This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 04 MUSCAT 000793 
 
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: LABOR UPDATE FOR US-OMAN FTA HEARINGS 
 
REF: 05 MUSCAT 1874 
 
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Summary 
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¶1.  The Ministry of Manpower confirmed on May 13 that it is 
researching and preparing ILO-consistent legislation to meet 
recent labor reform commitments for ratification of the 
US-Oman Free Trade Agreement.  Labor committee members and 
government officials assert that, in practice, the government 
neither interferes with nor unduly involves itself in 
committee activities, but continues actively to support 
establishment of labor committees through private sector 
outreach and educational awareness.  Although committees and 
members continue to face their own organizational challenges, 
a few are already achieving success in negotiating better 
working conditions for members.  End Summary. 
 
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No Government Interference 
-------------------------- 
 
¶2.  The Ministry of Manpower (MOM) asserts that it is not 
intrusively overseeing labor union representative committee 
(RC) activities as permitted in Ministerial Decision 
135/2004, and claims that the actual application of the labor 
law is already ILO-consistent.  In practice, committees do 
not give notice to MOM prior to general assembly meetings; 
nor do they provide the MOM a copy of their agendas or 
meeting minutes.  Moreover, according to sources at the MOM 
and within the committees, no MOM official has ever attended 
any committee meetings or banned any RC from meeting without 
prior approval.  To the contrary, committee members have 
expressed their displeasure at the MOM's non-attendance at 
and lack of involvement in committee organizing events and 
activities. 
 
¶3.  Although allowed in Ministerial Decision 135/2004, MOM 
dismissal of committee leaders for "committing acts that 
cause material or moral harm" has not occurred, and MOM has 
never rejected any elected RC leader for failure to meet 
restrictions set out in previous ministerial decrees.  One 
committee member told PolOff that an MOM official told him 
"not to worry about restrictions in the law" with regards to 
establishing a committee because the MOM is more interested 
in encouraging their growth rather than in details of 
membership.  As there are no official MOM application forms 
for establishing committees, employees wishing to establish a 
committee simply notify the MOM with a letter of intent and a 
list of elected officials comprising their leadership board. 
The MOM has visited over 400 companies to educate the private 
sector and encourage establishment of representative 
committees.  The MOM and the MRC also hold regular awareness 
sessions throughout the year to discuss labor rights and 
establishment of RCs. 
 
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Right to Organize and Committee Leadership 
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¶4.  As of May 13, thirty representative committees have been 
established, representing roughly 49,000 employees.  RCs have 
been established primarily in the construction, hotel 
service, transportation, oil and gas, telecommunications, and 
engineering sectors.  There are no committees in the public 
sector, which is covered by Civil Service Law, and the labor 
law does not prohibit any category of worker from 
establishing worker committees.  Of the committees 
established, company management holds officer positions of 
Saud Bahwan Group, Omantel, Port Services, and Suhail Bahwan 
Group committees.  Candidates interested in leadership 
positions submit their name and are chosen by secret ballot 
elections.  Many general assembly members also write-in 
names, such as for management, who may also be elected to 
leadership positions. 
 
¶5.  While Ministerial Decree 135/2004 delineates 
qualifications for leadership, such as the ability to speak 
and write Arabic, be employed more than one year, and not 
have been convicted of a felony, the MOM has not denied 
candidacy to anyone failing to meet these regulations, and, 
in fact, has encouraged people to participate regardless of 
proscriptions.  Since committees do not yet require 
applications for membership, and do not have established 
procedures to collect dues, RCs currently represent de facto 
the entire workforce of a company, including those who have 
been employed less than one year.  A February statistical 
bulletin confirmed the current private workforce of Oman to 
be 102,455 Omanis and 438,531 expatriates, meaning that 
approximately nine percent of the workforce is now 
represented by a union.  Committees are expected to maintain 
their own finances and are not regulated by the MOM. 
 
¶6.  All established committees may participate in the 
national federation of unions, referred to as the Main 
Representative Committee (MRC).  The MRC is currently the 
only umbrella organization to represent Omani unions 
internally and abroad, and members are chosen through secret 
ballot elections.  Similar to the situation of the 
representative committees, members of the MRC do not give 
notice to MOM prior to general meetings; nor do they provide 
the MOM a copy of their agendas or meeting minutes. 
Moreover, no MOM official has ever attended any committee 
meetings or banned the MRC from meeting without prior 
approval.  Members of the MRC maintain open relations with 
the MOM to discuss ongoing changes in the labor law and 
possible means to strengthen the labor unions. 
 
