INSIGHTS

The Changing Landscape of Government Affairs in APAC, Africa, and the Middle East.

Dom LaVigne shares his experience with Government Affairs (GA) how the transformation of Government Affairs roles in APAC, Africa, and the Middle East has evolved over the years.

GA’s Evolution:  From Unknown to Essential

When I began my career in government affairs (GA) in the Asia Pacific region (APAC) in 2003, I could almost count on both hands the number of GA professionals in the region.  In the early 2000s, most companies were either not aware of the importance of government and stakeholder relations, or they felt the role was not worth creating, since it was deemed as not directly driving revenue like other corporate positions.

Fast forward to today, and GA professionals are seen as an essential part of most organizations’ in-country, regional, and global leadership teams.  By the robust hiring trends last year and this year in APAC, Africa, and the Middle East, it is evident that GA functions are critical for organizations’ futures.  These roles have evolved significantly beyond pure, one-sided lobbying that many people might associate with traditional (often Western-centric) government and stakeholder relations.

GA professionals now need to balance the commercial interests of their organizations with the nation-building interests of their host governments.  While they are usually the point-person on stakeholder relations, even in organizations which have a primary industry focus, GA professionals increasingly need to become technical, functional experts in areas ranging from climate change, sustainability, and digital/ICT, to data privacy and innovation.

They also need to have an almost clairvoyant-like mindset which enables them to identify and create industry value chain partnerships that can advance these mutually dependent set of public and private sector interests.  Against an increasingly complicated geopolitical environment, GA professionals critically must spot the unforeseen risks and potential damage to their organization or industry.  This includes the very traditional (but equally critical) monitoring of – and trying to pre-emptively contribute to – potential regulatory frameworks that governments are considering.

In the Gulf Cooperation Council (GCC) and broader Middle East and Africa, GA roles have traditionally and primarily focused on daily operational compliance – obtaining/renewing corporate licensing and operating permits, and securing non-immigrant employment visas for expatriates.  Strategic GA decisions were usually made out the organizations’ London or EU-based EMEA headquarters.

However, that is changing as MNCs – and even GCC ministers and government bodies – are looking for senior GA professionals to help drive their future visions.  Where such talent does not exist within organizations, specialist executive search consultancies like Andrews Partnership (AP) are increasingly being called on to help entities identify, recruit, and build their GA talent pools.

Where it might be cost-prohibitive for firms to add full-time GA headcount, over the years in APAC, they have increasingly engaged consultancies like Asia Group Advisors (AGA), BowerGroup Asia, Landmark Public Affairs (now part of Edelman), PS-engage and Vriens & Partners.  In the Middle East, firms like Consulum and THE MENA Catalysts are increasingly being tapped to help governments and the private sector achieve their long-term foreign direct investment (FDI) goals and commercial goals.

A Broadening of Responsibilities

The 2016 United Nations Climate Conference (COP-21)’s Paris Agreement’s provisions to limit global warming to 1.5°C, including reducing greenhouse gas (GHG) emissions by 43% by 2030, is particularly driving organizations’ GA and sustainability roadmaps.  In APAC, I have seen a number of fellow GA colleagues’ roles significantly expanded to include helping develop and drive their organizations’ environmental, social, and governance (ESG) activities.  While many companies are doing well in mitigating their Scope 1 and 2 emissions, tackling Scope 3 emissions reductions across their regional and global value chains is becoming a top priority.

So much of current and future sustainability, data privacy, and other areas are being driven by EU public policy, that many GA professionals globally whose employers are based in Europe (or who have significant EU-related business interests) need to keep abreast of these important regulations, their global reach, and their potential regional and local impact.  Some examples include:  climate reporting directives (CRDs) like the European Sustainability Reporting Standards (ESRS), the EU Carbon Border Adjustment Mechanism (CBAM), the EU’s Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), and the EU Deforestation Regulation (EUDR) – which is particularly contentious for countries like Indonesia and Malaysia.

Digital has become so firmly embedded in all aspects of businesses, that we have seen a seismic shift in how free trade agreements (FTAs) are being structured.  In 2003-2005, it was very different when I worked with the US private sector to develop feedback for the planned US-Singapore and US-Malaysia FTAs.

From single chapters on infocomms technology (ICT) and digital back then, we have seen a growing number of standalone digital economy framework agreements (DEFAs) over the last five years.  Singapore has led the development and signing of DEFAs with various bilateral partners, and last year the ASEAN Secretariat announced talks around the future creation of an ASEAN DEFA.

The Kingdom of Saudi Arabia (KSA) is playing an important role in global digitalization, as the Secretariat of the Riyadh-based Digital Cooperation Organization (DCO) which was established in November 2020.  The DCO is comprised of 16 member states from the Middle East, Africa, and South Asia, and 33 private-sector observers from the world’s leading ICT companies. Representing a market with USD 3.5 trillion GDP nearly 800 million people (of whom 70% are under age 35), the DCO’s mission to help drive global social inclusion and prosperity through digital transformation.

