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Patrick X Disney  07/11/2006 12:48:16 AM  From  DB/Inbox:  Patrick X 
Disney

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UNCLAS        MUSCAT 01084

SIPDIS
MUSCATCX:
    ACTION: POLE
    INFO:   OMC DAO DCM AMB PAO POLM

DISSEMINATION: POLE
CHARGE: PROG

APPROVED: AMB:GGRAPPO
DRAFTED: POLE:CPLATH
CLEARED: POLE: MSNOWDEN

VZCZCATI107
OO RUEHC RUEHZM RUEHC RUEHGV
DE RUEHMS #1084/01 1911201
ZNR UUUUU ZZH
O 101201Z JUL 06
FM AMEMBASSY MUSCAT
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6866
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUEHC/DEPT OF LABOR WASHDC
RUEHGV/USMISSION GENEVA 0114

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 
----------------- 
 
¶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. 
 
--------------------------------------------- -------- 
Sultan's Decision Made to Ensure Quick Passage of FTA 
--------------------------------------------- -------- 
 
¶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. 
 
--------------------------------------------- ---------- 
Forced Labor, Right to Strike and Collective Bargaining 
--------------------------------------------- ---------- 
 
¶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 
------------------ 
 
¶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. 
 
------------------------ 
Implementing Regulations 
------------------------ 
 
¶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. 
 
------------------------------- 
Editorial Points to FTA Promise 
------------------------------- 
 
¶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