Case Study: Conflict of Interest Regulations in Bahrain [6.5]

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In Bahrain, the regulations regarding conflict of interest for employees (including the General Director and all staff members) of the Telecommunications Regulatory Authority (TRA) are included in Sections 7 and 21-23 of the Telecommunications Law.

Section 7 provides that no members of the Board of Directors may have a direct or indirect equity or financial interest in a licensee. Members of the Board must disclose any direct or indirect personal interest in any matter being considered by the Board, and must not participate in the consideration of the matter. The disclosure of the Board member’s conflict of interest is recorded in the minutes of the meeting.

Section 21 contains the main provisions regulating conflict of interests, and provides the following:

(a) The General Director and all TRA employees are prohibited from having any direct or indirect financial interest in the telecommunications sector during the term of their employment. If any such interest arises, the Director General must promptly notify the Board of Directors, and the other employees must promptly notify the Director General.

(b) Upon commencing employment at the TRA and each year thereafter, the General Director and all employees must provide a written declaration of: (i) any direct or indirect interest in the telecommunications sector; and (ii) any direct or indirect interest of their relatives up to the third degree in the telecommunications sector that conflicts with the employee’s position at the TRA.

(c) The Board of Directors can disregard any “ordinary or non-material interests” of the General Director and any TRA employee that do not conflict with the requirements of the employee’s position in the TRA.

(d) In determining the extent of the conflict of the employee’s interests with the TRA’s interest, the Board of Directors will consider: (i) the degree to which the economic interests of the employee in other entities may affect the actions of the TRA; (ii) the extent to which the TRA regulates and oversees the activities of the entity in which the employee has interests; (iii) the seniority level of the relevant employee; and (iv) the actual or potential public perception regarding the conflict of interest.

Section 22 regulates the potential conflicts of interest that may arise from the outside employment of the General Director and any other TRA employee. During their employment at the TRA, and for one year after termination of employment, no employee is allowed to engage in any employment, consulting or other service relating to the telecommunications industry in Bahrain without obtaining prior approval of the TRA. Section 22 also prohibits any employers from hiring TRA employees during their employment at the TRA and for one year after termination of employment.

Section 23 prohibits any TRA employee from disclosing confidential information obtained during the course of their employment, as well as after the termination of their employment at the TRA.

Source: Kingdom of Bahrain, Telecommunications Law, promulgated under Legislative Decree no. 48 of 2002, October 23, 2002.

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