This goal is especially critical for helping strengthen nations’ food security, which has become a priority for most governments, especially those in Africa and Asia.  The world’s food security depends on 600 million smallholder farmers globally, 100 million of whom are in Indonesia and 33 million in sub-Saharan Africa, most of whom lack the financing and access to digital technologies to transition to more productive and environmentally sustainable agricultural practices.

In addition to digital agreements, we are increasingly seeing, traditional FTAs develop around regional and even continental markets, such the Regional Comprehensive Economic Partnership (RCEP), US-led Indo-Pacific Economic Framework for Prosperity (IPEF), Africa Continental Free Trade Area (AfCFTA), and EU bilateral FTAs being negotiated with markets like India, Indonesia, Kenya, and the Philippines.

Increasingly Global Reach & Responsibilities

For GA professionals, the growing number of bilateral, multilateral, regional, and global frameworks increasingly require a global understanding and coordination with headquarters to balance organizations’ global and local interests.

As economic growth began to slow in 2H-2023, many firms and industries have begun taking a hard look at bottom-line costs.  Optimizing regulatory frameworks to support of harmonized standards, elimination of non-tariff barriers, and to mitigate compliance costs (especially around potential duplication of reporting requirements) is becoming a key priority for GA professionals in APAC and globally.

Two great examples of this are CRDs and data privacy regulations.

EU- and European Economic Area (EEA)-listed companies are transitioning to reporting on their FY2024 activities through the European Sustainability Reporting Standards (ESRS). The ESRS will gradually rollout additional sectoral provisions and those for non-EU/EEA companies by 2026 and 2028.

A number of APAC markets have begun assessing their own individual CRD frameworks for listed, and non-listed large companies. This includes Singapore’s SRAC (which is ISSB-aligned framework but would allow for mutual recognition of ESRS reporting), Australia’s Climate-Related Financial Disclosure, and similar future considerations by nations like China and the Philippines.  Such CRD developments are not currently under consideration in Africa and the Middle East.

The CRD compliance burden for companies is significant.  An important part of GA professionals’ scope is centering on how to ensure their firms’ global reporting (whether aligned to ESRS, ISSB, or other CRDs) would be accepted by individual markets.  If not, their regional or local offices would need to prepare separate reporting disclosures; this could potentially impact their subsidiary offices and downstream supply chains in those markets.

Similarly for areas like data privacy, regulatory frameworks like the EU’s General Data Protection Regulation (GDPR) are playing a huge role in organizations’ data privacy considerations.  This can impact everything from a media outlet filming a company’s operations for their TV program, to internal town halls and external corporate conferences.

To ensure compliance, many MNCs are building data privacy teams or hiring internal legal counsel who specialize in this area.  GA professionals will need to become experts as well, while working increasingly closely with their internal/external legal and data privacy counterparts to not only ensure appropriate data protection, but also to assess compliance where there might be conflicts between local (i.e., Country X) data privacy regulations and global ones like GDPR.

A Risky and Uncertain Future

With a deteriorating global security environment in recent years, and companies facing pressure by local governments for the global actions of their headquarters, GA professionals will need to incorporate HESQ (Health, Environment, Safety, and Quality) and HSSE (Health, Safety, Security, Environment) into their portfolios.

The GA function has typically worked closely with product stewardship colleagues on things like chemical safety, product labelling, occupational health & safety requirements.  However, with a number of MNCs doing business in high-risk warzones like Myanmar and the Ukraine, GA professionals will play a critical role in helping their HESQ and Security colleagues assess the risks to their locally based colleagues and their families, and to their customers and business partners.  They will also be vital for identifying the correct internal and external stakeholders to leverage, and balancing the need for external PR and commercial results with the safety and security of their locally based assets.

The Hamas-Israel conflict is a perfect example that spotlights reputational risks to organizations.  Many NGOs and media have begun scrutinizing companies’ global supply chains and business activities, and whether these have ties to the conflict.  This is particularly sensitive for organizations with large commercial interests in APAC and African markets that have large Muslim populations and/or where local governments have called for boycotts of products.

As GA professionals help their C-suite leaders and country executives prepare for local and international travel – and similarly for inbound executives, government officials, and media visiting their local country offices, they will need to work closely with their global, regional, and in-country Security and HESQ teams to ensure all aspects of these trips have been considered.

Also, of high risk to companies is governments putting increasing pressure on their local entities for actions or positions taken by their regional and global headquarters, and even by politicians in that company’s country of origin.  GA professionals will increasingly need to tight-walk this delicate and constantly changing minefield.  They will need to ensure that their organizations’ and their leadership’s external and internal communications and stakeholder engagements accurately reflect the pulse and views of their local business units, and the long-term interests of the nations and territories which they are supporting.

Andrews Partnership are the reputation experts, with offices in Hong Kong, Singapore and Australia working across Asia, as the leading specialist corporate affairs, communications and investor relations executive search firm. We excel at understanding each organisation's unique challenges and appointing the right talent, who make meaningful business impact.