As discussed in a previous post (Hot Topic: Solar Energy), solar power is poised to play a key role in meeting the Sultanate’s future energy needs. With the Omani Authority for Electricity Regulation having published a comprehensive report on renewable energy in 2008, and the Omani Public Authority for Electricity and Water anticipated to soon release a feasibility study for the Sultanate’s first large-scale solar plant, there are clear indications of growing support at the policy level for solar energy projects in Oman. Once policymakers decide to undertake specific solar energy projects, the implementation framework for these projects will come to fore.
As the Sultanate crafts its implementation framework for solar energy projects, it is likely that economic and strategic issues will lead, and the legal issues will follow their cue. However, it is important to choose the legal structure that will best express and accomplish the chosen policy goals. This article explores the economic and strategic context for solar energy in Oman, and outlines some possible legal structures that may meet the Sultanate’s needs.
Economic and Strategic Context
Solar energy has clear advantages over other energy sources, namely that it is renewable, plentiful and non-polluting. Over the long term, investing in solar energy makes solid economic and strategic sense. Solar power provides a secure, stable and sustainable energy source. Solar production costs will likely fall as technology improves, whereas fossil fuel costs have shown a propensity to rise with global supply constraints and demand increases. Further, replacing fossil fuel-based power with solar power also reduces pollution, which lowers health and environmental costs to society as a whole.
However, solar projects do face a short-term disadvantage: at current technology and market prices, the per-unit cost of producing electricity using solar energy is significantly higher than using natural gas or other fossil fuels.
In order to overcome the obstacle of short-term cost and launch solar projects that will yield long-term benefits, governments usually will absorb, over the short and medium term, the production cost difference between solar-based energy and fossil fuel-based energy. In other words, the key step to getting solar energy projects off the ground is for the government to subsidize the project to make it economically viable. Although such a subsidy can be politically difficult to carry out in some countries, it likely could be done in the ordinary course in Oman, where government subsidies to provide affordable electricity to the population have long been a top priority of government policy.
There are a number of possible ways that the Sultanate could structure such subsidies, and these various legal structures contain subtle but important differences.
Possible Legal Structures for Solar Subsidies
The first, most obvious way that Oman could subsidize solar energy production would be for the government to absorb the higher per-unit cost by directly financing and carrying ownership of the solar plant. In this case, the government would typically recruit a third-party operator with the requisite technical expertise, and would build and operate the solar power facility as a public-private partnership (see the June 2010 Client Alert for an overview of the public-private partnership model).
Alternatively, the government could subsidize the purchase of output from a privately owned and operated plant. Under this approach, the government would solicit a private party to build and operate a solar energy plant and cause the Oman Power & Water Procurement Company (“OPWP”), the government-owned, sole wholesaler buyer of electricity in Oman, to enter into a subsidized long-term purchase agreement that would allow the operator to earn a reasonable profit above its cost of producing the solar energy. This power purchase agreement would typically have a term of between 15 and 25 years. It is important to note that private operators seek a long-term power purchase agreement not only for assurances that they will earn a reasonable operating profit, but also to help secure financing to build the plant in the first place, as banks are more likely to lend money for projects that have revenue streams which are guaranteed (and are backstopped by the government).
Finally, as Oman’s solar power sector evolves in future years, OPWP eventually may decide that it would like to tap private-sector capacity even further. One way to do this would be by adopting a “feed-in-tariff” model along the lines of what is used today in Germany and other European countries. Under this model, private businesses and households install solar panels on their property and sell the excess energy that they produce to the relevant electricity authority (in Oman’s case, this would be OPWP). Rather than negotiate power purchase agreements with each business and household that contributes to the electricity grid, the electricity authority establishes a standard rate, commonly called a “feed-in-tariff”, that it pays to all contributors. The government purchases excess solar-produced electricity from businesses and households at feed-in-tariff rates that are high enough to allow the businesses and households to recoup the cost of purchasing and installing their solar panel systems. The feed-in-tariff model both encourages more widespread adoption of solar energy and helps to instill eco-friendly values across society.