¶7.  The representative committees are experiencing growing 
pains in terms of organization and management.  The MRC has 
not yet moved into a permanent office space or established a 
bank account to manage its finances.  In addition, recent 
personnel changes at establishments have meant the addition 
of Issam al-Sheibany of Oman Oil Refinery and Aida al-Hashmy 
of the Al-Bustan Palace Hotel to the MRC, bringing the total 
number of MRC representatives to 13.  In spite of logistical 
issues, however, MRC members continue to meet regularly with 
the International Labor Organization (ILO) and the Ministry 
of Manpower to discuss technical assistance and other needs 
to support a fully functioning MRC. Moreover, the MRC 
continues to mediate disputes and is informed of complaints 
with the MOM (reftel). 
 
¶8.  As part of its outreach and organization, the MRC 
recently established four sub-committees to focus on specific 
areas of concern: 
 
--External Relations - This committee manages conferences and 
is headed by mid-level officer Saud al-Jabri of Petroleum 
Development Oman; 
--Rights and Duties - This committee is headed by Oman's 
busiest labor advocate, Nabhan al-Battashi, of the Grand 
Hyatt Hotel Muscat; 
--Articles of Association and Membership - Abdullah al-Araimi 
heads this committee, which serves as a resource for newly 
established committees; and 
--Women's Issues - New MRC member Aida al-Hashmy of the 
Al-Bustan Palace Hotel heads up this important committee 
promoting women in the workforce. 
 
¶9.  The MRC is currently preparing for the upcoming annual 
meeting of the ILO in Geneva and recently appointed its 
participating delegates.  In addition to senior members Saud 
al-Nahari and Abduladheem Abbas, junior MRC members Saud 
al-Jabri, Aida al-Hashmy, and Nabhan al-Battashi will attend 
the ILO for the first time.  The government fully funds the 
participation at the ILO's annual meeting for a tripartite 
delegation of one employer, government official and one labor 
representative.  The MOM has further supported the attendance 
of the other MRC members by officially requesting that 
companies allow designated representatives the necessary time 
off and pay for their travel. 
 
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Success Stories 
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¶10.  Although the committees are loosely organized and lack 
some basic management skills, the MRC has been active in 
mediating disputes and performing outreach.  Nabhan 
al-Battashi, head of the Rights and Duties subcommittee, 
makes frequent trips throughout the country to promote the 
establishment of committees and liaise with private sector 
management to educate companies on the labor law and the 
important role of the committees.  Two recent trips include 
visits to al-Jazeera Tube Mills in Sohar and Oman Flour Mills 
in Salalah.  Although both companies were initially skeptical 
of the idea of a representative committee, company managers 
not only agreed to allow company time to hold meetings, but 
also provided space for the new committees as well. 
 
¶11.  At the enterprise level, the RC of the Grand Hyatt has 
made the most significant progress in negotiating better 
working conditions and advocating on behalf of its committee 
members.  In recent months, the RC's President negotiated a 
new vendor contract for employee meals, reached an agreement 
to prohibit smoking in the staff cafeteria, secured an annual 
bonus for all staff, ensured payment of overtime, and 
negotiated 4 percent of the hotel's service charge to be paid 
directly to employees, a monthly increase of 209 USD for 
every employee.  As a result of the committee's significant 
achievements, the Grand Hyatt dramatically reduced 
resignations from 166 in 2005 to zero for the calendar year 
to date. 
 
¶12.  While the law does not explicitly permit workers the 
right to strike (to be amended by October 31), there were 33 
strikes involving 6,000 workers in 2004 and 4 strikes 
involving 1,083 workers in 2005.  There are no restrictions 
on the right to strike and no activities associated with 
striking are grounds for dismissal.  In 2005, there was one 
reported collective complaint that occurred during one of 
Oman's most widely publicized strikes.  As reported in 
reftel, workers at Salalah Port closed Oman's largest seaport 
for two days while the MRC and the MOM negotiated the 
reinstatement of a committee representative who had been 
fired.  In addition to the strike, workers took the 
opportunity to successfully renegotiate working hours and 
split-shift schedules.  Although there are no penalties yet 
for anti-union discrimination (still under discussion), as 
evident by the Salalah example, the MOM and Oman's labor 
courts do not tolerate wrongful dismissal. 
 
¶13.  To date, there has been only one case of an individual 
terminated who was also a member of a representative 
committee (reftel).  Neither employers nor managers have 
challenged the right of workers to form a representative 
committee, moreover, labor organizing is not grounds for 
dismissal or arrest.  While the MOM does keep a variety of 
labor statistics, there have been no reported cases of 
workers suffering retaliation for participating in worker 
committee activities.  As with any labor dispute, workers are 
encouraged to submit complaints to the MOM and may sue 
employers for wrongful dismissal.  Labor courts favor the 
worker in the majority of cases, regardless of the reason for 
termination. 
 
