May 28, 2007 01:52 AM UTC

NOPEC -- BiPartisan Effort to Lift OPEC's Antitrust Immunity

• 3 Comments
• by: bpilgram

A very interesting, yet obscure, article was recently published on the Heritage Foundation’s web site:

http://www.heritage….

“This week, the House is likely to pass the No Oil Producing and Exporting Cartels Act of 2007 (NOPEC, HR. 2264). This bill, sponsored by Representatives John Conyers (D-MI) and Steve Chabot (R-OH), would allow the federal government to sue the Organization for Petroleum Exporting States (OPEC) for antitrust violations. Similar legislation (S. 879) is pending in the Senate, sponsored by Senators Herb Kohl (D-WI) and Arlen Spector (R-PA). At a time when oil prices are climbing to ever-higher levels, fighting OPEC’s anticompetitive practices would be a welcome first step towards reestablishing the free market in this strategically important sector. This is long overdue and points the way toward a second step: allowing private antitrust suits against OPEC.

… the only serious challenge to the organization came in 1978 when a U.S. non-profit labor association, the International Association of Machinists and Aerospace Workers (IAM), sued OPEC under the Sherman Antitrust Act, in IAM v. OPEC. But the case was rejected in 1981 by the U.S. Court of Appeals for the Ninth Circuit. OPEC, the court affirmed, could not be prosecuted under the Sherman Act due to the foreign sovereign immunity protection it claimed for its member states.”

I, for one, did not realize OPEC had governmental immunity from US antitrust laws.  It’s good to see a bipartisan effort to eliminate this loophole. …