Monday, September 13, 2010
Solar Energy – Legal Structure Issues
Monday, August 16, 2010
Hot Topic: Solar Energy
Oman, like its GCC neighbors, is well known for its abundant oil and natural gas resources. What is perhaps less well known is that the Sultanate is also poised to become a leading player in the next great natural resource boom: solar energy.
This article provides background on Oman’s plans and potential for harnessing solar energy. In a future post, we will discuss some of the important legal issues that may come to the fore as Oman moves ahead in its solar development initiatives.
History
Solar energy has been on the agenda in Oman for quite some time. The use of solar systems for special industrial purposes – such as powering telecommunications and monitoring equipment in the Sultanate’s remote desert and mountain areas – dates back to the early 1990s. More recently, the Government has begun to focus on the potential for large, commercial-scale solar projects, both to help diversify the national economy and to meet growing domestic energy needs. A comprehensive report on renewable energy issued by Oman’s Authority for Electricity Regulation in 2008 (the “AER Report”) identified solar power as one of the Sultanate’s top prospective energy sources for the coming decades.
Over the past few weeks, we have witnessed the clearest signs yet that Oman’s potential as a solar energy producer soon will be realized. Oman’s Public Authority for Electricity and Water (the “PAEW”), which is overseeing the formulation of a national strategy for solar energy development, has been working with a consortium of international consultants to determine the size, location, and type of solar technology to be used in Oman’s first large-scale solar power plant. According to recent press reports, the feasibility study is near completion, and the PAEW soon will announce the details of the project and launch a competitive process for bidders to design, develop, finance, and operate the plant.
Looking toward the Future
As we await further details of Oman’s solar plans, it is easy to be optimistic about the Sultanate’s potential to be a major producer – and perhaps someday an exporter – of solar energy. As noted in the AER Report, which analyzed solar radiation data collected over a five-year period, Oman’s solar energy density ranks among the highest in the world. The AER Report estimated that, theoretically, it would be possible to produce sufficient electricity to satisfy all of Oman’s electricity consumption at present levels by utilizing 280 square kilometers of desert (0.1% of the Sultanate’s total land area) for solar collectors.
Building solar power generation capabilities could yield a variety of benefits for the Sultanate. First, the bolstering of Oman’s overall energy resources clearly would help to meet growing domestic electricity needs. Second, the partial fulfillment of domestic energy needs through solar power may allow Oman to export more of its oil and natural gas, which would generate additional revenue. Third, advancing the development of renewable, environmentally friendly energy sources would allow the Sultanate to take a leadership role in the global community. And finally, acquiring expertise in “green” technology may be something that the Omani tourism industry could tap into – hotels featuring eco-friendly technology would nicely complement the stunning natural beauty of their surroundings, and could enhance Oman’s appeal as an upscale, eco-friendly travel destination.
Potential Technologies
According to the recent news reports, it is likely that Oman’s initial large-scale solar projects will utilize some form of concentrated solar power (“CSP”) technology. CSP systems use a group of mirrors to focus a large area of sunlight onto a smaller collecting surface. The collecting surface is usually mounted on a tower surrounded by an array of mirrors, or inside a parabolic trough composed of mirrors. The collected heat is used to turn a heating medium (such as water or molten salt) into steam, which powers a turbine to produce electricity. An alternative technology is to use photovoltaic cells, which absorb solar radiation and directly turn it into electricity via the excitement of electron particles.
Thursday, October 1, 2009
IWPP Finance in Oman and the GCC
After years of remarkable expansion followed by a precipitous decline in the wake of the global financial crisis, the credit market for international water and power projects (IWPPs) in Oman and the GCC appears poised for a recovery.
While 2008 saw a project volume in the Middle East of about US$50 billion, nearly six months passed before the GCC saw its first IWPP financing of 2009. Bahrain’s Addur IWPP closed on 29 June, raising US$2.1 billion and bringing the overall project volume for the region to US$6.7 billion for the year.
