Saturday May 07, 2022

Injudicious bill passed by Senate Judicial panel

Injudicious bill passed by Senate Judicial panel

Joe Biden. File

It is a bill that has been passed by the US Judiciary Committee. It needs to be passed by the whole Senate and then by the Congress before President Joe Biden will sign into law. If it is reaches that stage, then the US Attorney General will be in a position to sue the national oil companies of any member of the Organisation of the Petroleum Exporting Countries (OPEC) and also OPEC + countries like Russia for increasing oil prices or for not pumping oil into the market to keep the prices stable.

The bill that has been passed by the Senate Judiciary Committee is called the “No Oil and Petrol Exporting Cartels (NOPEC)” and it has been passed by margin of 17 for and four against. It has been in the making for many years now, but it is generally believed that it may not get passed. White House spokesperson Jen Psaki has described it as a bill with “potential implications and unintended consequences.”

In many ways, the Senate bill is an example of American overreach. American politicians and lawmakers, it seems, want to protect American consumers, though they pretend and protecting consumers across the world, and that is the burden of the acronym NOPEC. The OPEC members are doing what any country with a natural resource of its own does – leverage its strength and demand a fair price from the market. The Americans are unwilling to use their own strategic oil reserves and they do not hesitate to pressurise OPEC to meet the oil demands of the world, and mainly that of the Americans themselves.

Even if the NOPEC goes through and gets the presidential assent, the law should have no bearing on the OPEC or any other oil consuming country. The United States are not the legislator of the world, and it cannot impose its will on other countries. This could be also a way of eyeing Russian oil resources and of wanting to capture them in a war. That would be a destructive and disastrous move.

Democrat Senator Amy Klobuchar, one of the two who moved the bill, the other is Republican Chuck Grassley, tried to explain the rationale of the bill, which of course sounds nothing more than American unilateralism, said, “I pass that free and competitive markets are better for consumers than markets controlled by a cartel of state-owned companies…competition is the very basis of our economic system.” The bill will enable an American consumer to sue a state-owned foreign oil company, which was not possible until now because of the national sovereignty issue. No American can sue a foreign state in an American court of law because of the complications of international law based on the concept of national sovereignty.

The basis of the American argument is that America is the largest guzzler and the dollar is the most prized currency and that oil companies, whether owned by the state or nor not, would be earning their profits in the American markets. It is for this reason that American lawmakers presume that American consumers have the right to call the shots. But if the foreign oil companies were not to sell the oil to America on terms defined by American laws, then it would become a different ball game altogether.

The irony is that America has been preaching free market precepts and rules to the world and used trade bodies like the World Trade Organisation (WTO) to pressurise other countries. But when its own interests are under siege, and America is faulted for not playing by the free market rules, then America would not hesitate to move away from WTO framework. If America feels that OPEC business deals are not fair, then it should be sorting out the problem at the WTO and its dispute resolution mechanism. It cannot make laws of its own and seek to impose them on others.




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