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hassan

URGENT:

Iraq oil workers' leader Hassan Juma'a will be in court in Basra on 7 April, facing up to 3 years in prison for organising protests.

South Oil Company has brought charges against Hassan, under the Iraqi Penal Code No. (111) 1969, Paragraph 327, accusing him under the section concerning officials who “overstep the bounds of their duty.” He faces imprisonment if, as a result of his actions, “the interests of the state are harmed.”

Please take action to help defend Hassan.

Since 2003 Hassan has been a courageous voice for the rights of oil workers in Iraq, and indeed for the rebuilding of his country's economy. In civil society activists like Hassan lies hope for Iraq's future, which perhaps is why he has faced such persistent attacks from the government. He is also my friend.

Iraq observers fear the country is taking an increasingly authoritarian turn. The rise of Iraqi civil society is one of the few positive stories since 2003. Taking action for Hassan will send a message that government attacks on civil society are not acceptable.

Currently 31 unions and 10 NGOs have signed our letter to Prime Minister al-Maliki (below), calling for the charges to be dropped.

Please take any or all of the following actions:

  • Sign the petition to Maliki here
  • Ask your trade union, or other organisation you are involved in, or your MP/Congressperson URGENTLY to sign the letter here
  • Forward this email to your contacts, and post on Facebook and Twitter

Thank you



The letter :

To His Excellency Mr. Nouri Al Maliki Prime Minister of Iraq Baghdad-Iraq 

Best Greetings,

We are deeply concerned about the continuing violations of union rights and freedoms in Iraq, in particular in the oil sector. Hassan Juma Awad, Chairman of the Federation of Oil Unions, has been summoned before the Basra Court, on March 20, where he will face charges of organizing a strike at the Southern Oil Company. However, Hassan Juma Awad declares that these charges are false and that he is being accused as part of a Ministry of Oil effort to slander and undermine him and the unions. Also, eight Southern Oil Company workers have been summoned to the General Inspector’s Office in the Ministry of Oil in order for the Ministry to investigate their role in recent demonstrations in Basra, where workers engaged in peaceful protest to express their legitimate demands.

The Iraqi constitution guarantees freedom of association and peaceful demonstrations, yet over the years, the Ministry of Oil has repeatedly taken disciplinary actions against union activists, including transferring them to distant work sites, reprimanding them, filing criminal complaints against them and imposing heavy fines and penalties on them. The Ministry has banned union organizing at the companies affiliated to it, which is also a violation of ILO convention 98, which Iraq has ratified. These attacks on freedom of association and the right to organize and bargain collectively reflect the government of Iraq’s intention to hold on to repressive laws and policies issued under the Saddam Hussein regime. Decree 150 of 1987, which bans union organizing in the public sector, is clear evidence of that, as is the continued enforcement of labor law number 71 and the union organizing law number 52 of 1987, both of which are in contradiction with ILO conventions and international labor standards, though Iraq has ratified sixty six international labor conventions.

The Iraqi government’s continued repression of freedom of association and worker rights, based on laws issued under a dictatorship, is in direct contradiction with the principals of democracy and justice that the Iraqi government promises its people. The government of Iraq should immediately cancel the orders issued by the Ministry of Oil to union activists, including all transfer orders, reprimands and arbitrary penalties against union activists. Charges against Hassan Juma Awad, and any other workers

Unions
   
AFL-CIO, USA
American Federation of Teachers, Local 2026, AFL-CIO
American Federation of Teachers, Local 3220, AFL-CIO
Berkeley Federation of Teachers, AFT Local 1078, AFL-CIO
Brotherhood of Maintenance of Way Employees, IBT
Brotherhood of Railroad Signalmen, AEGC
California Federation of Teachers
Communications Workers of America, AFL-CIO, Local 1180
Faculty and Staff Federation of Community College of Philadelphia, AFT 2026
Federation of Workers' Councils and Unions in Iraq FWCUI
Federazione Impiegati e Operai Metallurgici-CGIL
GMB Trade Union
International Brotherhood of Teamsters, Local 340
International Trade Union Confederation (ITUC)
Interregional Trade Union of Autoworkers
Maryland and District of Columbia AFL-CIO
Midwest Casino Workers Organizing Council
National Gathering of Farmers of the Morocco Union for Labor
National Union of Journalists
Pennsylvania Federation BMWE, Division of the Teamsters
Sud Aerien
Syndicat Snapap Algerie
Transport Salaried Staffs’ Association
United Auto Workers, Local 2320, Southeast Region
Union of Construction, Allied Trades and Technicians
Union Syndicale Solidaires
UNITE
Unite the Union, Branch EM/10-465
Unite the Union, Branch LE128
United Transportation Union
Vermont State Labor Council, AFL-CIO


NGOs
   
Bay Area Labor Committee for Peace & Justice
Bund for Soziale Verteidigung
Counterfire
Ecumenical Peace Institute/Clergy and Laity Concerned
Iraq Civil Society Solidarity Initiative (ICSSI)
Platform London
Press Freedom Advocacy Association in Iraq
U.S. Labor Against the War [USLAW]
War on Want
Working Democracy of Minneapolis, MN


Greg_palast

30 March 2013


The world, according to writer Greg Palast, is a frightening place, but one that ultimately functions in very simple ways. The bad guys generally conspire with each other to hurt the good guys. And thank heaven, we have Palast to tell us about their dastardly plans.


In his latest piece for Vice magazine, he has some undisputed villains – the Saudi government and Exxon – working to enrich themselves while hurting the good American car-driving public. The Iraq War wasn’t a war for oil, as we all thought. Thanks to his investigation, we discover it was in fact a war for no-oil, where the US government – the ones you voted for – took the side of the villains by keeping Iraqi oil in the ground so as to push up prices. 


It’s a good yarn. And it’s true that Big Oil wanted to restrict Iraqi oil production. The only trouble is, that was in the 1950s and 1960s. Back then, they controlled the majority of world oil production and ran the oil market – the US Senate called them the ‘International Petroleum Cartel’ in a 1952 report. So they held back production in Iraq in order to push up the price and make higher profits in other countries where they operated.


Unfortunately for Palast, things are nothing like that now. Most major oil-producing countries have nationalized their industries, and the market is controlled more by a cartel of governments, OPEC, which rivals the multinational companies  for market share. 


It’s not even the case – contrary to popular belief – that oil companies want the oil price to be as high as possible. True, a high price does maximize their profits, but in the longer term it harms them by encouraging producing governments to manage without them, or at least to do any deals with them on less profitable terms. Like Goldilocks, oil companies want a price neither too high nor too low: high enough to gove them good profits, but not so high that governments get any impertinent ideas. 


Several facts inconveniently fail to fit Palast’s story. Most obviously, if Big Oil really wanted to hold Iraq back, why are the companies now there en masse extracting oil? Sure, it took them eight years to get there, during which time the oil price went up from $25 to $150. But Palast doesn’t tell us why they might have dropped their earlier plan. 


He also neglects the fact that the oil companies were demanding access to Iraq – in secret at first, but in public certainly by 2004. And the fact that throughout 2006 and 2007, tied to the ‘Surge’, the Bush administration was demanding the Iraqis pass a law to let Big Oil take the lion’s share.


More specifically, he gets plenty wrong. US oil adviser Robert McKee (who incidentally was from Conoco not Halliburton) was not cautious like his predecessor Phil Carroll, but instead was the one who really started the process toward getting Big Oil into Iraq. 


Nor is it true that the neocons in the Pentagon were rabid privatisers while the State Department 'realists' wanted to help out OPEC. In fact, the State Department generally pushed harder for Big Oil's entry into Iraq, whereas the neocons believed that once "set free" Iraqis would naturally want to privatise (because that's what free people do), without a US intervention.


Well, perhaps Palast didn’t know about any of that. But even documents he did have he (at best) quoted out of context. For example, Palast leaps from 10 words of a December 2003 US government document on Iraqi oil policy – “A single state-owned company ...enhances a government's relationship with OPEC” – to the conclusion that the US had ruled out privatisation as part of a conspiracy with OPEC, by restricting investment and hence production. When seen in context however, this is not in fact a prescription to keep the oil industry in public hands, but rather a discussion  of the relative roles of oil ministry and state company (alongside multinational oil companies). 


The document, entitled Options for Developing a Long-term Sustainable Iraqi Oil Industry, was indeed intended to establish a blueprint for what came next. But looked at as a whole, its purpose is actually to recommend how to bring in investment from Big Oil in order to achieve higher rates of production – the precise opposite of what Palast claims.


Palast doesn’t publish his source documents, perhaps so no-one can call him out on his more fictional reports. In fact, it’s worse than that. When he published a version of the same story in Harper’s magazine and on BBC Newsnight in 2005, I asked him for a copy of the document, to share with Iraqi trade unionists who wanted to know what was planned for their oil industry, he refused, on grounds that he was working on a book and wanted to use it in that. 


The first half of Palast’s article is devoted to how he got hold of the document. “I'd just beaten the Military-Petroleum Complex in a lying contest, so I had a right to be chuffed”, he recounted modestly. When he refused to share it with the people who really needed to know – Iraqis – I got hold of the document myself, using my own cunning investigative methods: phoning USAID (the government agency that sponsored it) and asking for it. I put it on my organisation’s website, and shared the contents with Iraqi colleagues.


One reason the Iraqi oil story wasn’t told by media is the insistence with which the US and UK denied an oil motive. Another reason was that some activists adopted far-fetched conspiracy theories that served as straw men for the governments. In this sense, Palast’s investigation hinders more than it helps.


hassan

21 March 2013

 

My friend Hassan Juma'a, leader of the Iraqi Federation of Oil Unions in Basra, is to be prosecuted on 7 April), charged with organising a strike at the South Oil Company. Hassan has played a central role in defending the rights of Iraqi oil workers, and in working to democratise decisions about oil.

 

URGENT: Please take action by getting your union or organisation to sign this letter of protest to Prime Minister Maliki. We know from past experience that such letters have been effective in helping stop violations of trade unionists´rights. 

 

(Note that the letter gives the court date as 20 March; it has since been postponed to 7 April)


oilblood

20 March 2013


Tony Blair always did like to think of himself as a world statesman. I sometimes wonder whether he had an eye on Winston Churchill when he said of the Iraq War in 2003, “the oil conspiracy theory is honestly one of the most absurd”. Back in 1920, Churchill told parliament that the idea of an oil motive behind Britain´s Mesopotamia Campaign during the First World War was “too absurd for acceptance.”


