Legal Overview on Oman's Social Protection Law

Oman's Social Protection Law

Royal Decree 52/2023, Oman, issued on July 19, 2023, has been a momentous step forward in the implementation of universal social security throughout the Sultanate. With the technical assistance of the International Labour Organization (ILO), this is a landmark law that establishes an all-encompassing framework of contributory and non-contributory benefits for protecting the socioeconomic rights of Omani nationals and residents alike, including migrant workers. By July 2026, when the system is fully operational, it has the potential to set a regional standard for protecting individuals from economic insecurity.

Key Features of the Social Protection Law

The Social Protection Law is a universal approach to social security, replacing means-tested benefits with entitlements available to all eligible residents. Its key provisions include:

1. Universal Child Benefits

Each family shall have a child benefit, irrespective of wealth or income for each child in every month. It is rather away from a means-tested approach; it will do away with income inequality and never become a development inhibitor to any child.

2. Entitlements for older people and people with disabilities

The law provides for universal entitlements to people 60 years old and above, including disability allowances integrated into family income support programs. This ensures the minimum financial security of vulnerable groups.

3. Increase Maternity and Paternity Leave

Oman becomes one of the first countries in the Gulf Cooperation Council to implement paid maternity and paternity leave. The law doubles paid maternity leave from 7 to 14 weeks, though short of the ILO's recommendation at 18 weeks, and establishes one week of paid paternity leave. It also allows for 14 weeks of unpaid parental leave, which may be shared by parents.

4. Widows and Orphans Support

A new measure provides focused aid to widows and orphans, providing direct financial support to households whose incomes have been dramatically reduced by the death of a family breadwinner.

5. Occupational Injury and Unemployment Insurance

The statute extends coverage to work-related accidents and provides for unemployment insurance among documented workers. These programs create a safety net against workplace accidents or sudden job loss.

6. Savings Program for Migrant Workers-Compulsory

Replacing the old end-of-service gratuity system, the law establishes a mandatory savings program for documented migrant workers. Contributions will be managed by the Social Protection Fund to ensure fair treatment.

Funding the System: Increased Budget Allocations

The Omani government has committed significant financial resources to implement the new system. The social security budget has increased by 45% from OMR 384 million (approximately USD 997.4 million) in 2023 to OMR 560 million (approximately USD 1.4 billion) in 2024. This expansion coincides with the phasing out of fossil fuel subsidies, which disproportionately benefit wealthier segments of the population. Savings from subsidy reductions are being reallocated to strengthen social security systems and invest in renewable energy.

Addressing Climate-Related and Economic Challenges

The transition away from fossil fuel subsidies is part of Oman's overall effort to fight climate change and build a sustainable economy. In order to protect low-income households from the effect of rising fuel and electricity prices, the government has introduced poverty-targeted subsidy programs. These are important steps toward ensuring that the most vulnerable are not disproportionately impacted during the transition.

Benefits for Migrant Workers

Over 1.8 million migrant workers call Oman home and are under dire conditions through the kafala visa sponsorship system. The new bill provides important coverage to documented migrant workers, including but not limited to:

1. Work Injury and Sickness Insurance

On par with citizens, migrant workers will be able to receive their benefits.

2. Compulsory Saving Scheme

They will have no end service benefit but a good savings scheme contribution.

But gaps persist. Illegal aliens are specifically denied access to such benefits and also to accident and sickness insurance for workmen. The vast majority of the country's labor force remains unprotected and thus open to exploitation and economic insecurity.

Human Rights Watch Opinion

Human Rights Watch (HRW) has commended Oman for the initiative, which it says is a "groundbreaking standard" for the region.HRW has identified several shortcomings, including:

1. Low Level of Benefits

Benefits like disability allowances and unemployment insurance are quite low.

2. Paid Leave is less than the International Norms

The number of weeks paid maternity leave is less than that of international standards, and there is no provision for paid parental leave.

3. The informal workers

All the migrant workers who work in the informal economy or have no valid residency in the country do not receive the benefits of this system.

4. Disproportionate Gender Gaps

Benefits of widows are not equally offered to widowers.

Recommendations for Improvement

The following steps should be taken to ensure that the law is maximally effective:

1. Increase Benefit Levels

The government should restructure the benefit structure so that all entitlements are adequate to support a decent standard of living. For instance, paid maternity leave should be extended to the ILO's 18-week recommendation.

2. Incorporate Informal Workers

Informal workers and undocumented migrant workers should be included in the social security system. This can be done through amnesty programs that will regularize the status of undocumented workers.

3. Gender Disparities

Widowers should benefit equally with widows to enhance gender equality. The introduction of paid parental leave would also help challenge traditional gender roles and support shared parenting responsibilities.

4. Transparency and Accountability

The Social Protection Fund should be transparent in its operations and involve stakeholders, such as civil society organizations and workers' unions, in addressing concerns and improving implementation.

5. Expand Funding Sources

Although ending fossil fuel subsidies will generate some revenue, Oman should look for other sources of revenue. The options include raising taxes on the rich and corporate entities, stopping tax evasion, and curbing illicit financial flows.

Compliance with International Best Practices

Oman's adherence to universal social security is also congruent with obligations under international law on human rights. Article 22 of the Universal Declaration of Human Rights and Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) reaffirm the right to social security. The Committee on Economic, Social and Cultural Rights of the ICESCR outlines nine areas of support that are to be provided in universal systems. These include healthcare, sickness, old age, unemployment, employment injury, family and child support, maternity, disability, and surviving spouses and orphans.

By addressing the gaps that HRW and other stakeholders point out, Oman can fully realize its obligations under these treaties and set an example for other countries in the region.

Conclusion

This development in the pursuit of socioeconomic rights is promising; Oman's new social protection law, with a universal approach that, together with the increased budgetary allocations and technical support from the ILO, will provide an excellent foundation for comprehensive social security. The success of this initiative depends on its implementation and the willingness of the government to address the shortcomings.

As the system moves towards full implementation by 2026, Oman can fine-tune its framework to be inclusive, equitable, and sustainable. This will not only benefit Omani nationals and residents but also serve as a model for universal social protection in the Middle East and beyond.

In conclusion, Oman's Social Protection Law is a blueprint for building a just and resilient society where everyone's right to social security is upheld. By addressing existing gaps and aligning its policies with international standards, Oman can pave the way for a future where no one is left behind.