can ensuring that the company is aligned with the UN’s Paris Agreement on climate change.

At Ecotricity, Vincent raises the idea that companies could use their buying power to encourage external providers of legal services to take a supply of green energy – in much the same way as corporates often use the power of the purse to encourage diversity among panel firms.

‘I actually heard this from another GC at a conference, and it really made me think. It was a much bigger company than Ecotricity, with a far greater panel of law firms, and therefore the ability to choose competitively was at their fingertips a little bit more,’ she recalls.

‘But when they were asking law firms to provide a proposal, one of the deciding criteria for whether or not they would get the job was whether they procured a supply of green energy for their building.’

‘If we are continuing to be a renewable developer – a company that invests in a green economy – then that comes with a degree of innovation. As a legal team, we have to be live to that – we have to be able to understand difficult technical concepts and difficult commercial prospects that haven’t necessarily been done before,’ she explains.

‘That comes with a very novel approach to commercial contracts or to understanding long-held legal principles, and then bringing them into a new framework for a different kind of technology or a supply of electricity. You have to be fleet of foot.’

The legal team supports the company in putting its mouth where its money is, lobbying on climate issues and partnering with organisations like Extinction Rebellion and anti-fracking campaigners. Most recently, evidencing concerns about the climate risks of a no-deal Brexit, the company’s owner and founder, ‘Dale Vince’, was seen in the Scottish courts alongside others seeking to compel the UK Prime Minister, Boris Johnson, to comply with the Benn Act and send a letter to the European Council requesting an extension to the Brexit date or to authorise an official of the court to do so.

Scaling the impossible

In the US, California-based Impossible Foods is trying to solve the climate conundrum from a different perspective. Pat Brown, a Stanford biochemist, set himself the challenge of finding the most important problem facing the world that he could solve with science. He came up with climate change – and took a novel approach. Brown recognised the impact that human appetite for meat was having on resource consumption, fresh water use and greenhouse gas emissions, but that climate change alone was not convincing large enough numbers of people to switch to a plant-based diet. He set about using his skills to create ‘meat’ made from entirely plant-based ingredients. The company’s ground beef analogue and its ‘Impossible Burger’ have been available in restaurants since 2016 – counting the likes of Burger King among its customers – and recently went on sale in retail outlets. The company eventually aims to launch plant-based versions of a full range of meat, poultry, fish and dairy.

‘It is an animal-free product, but it is meat chemically and in terms of its content, just instead of feeding plants to a cow and having it break them down, we’re taking the plants directly and turning them into meat,’ says chief legal officer, Dana Wagner.

‘We wanted to create food from plants that satisfies people’s existing tastes rather than asking them to change their tastes.’

As such, Impossible Foods has set itself a substantial task – persuading meat-lovers that a plant-based product can be as satisfying as an animal one in terms of flavour, texture, and nutritional content. But Wagner believes that, despite the ongoing R&D challenges, the potential for iterating its products to improve on nutritional content is a big advantage in the long term over animal-based foods.

‘The cow doesn’t really change very much and its product hasn’t really changed for thousands of years. Earlier this year we released the second-generation version of our burger product and we were able to the reduce levels of saturated fat and sodium and increase the protein. We can optimise and use science and technology to make an even better item of food,’ explains Wagner.

But tinkering with one US cultural icon – the hamburger – has led to a confrontation with another: the cowboy.

‘Last year there were a number of initiatives at the state level in the United States led by various cattlemen organisations to restrict how plant-based foods may label and market themselves to consumers – they were trying to restrict, among other things, the use of the word “meat”,’ says Wagner.

‘We certainly think that definition was at odds with the English language and the idea that people would be confused into thinking a plant-based meat came from an animal are very low – companies like ours are loud and proud about the fact that no animals are involved; that’s our selling point to consumers, actually.’

On the regulatory side, thus far, things have been smoother. As developers of entirely plant-based foods, the company sits comfortably within existing food regulatory frameworks, unlike cell-based lab-grown ‘clean meat’, which has faced more regulatory uncertainty.