Six years earlier, as First Lord of the Admiralty, Churchill had championed the half-nationalisation of Anglo Persian Oil Company (later renamed BP) - which had recently found oil in Persia (now Iran) and was looking to expand into neighbouring Mesopotamia (Iraq) - in order to secure fuel for the Royal Navy´s battleship fleet. Just 11 days after the British state´s acquisition of 51% of Anglo Persian was approved, Archduke Franz Ferdinand was assassinated in Sarajevo.


Ok, it´s a little more complicated these days. Oil no longer flows through closed supply chains from a BP well to a BP forecourt, or from a British colony to the British military. Since the 1980s oil has been mostly traded on open markets, between any buyer and any seller. Nor is access to oil any more such a decisive factor in warfare, as any other army can buy it too. The result is that Western strategists are not so much trying to get oil into their own (or their own companies´) hands, but rather to maintain plentiful and cheap global supplies – as expensive oil can cripple their economies.


To that end, they aim to maximise foreign investment in oilfields, so as to boost the flow. At the time of the Iraq War, three quarters of the world´s oil was off-limits to the oil companies, as governments preferred to run their oil industries in-house, and their economies were not generally best served by pumping as fast as possible.


To me, fighting a war to break open a country´s oil industry to foreign investment sounds no more justified than fighting one to seize the oil as loot.


I still get asked ´So was it a war for oil?´ I find it a surprising question, as it´s no secret that Iraq has nearly a tenth of the world´s remaining oil, nor that the Persian Gulf region as a whole has nearly a half (and at the time of the war it was more like two thirds). It´s only because of the insistence with which our politicians (Donald Trump aside) denied any role for oil that it became a question at all. And perhaps those very denials stimulated suspicions of a bigger conspiracy than it was.


No, it was not some Cheneyesque masterplan that played out over the years. In fact the approach to oil changed several times – for example from outright privatization, to contracting by a US authority, to contacting by an Iraqi authority – and different people in the US and British governments disagreed on the details, such as whether to treat their own companies more favourably or whether to break OPEC.

 

But the strategic interests were certainly there. They were acknowledged in public documents – most famously Cheney´s 2001 energy task force report, which stated, “By any estimation, Middle East oil producers will remain central to world oil security. The Gulf will be a primary focus of U.S. international energy policy.” Private government documents spelled the interests out even more explicitly. I obtained the UK´s strategy for Iraqi oil, dated May 2003, which baldly stated that “The future shape of the Iraqi industry will affect oil markets, and the functioning of OPEC, in both of which we have a vital interest”.


And the governments certainly formulated plans to achieve those interests. In the months leading up to the war, both the State Department´s Future of Iraq Project and the Pentagon´s Energy Infrastructure Planning Group worked out the details of a future Iraqi oil industry with foreign multinationals in charge.

 

In late 2002 and early 2003, BP and Shell held at least five meetings with the British government on the subject of Iraq. The minutes of one such meeting in the Foreign Office, in October 2002, began, “Iraq is the big oil prospect. BP are desperate to get in there.” In another meeting, Blair´s Trade Minister Baroness Symons said she believed that if Britain fought in the war, British oil companies deserved to get a share of the spoils, and she promised to lobby the US government to that effect. At the time the companies and government denied any such meetings happened; it took me a five-year struggle under the Freedom of Information Act to get hold of the minutes.

 

Then once the war had taken place, the US and UK worked hard throughout the occupation to turn Iraq over to Big Oil. This began with ensuring the right Iraqis were running the Oil Ministry, and writing the blueprint for the industry´s future. The Brits even hired a former BP executive to draft Iraq´s contracts to be signed with companies like BP! (That initiative failed).


In 2007, President Bush announced a surge of an extra 30,000 troops to be sent to Iraq. The surge is generally remembered (wrongly) as what turned things around in Iraq, ending the sectarian bloodshed and marking the first sensible US policymaking. At the time, even critics accepted at face value the claimed noble aims, and simply argued that it would not work in achieving them. They neglected the surge's political purposes: firstly to shore up the US allies in the Iraqi government (many of whom were implicated in sectarian violence) and secondly to pressure them to deliver political "benchmarks", most importantly to pass a law to restructure the Iraqi oil industry in favour of foreign oil companies. Throughout 2007, on surprise visits to Baghdad by members of Bush’s national security team, it was the oil law that dominated discussions. During biweekly video conferences with Iraqi Prime Minister Maliki, Bush warned that U.S. patience had grown thin, and repeatedly pressed Maliki on the oil law. The US made threats (sec.1314) to cut off aid and reconstruction funds if the law were not passed, and even to remove Maliki from office.


In this approach, like many others, the US failed. The law was not passed, largely because of a popular Iraqi campaign against it. In the end, it was decided to sign long-term contracts even without any legal basis for doing so, and Iraq´s oil industry is now almost entirely run by companies like BP, Shell and ExxonMobil. These stories – the hidden stories of the war – are told in Fuel on the Fire.

 

So the US and UK had a motive for handing Iraq´s oil to multinational companies, and a series of plans for how to do so; they then consistently acted so as to achieve that end. Isn´t that enough to answer the question about whether it was a war for oil? Apparently not for some. The initiatives to bring in the oil companies were largely dressed up as being for the benefit of Iraqis, as of course they would need a modern oil industry with the advantages of investment and technology from the likes of ExxonMobil. In the run-up to the war ten years ago, a popular cliché among policy-makers became that the war was not about oil, but the day after the war it would become all about oil. As if war hawks hadn´t noticed Iraq had all this oil, but once the war had taken place, they discovered it would conveniently be a good idea to bring in Big Oil.


Perhaps they even believed it. After all, human beings are very capable of believing what is in their interests to believe. Psychologists use the term ´confirmation bias´, to describe people accumulating and interpreting information such as to reinforce their pre-existing beliefs. Blair even once suggested that his belief in the rightness of the war was sufficient justification, regardless of whether there was solid basis for that belief. Again, even if he did genuinely believe in what he was doing, that does not justify it.


So let´s not get hung up on whether the governments consciously drew the link between oil motive, oil plans and the decision to go to war, on whether they ever said “let´s go to war for oil”. In fact the issue is quite simple. A few years ago I put the war-for-oil question to Robert Ebel, the State Department's senior pre-war adviser on Iraqi oil. He replied, "What was it that the Iraqis had that we would like to have? It wasn't the sand".

 


eni postcard

15 February 2013


Strange that such powerful companies can still be paranoid. Yesterday we tried to deliver a postcard to Eni’s headquarters in Rome, signed by four of Iraq’s union leaders – a postcard that wouldn’t fit through the letterbox. (Read the text of the card here). The company refused to receive it.


Eventually, after we’d been there for an hour and the Italian news agency had run a story about the strange refusal, the company agreed that we could leave the postcard outside for them, but no managers would come to take it. Apparently they were worried they might get drawn into a conversation about the rights of workers in their facilities.


One other, entertaining, explanation was perhaps that CEO Paolo Scaroni, the addressee of the card, was without his liberty. His house was raided by police last week in an investigation into the company’s alleged payment of bribes in Algeria. By the way, the company is also being investigated for alleged receipt of bribes in its Zubair field near Basra.


The postcard raised an interesting point, which made me remember a comment Basra oilworkers’ leader Hassan Juma’a made when I first met him in 2005. “There are two stages of this war,” he said. “First, the military occupation. Then the economic war.” 


As readers of Fuel on the Fire will know, oil companies are in Iraq without legal authority – their contracts are technically not valid under Iraqi law unless approved by the Iraqi parliament (which hasn’t happened). And signed with a government that had been installed by an occupation power, when the majority of Iraqis did not want foreigners to control their oil, the contracts have no moral legitimacy either. The companies meanwhile overprice their subcontracts at the expense of the Iraqi government; they violate the rights of workers; they operate without accountability such that corruption thrives. 


In fact, for all Iraq’s problems, the biggest impingement on the country’s sovereignty, since the troops left in 2011, is now the foreign oil companies. So, the postcard demanded, now the oil companies should be subject to a timetable for withdrawal.


anti-war march_1

15 February 2003


Ten years ago today, I joined more than a million others on a noisy shuffle through London’s streets. I did so in order to register my opposition to the war, rather than because I thought we could stop it. The cover of Private Eye gave an apt twist to an old joke, with a photograph showing Prime Minister Tony Blair playing rock guitar with his son Nicky, under the headline TONE DEAF. ‘Do you know there are a million people marching against you?’ asked the speech bubble coming from Nicky. ‘No,’ replied his father. ‘Hum it and I’ll ignore you.’  


But that afternoon my pessimism started to wane.  It was not only Britain’s largest ever political demonstration, but also one of its most diverse. Anarchists, Trotskyists and peaceniks, young Muslims, shire Tories and liberals marched together. NO WAR, MORE PEAS, insisted the banner of one gardening enthusiast beneath Hungerford Bridge. LIBRARIANS SAY SSSSHHHHHH! DON’T BOMB IRAQ, whispered another. 


NO BLOOD FOR OIL was one of the more popular slogans. It seemed like an obvious point to make: Iraq had around 10% of the world’s oil reserves, and its neighbours a further 50%, while the USA was the world’s largest oil consumer, accounting for around a quarter of total demand. 


By chance, I began the march outside the Shell Centre, one of the oil company’s two global headquarters. We were supposed to start at Victoria Embankment in Westminster on the other side of the Thames, but the crowds stretched along both banks and across Waterloo Bridge in between – from the the home of the mother of parliaments to the seat of an icon of British economic power. And while we knew fairly well what had been said about the imminent invasion in the House of Commons, I wondered what conversations about Iraq had taken place inside the oil company office by which I stood. Over the following weeks I started reading specialist oil industry magazines, to try to find out what the oil companies thought. They told a story quite different from what we read in newspapers and saw on our TV screens. International Petroleum Finance observed during the invasion, for instance, ‘The war in Iraq may have divided the world’s politicians, but it has united its oil executives – every one of them is wondering how and when the country’s 112 billion barrels of known oil reserves, not to mention its huge exploration potential, might be opened up to foreign participation.’ 


