Iran Sanctions and Iran-Oman Trade – Part I Oman is a close neighbor and a significant trading partner of the Islamic Republic of Iran, which is located just across the Strait of Hormuz from the Sultanate. Iran accounts for approximately 4% of Oman’s exports. As reported in the Omani press, Oman and Iran recently held the 13th round of the Omani-Iranian Joint Committee to discuss ways to strengthen their trade relationship in areas such as investment, transportation, banking, tourism, mining, oil and gas, petrochemicals, shipping and telecommunications. However, numerous aspects of Omani-Iranian trade are likely to come under stress as a result of the sanctions that have been imposed against Iran in recent months by the international community. Nuclear Program Prompts Sanctions In response to Iran’s nuclear development program, which many suspect of pursuing nuclear weapons, the United Nations (“U.N.”) Security Council, the United States of America, and the European Union have all imposed sanctions relating to trade with Iran. All of these sanctions have the potential to affect Omani companies that do business, directly or indirectly, with Iran. This month we discuss the U.N. Security Council resolution against Iran, Resolution 1929. In next month’s Client Alert, Part II of this article will discuss the sanctions that the United States and the European Union have imposed against Iran. U.N. Security Council Resolution 1929 In recent years, the United States, many European nations, and other countries have grown increasingly alarmed at the prospect of Iran developing nuclear weapons, and have urged the larger international community to take measures to rein in Iran’s nuclear program. On June 9, 2010, the U.N. Security Council passed Resolution 1929, holding Iran in violation of its non-proliferation obligations under international law and instituting a fourth round of sanctions. Resolution 1929 was passed by the Security Council with twelve votes in favor, one abstaining, and two against. Under Chapter VII of the U.N. Charter, Security Council resolutions finding a threat to the peace, such as Resolution 1929, are binding upon member states and require implementation of their provisions via national law. Accordingly, all U.N. member states, including Oman, are obligated to implement and enforce Resolution 1929. Resolution 1929 institutes a number of measures targeting Iranian military and nuclear capabilities, as well as entities that provide financial or transportation services related to Iran’s military or nuclear activities. Among other measures, the resolution seeks to ban the sale of weapons and military equipment to Iran. Furthermore, all U.N. member states are prohibited from allowing Iranian investment in uranium mines, enrichment facilities and other nuclear technology. Finally, Resolution 1929 calls on U.N. member states to ban travel by, and freeze the assets of, specifically named Iranian officials and entities tied to the Iranian government, in particular those connected to the Islamic Revolutionary Guard Corps.
Tuesday, January 4, 2011
Tuesday, July 28, 2009
Focus On: Maritime Piracy and the Law
A series of spectacular attacks by Somali pirates over the last year has attracted enormous attention to the timeless, and now resurgent, problem of maritime piracy. For a time, the problem seemed limited to the waters off the Horn of Africa, but last month, pirates struck close to Oman in dramatic fashion. Armed with heavy weapons and night-vision capabilities, Somali pirates hijacked the German cargo ship MV Charelle 60 nautical miles off the coast of Sur. This attack was the first instance of Somali pirates seizing a ship outside of their normal area of operations.
The international attention is more than a passing fancy. Maritime piracy has had very real costs for shippers, as well as exporting countries and industries. The world has watched as pirates have hijacked vessels of increasing size and value, including a super-tanker carrying 2 million barrels of oil worth US$100 million. The total economic cost of maritime piracy has been estimated at over US$10 billion.
For a nation like Oman whose fortunes rest in part on a healthy shipping and export sector, security of shipping vessels and cargo is imperative. Perhaps the most significant determinant of security is how the law is used by both governments and private actors to combat and prevent maritime piracy.
International law creates a framework through which coordinated, collective action by states against maritime piracy is possible. Domestic civil law, on the other hand, provides a range of mechanisms through which businesses may protect their interests by taking preventative action.
The International Legal Response
The recent spike in attacks has sparked an unprecedented level of multinational anti-piracy activity; namely, the creation of an anti-piracy armada including ships from more than twenty countries. These joint patrols find legal authorization under the U.N. Convention on the Law of the Sea (the “U.N. Convention”). The United Nations Convention deals with the rights and responsibilities of nations in their use of the world’s oceans. Oman is a signatory to the U.N. Convention and ratified it in Royal Decree 67 of 1989. Recently, the U.N. Security Council has also issued a series of resolutions expanding the legal basis for the use of force on Somali pirates.
The result of this coordination has been, in the words of U.N. Secretary General Ban Ki Moon, “one of the largest anti-piracy flotillas in modern history.”
This cooperation has included many Gulf nations, including Oman. On June 29, Omani naval commanders participated in a conference in Riyadh with representatives from eleven other Arab states in the Gulf and the Red Sea aimed at coordinating a regional response. Out of this meeting came decisions to establish a joint naval task force and strengthen naval forces in the region.
In addition to providing a framework for joint action, international law has helped direct the criminal prosecution of suspected pirates. In the 18th century, it was determined that maritime piracy constituted a universal crime that could be prosecuted in any jurisdiction, regardless of geographic connection to the criminal act, the defendant or the victim. This concept became known as “universal jurisdiction.”
While universal jurisdiction allows any nation to prosecute a maritime pirate, in practice, most nations are loathe to spend time or resources prosecuting and incarcerating pirates from far away lands for crimes widely considered to be beyond the deterrent effect of limited judicial prosecution.
As a result, interested nations have increasingly entered into bilateral agreements on the prosecution of suspected pirates. In recent months, Kenya has signed memorandums of understanding with the U.S., the European Union and Britain to prosecute suspected pirates in Kenya.
The Domestic Legal Response
In Oman, there have been concerns about more pirates crossing into the territorial waters of Oman. Territorial waters, as defined in the U.N. Convention, consist of the coastal waters extending no more than twelve nautical miles from Oman’s coasts. These territorial waters are regarded as the sovereign territory of Oman.
While international law plays a crucial role in organizing the governmental response to piracy, businesses and individuals in Oman may consider a preventative approach by looking to domestic laws to protect their interests.
Specifically, exporting industries and businesses involved in shipping will secure their goods and vessels through contracts with insurers and private security contractors. In that regard, private maritime security companies are considering the establishment of business operations in Oman.
War insurance may be desirable, as may ransom and kidnapping coverage. The Oman Maritime Law (Royal Decree 35 of 1981, as amended) states that certain war risks, which may include piracy, are not included in a policy unless it has been agreed otherwise between the insurer and the insured. Therefore, it would be important for those seeking war insurance coverage for piracy in Oman to clearly agree what events are covered.
Some may seek new physical deterrents to employ onboard their vessels, while others may prefer to hire armed escort vessels to repel would-be pirates.
In instances where shipments have been hijacked, private individuals will need to ensure that the payment of ransom does not run afoul of the law in any jurisdiction in which they operate. While it is not typically illegal to make a ransom payment, it is illegal in many jurisdictions to make payments to parties determined to be involved in acts of terrorism. Given the murky relationships between Somali pirates and terrorist organizations active in Somalia, it must be determined whether any relevant domestic anti-terrorism laws would be implicated in the payment of ransom.
The legal issues created by maritime piracy underscore the need for internationally experienced legal counsel. In under a decade, the 21st century has shown with alarming frequency that domestic concerns, such as instability in Somalia, can give rise to global problems as significant as maritime piracy.
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.
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