The US-Oman Free Trade Agreement:

Disastrous for Wildlife

 

The US-Oman Free Trade Agreement (OFTA) is a binding trade pact between the United States and Oman, a Middle Eastern nation bordering Yemen and the United Arab Emirates. The agreement will build on FTAs already in effect with Israel, Jordan, Morocco and Bahrain, paving the way for a Middle East Free Trade Area (MEFTA).[1] This report focuses on the destructive implications of the agreement for animals, arguing that loopholes in the environmental section will lead to habitat destruction; that OFTA’s lack of minimum standards for wildlife protection leaves species exploitation within the law; that the agreement provides an opportunity for the weakening of animal protection laws; that virtually unlimited foreign investor protections in the agreement are a further threat to wild animals.

 

 

Gaping Loopholes in OFTA’s Environmental Chapter Could Destroy Habitats

 

The central idea of OFTA’s environmental chapter, like that of the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA), which passed last July when approved by a one-vote margin in the House, is that both countries must enforce their respective environmental laws. However, there are two gaping loopholes in the text of the agreement. Firstly, failure to enforce one’s own laws only “through a sustained or recurring course of action or inaction” technically breaches the agreement, meaning that tribunals of unelected “judges” unaccountable to citizens in either the United States or Oman could dismiss important environmental cases with the claim that the violations in question were not sufficiently prolonged or “recurring.”[2]

 

Secondly, the text grants both countries broad discretion over the implementation of environmental laws and the allocation of resources, stating that any course of action reflecting “reasonable” exercise of such discretion or “resulting from a bona fide decision regarding the allocation of resources” can be said to be in compliance with the trade agreement. In other words, either government could simply argue that it lacked sufficient funds to comply with its own environmental laws without technically violating the agreement.[3] Since the international tribunals operate outside the domestic judicial system, these provisions would lead to increased challenges to local Omani environmental and laws, threatening community health-based and environmental efforts,[4] as well as the habitats and lives of wild animals.

 

The chapter is littered with similarly weak language that leaves existing environmental laws open to OFTA challenge. It states merely that “it is inappropriate . . . to encourage trade or investment by weakening” domestic environmental laws. It requires the provision of “remedies or sanctions” for violations, meaning that violators may commit environmental crimes with impunity, while the state merely provides “remedies” for the situation with taxpayers’ money. Further, authorities must “consider,” but not necessarily grant, requests for investigations of potential violations, and that those affected by them “may,” but not must, be granted the right to sue and to seek sanctions or remedies. Even the promise of these vague “remedies,” then, is uncertain. This noncommittal language indicates that the agreement does not safeguard important domestic environmental laws. It also suggests that investors that pollute and destroy vital habitats will not be held accountable for their actions.

 

Other problems with the environmental chapter include the cap for fines at $15 million per year that a country pays back to itself – no matter the breadth and severity of the environmental damage and costs of cleanup.[5] On the other hand, there is no maximum fine for violations of OFTA’s commercial provisions.

 

 

Lack of Commitment to International Agreements Threatens Wild Animals

 

Even beyond the loopholes, the “effective enforcement” provision is highly problematic in itself, because it does not require either country to abide by any set of minimum environmental standards, nor does it mandate any form of sanctions for breaching key environmental treaties on biodiversity and species protection.[6] On the other hand, both countries are required to ratify eight separate international agreements on intellectual property rights.

 

Specifically, while Oman requires documentation of trade in wild animals similar to that required under the Convention on International Trade in Endangered Species (CITES), which regulates international trade in wildlife, it has not signed on to that agreement.[7] However, according to CITES reports, Oman is home to 24 species of animals that are threatened with extinction and 189 additional species whose trade must be closely controlled for their survival. The animals threatened with extinction include the desert lynx, the Arabian oryx and the Indo-Pacific Humpbacked dolphin, as well as leopards, grey wolves, urials, ostriches, monitor lizards, manatees, four species of whales, five species of birds, and five species of sea turtles. These include the green turtle, the hawksbill turtle, which is also listed on the World Conservation Union’s Red List of critically endangered species, the loggerhead turtle, the olive ridley turtle, and the leatherback turtle. CITES is one of the most important international treaties for the conservation of sea turtles, which have been hunted by humans for over 7000 years in Oman. While Oman’s policies regarding trade in sea turtle products (meat, tortoiseshell and eggs) have been “responsible” thus far, according to a study by major environmental groups,[8] and the nation is a party to the Memorandum of Understanding on the Conservation and Management of Marine Turtles and Their Habitats of the Indian Ocean and South-east,[9] there is no provision of OFTA that mandates the animals’ protection in the future. Oman provides critical habitat to only two of the five species of sea turtles that live on its shores.[10]

 

The same is true for other endangered wild animals. According to the World Conservation Union, in addition to those listed as threatened with extinction in CITES reports, there are 3 endangered species living in Oman, two of which – the knifetooth and narrowsnout sawfish – appear on the IUCN Red List of critically endangered species[11]. At high risk for extinction in the wild, according to Birdlife International, are another 5 species of birds.[12]

 

One animal appearing on the IUCN Red List is the slender-billed curlew, which has been severely threatened due to hunting. One endangered animal mentioned above, the Arabian oryx, is also threatened from sport hunting; in Oman, illegal live capture for sale to private collections have devastated the population.[13] Oman also imports $749 million worth of food and live animals per year.[14] Without the ratification of CITES and other important international agreements, the exploitation of species such as these by US investors in Oman remains completely within the law. There is no provision of OFTA requiring that Oman implement such agreements.[15]