It was not difficult to read those journals and to speak and write about what I read, but it seems no one outside the oil business thought to do so, and I found a number of people were interested in what I had to say. At the time I was working for a small yet resourceful campaigning charity called Platform, which monitors the activities of oil companies, and over the following years I observed events unfold in the Iraqi oil industry. When I first visited Iraq in 2005, I discovered that it was easier to find out from London what was happening to Iraq’s oil than in Baghdad or Basra. When publicised at all, announcements on new Iraqi oil policies were made in other countries to audiences of diplomats and businessmen rather than to Iraqis. I hoped that by studying Iraqi oil policy I might help inform public debate inside Iraq – after all, oil provides about 95 per cent of the Iraqi government’s revenues and drives the country’s economy and politics. Later, as other groups got involved, Platform became part of an inter¬national campaign against American and British interference in Iraqi oil decisions. Later still, after I left Platform to write Fuel on the Fire, I worked as a freelance journalist, again with a focus on Iraqi oil and politics. 


This work took me to events where World Bank and US and UK government officials lobbied Iraqi decision-makers, and to meetings at which Iraqi Oil Ministry teams discussed future policy with Western companies. I met some of the executives who hoped to benefit from Iraq’s oil and the government officials and advisers they worked with. Generously assisted by my lawyers Phil Michaels and Kel McClanahan, I used freedom of information legislation to obtain hundreds of unreleased British and American government documents which described their plans and activities to reshape Iraq’s oil industry. But I also talked to ordinary Iraqis and a few of the country’s politicians about what they wanted to happen to their oil. I attended Iraq’s first anti-privatisation conference in Basra, and the meeting in Amman at which Iraq’s trade unions decided they would fight the oil law the US was pushing in Baghdad. I made many Iraqi friends and came to know some of Iraq’s foremost oil experts.

My experiences gave me a very different perspective from what I read in the papers. I’ve never had much time for conspiracy theories, but human beings have a great capacity to hold beliefs about the world that advance or reinforce their own material interests, and it is only from a distance that one can perceive the self-serving nature of those beliefs. Indeed, the architects of the war have not found it hard to see oil behind the actions of Saddam Hussein,  al-Qaeda,  Iraq’s communities,  the governments of Russia or France,  or even (with historical distance) the British occupation of Iraq 85 years earlier.  They have seldom seen it behind their own.  


It would be wrong to say that the war and occupation were shaped only by oil; the reality is messier. But it would be at least as naive to accept the opposite view: that the war had ‘literally nothing to do with oil’, as US Defense Secretary Donald Rumsfeld insisted in November 2002.  Unless we look at the interests involved, and the means by which they have been pursued, it is impossible to make sense of this war and occupation, or learn its lessons.


tomdispatch_logo_v1

23 August 2012


Published (with an intro by Tom Engelhardt) on TomDispatch

In 2011, after nearly nine years of war and occupation, U.S. troops finally left Iraq. In their place, Big Oil is now present in force and the country’s oil output, crippled for decades, is growing again. Iraq recently reclaimed the number two position in the Organization of the Petroleum Exporting Countries (OPEC), overtaking oil-sanctioned Iran. Now, there’s talk of a new world petroleum glut. So is this finally mission accomplished?

Well, not exactly. In fact, any oil company victory in Iraq is likely to prove as temporary as George W. Bush’s triumph in 2003. The main reason is yet another of those stories the mainstream media didn’t quite find room for: the role of Iraqi civil society. But before telling that story, let’s look at what’s happening to Iraqi oil today, and how we got from the “no blood for oil” global protests of 2003 to the present moment.

Here, as a start, is a little scorecard of what’s gone on in Iraq since Big Oil arrived two and a half years ago: corruption’s skyrocketed; two Western oil companies are being investigated for either giving or receiving bribes; the Iraqi government is paying oil companies a per-barrel fee according to wildly unrealistic production targets they’ve set, whether or not they deliver that number of barrels; contractors are heavily over-charging for drilling wells, which the companies don’t mind since the Iraqi government picks up the tab.

Meanwhile, to protect the oil giants from dissent and protest, trade union offices have been raided, computers seized and equipment smashed, leaders arrested and prosecuted. And that’s just in the oil-rich southern part of the country.

In Kurdistan in the north, the regional government awards contracts on land outside its jurisdiction, contracts which permit the government to transfer its stake in the oil projects -- up to 25% -- to private companies of its choice. Fuel is smuggled across the border to the tune of hundreds of tankers a day.

In Kurdistan, at least the approach is deliberate: the two ruling families of the region, the Barzanis and Talabanis, know that they can do whatever they like, since their Peshmerga militia control the territory. In contrast, the Iraqi federal government of Prime Minister Nouri al-Maliki has little control over anything. As a result, in the rest of the country the oil industry operates, gold-rush-style, in an almost complete absence of oversight or regulation.

Oil companies differ as to which of these two Iraqs they prefer to operate in. BP and Shell have opted to rush for black gold in the super-giant oilfields of southern Iraq. Exxon has hedged its bets by investing in both options. This summer, Chevron and the French oil company Total voted for the Kurdish approach, trading smaller oil fields for better terms and a bit more stability.

Keep in mind that the incapacity of the Iraqi government is hardly limited to the oil business: stagnation hangs over its every institution. Iraqis still have an average of just five hours of electricity a day, which in 130-degree heat causes tempers to boil over regularly. The country’s two great rivers, the Tigris and Euphrates, which watered the cradle of civilization 5,000 years ago, are drying up.  This is largely due to the inability of the government to engage in effective regional diplomacy that would control upstream dam-building by Turkey.

After elections in 2010, the country’s leading politicians couldn’t even agree on how to form a government until the Iraqi Supreme Court forced them to. This record of haplessness, along with rampant corruption, significant repression, and a revival of sectarianism can all be traced back to American decisions in the occupation years. Tragically, these persistent ills have manifested themselves in a recent spate of car-bombings and other bloody attacks.

Washington’s Yen for Oil

In the period before and around the invasion, the Bush administration barely mentioned Iraqi oil, describing it reverently only as that country’s “patrimony.” As for the reasons for war, the administration insisted that it had barely noticed Iraq had one-tenth of the world’s oil reserves. But my new book reveals documents I received, marked SECRET/NOFORN, that laid out for the first time pre-war oil plans hatched in the Pentagon by arch-neoconservative Douglas Feith’s Energy Infrastructure Planning Group (EIPG).

In November 2002, four months before the invasion, that planning group came up with a novel idea: it proposed that any American occupation authority not repair war damage to the country’s oil infrastructure, as doing so “could discourage private sector involvement.” In other words, it suggested that the landscape should be cleared of Iraq’s homegrown oil industry to make room for Big Oil.

When the administration worried that this might disrupt oil markets, EIPG came up with a new strategy under which initial repairs would be carried out by KBR, a subsidiary of Halliburton. Long-term contracts with multinational companies, awarded by the U.S. occupation authority, would follow. International law notwithstanding, the EIPG documents noted cheerily that such an approach would put “long-term downward pressure on [the oil] price” and force “questions about Iraq’s future relations with OPEC.”

At the same time, the Pentagon planning group recommended that Washington state that its policy was “not to prejudice Iraq’s future decisions regarding its oil development policies.” Here, in writing, was the approach adopted in the years to come by the Bush administration and the occupation authorities: lie to the public while secretly planning to hand Iraq over to Big Oil.

There turned out, however, to be a small kink in the plan: the oil companies declined the American-awarded contracts, fearing that they would not stand up in international courts and so prove illegitimate. They wanted Iraq first to have an elected permanent government that would arrive at the same results. The question then became how to get the required results with the Iraqis nominally in charge. The answer: install a friendly government and destroy the Iraqi oil industry.

In July 2003, the U.S. occupation established the Iraqi Governing Council, a quasi-governmental body led by friendly Iraqi exiles who had been out of the country for the previous few decades. They would be housed in an area of Baghdad isolated from the Iraqi population by concrete blast walls and machine gun towers, and dubbed the Green Zone.  There, the politicians would feast, oblivious to and unconcerned with the suffering of the rest of the population.

The first post-invasion Oil Minister was Ibrahim Bahr al-Uloum, a man who held the country’s homegrown oil expertise in open contempt. He quickly set about sacking the technicians and managers who had built the industry following nationalization in the 1970s and had kept it running through wars and sanctions. He replaced them with friends and fellow party members. One typical replacement was a former pizza chef.

The resulting damage to the oil industry exceeded anything caused by missiles and tanks. As a result the country found itself -- as Washington had hoped -- dependent on the expertise of foreign companies. Meanwhile, not only did the Coalition Provisional authority (CPA) that oversaw the occupation lose $6.6 billion of Iraqi money, it effectively suggested corruption wasn't something to worry about.  A December 2003 CPA policy document recommended that Iraq follow the lead of Azerbaijan, where the government had attracted oil multinationals despite an atmosphere of staggering corruption (“less attractive governance”) simply by offering highly profitable deals.

Now, so many years later, the corruption is all-pervasive and the multinationals continue to operate without oversight, since the country’s ministry is run by the equivalent of pizza chefs.

The first permanent government was formed under Prime Minister Maliki in May 2006. In the preceding months, the American and British governments made sure the candidates for prime minister knew what their first priority had to be: to pass a law legalizing the return of the foreign multinationals -- tossed out of the country in the 1970s -- to run the oil sector.

The law was drafted within weeks, dutifully shown to U.S. officials within days, and to oil multinationals not long after. Members of the Iraqi parliament, however, had to wait seven months to see the text.

How Temporary the Victory of Big Oil?

The trouble was: getting it through that parliament proved far more difficult than Washington or its officials in Iraq had anticipated. In January 2007, an impatient President Bush announced a “surge” of 30,000 U.S. troops into the country, by then wracked by a bloody civil war. Compliant journalists accepted the story of a gamble by General David Petraeus to bring peace to warring Iraqis.

In fact, those troops spearheaded a strategy with rather less altruistic objectives: first, broker a new political deal among U.S. allies, who were the most sectarian and corrupt of Iraq’s politicians (hence, with the irony characteristic of American foreign policy, regularly described as “moderates”); second, pressure them to deliver on political objectives set in Washington and known as “benchmarks” -- of which passing the oil law was the only one ever really talked about: in President Bush’s biweekly video conferences with Maliki, in almost daily meetings of the U.S. ambassador in Baghdad, and in frequent visits by senior administration officials.

On this issue, the Democrats, by then increasingly against the Iraq War but still pro-Big Oil, lent a helping hand to a Republican administration. Having failed to end the war, the newly Democrat-controlled Congress passed an appropriations bill that would cut off reconstruction funds to Iraq if the oil law weren’t passed. Generals warned that without an oil law Prime Minister Maliki would lose their support, which he knew well would mean losing his job. And to ramp up the pressure further, the U.S. set a deadline of September 2007 to pass the law or face the consequences.

