OMAN FULFILLS FTA LABOR PROMISE TO CONGRESS THREE

UNCLAS SECTION 01 OF 02 MUSCAT 001084

SIPDIS

SIPDIS

STATE FOR NEA/ARP (S. STEINGER),DRL (J. DEMARIA)
STATE PASS USTR FOR J. BUNTIN, A. ROSENBERG, AND L. KARESH
DOL FOR J. SHEA, B. SHEPARD, AND J. RUDE
US MISSION GENEVA FOR LABOR ATTACHE

E.O. 12958: N/A
TAGS: ELAB ETRD PGOV PHUM MU
SUBJECT: OMAN FULFILLS FTA LABOR PROMISE TO CONGRESS THREE
MONTHS EARLY

REF: MUSCAT 793

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Summary
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1. In a surprise, Sultan Qaboos issued a royal decree July 7
that fulfills, three months early, the important labor
reforms to which Commerce Minister Maqbool Sultan committed
the Sultanate in his March 26 letter to the House Ways and
Means Committee Chairman. Minister Sultan told the
Ambassador that the Sultan took the decision to issue the
decree now in recognition of the "urgency" of completing the
necessary reforms and demonstrating Oman's determination to
meet its obligations and ensure quick approval of the FTA in
Congress. The right to strike, collective bargaining,
protections for labor activity and elimination of government
interference are now the law of the Sultanate. These labor
reforms fulfill a major demand of congressional FTA opponents
and further raise Omani expectations of positive action in
the House before Congress' summer recess. End summary.

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Promise Fulfilled
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2. In a historic move to meet labor reform commitments for
passage of the US-Oman Free Trade Agreement (FTA),Sultan
Qaboos bin Said issued Royal Decree 74/2006 on July 7. The
royal decree was published in the Official Gazette July 8 and
provides for the following:

-- unequivocally prohibits forced or coercive labor;
-- canonizes collective bargaining and peaceful striking as
lawful mechanisms to settle labor disputes, improve
conditions of work or raise productivity;
-- prescribes penalties for employer violations of worker
rights;
-- removes all previous government interference in the
committees (now called "unions"); and
-- provides stiff penalties for anti-union discrimination.

The royal decree comes months ahead of the October 31
deadline Commerce Minister Maqbool Sultan made in his March
26 letter to House Ways and Means Committee Chairman Thomas.
Royal decrees are the highest law of the land and solidify
Oman's compliance with all of its International Labor
Organization (ILO) commitments.

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Sultan's Decision Made to Ensure Quick Passage of FTA
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3. Reached in Australia on business and vacation, Commerce
Minister Sultan told the Ambassador that the Sultan had
decided to act quickly on the promised labor reforms
"exactly" because of Oman's desire to secure quick approval
of the FTA in Congress. The Minister said that the royal
decree should demonstrate Oman's commitment to meeting "all
the promises made to the Congress" regarding labor. He
confirmed that implementation guidelines in draft by the
Ministry of Manpower (MOM) are well advanced and will be
completed well before the October 31 deadline. Minister
Maqbool emphasized to the Ambassador that the Sultan views
congressional approval of the FTA to be of "utmost urgency."
The expedited royal decree, the Minister assured, should also
demonstrate that Oman "keeps its promises." The Minister
indicated that Oman's ambassador to the United States will
shortly deliver letters referencing the Sultan's action to
United States Trade Representative (USTR) Schwab and to the
Congress.

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Forced Labor, Right to Strike and Collective Bargaining
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4. The royal decree provides an addition to Article 3 of the
2003 Labor Law, prohibiting employers from imposing "any type
of forced or coercive labor." Anyone found to be in
violation of Article 3 will be penalized with a prison term
not exceeding one month and a fine not exceeding $1315, or
either of the two penalties. The penalty will be doubled for
repeat offenses. Article 118 prescribes penalties of $1315
(multiplied by the number of juveniles or women being
employed in violation) to anyone who violates Part Five of
the labor law (Employment of Women and Children). If an
offense is committed a second time within one year from the
date of sentencing, the employer may be imprisoned up to one
month. (Note: These measures are in addition to Article 260
of the Penal Code, which already stipulates 5-15 years in
prison for putting persons under conditions of "enslavement
or quasi-slavery status." End note.)


5. Also added to the Labor Law is the new Article 107, which
explicitly legalizes collective bargaining and peaceful
striking as appropriate mechanisms to settle labor disputes,
improve conditions of work or raise productivity.

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Union Organization
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6. Representation committees (RC) are now called "unions."
Article 108 of the Labor Law has been amended by this decree
to read, "Laborers may form labor unions aimed at serving
their interests, defending their rights, improving their
material and social conditions, and representing them in all
matters of their concern." Moreover, all government
interference in unions has been rescinded. Article 110 has
been amended to reflect the autonomous nature of unions and
their guaranteed right to practice their activities in "full
freedom and without interference in or influence of their
affairs in any way."


7. An addition to Article 110 prohibits both termination of
an employee for his or her union activities and obstruction
of union formation. Penalties for violation of Article 110
may include one month imprisonment and a fine of not more
than $1315.

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Implementing Regulations
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8. According to the Under Secretary for Labor, Sayyid Hamad
Hilal al-Busaidi, the royal decree had been ready for some
time before the July 7 announcement, but had not yet been
vetted by all the concerned officials. The Under Secretary
also confirmed to PolOff on July 10 that the Ministry of
Manpower (MOM) is trying to issue the implementing
ministerial decrees "as quickly as possible" and has taken
ILO suggestions into consideration. Al-Busaidi said that the
Omani government hopes this decree will show Congress that it
has faithfully followed through on its commitments, and that
the FTA will be ratified soon.

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Editorial Points to FTA Promise
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9. The lead editorial in the July 10 edition of
government-owned Arabic daily newspaper "Oman" trumpeted the
royal decree as a "significant labor achievement." It stated
in part that, "These amendments conform with the latest
developments in today's globalized world, and also conform
with the requirements of the Free Trade Agreement which is
due to be signed (sic) with the U.S. during the coming period
after the ratification of the U.S. Congress. (They) are also
consistent with WTO law."

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Comment
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10. These sweeping reforms come well ahead of the October 31
deadline and affirm Oman's commitment to meeting its
compliance with core international labor standards. Although
implementing regulations will be required from the Ministry
of Manpower for collective bargaining and striking
procedures, royal decrees are the highest law of the land and
ensure Oman's compliance with its congressional commitments.
News regarding these significant reforms was carried in all
national media and will likely continue to reverberate
throughout the country as companies and workers begin to
grasp the significance of the new changes. Initial feedback
from union representatives, as well as the resident
diplomatic community, has been extremely positive. The FTA
process has been directly responsible for this important leap
forward in democratic and labor rights in Oman.
GRAPPO