Legal Environment in Oman
Discuss about the Aquaculture Development in Sultanate of Oman.
The legal system of the Sultanate of Oman might seem complex, however it is relatively comprehensible and rational. The country is recognised as one of the advanced Arab countries with significant economic stability. The government of Oman prioritizes its business sector, maintaining ethics, social corporate responsibility and environment. The country competes with other GCC countries to obtain global investment fund.
The report presents analyse the international and national legal environments of businesses in the Sultanate of Oman. It strives to elucidate the major features of the judicial system and governing laws of Oman. The report demonstrates legal information, issues and its analysis. The chief objective of the report is to present a thorough and in-depth informative and critical analysis of Oman legal system concerning ethics, environment and corporate responsibility.
As per the viewpoint Al-Kalbani et al. (2017), laws of legal contracts of Oman might be complex yet it is fairly legible to comprehend. When two or more parties come to an agreement and make contract, they are required to write the contract, stating its physical evidence. The contract law is present in the Oman Commercial law. A valid contract is legally binding; it creates a binding relationship among the involved parties. The contract sets the terms of obligations. A contract which is well executed and clearly written is considered useful to clearly identify the bargain acquired by each of the involved parties. The most important fact is, once the contract is written, agreed with due signature, it is enforceable as valid. However, it should be said that a third party, project, contract manager or contract holder is responsible to observe the success and completion of the process. The third person possess the duty of executing the contract. Following the signing of the contract, the parties are expected to act accordingly. However, one of the most common reasons which leads one of the parties (or both) to litigation is the failure to understand the process in which the contract functions (Barnett and Oman, N.B., 2016).
The companies need to make sure that parties involved in the contract. The party accused of breaching the contract should be penalised, might be detained from participating in business. Section of the merchant in general, article 26 states that individual who is guilty of breach of trust would be deprived from conducting business. In other words, the individual or the company should involve in business and trade. Considering the section of types or commercial sale, article 130 deals with agreement related to sale. The provision states that the third party involved and aware about the breach of time would have to pay penalty for the breaching of the particular law (Oman et al. 2016).
Contract Law in Oman
In terms of deciding whether or not the involved party is guilty of breaching the law, the court shall interfere and be the entity to take the final decision. Contract breach also occurs when the guilty company or individual fails to keep the contract. For example, contract breach due to poor service, poor performance. Failure to maintain trust of another party also leads to contract breach. The option of liquidated damage and penalties are present to compensate breach of contract. Penalty clause is one of the common legal norm concerning contract breach. On the other aspect, limitation and exclusion clauses are useful for managing and potentially reducing contract risk (Krawiec and Liu, 2017). The law of contract outlines duties and obligations of the parties to a contract and eliminates ambiguity. Critically analyse, vis-à-vis the law of contract provisions.
It is necessary to state that in the country of Oman, contracts hold significant amount of importance. Contracts are excessively important for individuals and organizations dealing with government. It is true that the government offers various opportunities to the companies for growth and development. However, working with government can be equally challenging and complicated. Conducting government projects generally necessitates various contractors to ensure delivery of projects on time. Relationship among the different contractors tends to be complicated. Multiple number of departments are included during the formation of contractual agreements (Schwenzer et al. 2012). For instance, ministry of communication and transportation is responsible for making a particular road, however the concerned contract has to pass the tender board, i.e. the legal affairs ministry and finance minister. The process takes considerable amount of time. However, possessing clear contract would enable the departments to understand the purpose and motive of the work. It should be stated that in Oman contracts need to be performed in careful consideration as it is translated in Arabic and English. The formation process of contract often leads to complication, especially in the final step if it tends to be incomplete. In certain situation, the court of Oman tends to assign the presence of a contract even when the parties have not signed the concerned contract. For instance, an agreement which is not signed by the employee and the employer would still be considered enforceable and valid from the point of Oman court (Ali, 2016). The validity of the agreement would be recognised on the basis of payslip, regular transfer of salary.
