In 1982 the Sultanate of Oman became the first country in the Gulf region to pass a comprehensive law on the environment. Environmental law in Oman is now a mix of primary legislation (Sultani Decrees), secondary legislation (Ministerial Decisions), international treaties, conventions and protocols. Most areas of environmental law that one would expect to see covered in highly regulated countries, such as in Western Europe, are covered, albeit briefly and the law has not yet benefited from the high level of development and interpretation it has in countries where environmental legal regulation has a longer history.
Oman, however, is one of the few jurisdictions in the Gulf region which has a national integrated environmental policy with high-level, cross-cutting bodies under the direct control of the Government. In 1984 it became the first country in the region to establish a specific Ministry for the Environment. Now reconstituted as the Ministry for the Environment and Climate Affairs (MECA) (environmental affairs were previously managed by a Ministry for the Environment), it operates a permitting regime to authorise and regulate activities that may result in damage to the environment. The inclusion of “climate” within the title of the Ministry suggests a renewed focus upon climate and “green energy” projects.
This article sets out an overview of the current principal legislation governing environmental regulation in Oman, and reviews environmental permitting and enforcement for breach of the legal requirements. It also considers renewable energy matters in Oman and how innovative new energy projects in the Sultanate fit with the existing environmental law.
Oman’s primary environmental law: Sultani Decree 114/2001
The principal environmental legislation in Oman is Sultani Decree Number 114/2001, the Law on Conservation of the Environment and Prevention of Pollution (SD 114/2001), which replaces the previous basic environmental law, Sultani Decree 10/1982.
SD 114/2001 prohibits the disposal into the environment of pollutants in such quantities and types as may adversely affect the intactness of the environment, its natural resources or nature conservation areas and the historical and cultural heritage of the Sultanate of Oman (Article 7 of SD 114/2001).
Standard of duty
It places duties for minimising the environmental impacts of operations on “the owner” of “a source” or an area of work that may produce environmental pollution. The concept of “owner” is very widely defined as any natural or legal person (pubic, private, national or foreign) owning or leasing a “source” or being responsible for operation or management of the same (the Owner). A “source” is defined as “the process or activity which causes environmental pollution” (the “Source”).
The legislative obligations under SD 114/2001 require a high level of commitment from the Owner, e.g. use of “all necessary measures” to minimise pollution and adoption of “state of the art” techniques approved by MECA to minimise generation of waste (Article 10 of SD 114/2001).
Failure to comply with these duties, or other breach of this legislation, can result in heavy penalties. Potential sanctions include suspension of activities, substantial incrementally increasing fines for individuals and corporates, including fines linked to percentages of invested capital, and potential criminal sanctions for individual breaches by managers/ directors acting in the course of their duties.
Remediation and compensation
The “polluter pays” principle is observed in relation to the remediation obligation set out in Article 41 of SD 114/2001, which requires that whoever causes environmental damage shall remove it at its own expense and reinstate the pre-existing environmental status in addition to the payment of any necessary compensation to those who have suffered consequent loss. If the polluter fails to remove the causes of the pollution within the specified period, MECA has the right to remediate at the polluter’s expense.
Under Sultani Decree No. 34/1974, the Marine Pollution Law, no person or ship may discharge any pollutant in “an area free of pollution” from a ship, shore location or oil transport facility. “An area free of pollution” is defined as a specified belt of water, which extends 38 nautical miles from the edge of the territorial waters of the Sultanate (Pollution Free Area). Oman registered ships are subject to even stricter regulations which prohibit them from discharging any pollution worldwide. Any such discharge is punishable under Oman law.
If pollution has been discharged in a Pollution Free Area from a ship, shore location or oil transport facility, its Owner shall, without requirement of fault or negligence, be liable for loss or damage specified in the law. The law provides for certain specified defences to an Owner’s liability.
By virtue of Sultani Decree 57/94, Oman ratified accession to the two 1992 protocols of the International Convention on Civil Liability for Oil Pollution Damage and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage respectively. These conventions provide for ship owners to be liable for oil spills, and responsible for maintaining mandatory insurance. They also provide for an international fund to be established to provide compensation for oil pollution damage. These conventions have now become Oman law, and generally, principles enshrined in them are likely to take precedence over conflicting provisions of Oman law.
Other environmental legislation
Chemicals, hazardous and non-hazardous waste Other specific obligations are provided for in primary and secondary legislation regarding the handling and disposal of chemicals. Hazardous and non-hazardous waste legislation is governed by Ministerial Decision No. 17/93, Management of Solid Non-Hazardous Waste and Ministerial Decision No. 145/93, Regulations for Wastewater Re-Use and Discharge.