 

 

OFTA Tribunals Could Weaken Animal Protection Laws

Finally, one country’s alleged right to enforce the environmental laws it does have is completely undermined by the fact that the implementation of them can violate commercial obligations under OFTA, resulting in a challenge in binding, secret tribunals set up by the pact’s terms. The tribunals can demand payment from governments for upholding their own laws and expose the country to trade sanctions until the laws are changed to comply with the tribunal’s ruling.[16] Similar provisions in previous trade agreements have been used to attack and successfully weaken animal protection laws. For example, under the GATT (the WTO’s predecessor), Mexico and other countries successfully challenged the U.S. Marine Mammal Protection Act, which was used to prohibit the importation of fish products from a country that cannot prove its “harvest” of tuna, or that of the countries of its origin, adheres to US dolphin protection regulations. A 1991 GATT panel ruled that the United States could not ban such imports based on its own environmental laws. This precedent – with scores of others – begs the question of whether, under OFTA, Oman could drag the United States to tribunal and demand payments for the U.S.’s refusal to import products illegal in the United States under its own environmental laws. Oman trades in rhinoceros horns,[17] for example, which is illegal under CITES and thus under US law. All commercial trade of rhinoceros, which is threatened with extinction, is banned under CITES; the Office of the US Trade Representative (USTR) has deemed Oman’s trade in rhinoceros horns “a concern to the United States.”[18]

 

 

Foreign Investment and Reckless Development: Further Threats to Wildlife

 

OFTA’s investment chapter states that no part of the text “shall be construed to prevent” either country from “adopting, maintaining, or enforcing” environmental measures “otherwise consistent with this Chapter.” However, OFTA provides greater rights to foreign investors – which would include subsidiaries of US corporations – greater rights in Oman than they are granted according to US law.[19] The agreement allows multinational corporations to challenge any US government decisions about any federal contracts with the company, including natural resource contracts, service contracts, and infrastructure projects.[20] These provisions will likely lead to increase challenges of local environmental laws in both the United States and Oman, threatening community health and environmental efforts.[21]

 

With OFTA, then, oil extraction in ecologically sensitive areas may only be expected to increase. Oman consistently produces about 900,000 barrels of oil a day, and the energy sector accounts for about 40 percent of the country’s GDP, 65 percent of its exports, and 70 percent of its income.[22] Crude petroleum, as well as textiles and apparel, remain the United States’ largest imports from Oman,[23] and the spiraling out of control of international oil prices, along with the broad protections provided to US investors under OFTA, are likely to lead to increased extraction. Oil spills and discharges from refinement and distribution are already a principal environmental threat to Oman;[24] in particular, because the country borders the Strait of Hormuz, through which the vast majority of Persian Gulf oil is transported for export, spills damaging marine and coastal areas have been and continue to be a grave environmental concern that has serious implications for animals and their habitats.[25]

 

Because Oman’s petroleum reserves are expected to be depleted within 20 years,[26] however, economic officials hope to diversify the economy. The recent discovery of natural gas reserves, processed in liquid form for export, has led to the rise of gas-based industrial production of substances such as aluminum, polypropylene, fertilizer and methanol.[27] Industrial pollution from these and future similar developments encouraged by OFTA are a serious concern for wildlife. For example, chemical pollution is thought to be linked to potentially fatal tumors in green sea turtles, found in Oman. Pollution is also a serious threat to the narrowsnout sawfish, a critically endangered fish found in Oman’s waters.

 

Economic officials there also hope to expand the manufacturing and information technology sectors, as well as tourism and fisheries. Uncontrolled development has led to the disturbance and destruction of beaches that serve as vital nesting, foraging and feeding locations for a variety of species of sea turtles. Artificial lighting on the beaches may disorient hatchlings, drawing them away from the ocean, and vehicle traffic on beaches compresses the sand, making nest building difficult or impossible.[28] An estimated 30,000 loggerhead sea turtles nest on Masirah Island, Oman. One solution to this problem is placing limits on the number of businesses to curb the negative impact of development projects such as oil drilling, hotels, resorts and waste incinerators.[29] Yet such limits are specifically prohibited under OFTA.[30]

 

Destructive fishing is also a serious concern, as a source of habitat destruction for sea turtles and other marine animals. Oman’s fish and shellfish exports reached $34 million in 2000, and the ban on limiting businesses ensures that they will multiply under OFTA. Humpback whales, sea turtles, and the critically endangered sawfish and shark species mentioned above are all seriously threatened by entanglement in fishing nets and accidental hooking. As larger enterprises sweep through the seas with their larger nets, sea turtles become entangled in them and drown when they cannot reach the surface; loggerhead turtles are highly migratory, and leatherbacks, of which just 2,300 adults are thought to remain, do not dive very deep, leaving them especially vulnerable to fishers.[31]

 

 

Conclusion

 

The Oman Free Trade Agreement, has been rightly compared to DR-CAFTA, “except where it’s worse.”[32] OFTA, like DR-CAFTA, threatens wildlife and wildlife habitat and compromises the welfare of farmed animals. Animal advocacy groups and members of Congress should oppose this agreement.