Importance of Contracts in Oman
In certain standard circumstance, two parties with substantial negotiation without any written agreement, except in verbal contract, the situation is vague. In this situation, the court is likely to investigate for any kind of documentation which might exist mentioning the contract. Considering the commercial code, a contract can be proven in alternative ways other than signed agreement. The courts of Oman acknowledge the existence of an agreement or contract even though there is no written evidence of the particular contract. It is relevant to state the court of Oman possess the ability to recognise the existence of contract on the basis of article 89 as per the civil code of Egypt (Morrison, 2015). The code of Egypt states that agreement is formed the moment when parties start to converse about and reaches to an agreement;
In spite of the fact that the Oman government gives great importance on the factor of contracts or agreements, it certainly takes a modern approach regarding termination issue. Article 167 shows that “if the contract is binding and valid, neither of the contracting parties may terminate or amend thereof, save my mutual agreement or litigation” (Charabi and Al-Badi, 2015). The statement suggests that the contract fails to possess the option of termination, then the parties need to acquire the permission from the court. However, it should be mentioned that agreement or contract should always hold termination provision in the content. Considering the opinion of (Abdul-Wahab et al. 2017), contracts should have provisions of termination to enable the involved parties to terminate the contract as and when required. Critically analyse legal and Ease of Doing Business issues that need to be addressed by Oman so that Tanfeedh Diversification plan 2040 can achieve its objectives and succeed in its diversification thrust
Tanfeedh is a national programme and initiative that has been launched with an aim of building the achievements regarding the plans that were made previously by the means of focusing on some specific sectors.
The targeted sectors that have been identified by the Royal Decree (1/2016) includes the transport and logistics, tourism, manufacturing, fisheries and the mining industries. This diversification plan will focus on these specific sectors of the Oman economy to increase the Gross Domestic Product (GDP) by the means of increasing the investments that are made in these sectors and thus increasing the job opportunities within the nation (Al-Shaqsi, 2015). Here, the role of the Tanfeedh is to link the various strategies of the sectors that are selected for the purpose and with that provide for a platform that can enhance the services to the society by the means of partnership between the private and the public sectors. For the success of this plan Oman will have to plan for the long-term strategies that can end up with the enhancement of every specific chosen sector for this purpose. Here, the two major issues that needs to be addressed by Oman are:
- Increase its participation of the prevailing private sector in the areas of funding the large projects
- Think and plan regarding the ways that can enhance the business environment and can bring about the attraction of the investors.
Termination Provisions and Ease of Doing Business in Oman
In the overall Ease Of Doing Business Index, Oman was ranked at the 70th position as per The World Bank – Doing Business Report, 2016. To achieve the targeted mission, the country must concentrate on improving such rankings so as to attract the foreign investors to invest in the country. Also the business environment must be given a special emphasis. In order to do that, Oman may think regarding the privatisation of some of the Government-owned enterprises, with that they can be listed in the stock market and thus the business environment will also be enhanced with that. Along with that the country may plan regarding the alignment of the business environment of the nation and the educational service providers so that the quality of the training programmes organized are enhanced and improved as per the requirement of the enhancement of business environment (Prints, 2015). With that to speed up the process, the youth of the nation can be either trained to seek employment within the private sector or encouraged to initiate the operations of the small and medium sized enterprises so that they can effectively add to the entire productivity of the nation and help it in achieving its set target. Along with that, relaxing the labor laws within the possible limit, planning strategies that can enhance and create more employment opportunities in the selected sectors can also be a major step for achieving the targets by Oman.
The term ‘ethics’ refer to moral principles that determine an individual’s behaviour and code of conduct. Business ethics indicates the code of conduct and moral principles with which an organisation governs and runs its business. It is important to note that business ethics concentrates on key principles, truth, integrity and commitment, honesty, law abiding and good conduct. Conducting business ethics suggests that the company ensures quality, reliability, confidence and responsibility towards its environment and society in general.
Corporate social responsibility states that the organization possess duty and responsibility towards society in which it resides and operates. The concept of CSR focuses on community, environment, marketplace and workplace. It encourages sustainable development of the organization. The company considers welfare of external community, environment. On the other aspect, the company ensures safety, security, welfare to employees working under the company. Employees shows positive and behaviour to work in such company. Instead of solely giving importance on company growth and profit rate, it tries to create a difference in society (Agarwal, 2017).