The armour, the sword and the shield

But some organisations are involving their legal teams in a targeted way, weaponising the law in the fight against climate change. One such entity is Greenpeace, an NGO well known for direct action on environmental issues, as well as its lobbying and investigative work. Greenpeace International is the global governing body for the organisation’s 26 national and regional organisations, and has an 11-strong legal team of barristers offering support to their local activities, led from Amsterdam.

As with any organisation, the legal team acts as Greenpeace’s ‘armour’. This means ensuring compliance with local regulations in areas such as charities law, tax, IP, governance and labour law.

‘We can optimise and use science and technology to make an even better item of food.’

‘In order for us to be the risk-taking organisation that we like to be, we need to ensure that we’re compliant, because that’s an expression of our core values,’ says Teulings.

‘But it is also necessary because we know that as a campaigning organisation, we’re often subjected to additional scrutiny.’

In addition, the team functions as the organisation’s ‘shield’, dealing with reactions to Greenpeace campaigns.

‘All of those actions are covered by fundamental freedoms such as free speech and freedom of association and assembly, but sometimes they trigger responses from either governments or corporations in the form of disproportionate penalties and sanctions imposed on activists and activism, such as “SLAPP” suits – strategic litigation against public participation,’ Teulings explains.

An example of the ‘shield’ in action is the case of the Arctic 30: 28 Greenpeace activists and two journalists who sailed through Arctic waters in 2013 to protest against a drilling platform operated by Gazprom. Russian authorities boarded Greenpeace vessel ‘The Arctic Sunrise’, detained those onboard and transported them to Russia, where they were remanded in custody and charged with piracy, later converted to hooliganism, before being freed two months later. The Dutch government successfully sought an order from an international tribunal arguing that the matter was a violation of the international Law of the Sea, and a declaratory judgment that the Russian authorities had violated international law.

‘We collaborated intensively with the Dutch government and provided full information at a very detailed level on what happened, and we made our own submissions in those proceedings,’ says Teulings.

‘As a result of that, the right to peaceful protest at sea in those two rulings was recognised, advanced and secured in international law. That’s a way you could say that a strategic defence to a disproportionate response to our campaign activities can actually be used to advance fundamental rights – and that’s exactly what the shield is about.’

‘Strategic litigation can have an impact that goes well beyond national borders.’

The ‘sword’ refers to supporting strategic litigation to further the organisation’s activism on climate change and biodiversity. Greenpeace commissions scientific research, at times using it to bring litigation – often in partnership with academics or other NGOs – such as People vs Arctic Oil. In this case, Greenpeace Nordic and Nature and Youth, another NGO, brought a constitutional challenge against the Norwegian government arguing that the licences it had granted for further oil and gas exploration in Arctic waters violated not only Norway’s own constitution, but also its obligations under the UN’s Paris Agreement on climate change.

‘In the first instance, the Oslo District Court ruled in favour of the Norwegian government – it did recognise for the first time that the right to a healthy environment is a claimable right with teeth, but it found that the government had not violated this right. The case has been appealed and the appeal will be dealt with this Autumn, so that’s clearly a priority for us,’ says Teulings.

Another example is the matter brought by Greenpeace Philippines and local organisations before the Philippines Commission on Human Rights, following loss of life during Typhoon Haiyan in 2013. The Commission was asked to investigate the responsibility of fossil fuel companies in contributing to the devastation. The investigation has been completed and a report is awaited.

‘Strategic litigation can have an impact that goes well beyond national borders, and I think this case is expected to have a similar impact,’ says Teulings.

‘Even though it won’t lead to an enforceable claim for damages against these companies, it will hopefully constitute a key building block in the further building of creating climate accountability at the global level.’

Strategic cases like these, he explains, ‘inspire other organisations, they inspire judicial audacity – and that’s the level of audacity that’s needed to tackle this global problem.’

Wielding the sword

Perhaps no one knows more about strategic litigation than ClientEarth – and founder James Thornton (himself a lawyer) is passionate about the potency of pursuing legal avenues in climate issues. He first came across environmental lawyers when editing the Law Review at NYU School of Law.