It was then that things started going really wrong for Bush and company. In December 2006, I was at a meeting where leaders of Iraq’s trade unions decided to fight the oil law. One of them summed up the general sentiment this way: “We do not need thieves to take us back to the middle ages.” So they began organizing. They printed pamphlets, held public meetings and conferences, staged protests, and watched support for their movement grow. 

Most Iraqis feel strongly that the country’s oil reserves belong in the public sector, to be developed to benefit them, not foreign energy companies. And so word spread fast -- and with it, popular anger. Iraq’s oil professionals and various civil society groups denounced the law. Preachers railed against it in Friday sermons. Demonstrations were held in Baghdad and elsewhere, and as Washington ratcheted up the pressure, members of the Iraqi parliament started to see political opportunity in aligning themselves with this ever more popular cause. Even some U.S. allies in Parliament confided in diplomats at the American embassy that it would be political suicide to vote for the law.

By the September deadline, a majority of the parliament was against the law and -- a remarkable victory for the trade unions -- it was not passed. It’s still not passed today.

Given the political capital the Bush administration had invested in the passage of the oil law, its failure offered Iraqis a glimpse of the limits of U.S. power, and from that moment on, Washington’s influence began to wane.

Things changed again in 2009 when the Maliki government, eager for oil revenues, began awarding contracts to them even without an oil law in place. As a result, however, the victory of Big Oil is likely to be a temporary one: the present contracts are illegal, and so they will last only as long as there’s a government in Baghdad that supports them.

This helps explain why the government's repression of trade unions increased once the contracts were signed.  Now, Iraq is showing signs of a more general return to authoritarianism (as well as internecine violence and possibly renewed sectarian conflict).

But there is another possibility for Iraq. Years before the Arab Spring, I saw what Iraqi civil society can achieve by organizing: it stopped the world’s superpower from reaching its main objective and steered Iraq onto a more positive course.

Many times since 2003 Iraqis have moved their country in a more democratic direction: establishing trade unions in that year, building Shi'a-Sunni connections in 2004, promoting anti-sectarian politicians in 2007 and 2008, and voting for them in 2009.  Sadly, each of these times Washington has pushed it back toward sectarianism, the atmosphere in which its allies thrive.  While mainstream commentators now regularly blame the recent escalation of violence on the departure of U.S. troops, it would be more accurate to say that the real reason is they didn’t leave far sooner.

Now, without its troops and bases, much of Washington’s political heft has vanished. Whether Iraq heads in the direction of dictatorship, sectarianism, or democracy remains to be seen, but if Iraqis again start to build a more democratic future, the U.S. will no longer be there to obstruct it.  Meanwhile, if a new politics does emerge, Big Oil may discover that, in the end, it was mission unaccomplished.


falahmilwaukee

26 July 2012


Falah Alwan is president of the Federation of Workers' Councils and Unions in Iraq. He made these comments during an international conference call on the Iraqi labour situation. They give an important insight and so are shared here.
 
The main issue facing Iraqi workers at the moment is the government’s attempt to impose a new labour code. Iraqi workers have been working without an official labour code since the fall of the Ba’athist regime. Effectively people have been working on the basis of established traditions, conventions, and practises rather than a legal code. There was a draft in 2004, but in our view this was worse than the 1936 labour law of the old monarchy!
 
The new draft includes 156 articles, and we have serious objections to 140 of them. The code was produced by the Ministry of Labour, so it’s been produced entirely by representatives of capitalism. There was some sham consultation with “workers’ representatives” – two individuals from government-backed unions were involved – but there was no real participation from independent workers’ organisations in drawing up the code. The new code does include a notional right to join a union, but only unions sanctioned or officially recognised by the government.
 
Independent unions in Iraq met with the AFL-CIO Solidarity Centre in Lebanon recently to discuss campaigning against the law. We want to pressure the Iraqi authorities, both internally and internationally, on this issue. We want to expose the reality of the new labour law, as a lot of workers don’t know about its contents. It contains no positive guarantees of workers rights, and we need to oblige the Iraqi authorities to listen to the labour movement and change the code.
 
We want a labour code based on positive workers’ rights – the right to form independent unions, the right to strike, health and safety benefits, social security, and other basic rights in the workplace.
 
The government needs to pass it through a second reading in parliament before it can be formally ratified, but they haven’t yet announced when that second reading will be. We want to stop it getting that far. If it is ratified, that would be a disaster for Iraqi workers.
 
There is also ongoing interference from the Ministry of Labour in the affairs of Iraqi unions. There has been a long-running attempt to delegitimize all unions except for a single, government-sanctioned federation. Recently, the Ministry has been holding sham “elections” for “union” representatives, which are a direct attempt to undermine the internal democracy of the existing federations. Workers are being asked to vote in general election, regardless of which union they are a member of, for “representatives” who will negotiate with their employers. Authorities have effectively been bribing people to participate in these elections, for example by promising unemployed workers jobs if they vote.
 
The backdrop is an attempt by Islamist forces – Sadrist elements, and supporters of the Supreme Council – within the Ministry of Labour to gain political control of the unions. The Minister of Labour himself [Nassar al-Rubayie] is a Sadrist. The Basra branch of the General Federation of Iraqi Workers (GFIW) had its offices raided, and there were labour movement protests against this.
 
This is a political issue. It’s about the right of workers to choose which union to join and to elect their own representatives. The imposition of sham elections threatens the independence of the labour movement and threatens to undo everything we have built in the last nine years.
 
Despite these difficult conditions, there are many industrial disputes and struggles still ongoing in Iraq. In Basra, there have been large demonstrations demanding electricity services. Many homes are still without electricity, and in the current conditions – which are incredibly hot – it’s awful not to have electricity [to power fans, AC etc.] These demonstrations have been repressed violently by the army and the police, with many arrests made. There have been similar demonstrations in Diwaniya.
 
Municipal authority workers in Baghdad held a protest in the main local government building. This was part of a dispute over housing benefits. Public sector workers have a clause in their contract that guarantees them accommodation, but these workers have been denied that. Again, the authorities responded very heavy-handedly to the demonstration.
 
The petrochemical workers in Basra are continuing their campaign against job losses and transfers. Of 5,000 workers at one particular plant, 3,000 have been declared “surplus”, and face lay off or transfer to other workplaces. The workers have been fighting this. Leather workers in Baghdad have also taken action recently, demanding health and safety benefits.
 
Workers internationally can help our campaign against the government’s labour law by protesting at Iraqi embassy, writing to the Iraqi authorities, and generally raising awareness of the issue. We need maximum international solidarity to win a labour law based on the protection of workers’ rights.


oilworkprotest_0716_07

18 July 2012


The re-emergence of trade unions is one of few positive stories to come from Iraq since 2003. The unions have had inspiring successes not only in defending their members' rights but in influencing the political direction of Iraq for the better. 


Ever since unions thwarted the US-sponsored oil law in 2007, the Iraqi government has however tried to crush them. The attacks on trade unions escalated after oilfield contracts were signed with multinational companies in 2009/10 - including raiding of offices and prosecutions. The latest has been the cutting of wages of activists - explicitly for their union activities, such as attending meetings or organizing demonstrations.

This repression must be stopped. Please join the campaign by taking this small online action..

Although the government is led by those who campaigned against the Saddam Hussein dictatorship and called for human rights in Iraq, they have not hesitated to use Saddam's laws to repress civil society now that they're in government. This is the political system the USA/UK created, and the politicians the USA/UK promoted within it. We have a responsibility to stand up against these abuses - the legacy of our countries' occupation of Iraq.

We also have an opportunity. It is Iraqi civil society that carries hope for Iraq, that represents genuine democracy and that expresses Iraqi views and desires rather than foreign ones. Iraqi civil society has shown what it can achieve - whether stopping the USA's oil law, highlighting corruption, defending activists or holding the government to account. The years since 2003 have also demonstrated the importance of solidarity - simply by showing the Iraqi government we are watching we can deter some of its attacks. The Iraq story is not over - but now that US troops have been withdrawn we have a chance to help Iraqis build a better future for themselves.

You can find out more from this US Labor Against the War leaflet. You can also mobilize in other ways: demonstrate at the Iraqi embassy, propose that your union branch write a solidarity letter to Iraqi unionists, tell your community and co-workers about Iraqi trade unions (they won't have read about them in the newspapers!)


mcgurk

22 June 2012


Iraq has been back in the news this week, with the controversy over Barack Obama’s nominee for new US ambassador to the country. Brett McGurk withdrew his nomination on Monday, following a scandal over his extramarital affair with a journalist while in Iraq in 2008. Emails between the couple had been obtained and published, revealing their courtship in cringingly graphic terms. Another sexed-up dossier, you could say.


Several commentators rightly lamented that US political culture is so prudish as to disqualify someone from public office on grounds of their sex life. McGurk had been in Iraq for much of the last eight years, since 2004, and was an experienced hand. But it would be wrong to say that this was a good guy who'd been smeared.


Like so many elements of the long Iraq War story, the emails were a proxy for the real issue of concern. Even before they were released, McGurk was a controversial choice among Republicans, because as lead negotiator last year on keeping US troops in Iraq he had failed to secure an extension. Those Republicans – like the Bush administration – would have liked to keep US military force in Iraq indefinitely.


In fact, McGurk’s previous two major achievements on Iraq were both about expanding and extending the troop presence: advocating for the ‘surge’ in US troop numbers in 2006 (which was subsequently announced by President Bush in January 2007), and then negotiating an extension of US troops' stay beyond 2008.


According to US political folklore, the surge was the great success that turned the war around, marking the shift from stupid to sensible policy. Its two implementers, General David Petraeus and Ambassador Ryan Crocker, were both later sent to Afghanistan to work some of their magic there (unsuccessfully). And once the surge had been implemented Democrats’ earlier criticism of the strategy evaporated; then Senator Obama even said the surge had “succeeded beyond our wildest dreams”.


Once that myth of the surge got out there, it was quickly accepted by Republicans desperate to show some success at last in Iraq, by Democrats keen to welcome the opportunity to withdraw some of the troops without Iraq falling apart, by newspaper proprietors anxious to close their expensive Baghdad bureaus, and by a war-weary public ready to hear about something different in the news.


Perhaps now the last US troops have withdrawn, it’s a good time to revisit the history of the Iraq War, and whether the surge was really such a success.


