Oil Laws - Colonising Iraq's Economic Prize

Article Published in Medialens (Excerpt)
http://www.medialens.org/alerts/index.php

An Equitable Sharing of Resources?

We are led to believe that Western societies are free and open. In many respects this is true: freedom of speech and the right to protest still exist, albeit within ever-tighter constraints. At root, however, much of what we see and hear in the corporate media has been shaped by money, power and greed. What passes for vibrant public debate is often a sham.

“The story of the corporate colonization of Iraq's oil, and potential dismemberment of the country under a brutal military occupation, has been disappeared from the news agenda. Reporters ignoring the political and economic realities at stake in Iraq are guilty of deception and of promoting the neoliberal agenda of economic takeover of Iraq."

The Federation of Oil Unions, the largest trade union in the Iraqi oil sector with over 26,000 members, also starkly challenges the media message of "reconciliation":
"Depending on how it is applied, the current draft of the law could increase poverty, undermine state institutions and worsen the conflict in Iraq." (PLATFORM, op. cit.)

In reality, Orwellian-named 'production sharing agreements' are being prepared which would hand over the lead role in the development of oil resources to corporations under highly-profitable contracts of up to 30 years. Unsurprisingly, this has been met with considerable opposition in Iraq. In response, the 'production sharing' terminology has been dropped from later drafts of the law. But as Kamil Mahdi, an economist at the University of Essex warns, "the content remains the same." (Mahdi, 'No law for oil,' Red Pepper, August 2007; http://www.handsoffiraqioil.org/)

Such lucrative contracts are being sought by US-allied sectarian and political blocks within Iraq, all manoeuvring to gain control of Iraqi politics and state institutions. Mahdi warns that the likely outcome is that "the majority of Iraq's oil resources are to be surreptitiously privatised and handed over to multinationals under the guise of decentralisation and benefit-sharing." The draft law stipulates a "bizarre resource management arrangement" that will have Iraq's regions scrambling over each other in a desperate race to award oil contracts to corporations. Any actual benefits will be reserved for "corrupt local elites and the multinationals themselves."

Mahdi adds:
"The weak, sectarian and fractious Maliki government has proved to be just what the US needs at this time: one that is willing to acquiesce in US military offensives and to pursue the handover of oil to the multinationals, while at the same time applying the harsh economic policies dictated by the IMF, particularly over the domestic price of fuel." (Ibid.)

The UK government has played a key role by boosting the lobbying efforts of oil multinationals. Six of these oil companies collectively appointed lobbyists, the International Tax & Investment Centre (ITIC), to push for Iraqi resources to be opened up to long-term oil production contracts. ITIC was even advised by UK Foreign Office and Treasury officials on how best to influence Iraqi decision-makers.

Moreover, the main ITIC lobbying document, 'Petroleum and Iraq's Future', was sent to the Iraqi finance minister in late 2004 by the British ambassador to Iraq. ITIC says that the ambassador "formally" submitted it to the Iraqi minister, implying UK endorsement of its contents. A diplomat from the British embassy played a key role in organising a meeting of ITIC and its six corporate sponsors with Iraqi ministers and officials in January 2005.

Since the first draft of the oil law was completed in July 2006, British officials in both Whitehall and Baghdad have actively worked on the law. It was first seen by British officials at that time, fully eight months before it was seen by members of the Iraqi parliament in March 2007. (See PLATFORM, op. cit.; http://www.j-n-v.org/pdfs/0706_Iraq_Commission_Platform_submission.pdf)

This scandal has barely caused a ripple across the corporate media.

Progress Is Needed Soon!
A rare exception hinting at the truth about Iraqi oil was an Associated Press report in March 2007 which described "close associates" of Prime Minister Nouri al-Maliki expressing "fears the Americans will torpedo his government if parliament does not pass a law to fairly [sic] divvy up the country's oil wealth among Iraqis." American officials also made it clear to the "hardline" Iraqi prime minister "that they want an Iraqi government in place by year's end acceptable to the country's Sunni Arab neighbors, particularly Saudi Arabia, Jordan and Egypt." The message from the Americans was stark and left al-Maliki "convinced he would not survive in power without U.S. support." (Steven R. Hurst, 'Iraqi Leader Fears Ouster Over Oil Money,' Associated Press, March 14, 2007)

Then, in June 2007, a news story appeared at the top of the front page of the New York Times:
"U.S. Warns Iraq That Progress Is Needed Soon".
Admiral William J. Fallon, the leading American military commander for the Middle East, warned al-Maliki "in a closed-door conversation" of the pressing need for the Iraqi government "to make tangible political progress [...] to counter the growing tide of opposition to the war in Congress." A major milestone of this "progress" is "to complete a law on the division of oil proceeds." Clearly frustrated by Iraqi intransigence, Fallon warned al-Maliki: “You have the power. You should take the initiative.” (Michael R. Gordon, 'U.S. Warns Iraq That Progress Is Needed Soon,' New York Times, June 12, 2007)

Michael Gordon, Pentagon correspondent for the New York Times, had been invited to sit in on this "closed-door conversation". Gordon stated candidly that "it was only at the end of the meeting that American officials agreed that it could be on the record". In other words, as columnist David Broder noted, the NYT's Pentagon correspondent was invited by the US commander to sit in on "what would normally be a private meeting." The signal to the Iraqi Prime Minister was obvious: not only will you be pressured by the Americans to "make progress", but the pressure will be boosted by publicising it globally via the front page of the NYT.

Broder added:
"From an administration known for its secrecy, this deviation means only one thing: So desperate is the need to push Maliki into action that even the [ New York ] Times becomes a lever." (Broder, 'Failure on Two Fronts,' Washington Post, June 17, 2007)

This bullying behaviour is, of course, standard for Washington and well documented (see, for example, Noam Chomsky, 'Failed States', Hamish Hamilton, London, 2006).