The financial crisis forced project lenders to write down the value of project debt, driving up the cost of borrowing. Further, it wiped out the secondary market for project loans as banks shunned the formerly popular practice of packaging debt in off-balance sheet vehicles.
The capital that commercial banks were willing to lend came at a higher cost and decreased tenor. Whereas tenors running from 15 to 20 years at 100 bps over Libor were once common, the Addur project received debt at a tenor of eight years at 350 bps over Libor. Today, the cost of capital averages at 250 bps over Libor.
The revival of IWPPs in the region has been driven by loosening credit conditions linked to new trends in IWPP finance. Specifically, banks are making increasing use of hard or soft mini-perm structures. In a hard mini-perm, debt is offered at a short tenor, in the range of seven years, requiring early refinancing. In a soft mini-perm, a longer tenor is used, but incentives are used to encourage the lender to refinance well before maturity.
Another key trend has been the rising profile of export credit agencies and international development banks. Export credit bodies provide access to large amounts of relatively inexpensive capital and offer added confidence to commercial banks. Development banks have also played a key role by providing an additional source of capital and a backstop for project debt.
Finally, banks have been favoring government supported projects. For instance, an IWPP with a concession or off-take agreement is a stronger candidate for financing given its relatively secure future cash flows. Additionally, governments may guarantee the obligations of state-owned parties entering into such agreements.
Increasing electricity and water demand has led the government of Saudi Arabia to tender projects in form of engineering, procurement, construction (EPC) contracts, rather than build, own, operate (BOO) or build, own, transfer (BOT) contracts.
Oman aims to avoid such a measure. Continuing on its program of privatization, Oman expects to see the close of a club financing of an IWPP in Salalah this year. RFPs have been released for projects at Barka, Sohar, Duqum, and Ghubrah, with another for an IWPP in Mirbat on the way. Additional projects are being studied, including a solar plant in the south of the country.
In past projects, the Oman Power & Water Procurement Company (OPWP) has entered into off-take agreements. In the case of the Barka and Sohar IPPs, the OPWC will purchase the output under a 15-year agreement.
IWPP finance and execution in Oman implicates a range of complex legal issues, including:
In addition, it is often necessary to put in place all the project agreements in order to obtain IWPP finance. Depending on the project, these agreements may include:
As the credit market revives -- and as the oil prices rebound -- Oman grows increasingly likely to meet its goal of increasing output through an ambitious program of privatization.
Tuesday, May 26, 2009
Hot Topic: Red Tide Legal Issues
In recent weeks, the Omani coastline has been significantly affected by red tide, a biological phenomenon that occurs when the rapid growth of algae overtakes a water column.
Red tides, also known as algal blooms, are common along the coastlines of the Arabian Gulf between the months of March and September. Red tides are generally considered to be a natural phenomenon, though many scientists contend that human activity such as pollution or global warming can increase their likelihood or exacerbate their severity.
The red tides result in red or green colored seawater, unpleasant odors, and low underwater visibility, making the water an unpleasant place for beach goers. Severe red tides, however, are more than just a nuisance. The proliferation of algae blocks out sunlight and results in a lack of dissolved oxygen in the water, causing the death of marine organisms and the destruction of ecosystems.
As has been seen in Oman, the environmental disruption caused by red tides can have a serious impact on businesses relying on the waters for economic activities.
Perhaps the most direct consequence felt by businesses has been the killing of massive amounts of fish. In 2001 and 2002, 27 tons of dead marine life came ashore along Sur, Batinah and the south of Oman. The recent red tides have also resulted in large amounts of dead fish washing ashore in Muscat. Such destruction has a detrimental impact on fisherman and fisheries in Oman.
Additionally, the red tides significantly affect tourism. The red tides are toxic and cause skin irritation rendering the water un-swimmable. Resorts in the area routinely warn their guests to stay out of the water during red tides. Further, the blooms have resulted in the destruction of coral reefs and the killing of whales and dolphins.