‘In my third year, one of my colleagues came in and said, “James, I’ve just done a clinical programme with this group of environmental lawyers, NRDC [Natural Resources Defense Council, a US-based non-profit].” So then I did a clinical programme with them, and I saw that they were working to the highest legal standards and that this was a new idea – to have lawyers use their skills to protect the environment.’

After qualifying, Thornton worked on Wall Street for a while, before working for NRDC full time. But nowadays, his organisation has only one client, the Earth.

‘Lawyers have an absolutely pivotal role to play in the climate fight. Law is the first language of governments and business. Campaigning and mobilising public opinion is key to persuading the courts of the public mandate to act,’ he says.

‘But, ultimately, it is the patient, painstaking work of lawyers that identifies wrongdoing, finds the right legal lever, and brings about positive change by compelling compliance in court.’

ClientEarth uses scientific research to develop policy, and then lobbies institutions like the UK, Polish and European parliaments to turn policy into law, battling subsidies to fossil fuel industries and working towards legislation that gives incentives to renewable energies. Crucially, it mobilises its repository of legal experience to help enforce that legislation.

‘Litigation is very important because it’s a way of sending powerful signals to vested interests who have never been challenged before successfully. It’s also a very powerful way of getting governments to comply with their own laws,’ says Thornton.

In 2018, for example, the UK’s High Court found against the UK government in litigation over air quality in 33 towns and cities, ordering the government to force these local authorities to deal with illegal pollution levels.

‘In a real way [the UK government] are doing it – too slowly – the steps that will lead to cleaner air, which they clearly never would have done without the order. And we’re doing this in more than ten countries across Europe, so we’re holding the governments across Europe to their own commitments, their own legal duties,’ says Thornton.

Outside Europe, Thornton has advised members of the Chinese Supreme Court, congress, legislature and the Ministry of Ecology and Environment in connection with the development of a pioneering law allowing Chinese environmental NGOs to sue polluting companies, and training of environmental court judges and prosecutors.

For Thornton, it’s all about using lawyers to make, enforce and change the rules if necessary – sometimes in creative ways. In its case against Enea, co-owner of a project to build a new coal-fired power station in Poland, ClientEarth bought shares in the company and commissioned financial analysis used to present concerns at a shareholders meeting, demonstrating that the investment was flawed. When the project proceeded anyway, the organisation brought a successful shareholders suit.

‘When it comes to climate change, or environment more broadly, for general counsel, the questions are: what should I tell my CEO? What should I tell my board of directors? What sort of duties do we have? People have been saying we should do the right thing, but nobody has been saying this is actually a fiduciary duty and if you make the wrong decision, you’ll be liable for it. We think this should become the turning point, when general counsel are able to say, look, climate change equals financial risk, which equals fiduciary duty, which requires you to manage for the risk. And if you start managing for climate change risk, you think about it in a very different way,’ says Thornton.

Thornton believes that the next challenge for in-house counsel is to bridge what he calls the ‘imagination gap’:

‘It is one thing to accept the proposition that climate change risk triggers fiduciary duties. But what does that mean for you when you go to work on Monday morning? What does it mean when you advise the directors on a Thursday afternoon? How do you move down from the abstract principle to the detailed advice?’

Translating the abstract into the concrete is the very raison d’etre of lawyers. And if more of them, be they in organisations with a mission to combat climate change or not, begin to apply this skill – the results could be world-changing.

Getting a work out: agile in in-house teams

Business is full of buzzwords, and among the buzziest of the last few years is ‘agile’.

The traditional project management approach is ‘waterfall’. But, in contrast to the dynamism of the term, the waterfall process can actually be quite rigid. After a long period of requirement gathering and planning, the project is developed in a linear way, journeying through multiple phases and functional silos. A final product is delivered after an often lengthy process, perhaps measured in months or years, but with little opportunity for adaptation once the process has begun.

‘It is difficult to adjust and change anything mid-course, it is very difficult to adapt if customer needs change, for instance,’ explains Carine Simon, senior lecturer in operations research and statistics at MIT Sloan School of Management.

