OPEC from myth to reality.

OPEC is, once again, acting in conformity with an objective set

forth in its Statute since the establishment of the Organization in

1960, namely to secure an efficient, economic and regular supply of

petroleum to consuming countries. (291)

A supranational organization that coordinates the petroleum policy of its members should not remain silent when one of its founding members is invaded and its resources are controlled through military force. Silence may become complicity. Iraq's critical situation calls for broad international involvement and for a transparent management of the Iraqi people's natural resources. Again, a new OPEC could lead in the right direction.

6. International Law

A comprehensive review of the many changes in international law between 1960 and today is beyond the scope of this document. However, some very important developments that clearly may impact OPEC's structure, goals, and objectives must be noted.

Nine years after OPEC was created, the Vienna Convention on the Law of Treaties was signed. (292) On March 21, 1986, the Convention on the Law of Treaties between States and International Organizations or between International Organizations was executed in Vienna confirming the importance of international organizations in shaping modern international relations and international law. (293)

The International Energy Agency (IEA) was established on November 15, 1974, as a direct response to the creation of OPEC and an Agreement on an International Energy Program was executed three days later on November 18, 1974. (294)

Particular important developments have taken place in the field of international environmental law and sustainable development including the Stockholm Declaration (1972), (295) the UN Framework Convention on Climate Change (1992), (296) the Rio Declaration (1992), (297) and the Kyoto Protocol (1997). (298)

The approval of the U.N. Convention on the Law of the Sea in 1982--noting specifically its provisions regarding deep seabed resources and resources beyond the limits of national jurisdiction, which were declared the "common heritage of mankind"--must be also considered as fields of international energy law that would be appropriate for OPEC to address as a supranational energy organization. (299) A potential agreement between OPEC, the IEA and the International Sea-Bed authority, for example, could ensure that limited resources are developed for the benefit of all mankind and not only a few states.

Further, an important body of international law has developed from international arbitral awards involving the petroleum industry in what could be the basis of a new Lex Petrolea. (300)

These and many other developments, which for reasons of space cannot be mentioned at this time, justify from a legal point of view updating the Organization's legal instruments through an international treaty and its corresponding binding Statute.

7. Fuel Poverty and Hydrocarbon Development in Countries Affected by Trade Sanctions

In issuing the Millennium Declaration, the U.N. General Assembly recognized the challenges of globalization, including the wide gap between rich and poor, and pledged to "spare no effort to free our fellow men, women and children from the abject and dehumanizing conditions of extreme poverty, to which more than a billion of them are currently subjected." (301) The General Assembly agreed to reduce in half the proportion of the world's poor living on less than $1 a day by 2015. (302) The elimination of poverty requires "good governance" at both the national and international levels, and "transparency." (303) In 2002, the U.N. Secretary General commissioned the so called Millennium Project to reverse poverty, hunger and disease affecting billions. (304)

It is well settled that to reduce poverty, energy poverty must be tackled. The G8 member countries, meeting in June 2006 in St. Petersburg, agreed that neither global energy security nor the Millennium Development Goals may be achieved without providing access to fuels to the 2.4 billion people who lack them and electricity to the 1.6 billion people living without it and committed to "addressing the energy challenges for the poorest populations in developing countries" and to reducing energy poverty. (305)

One of the challenges of the international energy market is to allocate enough resources to combat so called "fuel poverty." (306) While some countries have substantive oil and gas revenues, they still maintain an important part of their populations under conditions of poverty. (307) Thus, as eradicating poverty becomes one of the universally accepted goals of the community of states, an effective program to reduce poverty includes expanding fuel and electricity access to those who do not have it, extending the economic benefits of oil exports to the peoples of the producing countries, and managing with transparency oil and gas revenues.

A statement by the Director of the International Labor Organization was true in 1963 and remains valid today when he recalled that "[p]rosperity in the industrialized countries could not long be sustained if persisting poverty and rising frustration in the less-developed countries were to endanger the peace of the world." (308) OPEC's Caracas Declaration urged industrialized countries to recognize that the "biggest environmental tragedy facing the globe is human poverty." (309)

An additional important issue addresses resource exploitation in environments where the government may directly or indirectly disregard human rights. This matter may also be analyzed as the political use of human rights issues by raising human rights violations as tools to impose economic sanctions or using the veto power at the U.N. Security Council, not to maintain peace but as a foreign policy instrument to secure reliable energy sources. (310)

To satisfy its huge demand for oil, China is entering into agreements with countries like Sudan, Angola, and Iran. (311) These agreements present an interesting international law question regarding human rights violations, and whether members of the U.N. Security Council may avoid enforcing international sanctions due to their individual country's interests and economic relations at stake. Thus, reviewing basic compliance with jus cogens provisions by any nation-state and enforcing human rights anywhere on Earth should limit commercial transactions that may otherwise support regimes that do not respect human rights. OPEC, as an oil exporter's organization, would have great legitimacy to address these issues and to propose the basic international law conditions for oil and gas investment and development.

The fact that Angola and Sudan may become new OPEC members, as announced in November 2006, would allow OPEC's involvement in human rights issues and in the debate of who profits from oil revenues. Angola is a case on point on the inconsistencies between high oil revenues and rampant poverty. (312)

8. United States Based Litigation Against OPEC

Attempts to bring civil causes of action against OPEC before U.S. Courts are not new. In December 1998, the International Association of Machinists and Aerospace Workers filed an action for antitrust violation against OPEC and its then thirteen members. (313) At that time the court, reviewing the principle of a state's permanent sovereignty over natural resources, dismissed the complaint concluding that the activities of OPEC members were by its nature sovereign and governmental, and entitled to sovereign immunity. (314) In assessing this matter the court noted that "certain States in the United States have restricted production of crude oil in order to maintain and stabilize prices and, thereafter, the Federal Government not only acquiesced in this activity, but made the States' acts effective by the assistance of Federal law enforcement." (315)

For the court the activities of OPEC members were clearly governmental, not commercial and entitled to sovereign immunity. (316) Further, it was argued that antitrust violations could only be incurred by persons and not by states. (317) The court also followed precedents pursuant to which foreign states cannot be defendants of antitrust complaints because allowing so would interfere with sensitive foreign policy questions. (318)

Interestingly, the California Federal Court went far enough to address the merits of price increases and concluded that "[f]ederal regulation of the petroleum market has posed a greater threat to the American consumer than any other single factor." (319) In its opinion, the court stated that OPEC could not be legally served under the Foreign Sovereign Immunities Act (320) or the International Organizations Immunities Act, (321) because OPEC is not a sovereign and is not an international organization in which the United States participates. (322) Thus, despite concluding that OPEC is not a foreign sovereign, the court dismissed OPEC from the lawsuit, because it could not be served with legal process. (323)

On appeal, the District Court for the Ninth District reviewed the above decision and affirmed it on act of state doctrine grounds. (324)