The new strategy came about because by late 2006, the USA had lost control of Iraq. Public opinion back home had turned against the war to the extent that the Bush administration faced being forced to pull out in defeat. So first and foremost, the surge was about reasserting US control over Iraq.


What tends to be forgotten is that the surge was only half of two-part strategy. The other part was to use the extra control generated by the increase in force, to achieve US-defined political objectives known as “benchmarks”. Foremost among these, and constantly talked about by US officials and politicians throughout 2007, was passing an oil law, which would authorize the signing of long-term oilfield contracts with multinational companies. This was done under the cover that achieving the benchmarks would deliver “reconciliation” between Iraq’s warring communities.


At the same time, the strategy sought to create a new political dynamic more favourable to US interests, moving away from the tripartite Shi’a-Sunni-Kurd system created in 2003 and 2005 to establish a government comprised of pro-US members of each of the three ethnosectarian groups. Ironically termed the “alliance of the moderates”, it actually consisted of the most sectarian members of each camp: from the ISCI party which had established Interior Ministry death squads to kill Sunnis in 2005, to the Kurdish architects of the constitution which created an ungovernably divided Iraq, to the only Sunni party that had supported the constitution.


In its immediate goal of delivering benchmarks, the surge failed. The oil law, for instance, has not been passed to this day – largely because of popular opposition to it led by Iraq’s trade unions. I tell the story of this struggle in Fuel on the Fire.


In delivering a pro-US government the picture was mixed. It did shore up a collection of politicians who without US military support could not have governed the country. But even those chosen politicians became less malleable.


The big claim for the surge’s success however was that it delivered security – and in September 2007 when the strategy was evaluated, the White House moved to claim this was its purpose all along, dropping all mention of benchmarks. Certainly levels of violence in Iraq dropped dramatically during the course of 2007. But how much of this was down to the surge?


Most Iraq analysts agree that there were two major factors in the reduced violence: the Sahwa (Awakening) movement of tribes in al-Anbar province turning against al-Qaeda, and Muqtada al-Sadr’s declaration of ceasefire. In both, the surge contributed but was not the main factor.


The tribes had been turning against al-Qaeda since 2005, partly because they did not approve of slaughtering fellow Iraqis over religious dogma; partly because they didn’t want a foreign force controlling their lands (and at that time al-Qaeda was a greater threat to them in al-Anbar than the Americans). General Petraeus’ role was to formalize an alliance, providing funds and protection to Sahwa members and leaders.


The triggering incident for Sadr’s ceasefire was Iraqi public revulsion at the Mahdi Army’s gunfight with Iraqi police during a religious festival in Karbala. In 2004 the Mahdi Army had been seen as national liberators from the occupation; but during 2007 they had become increasingly implicated in the sectarian killing. Sadr’s decision to call a ceasefire in August 2007 may have been partly influenced by a recognition that his forces could not win against a superior surge-boosted US military. But like the Sahwa, the principal factors were Iraqi ones.


Ironically, the biggest contribution of the surge strategy to a more peaceful Iraq was in Iraqi opposition to the USA. The success of the oil law campaign helped establish a more Iraqi perspective in political discourse, which until then had been dominated by outsiders. And so much political capital had the USA invested in getting the oil law passed that its failure to do so marked the start of the decline of its influence in Iraq.


It was in this context that Brett McGurk made his second major contribution to the US effort in Iraq, when he led the 2008 negotiations for an extension of US forces’ stay beyond the end of their UN mandate. Iraqi politicians were sufficiently empowered – and subject to the demands of ordinary Iraqis – that they would not accept an indefinite extension. The final deal contained a time limit of end of 2011, which last year he failed to get extended.


Meanwhile in 2008 Iraqi politics also took a turn away from the identity-based system which had been so unpopular among Iraqis. Prime Minister Nouri al-Maliki capitalized on the shift by portraying himself as an Iraqi nationalist, won big in the 2009 provincial elections. He also performed well in the 2010 national election, compared to all other incumbent politicians.


But that is where things started to go wrong again, and within days of the election Maliki had shed his nationalist clothes. The US continued to try to steer Iraqi politics, albeit with reduced influence. As Iraq expert Reidar Visser recounted at the time, it was a combination of US and Iranian meddling that created a frame for a return to sectarianism. 


We can only speculate as to what would have happened if US troops had been forced to leave when the UN mandate (and the Bush administration) expired at the end of 2008. I like to think that since primarily domestic Iraqi factors over the previous eighteen months had restored peace to the country and responsiveness to its politics, that trend might have continued. In the whole sorry story of the Iraq War and occupation, Iraqis themselves are the only place I find hope for the future.


So back to McGurk’s record. He was closely associated with the surge, which was neither as noble or as successful as commonly believed, but which inadvertently created the conditions for sectarian bloodshed to subside. He negotiated the continued presence of US troops, which contributed to reversing those gains. While it is no one person’s fault, Iraq’s path today totters between sectarianism and authoritarianism. The last two weeks have been the bloodiest for some time.


In short, Iraqi politics is complicated. No wonder the newspapers prefer the sex.
   


pbk_cover

Revised and updated, the UK paperback features three new chapters:


  • The Black Gold Rush - reporting on what has happened since multinational companies arrived in Iraq's oil industry two years ago: corruption, mismanagement and lack of oversight.
  • Winter and Spring - Iraq after the 2010 election; the impact of the Arab Spring; why US troops finally had to leave at the end of 2011.
  • Another regime changed - oil and the 2011 war in Libya.


Available for £9.99 from bookshops or Amazon.


bp-logo

1 June 2012


Last week I spoke at the Festival of Asian Literature at Asia House in London. The event was lovely, and all went well, but one of the questions from the audience was quite odd. The questioner felt my analysis must be wrong, he said, “because BP is an ethical company, and would not behave like that”. He was referring mainly to my comments about how BP had secretly negotiated an extremely profitable deal, and was benefiting from free-for-all culture where Iraqi institutions were too weak and dysfunctional to regulate oil operations.


I said I couldn’t accept the assumption behind the question: BP was a company whose business model was based on cutting costs to the bone, with the result that under-maintained equipment or under-resourced operations frequently failed and caused accidents, including (but certainly not limited to) the tragedies at Texas City refinery in 2005 which killed fifteen workers, and the Deepwater Horizon in the Gulf of Mexico two years ago. It also works harder than most of its peers to avoid taxes or to drive down government revenues from its activities. The other speaker, Rafael Kandiyoti, echoed those points.


The questioner looked so sheepish that I felt quite sorry for him: Rafael and I had made his question look naïve at best.


At the end I went to apologise for embarrassing him. I had a feeling I’d met him before somewhere. Where did he work, I asked? BP. 


Well, that explained his question. But more surprising was what he did for the company: he worked in public relations. He needs to brush up a bit, I think.


top-secret-envelope

Lessons and precedent on Freedom of Information Act - how to win at the Information Rights Tribunal

 

11 March 2011


In May 2006, Tony Blair visited the first post-2003 permanent Iraqi government on the day after it was formed. Was he giving the new Iraqi government of Nouri al-Maliki its instructions? Three days later he was in Washington, reporting back to George W Bush. I requested documents from Blair’s Iraq trip under the Freedom of Information Act (FOIA).

After a three-year struggle, the Information Rights Tribunal has just ruled that the government must now release the documents to me. The case teaches us something about what can be achieved under FOIA, and sets a great precedent for future cases relating to national security and international relations. I’ll be speaking about the lessons at an event organised by the Request Initiative on Tuesday – please join us!

First, a quick overview of the case. I made the request to the Cabinet Office (CO) in April 2009, and the CO refused it. I asked for an internal review of the decision, after which the CO released 7 rather bland documents to me (press releases and the like) and told me it was withholding everything else under Section 27 of FOIA, on grounds that release would damage British relations with Iraq and, interestingly, the USA. I complained to the Commissioner, who found that the CO should release one more document but otherwise took the CO’s side. I appealed to the Tribunal.

There followed through the course of 2011 a number of written legal arguments, witness statements, a hearing and further written arguments. I represented myself, against the CO and Commissioner, both represented by barristers from 11KBW. In February 2012 the Tribunal ruled in my favour, that the CO had to release the remaining documents, with a few redactions. The CO asked the Tribunal for permission to appeal to the Upper Tribunal, which last week was refused. They have one more chance to appeal that refusal, or release the documents.

The case illustrates 2 great strengths and 2 great weakness of our FOIA, relative to other countries’ freedom of information laws (specifically, the USA’s, which I’ve used quite a bit). I made both points in my submission to the parliamentary Justice Committee’s review of FOIA, under which the government is arguing to restrict the Act. (Sorry I can’t post my submission until the Committee has published it).

The first strength of the UK’s FOIA is that the process is non-judicial. In the USA, if the government refuses a request (and upholds the refusal at administrative appeal, their equivalent of internal review), you really need to find a lawyer to take your case forward. Luckily in some of my US cases I have an excellent lawyer, Kel McClanahan – who’s achieving some great results. But if you can’t either pay a lawyer or find one who can act pro bono, you don’t have much chance of successfully challenging a rejection. Whereas in this case against the CO, I was able to make the arguments myself without a lawyer. Common sense can play a greater role in Tribunal cases than in a court, although you do need some knowledge of the law and precedents. For the latter, the Commissioner’s guides to FOIA, including some of the case law, are accessible and clear. The Ministry of Justice also publishes guides.

 

The second strength is the concept of the public interest - that many of FOIA's exemptions only hold if the public interest in maintaining them exceeds the public interest in releasing information. This means that for cases where there is an important reason the public needs to see the information, that argument can be made, as I did in this case. And since the public interest is not specifically defined in law, you or I can make arguments about the public interest almost as well as a lawyer can.

 

The biggest weakness of the UK’s FOIA is that whereas in the USA government openness is seen as part of democracy, here politicians and civil servants see FOIA as an inconvenient intrusion into their ability to make policy in secret. This attitude is illustrated by the attacks on FOIA by Tony Blair and former cabinet secretary Gus O’Donnell.

 

The other glaring weakness is that after all the appeals, the ultimate decision rests with… the government itself! Under section 53 of FOIA, the government can ultimately decide to veto any ruling that documents can be released. This provision has only been used twice – in relation to Cabinet minutes on the decision to go to war in Iraq and on devolution in Scotland, Wales and Northern Ireland. I hope it doesn’t happen in my case.