Enter agile – an alternative approach to project management that was crystallised in 2001, when a group of software developers agreed upon the Agile Manifesto. It strives to build in flexibility as customer requirements evolve, and provide more opportunity for managing expectations.

‘It’s taking large, complex problems, breaking them down into smaller increments, then prioritising those increments based on relative value. As they’re completing pieces of work, agile teams are soliciting customer and stakeholder feedback along the way, so they can adapt accordingly,’ explains Will Poindexter, leader of Bain & Company’s technology and agile innovation practices in the Americas.

Agile works in iterations – or ‘sprints’ – in which teams undertake short, focused bursts of activity – perhaps as little as a day or as long as a month – each resulting in a new version of the product. This ‘minimum viable product’ can be tested and reviewed by the client on a regular basis, and adjustments easily made without wasted work.

The team assigned to a sprint is often called a ‘Scrum team’, led by a product manager or owner and, crucially, it is cross-functional – in contrast to the waterfall process, in which working sequentially through separate departments can make communication a challenge.

Working in this way, says Poindexter, not only increases the likelihood of the project’s success by as much as four to six times, it speeds up the process of getting a product to market, and instils more motivation, engagement and satisfaction into team members.

‘There’s much more ownership given to the team, and the fact that it’s cross-functional means that communication and knowledge barriers are broken down,’ says Simon.

To be agile, or not to be agile?

Over the past five years, agile has moved out of the realms of IT, with partial or even wholesale adoption in fields and functions as diverse as marketing, construction and manufacturing.

Having seen agile working first-hand during her time in the corporate strategy team at Liberty Mutual, Carine Simon believes there are no obvious drawbacks to the approach other than the necessity to get buy-in and to train people on how to work in an agile mode. But that doesn’t mean it’s for everyone. If a task doesn’t typically see a lot of waste – for example, if work does not need to be repeatedly tested or redone, client feedback is not an important component, or if changes to the deliverable are easily made – then the iterative components of agile might not add much value. Also less prime for agile disruption, Simon says, are heavily regulated areas where the opportunity for rethinking might be stymied by the necessity of baking in non-negotiable elements of compliance.

‘Agile is not a Swiss Army Knife; it should be a tool in your toolbox versus the tool that you apply to every single problem,’ says Poindexter.

Agile teams are soliciting customer and stakeholder feedback along the way, so they can adapt accordingly.

He has found it best suited to highly innovative, customer-centric organisations where speed to market is paramount; organisations looking to break out of creeping bureaucracy; or those looking to ‘change-the-business’ functions – such as technology, product development or marketing – rather than ‘run-the-business’ ones, like legal. But if businesses adopt agile in a partial way without at least fostering an awareness among the latter functions, bottlenecks can arise. For this reason, during an agile roll-out, Poindexter often works with legal teams to build an understanding of agile and identify opportunities to harmonise across the different delivery methods.

‘One example in legal would be: can I create guardrails that we can work within from a legal perspective, and when things start to bump up against those guardrails, that’s where agile teams need to pull someone in from the legal team to help advise. It allows them a certain level of autonomy within the guardrails, without having to slow them down so that every time there’s something from a legal standpoint they have to go and look for help. That’s one way we work with “support and control” functions to help them adopt an agile mindset, even though the legal team may not be running sprints and fully shifting to an agile model,’ he explains.

But Simon sees some potential for direct agile application in legal teams:

‘If there would be a benefit to having the customer see multiple early versions or drafts of the contract and give feedback in an iterative fashion, if there’s a lot of interdependencies between different parts of the contract, such as changing one thing at the end would cascade to changing multiple parts of the document, then that would be an area where having an iterative agile process might help,’ she says.

And some corporate legal teams are seeing for themselves just how using agile methods can transform service delivery.

Sprinting to the finish

At pharmaceutical and medical device company B. Braun group, the legal team has reorganised into task-based teams, utilising Scrum, digital Kanban boards – charts that help teams to visualise and maintain workflow in terms of tasks to be done – and other collaboration-enabling software.