Algal blooms also have a serious impact on industries relying on the use of sea water, and are known to have caused temporary industrial shutdown. In Oman, the red tide has caused a temporary halt at the Qalhat LNG plant as well as the Sohar Aluminum plant. Similarly, other Omani plants in Sohar must remove foam from the sea water before it comes into contact with their systems and equipment. Removing the foam, which is caused by algal blooms, increases costs materially.
Red tides also raise complex legal issues, most of which hinge on the question of causation. Of particular concern to businesses is whether legal rights exist for those parties facing adverse economic effects. The answer to this question relies on whether red tides are caused by the activities of any particular person or legal entity. If so, it must be determined whether such entity has breached a duty to refrain from such activity or applicable environmental laws.
While red tides are widely considered to be natural phenomenon, many scientists believe the frequency and severity of red tides are influenced by human activities, including pollution and the dumping of raw sewage, that raise nutrient levels in the waters. If direct causation, for example by the unlawful dumping of raw sewage, can be determined, liability for damage caused by red tides could possibly be found against the violator.
Assuming the red tide is caused by pollution, Oman has environmental laws in place that would hold the polluter liable. Specifically, the Environmental Law, provided in Royal Decree 114 of 2001, provides criminal penalties for introducing harmful pollutants into the natural environment of Oman. If the pollution involves the discharge of a pollutant into wadis, sewage systems, catchments feeding the underground water or rain water disposal networks, or falajs and their channels, the penalties are more severe.
In addition to fines and imprisonment, polluters are also required, at their own expense, to repair the damage to the environment by restoring it to the previous state. If the red tide in Oman is caused by a polluter, the clean up and compensatory costs could be enormous.
Currently, however, it is not clear what causes the red tide and there is no hard evidence that it is caused by polluters in Oman. Therefore, perhaps more important than liability is the matter of mitigation and prevention. In Oman, this responsibility is imposed on the Ministry of Environment and Climate Affairs (MECA). MECA has set up a warning system involving the placement of buoys outfitted with sensors for continuous measuring of over 13 determinants of water quality.
Wednesday, April 29, 2009
Doing business in Oman: Alternative Energy
A study on renewable energy sources commissioned by the Authority for Electricity Regulation (AER) has found that the level of solar energy density spread throughout Oman is among the highest in the world, capable of generating more than enough electricity to meet domestic requirements and allowing for the export of any surplus. It also identified wind energy potential in coastal and mountainous areas of Salalah comparable to inland Europe where large numbers of wind turbines are operational.
The study has recommended the creation of a national authority to administer clean development mechanisms to assist renewable energy investment and policies. The international consultant conducting the study also assessed the potential of biogas, geothermal and wave energy.
Many private sector entities have shown interest in supporting solar and wind energy initiatives. Rural Areas Electricity Company SAOC, responsible for power generation and distribution in remote parts of Oman and the largest consumer of diesel in Oman, will identify locations for solar/wind energy pilot projects possibly as hybrid systems. Solar power, because it is an intermittent energy source, requires a backup supply, which can partially be complemented with wind power. Oman Power and Water Procurement Company SAOC will also conduct competitions for large-scale renewable energy projects.
The price of electricity generated using domestically produced gas is highly subsidized. Despite technological advancement and increased efficiency, renewable energy generation continues to be highly capital-intensive. Consequently, private sector initiatives will also need government support in terms of subsidizing the electricity price for domestic consumption; land concessions for installation and operation of generation plants; and tax and customs exemptions. Given the long-term benefits of using renewable energy and the dire need to reduce the reliance on depleting hydrocarbon resources, going solar may prove to be the most cost effective solution for averting an energy crisis and for reducing Oman’s carbon footprint.
Thursday, April 23, 2009
Focus On: Hormuz Oil Spill
In the early morning of March 20, 2009, two U.S. Navy vessels, the USS New Orleans (an amphibious assault ship) and the USS Hartford (a nuclear powered submarine), collided in a highly unusual incident in the Strait of Hormuz, between Oman and Iran. Both ships were damaged, and 15 soldiers were injured, though none of them seriously.