Tanfeedh Diversification Plan 2040
The concept of CG or corporate governance refers to a set of processes, principles and systems which makes effort that an organization is administered in a way which assures best interest for then involved groups of stakeholders. Taking into account the statement of Prins, (2015), corporate governance is considered as the system with the help of which a company is managed and directed. It enables the organization to promote transparency, accountability and corporate fairness. Effective CG indicates good business.
Oman Gas Company is one of the leading gas and oil company, operates in the international sphere. The company possess strong sense of business ethics, CSR views. As per the Oman laws and regulations, the company attempts to maintain consistency in ensuring environmental protection and social responsibility. It is responsible for community welfare. The company’s decision directly impacts or influence the environment, safety and security of the entire country. The company possess a strong framework of corporate governance. It attempts to provide safe and secure work condition for contractors and employees. It offers assistance for social development and performs business ensuring integrity. The Oman Gas Company along with other oil and gas companies have increased job opportunity for employment seekers. In terms of human resource, the company acknowledges contribution of working groups, hence it takes initiative to offer training and development programs for enhancing employee skill and ability. It assists employees to complete higher education for increasing qualification level (Abdallah, A., 2015). The company strictly abides by environmental laws of the country, takes measures for reducing level of waste materials produced during production and processing of oil and gas.
Although the high level of pollution have made it really very difficult to sustain a healthy life overcoming the risks and threats to the human race, yet the Sultanate Of Oman have taken several steps regarding the various pollutions so as to secure the life of the human beings. The various pollutions and the requisite government regulations regarding them are discussed below in details:
Royal Decree No. 37/74, the law on marine pollution, 1974e, focuses on marine environment safety. The chief purpose of the regulation is to reduce and curb the level of water pollutants discharge by ships, organizations present near sea shore, especially in the pollution free zone of Oman. Companies doing business in the particular area should make effort not to pollute water bodies and affect marine environment. As per the law, ships, transport facilitators, companies should not release any kind of pollutants Oman free zone. The zone is the water belt located around territorial water area of Oman, it covers and stretches to 38 miles (Abdallah, 2015).
The royal decree asserts that individuals responsible for regulation violation would have to give penalty of OMR 25,000. This is the maximum penalty amount for a single violation. On the other aspect, for several violations, the guilty is charged with OMR 4 million. It is worth mentioning that the person guilty of violating the royal decree despite multiple instances of charge would be deprived of environmental rights, can be temporary as well as permanent (Al-Busaidi et al. 2017).
Air pollution is responsible for affecting normal health condition, leading to deterioration of health in the process. Air pollution leads to various diseases which have the potential to create significant negative impact on an individual. The government of Oman is extremely concerned with environment protection, resulting the regulation in the process. The ministerial decision no. 118/04 stresses on control of air pollution. The regulation is present in statutory source, and highlights that corporate owners need to use and implement scientific methods that are stated by the ministry (Al-Busaidi et al. 2017). The ministry is responsible for prevention of pollutants discharge, disposal and treatment. The lay stresses that companies need to conduct proper management of agricultural or organic waste. Before chimney installation, the company should make effort to follow and conform to the regulation specification described in the legal rule.
The Ministerial Decision No. 79/34 regarding noise pollution control in public places determines noise level on the basis of categorisation of public places. It indicates external noise source as, construction sites and industrial plants, commercial operation, airports along with aircrafts for other purposes. The regulation considers variation of noise level standards during the holidays and the weekdays. The variations in the noise level are measured as per global standards, and the temperature, humidity and velocity direction are taken into consideration.
Ministerial Decision No. 80/94 deals with noise pollution in workplace. It stresses on equipment, devices that creates noise during their installations and operation. Noise pollution of high level disrupts health condition, affects work concentration, focus and such. Herein lays the importance of managing noise pollution (Mohsin et al. 2018). So it is very much crucial to check for the level of noise emission during the installation and the operations of the various gadgets and other equipments that are used within the workplace.
Conclusion
The report that has been presented can assist the Sultanate of Oman in gathering a significant economic stability. The implementation of the following strategies that are focused here in this report can in the long run bring about some huge and major changes within the business environment of the Sultanate of Oman giving relevant importance to the environment, corporate responsibility, and ethics.
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