‘Before, each person was responsible for their areas of responsibility and, although there was interaction between each other regarding different topics, everyone was more working individually. Now, we are working more and more in teams, solving problems together,’ says junior legal counsel Vanessa Weis.

At B. Braun, a Scrum team might be composed of people with knowledge of a topic, and another who is a complete outsider, bringing a level of neutrality and objectivity to a sprint.

‘This person sometimes has the best ideas. It’s like the saying “You cannot see the wood for the trees” – sometimes that’s really true. I think we have got more open-minded on topics, and share more thoughts, even if it’s not our responsibility. We are sharing topics and responsibilities we have,’ Weis adds.

The Agile Manifesto

We are uncovering better ways of developing software by doing it and helping others do it. Through this work we have come to value:

  1. Individuals and interactions over processes and tools
  2. Working software over comprehensive documentation
  3. Customer collaboration over contract negotiation
  4. Responding to change over following a plan

That is, while there is value in the items on the right, we value the items on the left more.

© 2001-2019 Agile Manifesto Authors

The team’s sprint approach has brought efficiency to the process of problem-solving by concentrating the efforts of the Scrum team into focused sessions – stripped of distractions such as phones or other meetings – that might last two or three hours, or even days depending on the size of the task.

‘We want to solve that problem during these hours or these days, and not work on it for weeks or for months, never getting things ready. In the past, someone would start a project and then you would be working in weekly or monthly project meetings,’ says Weis.

Opening minds

Gerd Pleuhs, general counsel of multinational snack company Mondelēz International, has organised his legal team into ‘centres of excellence’, which operate on a global basis. When local issues arise, these teams can quickly organise to collaborate with local business units, providing advice and training without the need for legal resources deployed permanently in each jurisdiction.

‘I think it creates a very trustful relationship with the finance side of the business, because they can see that it is a very efficient way of how you organise yourself and how you lower the cost of the service delivery while actually improving the quality,’ says Pleuhs.

The Mondelēz legal centres of excellence are grouped around subject areas – marketing, social media, data privacy and corporate governance – and so are perhaps not cross-functional in the strictest sense. But Pleuhs has found that the challenge of working flexibly across a full range of geographical jurisdictions exposes team members to cross-curricular problem-solving.

‘If you look at the traditional career development, you’re growing up in a department in your area of expertise over time. Now, with agile teams, what changes dramatically is the scope of work that you’re exposed to. You can have experiences which are completely different compared to the on-the-job experiences you have if you only focus on one geographical area or one subject,’ he says.

‘It changes the work for the individual involved and it becomes by far more interesting and colourful. If you are working in an agile team on resolving project X, once it’s done and you move on to the next one, it’s completely opened up a new chapter of your professional life. You’re building your own career and capabilities. You get more and more qualifications that then qualify you to become a more and more trusted and valued adviser within the company.’

Just add liquid

Global digital solutions provider Avanade, a joint venture of Microsoft and Accenture, has applied agile methods since 2011 and claims to employ more scrum masters than any other organisation in the world. The legal team has been no exception, plugging in and creating what general counsel David Oskandy calls a ‘liquid workforce’. Team members have a specific set of skills, often in core areas such as commercial and intellectual property law but, by virtue of working in an agile way, many have developed a sub-level of expertise.

For Avanade, the liquid workforce translates to a team of 60 lawyers working globally, enabled by a digital platform where team members can request assistance or pick up work, easing handover and communication across time zones. Some proponents of agile, like Poindexter, have found that co-location is important to productivity, but recognise the reality that this isn’t always feasible given globally dispersed teams, and that technology such as video conferencing can help bridge the gap. And, as cutting-edge technology shrinks distances, Oskandy believes that both skills and collegial bonds can flourish across borders.

‘Roughly speaking, 50% of our lawyers are playing a cross-border or global role. They can become really familiar with a new legal system, with perhaps a different area of law than they’re used to practising, and this is something that my team members tell me is life-changing for them, because [in the past] so many lawyers have been confined to or pigeonholed to the role they were hired in,’ says Oskandy.

Avanade’s legal team also creates thought-leadership taskforces – to prepare for GDPR, for example.