Neither ship was disabled by the damage sustained and the nuclear reactor aboard the Hartford remained uncompromised. The USS New Orleans, however, ruptured its fuel tanks and spilled 25,000 gallons of diesel fuel into the Arabian Gulf.
While diesel fuel was visible from the surface shortly after the accident, an aerial search conducted by the U.S. Navy that day found that the spill had disappeared from view. A Navy spokesman suggested that due to its low density, the fuel had likely dissipated.
Others sources speculated that the spill could have taken a trajectory toward Musandam, a popular resort destination in Oman considered by some to be an ecotourism treasure.
At this point in time, there have been no reports of environmental damage in the area around Musandam. Nevertheless, the incident raises the question: who may be held liable for environmental or ecological damage resulting from accidents at sea?
This question is a particularly relevant one for countries and companies with assets located along busy waterways.
Liability of Military Ships
The United Nations Convention on Law of the Sea (UNCLOS) provides that military ships are generally immune from all liabilities.
There are, however, exceptions to immunity for certain events and activities in territorial seas. Specifically excluded from immunity is loss or damage resulting from non-compliance with the laws or regulations of a coastal state concerning passage through the territorial sea or any act of willful and serious pollution contrary to the convention.
These exceptions to immunity, however, are applicable only in territorial seas, not in straits used for international navigation, such as the Strait of Hormuz. Significantly, the U.S. is not a party to UNCLOS, meaning that these exceptions could not be applied to attach liability to a U.S. military vessel.
Liability of Commercial Vessels
The liability of commercial vessels is an even more complex matter, subject to international conventions and a wide range of domestic laws, both of the flag nation of the commercial vessel and of any affected nation. Moreover, countries whose shores have suffered pollution have often taken matters into their own hands by bringing civil suits and/or criminal charges locally and abroad.
Monday, March 9, 2009
Environmental Law
The United Nations (UN) Environment Programme has credited Oman with having one of the best records in environmental conservation, pollution control and maintenance of ecological balance. Oman is even stated as having one of the world’s most rigorously “green” governments. Oman’s biodiversity is catered for by varying topographic features, with vast arid deserts in the West, to a belt of grass and woodland in the mountainous region of the South, with the Arabian Sea in the East.
Oman has ratified many international treaties related to environmental protection, including the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, the UN Convention on the Law of the Sea, the UN Framework Convention on Climatic Change, and the UN Agreement on Prevention of Desertification in Countries Facing Severe Arid Conditions.
Environmental problems currently faced by Oman include:
- • high levels of soil and water salinity in the coastal plains;
- • scarcity of water due to prolonged drought in certain areas;
- • industrial effluents seeping into the water tables and aquifers; and
- • desertification due to high winds driving desert sand into arable lands.
Oman’s environmental regime is primarily regulated by the Law on the Conservation of the Environment and Combating of Pollution (Royal Decree No. 114/01), 2001. Although its forerunner (of the same name − Royal Decree No. 10/82) now stands repealed, it enabled the enactment of a series of environmental legislation, most of which continues to be in force today.
Legislation for wildlife protection and nature conservation is mainly comprised of three Royal Decrees and two Ministerial Decisions:
- The Law on the Protection of National Heritage (Royal Decree No. 6/80), 1980;
- The Law on the Protection of Marine Biological Wealth (Royal Decree No. 53/81), 1981;
- The Law on the Conservation of the Environment and Combating Pollution;
- Ministerial Decision No. 4/76; and
- Ministerial Decision No. 128/93.
- The Protection of Arabian Oryx (Royal Decree No. 4/94), 1994;
- Establishing the Turtle Sanctuary (Royal Decree No. 23/96), 1996; and
- Establishing Animal Reserves and Natural Parks (Royal Decree No. 48/97, No. 49/97, and No. 50/97), 1997.