 

It's also worth noting a further weakness common to most countries' freedom of information laws: that public authorities have nothing to lose (except perhaps some embarassment) by refusing requests for information. There's no fine or other punishment. So a public authority can refuse routinely request requests on the assumption that most requesters will give up in the end and go away. In the few cases that are pursued, they can provide the information when forced to do so at the end of the process, having lost nothing. In both the cases I've had at the Tribunal (the other was against BIS) the government released more information right up to the start of the hearing in the hope that I'd be satisfied and go away. I wasn't and didn't. This is an important lesson for requesters - don't give up; apart from anything else that's what they want you to do!

Now the precedent – and this will be useful to others challenging the use of the section 27 (international relations) exemption. Faced with such cases in the past, the Tribunal has said the government has the greatest expertise in international relations (eg CAAT v ICO & MOD, 26/8/08, section 85) – so it has deferred to the government on such issues. My case comprehensively punctured that approach.

The CO chose as its witness deputy national security adviser Julian Miller. His claim to fame is that, working for John Scarlett in the Joint Intelligence Committee in 2002, he authored the dossier claiming that Iraq could attack Britain with weapons of mass destruction within 45 minutes – the dossier that was later reported to have been “sexed up”, leading to the death of David Kelly, the government attack on the BBC and the Hutton Inquiry.

In cross-examining Miller I asked how many times he had been to Iraq. None. I asked how many times he had discussed Iraq with senior US officials. None. So his main engagement on Iraq consisted of that dossier, which as we all now know was catastrophically wrong.
The reason the CO chose him was evidently not his Iraq expertise, but apparently his seniority. The CO huffed and puffed that an upstart like me was challenging such an important figure in the government: for example, “The Tribunal has the evidence of the Deputy National Security Adviser responsible for foreign and defence policy, who is in a better position than the Appellant to know what damage disclosure of material of the type at issue does to relations between the UK and other States. His evidence is that the damage would be very significant.”

And the Tribunal was not impressed. It found Miller's evidence "less than convincing" and even "incredible" and "felt unable to take at face value the sweeping assertions in Mr Miller's evidence about damage to the UK's international relations." It went on, "In short, the unrealistic and inconsistent positions adopted by the Cabinet Office and by Mr Miller severely damaged the credibility of the Cabinet Office’s case, and of Mr Miller’s evidence, in regard to the documents remaining in dispute."

One other useful point. Tribunal cases usually divide evidence and arguments into ‘open’ and ‘closed’ portions. The closed portions are supposed to be those that might themselves reveal the information. While naturally some submissions, including the information itself, have to be closed to prevent pre-judging the case, too much being closed acts against principles of justice – in that the government can make arguments that the requester does not see and so can’t respond to. I asked the Tribunal to reconsider whether any of the closed material should be shown to me, and it agreed that some should – another useful precedent.

My two witnesses were myself and Chris Ames, editor of the excellent Iraq Inquiry Digest. Chris countered very effectively the CO’s argument that the public interest in transparency over what happened in Iraq is fully satisfied by the Chilcot Inquiry, so there’s no need for FOIA releases. See Chris’ site for more detail on why the inquiry is insufficient.

So this is a major victory. It means that the government is no longer seen as having any special expertise on international relations, but that the Tribunal will make decisions based on the facts of the case – and that with strong evidence and argument we requesters can win. As the Tribunal’s ruling put it, "This is a yet further reminder to us of the need to approach with a significant degree of caution the claims that have been made in this case by the Cabinet Office, and partly accepted by the Commissioner, about the likelihood of disclosure causing damage to international relations."

I recently did a training session on FOIA for colleagues at War on Want. My golden rules are illustrated by this case:


  • Don’t give up – challenge bad decisions and you can often get the information in the end.
  • For later stages of the process, know the law, especially using the Commissioner’s guides.
  • Be polite and reasonable throughout – if the government is unreasonable (as it often is), the Commissioner and Tribunal may be more sympathetic to you.


Hope to see some of you on Tuesday.
   


rumaila_rig

How BP’s Rumaila contract was renegotiated in Baghdad


2 September 2011


Published as op-ed in Middle East Economic Survey

View the original documents and explanatory briefing here


For watchers of Iraqi oil the events that followed the first oilfield auction on 30 June 2009 have been a mystery. The story of what really happened goes to the heart of the Iraqi oil industry, and will shape Iraq’s relations with OPEC as well as the depletion rates of its fields. And it reveals why the Oil Ministry has so far proved unable to renegotiate the ambitious production targets set out in the contracts, despite announcing earlier this year that it wished to.


A series of unfortunate events

To recap, after companies placed their bids in the al-Rasheed hotel in June 2009, the Oil Ministry sprung a surprise by announcing the maximum remuneration fee it was prepared to pay. Only one bidder accepted: BP and its partner CNPC decided to take the offer on the Rumaila field, slashing their bid from $3.99 to $2 per barrel. So far, so unusual. But it was what happened next that raised the biggest questions.

BP/CNPC had been expected to sign fairly quickly: after all, the model contract was written and all they had to do was insert the two figures they bid: their production target and per-barrel remuneration fee. But discussions between the companies and the Oil Ministry dragged on through the summer, and the deal was not signed until November. What were they doing all that time?

Meanwhile in October consortia led by ExxonMobil and Eni announced that they would accept the Ministry’s maximum price on the West Qurna I and Zubair fields. They had walked away in June when the Ministry offered $1.90 and $2 respectively, compared to their bids of $4 and $4.80. What changed the companies’ minds?


A clarification or an obfuscation?
  
The Oil Ministry insisted the terms of the contracts were unchanged – the discussions with BP and the change of heart by Eni and ExxonMobil were down to some “clarifications”, primarily that income tax would not be charged on cost recovery, only on remuneration. This seemed to make little sense: no-one would expect the reimbursement of costs would  to be taxed as that would completely distort the projects’ economics. And in any case if it were just clarifications that were required, surely the companies would have taken the deal at auction and negotiated the precise legal wording of the offending article afterwards.

Furthermore, the companies gave quite a different account, which didn’t fit the “clarification” narrative. For example, the Chief Financial Officer of Eni told financial analysts that, “we accepted $2 because, basically, the fiscal terms are different now.” [1]  He added that the new terms with a remuneration fee of $2 were equivalent to the pre-bid terms at a fee of $4.50. How the terms changed was not explained.

Now these questions can at last be answered. I have obtained a version of the Rumaila contract dated 8 October 2009 – the day the contract was agreed and initially signed before being submitted to the Cabinet for approval. Close comparison of this version with the original model contract [2], on which companies bid in the June auction, reveals small technical changes of wording which nonetheless have profound implications.

It seems reasonable to assume that these changes were also made on the West Qurna I and Zubair contracts, and were what persuaded ExxonMobil and Eni to accept the lower remuneration fees. Let’s have a look at these changes.


Iraq and OPEC

Perhaps the most important change is in Article 12.5, which determines what happens in the event of government-imposed curtailment of production. This might occur to comply with a future OPEC quota, or to otherwise manage the Iraqi economy and natural resources. The issue is especially pertinent, as the total Iraqi production according to the contracts awarded in the two auctions of 2009 is projected to be over 12 million barrels a day by 2017, up from around 2.5m bpd today. If this were achieved, it would crash the oil price, and Iraqis would get less income, for more depletion of their natural resources, than at lower levels of production.

In the original model contract, the cost of such curtailments was shared between both sides, by delaying revenues for them both. Companies would be compensated by producing the curtailed amount of oil later on. [3]

In the renegotiated contract another option is added: payment of lost revenues. On this approach, which is considerably more attractive to the companies, BP/CNPC would be paid whether or not they produced oil. If the government required lower rates of production, perhaps to meet an OPEC quota, it would have to pay BP/CNPC for the oil they didn’t produce, as well as the oil they did.

By definition, this payment could not come out of oil revenues – instead it would come out of other budgets. And this fact would create a strong incentive for the government not to impose any restriction, for fear that it could not afford the compensation. The result could be overproduction, a dramatic weakening of OPEC and a return to a period of sustained low price. It could become companies like BP, rather than the government, that determined rates of production and depletion. So the addition to the contract of those four words “payment of lost revenues” could have an enormous impact on the future Iraqi economy.

It will be recalled that back in 2002/3, certain neoconservatives fantasised about pulling Iraq out of OPEC. Soon after the invasion it became clear that the neocons had over-reached and that such ideas had little mileage. Even the more pragmatic policy of the British government – that “it would be preferable that Iraq remained within OPEC, but that its future production levels are such that they put pressure on OPEC in terms of the price levels it is able to target” [4] (revealed in my book) – looked ambitious. But now perhaps some of those ideas seem less far-fetched.


A very British coup

Four other small technical changes to the contract wording also radically shift the balance of power, and of economic benefits and costs, between BP/CNPC and the Iraqi side.

Also in Article 12.5, an extra item was added to the list of circumstances in which the companies would be compensated: failure of transporter to receive produced oil or associated gas. It refers to the major risk that Iraqi pipeline and export infrastructure would not be expanded sufficiently to cope with the increased production. The original model contract provided a mechanism for the companies to help expand the infrastructure themselves, charging their expenditures as ‘supplementary costs’. But following BP/CNPC’s renegotiation this risk was shifted entirely to the Iraqi side, with the companies now entitled to be paid any revenues lost as a result of infrastructure bottlenecks. Just as with OPEC quotas, the companies would be paid whether or not they produced oil.
  
Next, in Article 9.20, Iraqi powers of oversight were weakened. As is normal in oil projects around the world, the contracts required Iraqi approval of major project expenditures. This is important to combat corruption, to prevent cost inflation depriving the government of revenues and to ensure development occurs in a way that meets the national interest. Whereas the model contract had required regional oil company approval of any expenditures above $50m, the renegotiation upped this threshold to $100m and set a time limit of 45 days for the Iraqi company (in the Rumaila case, South Oil Company) to make any formal objection – if it did not, its approval would automatically be assumed. Given the devastating loss of Iraqi human resources since 2003, there was a significant chance commissioning expert advice could take time – raising the danger that expenditures could pass through not properly examined.

Article 31.4 determines the ‘force majeure’ provisions: what happens if an unforeseen event such as natural disaster or war affects production. The model contract had these risks shared by the two sides in the form of delayed revenues – not unreasonably, since such events could be seen as neither’s fault. If force majeure stopped production, the contract would be extended accordingly. The renegotiated contract shifted these risks entirely onto the Iraqi side: so BP/CNPC would be fully compensated from Iraqi public budgets for any loss.