‘The task forces are visibly expanding the roles and responsibilities of many, if not most, of our lawyers. They’re building themselves into bigger profiles, both substantively and in terms of leadership. They’re getting more visibility within the company because they’re able to advise on areas that previously they felt were off limits to them. It enhances their career within the company and within the industry overall,’ says Oskandy.

The liquid workforce: Avanade’s application of agile methodology

‘The liquid workforce has allowed us to handle a 26% increase in master service agreements – the basic kind of operating arrangement with our clients – as well as developing new offerings, new alliances and enhancing our ability to keep up with new laws and trends. This last aspect is really important in our space, with greater rigour over data privacy and data protection laws as the legal field catches up to technology in terms of the requirements of complying with industry.

It has allowed us to lead the company as well. The best example is that we were at the forefront of developing our position on digital ethics. We set up a framework, put together a cross-functional taskforce and we’ve developed a point of view on digital ethics. Thought leadership is a really critical component in our company and I think this is pervasive in the tech industry. Technology changes so very fast – we notice big changes once every three months. You’ve got to be as swift as those changes to stay ahead of them, and this model encourages our lawyers to do that.

A knock-on effect of the liquid workforce is that we’re more readily leveraging offshore resources, contractors, interns and bots. That set of resources for lower-risk work has enabled us to purify our time and maximise our focus on the highest risk and highest potential.

The liquid workforce makes us congruent with the day-to-day culture of the business. Because we understand and operate with agile as a legal team, we speak the same language and we have the same muscle memory as the business, which I think is really important in terms of keeping up with them and maintaining credibility with them. We’re well integrated with the business team, we’ve got a bigger voice, and this allows us to participate in developing strategy, which is a bigger role for a lawyer than simply acting as the problem solver or the risk manager.

The feedback that I’ve gotten back from the CEO and the rest of the business is “highly efficient” and “productive”. They recognise that we have really transformed ourselves into the highest value-add team that we possibly could create.’

But an organisational style that invites frequent changes of scenery – be it changes of project or jurisdiction – requires a certain flexibility in the mindset of recruits.

‘What we are looking for is people who are more willing to be a generalist than a specialist. You still need the specialists and subject matter experts. But in dealing with the general kind of work that a company of ours has to manage on a daily basis, you want to have people who are curious, who want to learn, who want to build a career on making an experience in different parts of the law in order to become a more rounded lawyer,’ says Pleuhs.

Are you a believer?

There is no doubt that deciding to implement agile requires full commitment from the top to the bottom in order to make a success of what is, unavoidably, a substantial change management effort.

‘To really bring people with you in this effort, to convince others and sustain your own energy in the persistence and insistence you need to make this happen, you’ve got to be a true believer,’ says Oskandy.

‘With agile teams, what changes dramatically is the scope of work that you’re exposed to.’

At this point, many readers might look away, thanks to the received wisdom that the legal mindset is not always best adapted to changes of process.

‘In the beginning, I really struggled with how much time it took to convince people and how much investment you have to make in the process to convince folks to join you on that journey. There’s a fear coming with it because you have to give up certain things and invest in certain other stuff,’ says Pleuhs.

‘If I give my knowledge to an agile working group, I have to be willing to not spend time on stuff that I used to do and rely on my colleagues to help me get those things done. And that is a little bit of a learning curve – you have to let the trust build in the system and that it works.’

Being agile about being agile

As with other organisational change management projects, a good way to create buy-in can be to do a ‘proof of concept’ – identify suitable teams or functions for a pilot, and then use success to develop advocates who can sell the idea elsewhere.

‘It might be a little meta, but have an agile way of implementing agile, so it’s not all areas of the company at once, it’s iteratively starting where it makes more sense,’ says Simon.

‘We have seen some organisations that have tried a “big bang roll-out”, and they are big and flashy and they make headlines. But the results really tell a different story. What you find is it creates a lot of disruption and a lot of churn,’ adds Poindexter.

On the functional level, a gradual approach can be a good rule of thumb, too. Oskandy’s legal team, for example, deployed agile initially in the Nordic region, then extended across the globe following a successful transition.