The Law on the Conservation of the Environment and Combating of Pollution
The Law on the Conservation of the Environment and Combating of Pollution defines terms such as “the environment”, “environmental protection”, “pollution/pollutants”, “hazardous material”, “dumping”, etc. This law makes it mandatory for an owner of a place of work to obtain a license before setting up an establishment, and to follow the procedure specified by the ministry to minimize waste at the source of pollution, thus preventing pollution. It also stipulates that such owners should refrain from carrying out or permitting any discharge and release of environmental pollutants in excess of the standards specified by the ministry, but excludes from its purview any emergency measures to save lives or to safeguard the place of work. The owner must maintain a register on the quantity, nature, and method of effluent discharge at the establishment.
This law prohibits the discharge of hazardous material, sewage and waste into wadis (dry riverbeds), aquifers, rain water disposal networks, falaj (water management systems) and their channels, and the use or disposal of treated sewage water without permission. Ships and vessels are barred from discharging oil and other environmental pollutants into the Exclusive Economic Zone of Oman. Penalties for the violation of this law range from OMR 200 to OMR 1 million, with imprisonment in certain instances. Annexure 1 of this law lists certain endangered species, the hunting of which results in penalties ranging from imprisonment for six months to five years, and/or a fine of OMR 1,000 to OMR 5,000. Annexure 2 details other animals the hunting of which attracts a penalty of OMR 100 to OMR 1,000, and/or imprisonment for not more than three months.
The Petroleum Law
The Petroleum Law (Royal Decree No. 42/74), 1974, makes it mandatory to obtain prior approval before engaging in the exploration, extraction, exploitation, storage or distribution of petroleum or mineral resources. Prior approval is also needed to undertake activities involving processing plants, pipelines, storage tanks, storage facilities, ports, jetties, offshore platforms or installations, sea and marine loading facilities, pumps or pumping stations.
This law requires licensed operators to conduct their operations in a manner that minimizes air and water pollution and, which is safe to the health and wellbeing of their employees and the public. Any person violating this law is liable for loss or damage suffered by a third party or the government, directly or indirectly as a consequence of the violation. The compensation for such loss or damage is not limited to the direct loss incurred and includes consequential and economic loss.
Terms such as “operator”, “due diligence”, “waste”, “unsafe act”, etc, are all defined in this law.
Licenses
An application for an environmental license must be accompanied by a comprehensive environment feasibility report, assessing the benefits of granting the license as compared to the probable damage or adverse impact on the environment.
Ministerial Decision No. 209/95 on Environmental Permits for Industrial and Commercial Establishments provides that permit holders must comply with the conditions set out in their environmental permit. Notwithstanding the penalties prescribed in other environmental laws, a breach of this provision would be subject to an initial fine of 100 Omani Rials (OMR), with 15 days to rectify the breach, failing which a further fine of OMR 50 per day for three weeks is applicable, as well as the closure of the establishment for continued breach. This law empowers the relevant authority to suo moto (rectify any breach posing risk to the public and the environment), at the expense of the permit holder.
Main Areas of Environmental Concern
Hazardous and non-hazardous waste and substances
Ministerial Decision No. 17/93 on the Management of Solid Non-Hazardous Waste deals with solid or semi-solid material, such as household waste and solid materials from commercial and industrial establishments, which does not pose any danger to the environment or public health if its disposal is effected in a safe and scientific way. Solid non-hazardous wastes must be stored, collected and transported to a site designated by the relevant authority for this purpose. The relevant authority is the relevant municipality that falls under the ministry of regional municipalities and water resources.
Ministerial Decision No. 18/93 on the Management of Hazardous Waste includes in its definition of “hazardous waste” any waste from commercial, industrial or other activities, which by nature, composition or quantity or for any other reason is hazardous, or threatens to be hazardous to the
environment. All hazardous waste must be labeled and packed according to the relevant regulations, and stored in approved storage facilities until it is removed in accordance with the terms of the license issued by the ministry.