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Foreign Workers and Child Labor 
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¶14.  Foreign workers in Oman make up roughly 50 percent of 
the labor force and are concentrated in the following sectors: 
 
Construction - 28.2 percent 
Wholesale/Retail - 20.1 percent 
Domestic Servants - 13.4 percent 
Manufacturing - 11.8 percent 
Agriculture - 10.7 percent 
Hotels/Restaurants - 5.9 percent 
Health/Education/Community/Real Estate, Misc. - 10 percent 
 
¶15.  Non-Omani workers are informed of their labor rights 
through outreach by the Main Representative Committee, the 
MOM, and their embassies.  While some employers have 
reportedly held passports of foreign workers, the MOM asserts 
that this practice is illegal and that legislation 
formalizing that will be forthcoming.  Forced labor is 
prohibited by Oman's Basic Law and persons convicted of the 
crime are sentenced to five to fifteen years in prison.  Oman 
has ratified ILO Convention 29 on Forced Labor and ILO 
Convention 105 on the Abolition of Forced Labor. 
 
¶16.  Child labor is also prohibited by Oman's Basic Law and 
existing labor law.  Oman ratified ILO Convention 138 on the 
Minimum Age for Admission to Employment and ILO Convention 
182 on the Worst Forms of Child Labor.  The minimum age for 
employment is 15 years and minors (aged 15-18) are permitted 
to work only between the hours of 6 a.m. and 6 p.m.  Minors 
are prohibited from working in hazardous occupations; may not 
work on weekends or holidays; many not work for more than six 
hours in a day; and are prohibited from working overtime. 
Workplaces that employ minors are required to post certain 
items for display, including: a copy of the rules regulating 
the employment of children; an updated log with the names of 
minors employed in the workplace and their ages and dates of 
employment; and a work schedule showing work hours, rest 
periods, and weekly holidays. 
 
¶17.  Forced or compulsory labor by children is specifically 
prohibited by law.  Employers who violate the child labor 
provisions of the Oman Labor Law are subject to a fine of US 
¶260.  A second violation within a year can result in 
imprisonment for one week.  In practice, most employers will 
ask prospective employees for a certificate indicating that 
he or she has completed basic education.  Considering that 
most children usually begin their basic education at age 6, 
this means that workers, in most cases, will be at least 16 
years old when they begin work.  It is prohibited for anyone 
under the age of 21 to receive a visa to work in Oman.  There 
have been no incidents reported of illegal child labor. 
¶18.  In other labor news, a recent landmark agreement between 
the Omani government and the Indian embassy now requires 
Omani employers to provide Indian nationals with a two-year 
insurance package.  (Note: The decision does not cover Indian 
employees already in Oman.  End Note.)  The plan will require 
sponsors to pay a fee of 26 USD for two-year coverage plan 
and will cover 5,600 USD "blood money" (i.e., life 
insurance), 100 percent disability, and 655 USD for 
miscellaneous medical expenses.  This proactive solution by 
the Indian Embassy also set the minimum wage for housemaids 
at 131 USD a month. 
 
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Labor Inspections 
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¶19.  The Labor Care Directorate of the MOM is responsible for 
enforcement of, and compliance with, workplace laws and 
regulations.  Its responsibilities include:  occupational 
safety and health, labor inspections, dispute settlement, 
female employment, liaising with the Main Representative 
Committee, issues related to child labor and forced labor, 
and resolution of individual and collective labor disputes. 
The MOM employed approximately 82 labor inspectors who 
conducted 4,541 workplace inspections, including an unknown 
number of random inspections, in 2005 that represented 19 
percent of the workforce.  Labor inspectors are spread 
throughout the Sultanate.  The MOM operates a 24-hour hotline 
(English and Arabic) for workers throughout Oman to report 
complaints, offer suggestions or seek responses to questions 
about the labor law.  The MOM estimates that while it takes 
thousands of general inquiries a year on the hotline, it only 
receives about 150 complaints that require formal processing 
and action. 
 
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Comment 
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¶20.  Although committee members, businesses, and workers 
continue to work to understand the new labor climate and 
their labor rights under the 2003 Labor Law, all expect 
significant changes in the coming months as a result of 
recent commitments to Congress made by Maqbool Sultan, 
Minister of Commerce and Industry, and the impending 
ratification of the US-Oman Free Trade Agreement.  Committee 
members and MOM officials both assert that as far as the 
practice of the law goes, committees are already working 
within an ILO-consistent framework. 
GRAPPO