Being iterative might also mean listening carefully to the experiences of those on the frontline.

And being iterative might also mean listening carefully to the experiences of those on the frontline – even if they’re not customers.

‘When we started to use the different agile methods, a lot of people were sceptical. But [B. Braun general counsel] Dr Daum said, “If it’s not working, then that’s also fine. But let’s try this.” That was a really good beginning, because all the time we had the feeling we could say “It’s not good for us, it’s not helping, it’s time-consuming,” recalls Weis.

This reassurance was instrumental in winning over doubters, in part because it allowed for no-strings experimentation, which then revealed the methods most likely to enjoy greatest longevity in the department.

‘At the beginning we did a lot of sprints, because we wanted to try that out, and maybe we will decrease the amount of sprints in the future. In any case, we will keep using sprint, Scrum, the Kanban board, as we learned that we can organise our work efficiently using these methods. That’s a very good outcome, because at the beginning a lot of people were doubting that this could be a good approach. Now more and more people are convinced,’ she says.

The Mondelēz team took a similarly democratic approach to developing the vision for its future legal function.

‘What normally happens in an organisation with a more traditional mindset is you take the leadership teams and maybe their direct reports, and then you have a conference. We’ve been embarking on a different journey. We bring together teams from across the globe at different levels of hierarchy – so it’s not only the leaders, we have highly talented people who are somewhere else in the department, very junior people assigned to certain jobs. We get together in a facilitated environment for three days and try to hammer out a plan, which then we will present and implement to the entire department,’ Pleuhs explains.

‘Rather than “leaders are imposing it on me”, we have people who are “one of us” working on it – and they are wonderful ambassadors to implement what they have helped to design. I believe it is one way to really motivate a small group for the benefit of the entire department.’

Selling the value proposition

None of this is to say that the role of the leader should vanish in a fog of self-organisation – although those with very top-down, detail-oriented leadership styles might perceive team empowerment as loss of control.

‘We’ve seen a number of agile efforts that have not reached full potential because the leadership didn’t change their behaviours. I think it’s important to get the leadership on the same page with the actual team in terms of what are we trying to accomplish, what do we need to change?’ says Poindexter.

‘I think agile allows leaders to actually focus on what they should be doing, which is setting strategic direction, freeing up resources to actually work on the highest priority things, and removing impediments so that their teams can be productive.’

Oskandy agrees that the leadership is fundamental in supporting cultural change.

‘The value proposition has got to be right in order for people to really buy into it. But that’s a big learning – you’ve got to have that growth and mindset firmly in mind to encourage people to take steps beyond their core role, which they are very comfortable in. You’re requiring more time from them, more effort, more thought, more bandwidth,’ he explains.

Avanade works with Scrum.org, founded by software developer and consultant Ken Schwaber – one of the original Agile Manifesto authors – and has access to 2,000 trained Scrum professionals plus 60 agile coaches. It also conducts training on a continuous basis, often with immediate practical application baked into the process.

‘The lead on a task force will also be the lead for the agile-based training and it’s a very interactive methodology. They’ll set aside a specific time, ideally in person but quite often virtually, and create space for people to go through that process together. The training embeds itself so much more effectively when you’ve got people engaged not only in learning something really substantive, but also how we are going to deploy this,’ explains Oskandy.

‘You’re incorporating planning and giving people the opportunity to become part of that process, so they’re learning something new substantively, but they’re also contributing as they’re learning to how do we set this up for the company, how do we train others, what is it that other people need to know, and how do we communicate this? It’s all part of one effort.’

Carine Simon believes that getting team buy-in for agile methodology outside of the software development sphere might soon be a problem of the past, as new graduates without preconceived project management ideas enter the job market.

‘Then it becomes a much more natural way of doing work – it’s not like a big change where people switch from one mode of functioning that they’ve done for the past 20 years to a new mode. I think agile may become the new project management technique that is part of the standard toolbox of graduate students,’ she says.

Agile might not be for everyone, but some legal teams are deciding that it is – and if other business units have already walked the same path, it could be a critical tool for establishing a common language, common ground – and credibility.