Sultani Decree 81/99 approved Oman’s ratification and accession to the Rotterdam Convention. The Rotterdam Convention provides a mechanism for the parties to the convention to nominate particular hazardous chemicals and pesticides and to make decisions regarding the future use, importation and exportation of such chemicals. The convention also requires the transfer of information about hazardous chemicals and chemical bans.
Environmental controls on exploitation of energy/ natural resources
Article 27 of SD 114/2001 requires that institutions engaged in exploitation of natural resources set up controls to ensure their conservation. Government concessions for exploration of and production of oil, gas and other resources include provisions that ensure commitment of the concessionaire to observe the provisions of this law.
The Petroleum and Minerals Law (SD 42/1974) further requires that exploration, exploitation, storing and distribution of petroleum are conducted with due diligence to prevent harm to the environment, and that all necessary actions are taken to minimise pollution.
Any project to be undertaken within the Sultanate that may have an environmental impact will require a permit from MECA. Generally the process for procurement of such permits consists of an initial consultation with MECA to determine whether an environmental impact assessment (EIA) will be required, the provision of an EIA (where necessary), an application for an initial environmental approval and finally the application for the environmental permit itself. Where an EIA is required, it falls to the Owner of a Source or an area of work to submit it.
Ministerial Decision 187/01 (Environmental Permits) states that the environmental permit is issued by a two stage process: an initial approval which allows the project to be developed and a final environmental permit once it has been demonstrated that all conditions in the environmental approval are fulfilled. The environmental approval contains conditions which vary depending on any particular project and into which category such a project falls. Conditions of the environmental approval and environmental permit should be strictly complied with at all times, given that compliance can mitigate the risk of being held liable for any environmental impact/pollution to the Oman environment.
No permit will be given to practise any activity which may cause unavoidable or untreatable damage to the environment (Article 16 of SD 114/2001).
No hazardous substance may be handled, dealt with or disposed of in the Oman environment without obtaining a permit (Article 19 of SD 114/2001).
Renewables in Oman
Oman currently depends entirely on oil (33 per cent) and gas (67 per cent) for its energy requirements. Oil output is declining and industry sources speculate that natural gas supplies may be over committed. Oman therefore needs a more diversified energy mix with security of supply, and seeks to reduce the need to import raw fuel or electricity from other countries. It has started to consider other options to meet the country’s economic growth and environmental objectives.
The Authority for Electricity Regulation (AER) has recently issued the first systematic study of Oman’s renewable energy potential. In summary, the findings of the report were that solar energy density in Oman is amongst the highest in the world, and that there is significant wind energy potential in coastal areas of south Oman and in the mountains north of Salalah, but that biogas, geothermal energy and wave energy technologies offer little potential for development in Oman.
The report demonstrates that existing Oman legislation lacks statutory mechanisms specifically designed to accommodate renewable energy or facilitate its introduction on a wide scale. For example there are currently limits on supply and sale of surplus production of electricity. Potential new entrants are keen that market rules be amended to allow distribution and supply companies to connect renewable energy projects to their systems.
As a result of the study, Oman’s Public Authority for Electricity and Water has recently opened a tender for advisory services in relation to a large-scale concentrated solar power project. Non-governmental organisations with an environmental agenda are also flourishing in Oman, such as the Environmental Society of Oman, which was founded in 2000 under Sultani Decree 14/2000 and has recently conducted a series of high-profile campaigns including raising awareness of environmental issues such as the generation and disposal of waste plastic bags.
Oman is also a developing market with regard to waste technologies. We understand that although it has two large oil refineries, the Sultanate has no facilities for the disposal of waste oil. The Ministry of National Economy has for some time been considering a national hazardous waste disposal project to address this.
Legislation relating to the environment in Oman is both succinct and wide ranging in scope, without a lengthy history of environmental legal development and interpretation. Most of the broad areas of environmental law that one would expect (such as environmental permitting; the “polluter pays” principle; environmental impact statements) are covered, the standards required by the legislation are in many cases high and there are potentially heavy sanctions for breach of the legislation.
Concepts on which recent global emphasis has been placed such as biodiversity and sustainability are not yet specifically addressed within the regulatory framework. The establishment of the Ministry of the Environment and Climate Affairs and the launch of AER’s report into Oman’s renewable energy potential may signal an increasing focus in Oman on renewables and climate change issues going forward. Importantly, the current heavy reliance of the region on oil and gas, together with interesting opportunities in solar and wind energy, gives Oman obvious potential to develop projects which reduce greenhouse gas emissions and attract revenue through the Kyoto mechanisms, such as the clean development mechanism.
As environmental awareness and green technologies increase further in the Sultanate, we would expect to see further development of the environmental legislative and regulatory regime, both in terms of supplementary legislation and in terms of the interpretation of existing legislation. Legislative reform will be required in particular to establish a regulatory framework which encourages investment in renewable energy technologies and carbon reduction projects.