Finally, Article 22.4 was changed so as to specifically immunise BP/CNPC from any liability for reservoir damage caused by non-optimal production practices. This was significant because the companies were incentivised to maximise production only over the 20-year lifetime of the contract – it was only the Iraqis that would be concerned about geological damage constraining production after the fields reverted to public ownership.


Fixing the problems?

Whatever their view of the bid rounds, Iraqi oil experts were almost unanimous in criticising the production levels the contracts set – both for their impact on the oil price and for being unrealistic given the state of Iraqi infrastructure. During the course of 2011, the Oil Ministry finally seemed to accept this view.

The Minister thus announced in early May that he intended to renegotiate the contracts so as to lower the production targets to more feasible levels. But the companies commented that they would expect to be compensated for any change, and shortly afterwards the Ministry stepped back from the proposal. This sequence of events may have looked odd at first – as it would appear to be in both sides’ interest to contract an achievable level of production. The contract changes revealed here perhaps explain the deadlock.   

As a result of BP/CNPC’s renegotiations in 2009, the Iraqi government is obliged to pay the companies at the rate they bid, even if OPEC/oil market considerations or infrastructure constraints prevent them actually delivering those levels of production. So from the companies’ perspective it doesn’t matter whether their target rates are achievable or not; they get paid anyway. Hence they would be unlikely to accept being paid according a lower target rate. In other words, while the Oil Ministry erred in accepting such high production targets, the contract renegotiation prevent the Ministry from correcting its error.

There is a way out of this conundrum however, as the government does have one card up its sleeve in relation to the companies – the issue of legality of the contracts. As has been pointed out by many observers, Iraqi law still in force (in particular Laws 97 and 123 of 1967) requires an act of parliament to specifically ratify any contract in order to make it valid. [5] This has not happened in relation to any of the contracts awarded in the first three bid rounds. So while the companies might point to their contracts and argue the government has no right to change the production targets without compensation, the government could point to the law and argue the contracts don’t give the companies any rights at all until ratified by parliament.

Clearly it would be politically uncomfortable for the government to follow this course, given that it has consistently argued that parliamentary ratification of contracts is not required. But Iraqis might ask whether it is reasonable to sacrifice future control of the country’s natural resources for such political considerations.


Some lessons

With renewed talk of an oil law, these revelations highlight the importance of not simply retrospectively legalising the existing contracts in their current form. Analysts have estimated rates of return of over 20% on the largest fields. Given that the renegotiations removed the largest inherent risks in the projects, that return begins to look unacceptably high. If the final risk – the non-legality of the contracts – were to be removed by a retrospective oil law, there is a strong argument for parliament to use its power to review and amend those contracts.

More fundamentally, the story demonstrates the crucial importance of transparency. The bid rounds started out well, with a clear and transparent process, where bids were posted into a glass box in front of the TV cameras. But the fact that the deals were changed after being awarded fatally undermines that transparency: if the changes had been included in the model contract, companies might have made very different bids.

Former Oil Minister Husain al-Shahristani promised that contracts would be made available to anyone who asked for them. [6] While a generalised version was posted on the Ministry’s website in 2010, the actual contracts – in their final form as signed – have never been released. There is now an urgent need to publish them. Iraqis, after all, have a right to know.

Notes

1:  Eni SpA, Q3 2009 Earnings Conference Call, 29 October 2009 back
2:  released with the Final Tender Protocol on 23 April 2009 back
3:  This could be either by extending the term of the contract or by increasing the production profile at some later date from that specified in the development plan. Either way, over the full life of their contract they would produce the same aggregate amount, but it would be worth less due to the time value of money back
4:  FCO Iraq Policy Unit, ‘UK Energy Strategy for Iraq’, 6 September 2004. Fuel on the Fire, p.52 back
5:  eg Nori Jafar et al., ‘Legal Opinion presented to Iraqi Parliament’, 4 June 2009 back
6:  Jasim Azzawi interview with Husain al-Shahristani, Al-Jazeera English Inside Iraq, 18 December 2009 back


sanasino-2011

12 June 2011


I am simultaneously heartbroken, enraged and fortified by this poem performed by Sanasino at Stop the War Coalition's conference yesterday.


Check out more poems on Sanasino's website; or hear her perform the poem on YouTube.


Note "Irak" below is pronounced American-style "eye-rak".



        My name is not Irak
        I don’t need your help
        I am not a threat to you
        You’re a threat to yourself

        Every blood you spilt
        Has not gone in vain
        I’ve soaked it all back up
        And its rightfully mine to claim
        I carry a peoples burden
        I carry a peoples pain
        Not the worlds showers and monsoons
        None of the worlds rain
        Could ever erase the memories
        Could ever wash away the stains
        You’ve burnt into my soil
        And onto my soil you’ve engraved
        Noor Ali Zahra Hussain
        You’ve tattooed a million of my own childrens names
        Onto me and thats where they’ll stay

        My name is not Irak
        I don’t need your help
        I am not a threat to you
        You’re a threat to yourself

        You see I raised warriors
        My sons they protected me
        They were killed, humiliated
        But they never neglected me
        I am never alone
        My sons are staying with me
        For today tomorrow the next
        Staying indefinitely
        Cos this is our home
        And we are a family
        there are no divisions
        No shia no sunnis
        Your borders wont divide us
        But you can continue playing
        make believe
        Now before you leave
        Don’t forget to pick up your dignity
        You lost when you showered those
        missiles onto me

        My name is not Irak
        I don’t need your help
        I am not a threat to you
        You’re a threat to yourself

        My daughters are different
        I taught them to stay strong
        I taught them to be patient
        I taught them to live on
        Through their loss
        And your bombs
        I taught them to live on
        With their hope
        And their stones
        I taught them to live on
        I am still alive
        And ill forever live on
        You thought it’d be easy
        Destroy me steal my oil and run
        Oh how you were so wrong
        Oh how you were so wrong
        To underestimate me
        And the power of my sons

        My name is not Irak
        My name is Al-Iraq
        The difference is one is an american fake
        And the other is arab genuine and great

btc_pipe_rust

17 May 2011

Published in Bankwatch Mail #48, newsletter of CEE Bankwatch Network to mark 20th anniversary of the European Bank for Reconstruction & Development

 
In the early part of the last decade, I found myself involved for the first time in an international campaign against a major infrastructure project: the Baku-Tbilisi-Ceyhan (BTC) oil pipeline. It was being built by BP, whose CEO John Browne said it would only work with “free money” from governments, meaning loans and guarantees from the EBRD and other public banks. So, working with courageous activists from the region and civil society groups around the world, I set about highlighting how the project failed to meet the environmental and social requirements of its would-be financial backers.

The campaign won some tactical victories – achieving compensation for landowners here, strengthening environmental protections there. But ultimately the EBRD and others decided to finance BTC, in spite of dozens of violations of their lending requirements.

Much of what we’d feared came to pass. BP built BTC to its trademark shoddy environmental standards. The pipeline exacerbated regional tensions, playing a key role in the 2008 Georgia-Russia conflict. The added wealth and international prestige further entrenched the Aliyev dynasty in Azerbaijan. But once it was built, many along the route resigned themselves to their lives becoming harder, their land less productive and their communities more militarised. “It is, after all, the State” was a common reflection. The EBRD and other financial institutions moved quickly onto the next project.

Looking back, I realise the campaign taught me something about how international public finance works. In my youthful enthusiasm I’d made the mistake of assuming the institutions’ decisions were made rationally, and by judging whether projects met their policies and standards. In the event, politics played a far stronger role, as did the institutions’ undiscriminating assumption that all such projects were always good for the people of the host countries. Clearly, I now know, winning the arguments is not enough – it is via the success of organising by social movements that their course may be turned. That lesson was strengthened in my subsequent work on the privatisation of occupied Iraq’s oil, where Iraqi civil society succeeded – remarkably – in depriving the USA and UK of achieving much of what they’d come for.

As the EBRD celebrates its 20th birthday, it’s worth remembering how unpopular high finance has become, and how movements demanding social justice rather than neoliberalism have grown since its foundation. Will it last another 20 years? That is for us to determine.

Greg Muttitt was formerly a campaigner at Platform and is author of Fuel on the Fire – Oil and Politics in Occupied Iraq, published in April 2011 by Random House.


chilcot_oil

3 May 2011 

First published as guest post at libdemvoice.org

(Greg Muttitt is not a Liberal Democrat, but works with MPs of all parties on issues of public interest related to the Iraq war)


While change sweeps the Middle East and fighting escalates in Libya, the Chilcot Inquiry continues to consider the lessons of the Iraq war. The Inquiry has taught us more about the timing, process and legality of key decisions, but the elephant in the room remains the role oil played in those decisions.

“The oil conspiracy theory is honestly one of the most absurd when you analyse it,” said Tony Blair in February 2003. His protestations were sufficiently effective that in media and parliamentary debates, raising the oil issue became a sure-fire route to losing credibility. And so Chilcott, who invited only official witnesses to give evidence, never considered it.

I wanted to know what was really happening to Iraq’s oil, and to that end I spent five years requesting several hundred government documents under the Freedom of Information Act. Unwittingly, I was exploiting Blair’s greatest regret. A few days ago I released via the Independent some of the revelations from those documents.

“Iraq is the big oil prospect,” began the minutes of one meeting in the Foreign Office in November 2002. “BP are desperate to get in there”. This was one of at least five meetings between government officials and oil companies in the run-up to the war. BP and Shell both denied any such meetings took place.

In a meeting in October 2002, representatives of BP, Shell and BG (the former British Gas) asked Trade Minister Baroness Symons for the government’s help in getting them some of Iraq’s oilfields after the war. Symons agreed that “It would be difficult to justify British companies losing out in Iraq in that way if the UK had itself been a conspicuous supporter of the US government”. In other words, if British forces fought in the war, British companies should get their share of the spoils. Quite apart from the contradiction with the official statements, that policy would appear to be potentially illegal under the Hague Conventions. And an Early Day Motion in 2006/7, signed by 145 MPs of all parties, warned the government against interfering in Iraqi oil decisions.

Tracing the history of the occupation, I found that whenever faced with a choice between supporting the development of an effective democracy in Iraq or achieving their own interests (especially on oil), British and American officials consistently chose the latter.