The Law Regulating the Circulation and Use of Chemicals (Royal Decree No. 46/95), 1995, defines a “chemical substance” as a substance listed as “dangerous” in the international classification standards of dangerous substances that have an effect on public health and the environment. However, this law excludes “explosives”, the use and circulation of which is
governed by separate legislation. A license is mandatory for the use, manufacture, import, export, transport, storage and circulation of a chemical substance.
Ministerial Decision No. 145/93 on Wastewater Re-Use and Discharge prohibits the discharge of wastewater or sludge into the environment, in whatever form or condition, without a permit to do so. It also provides for regulating the quality of wastewater and its reuse. Before reuse, the
wastewater or the sludge is required to be tested to determine its pH value and the quantity of various metals in it. Those with high concentration of metals are disposed of in landfills with prior approval of the ministry. Wastewater may only be discharged where its re-use is not possible.
Royal Oman Police Civil Defence Regulations deals with public protection and safety in commercial establishments, addressing the following:
- • Specific and detailed requirements applicable to establishments involved in the use and storage of petrochemical products and the production of gas;
- • Protection of personnel and safety requirements in work places;
- • Transportation for dangerous chemicals; and
- • Training to deal with fire and emergencies.
- • Chalking out contingency plans for disaster management;
- • Measures to be undertaken during emergencies;
- • The conditions for import, manufacture, storage, sale and transport of radioactive or other substances which are dangerous to public safety; and
- • Safety and rescue rules and plans to be adopted during land, sea and air
transportation.
The Law on Marine Pollution Control (Royal Decree No. 34/74), 1974, brought to light Oman’s early concern for the safety of its marine environment. This law prohibits the discharge or release of any pollutant from a ship, shore location or oil transport facility in the Pollution Free Zone of Oman. This zone is the belt of water around Oman’s territorial waters, which stretched for a distance of 38 miles. Any person violating the provisions of this law is subject to a maximum penalty of OMR 25,000 for a single violation, and of OMR 4 million for multiple violations, and may also be deprived, either temporarily or permanently, of all environmental rights granted by the government. Terms such as “operator”, “oil transport facility”, “pollutant”, “pollution control officer”, etc, are all defined in this law.
Air pollution
Ministerial Decision No. 118/04 on the Control of Air Pollution from Stationary Sources stipulates that owners must employ scientific methods specified by the ministry for the prevention of the emission of pollutants, and for their treatment and disposal. This law prohibits the emission of smoke over a specified density, and burning of organic or agricultural waste in the open. Approval must be obtained before installing a chimney, which must conform to the height specifications stipulated depending on its intended use.
Noise pollution
Ministerial Decision No. 79/94 on the Control of Noise Pollution in Public Places prescribes noise levels based on the classification of public places, and identifies the following as external sources of noise:
- • Industrial plants and construction sites;
- • Road traffic; and
- • Airports and the operation of commercial and other aircrafts.
Ministerial Decision No. 80/94 on Noise Pollution Control in the Work Place prescribes noise limits in places of work. Machines, equipment and other noise generating installations are required to be checked for noise emission levels during operation and installation.
Health and Safety in Workplaces
Oman Labour Law (Royal Decree No. 35/04), 2004, has certain health, safety and environment provisions in place, including the provision by employers of first aid facilities to employees in the workplace, and provision of a generally hazard-free workplace. The employee must be apprised of potential hazards in their role, as well as mandatory safety measures. The employers must ensure that a generally hazard-free workplace is maintained, particularly ensuring that:
- • Adequate safety and hygienic conditions prevail in both the workplace and in the places that a worker must visit by reason of his work;
- • Safety checks are done on machinery and equipment in the workplace, ensuring they are in safe conditions; and
- • The stipulated safety measures are followed by their employees.
This article was first published on GMB Research. GMB Research commissions material from a large and growing network of leading local experts and international professional firms. Now covering 30+ countries from South East Europe, CIS and the Middle East as well as parts of North Africa and Asia, GMB Research is a rapidly evolving global resource.