I also released recently three government strategy documents from the early stages of the occupation, which set out exactly how Britain hoped to achieve the transfer of Iraq’s oilfields from the public sector to companies like BP and Shell. The documents’ authors knew very well that Iraqis would be appalled at their plans, and tied themselves in knots trying to square that knowledge with their idea of Britain’s “vital interest” in the future of Iraq’s oil and the public denials of any attempt to influence Iraqi oil policy. “We will wish to push the message on [foreign investment in the oilfields] to the Iraqis in private,” wrote one, “but it will require careful handling to avoid the impression that we are trying to push the Iraqis down one particular path.” In 2007, a Foreign Office civil servant told me that he believed a public consultation among Iraqis on the future of their oil should be avoided for risk of a “knee-jerk reaction” that rejected foreign company involvement.

The official account of the war still makes little sense. Weapons of mass destruction that did not exist. The removal of a dictator, only to back some of the most authoritarian politicians in post-Saddam Iraq. A country that threatened international security which eight years on, US officials are saying needs a continued foreign troop presence because it can’t even defend its own borders.

The determined exclusion of oil from the account makes the war impossible to fully understand. After all, oil provides 95% of Iraqi government revenue.

A September 2004 survey found nearly two thirds of Britons had lost trust in ministers since the Iraq war. Chilcott’s is the fourth public inquiry into the war. But if it does not examine strategic interests, it will fail to rebuild trust in government any more than the previous three.


iraq-protest-2011-2-21

29 April 2011

(adapted from my comment on Dan Hind's blog)


So why are Iraqis protesting against their government if it was elected last year? The answer goes to the heart of Iraq’s post-2003 political system, and to the consequences of Western intervention in the region. Of course almost all Iraqis are glad their dictator is gone. But we shouldn’t be hoodwinked into thinking that the war has brought them ‘freedom’.

Tim Arango hinted in the New York Times last week at the problems of "a shaky democracy imposed by American force". Actually, that's quite an understatement and is perhaps too generous to US intentions. More accurate would be "an utterly dysfunctional electoral democracy which few Iraqis see as legitimate or representative, imposed by American force".

Ok, my version's not quite so snappy. But the serious point is that the US didn't try to establish a democracy and find it difficult to do so in Iraq's conditions. Rather it sought to establish a form of democracy where the only politicians that could effectively compete were those who served its interests (or, to use the euphemism, ‘shared its values').

The roots of the problem go back to 2003, when US occupation administrator Paul Bremer established the so-called Iraq Governing Council as the first post-Saddam political entity (‘governing’ turned out to be a misnomer). Not only did he select members by quotas according to their ethnic and religious identity and thereby lay the ground for a sectarian politics, he explicitly ruled out those with an helpful ideology. In his memoir (p.95 of the paperback), for example, he wrote that he would only accept a representative of the once-popular Iraq Communist Party if “we could find someone who had cast off communism’s misbegotten ideas about how to run an economy.” And when he jointly selected the interim prime minister who would succeed him (Ayad Allawi), his principal criterion was that the candidate should thank the US for Iraq’s liberation.

US Undersecretary of Defense Douglas Feith noted (p.405 of paperback) that former exiles who had lived in Britain and the USA would be “better positioned to understand concepts of democracy than are those who do not have exposure outside Iraq.” He reflected in his own memoir on the dangers that home-grown political movements might reject the occupation or free-market economic policies, and argued that the Coalition should build up the profile of favourable politicians before any elections (p.253). In a 2005 memo (p.40), his boss Donald Rumsfeld 2005 echoed the point: "The Coalition will not let a thousand flowers bloom".

The US supported the same exiles and Kurdish politicians in their writing of the 2005 constitution, which enshrined sectarianism and a dysfunctional system. In 2006 and 2007, Ambassador Ryan Crocker and Bush envoy Meghan O'Sullivan worked to cultivate 'moderate' (pro-occupation) politicians in the name of ‘reconciliation’ (see eg here), who were in fact the most extreme sectarian parties and politicians.

The result has been an Iraqi political class that cares little for the interests and needs of the people they are supposed to represent. Their positions are owed to outsiders – both the US and neighbouring countries. Many are corrupt, many are sectarian and most are driven only by self-interest.

After last year's elections, Iraq achieved a world record with its eight-month stagnation before a government was formed and even then, that was achieved only after a Supreme Court intervention by 4 Iraqi civil society groups. At protests last summer against the fact that Iraqis still only get a couple of hours of electricity per day, some demonstrators carried chairs to symbolise the fact that their politicians were squabbling over their seats at the government table while nothing was done to improve services for ordinary people.

We see those factors again in the Iraqi protests of the last couple of months. Ironically, the biggest Iraqi manifestation of the 'Arab spring' has been in Kurdish Sulaymaniya - reflecting the fact that the most authoritarian and least democratic forces in post-Saddam Iraqi government are the Kurdish parties.

It seems at first strange in the context of the Arab revolutions that Iraqis are protesting against a government which was elected last year. But while the US has generally claimed (especially since 2006) to be pursuing reconciliation of Iraq's people by working with its more reasonable politicians, recent events again demonstrate that it's in fact the other way round. The reality is that there is hope for Iraq's future in spite of, rather than because of, US interventions.

Iraq's people are very capable and desirous of democracy, and hate corruption and sectarianism. It's the politicians that need to be moderated.


Gavel

15 April 2011


When in a hole, stop digging. That’s what someone ought to tell Iraqi Oil Minister Abdul-Karim Luaibi, whose Ministry this week formally launched a fourth auction of oil and gas fields, to take place in November.

The twelve exploration blocks will be added to the twelve oilfields and three gasfields awarded in 2009 and 2010, all under 20-year contracts. Between them those already-awarded oilfields account for nearly 60% of Iraq’s known oil. To that is now to be added much of Iraq’s yet-to-be-found oil.

Three important questions arise for impact on the Iraqi economy. First, will Iraq get a good deal? Second, what will be the impact on the oil price? And third, can Iraqis effectively oversee the oil company operations and manage the revenues from them?

The media narrative is that Iraq got a good deal from the earlier auctions – foreign companies would get fees of around $1.50 or $2 per barrel (depending on the field), which sounds pretty low. In most countries of the world it would be low. But you have to consider the circumstances of Iraq’s oil. No other comparable country lets foreign companies run its oil industry – the only others with such enormous and cheap-to-extract fields are Saudi Arabia, Kuwait and parts of Iran, all of which run their own oil industries.

When the per-barrel fee is multiplied by the contracted production rates of up to 2 million extra barrels per day, it amounts to very large profits. And with fairly little investment required, and all of that repaid quickly by the Iraqi government (according to the terms of the contracts), it’s no wonder analysts are predicting huge financial returns of 20% or more. I’ll come back to this point in later posts.

I saw part of the reason oil companies got favourable terms illustrated when I attended the second auction in Baghdad in December 2009. The first field on the block, the super-giant Majnoon near Basra, attracted two bids in the opening minutes, from consortia led by Shell and Total. The then Oil Minister Hussain Shahristani and his head of contracts Natiq al-Bayati tried to encourage more companies to make bids. ‘It should be the ambition of all oil companies to bid on Majnoon,’ said Bayati. He was right – Majnoon is one of the world’s 20 largest oilfields, and along with other Iraqi fields has some of the lowest production costs.

But no other companies bid. They didn’t need to – there were plenty of other equally lucrative fields also on offer. As Shell put it in a meeting with the British government in 2006, the Iraqi resource was so large that there was ‘room for everyone’. In other words, they didn’t need to compete, as each company could go for a different piece of Iraq. How different things would have been if only one or two fields had been put on offer.

Add to that Iraq’s already weak bargaining position, due to political divisions, decimated institutional capacity and the continued presence of foreign troops, and it really doesn’t look like a good time to be making 20-year commitments for the majority of the country’s wealth.
   
Fuel on the Fire tells the story of Iraqi oil politics from before the 2003 war until now. Naturally there are some in the story – albeit a minority among Iraqis – who believed it was right for foreign companies to run the Iraqi oil sector. The striking thing about the second auction was that almost all of them, including the strongest advocates of privatisation, disagreed with it. Their reason was that the planned rapid increase in production was set to collapse the oil price, and leave Iraqi incomes worse off. As former oil minister Thamir al-Ghadhban put it in March 2010, “‘I do think that Iraq should think twice before dumping excess capacity in the market or even maintaining excess capacity because that would exert a downward effect on the price of the barrel. It will be counterproductive and it will hurt Iraq.”

According to the contracts, the companies would increase Iraq’s total production from 2.5 million barrels a day to up to 13.5 million. This would add more than 10% to total world production almost overnight. If Iraq achieved this (or even, as is more likely, a significant portion of it), this would have an immediate and direct downward impact on the oil price, not to mention neutering OPEC as its members bicker over and breach their quotas.

Finally, there is the issue of whether Iraq can cope with the rapid influx of capital and activity. Iraqi oil institutions have been utterly decimated since 2003, as skilled staff have been cleared out and the top positions filled on the basis of party or sect. But it’s not as simple as just letting foreign companies do the work instead. Studies of the ‘resource curse’ have made clear that foreign investments are only successful insofar as they are well managed, overseen and regulated. Iraq hasn’t just lost its engineers, geologists and chemists: it has also lost its lawyers, accountants and economists.

In prospect is a goldrush-style free-for-all, where companies operate quickly without regulation, with high profits and little or no regard to Iraqi interests, and with massive corruption.

No-one believes Iraq can handle even the contracts it’s signed already. So why sign more?


twitter book

11 April 2011


I tried my hand at writing book reviews in less than 140 characters. Both fantastic books - highly recommended. Here's what I came up with:


@FuelOnTheFire
Greg Muttitt
A book of tweets (from Tahrir) sounds an implausible literary concept. But the drama’s gripping. Inspirational. http://bit.ly/gmEjFJ


@FuelOnTheFire
Greg Muttitt
Treasure Islands by @nickshaxson will shock even the most cynical. Re taxhavens. Many bad guys in story but biggest culprit is Bank of Engld


The Treasure Islands site is here


Unable to resist the lure of self-promotion, I added:


@FuelOnTheFire
Greg Muttitt
Treasure Islands has gr8 sec on Delaware. In FuelontheFire P Galbraith made >$55m frm secret oil deal thru DE co while pushing Iraq breakup


But don't come here for my tweets. Follow me!



6 April 2011


The lobby machine kicked into action following the announcement by George Osborne of plans to raise £10 billion over the next 5 years from the oil industry. Ex-PLATFORMer Greg Muttitt, author of Fuel on the Fire, explains in this guest blog why the outraged claims of the oil industry in response to this move should not be taken at face value.


Read my guest blog at platformlondon.org