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Home > English > Website archives > Rainbow of Crisis > Who will benefit from oil privatization?


Who will benefit from oil privatization?

Monday 2 April 2007, by Nahla Chahal

Perhaps the facts of the historical struggle over Iraq’s oil are general knowledge. However, at present, there are many attempts to establish a legal framework that would overturn the successes of that struggle and allow foreign companies to control Iraq’s wealth.

The “Oil and gas draft law” was first issued at the beginning of this year and would have remained confidential if not for action taken by some Iraqi experts on this subject—first and foremost Mr. Fouad Amir—and the pieces they sought to publish on internet sites, which put this subject up for debate. The draft law also came under internal disputes from members of groups in ruling positions in Iraq, which urged a second draft, issued mid-February. This was followed days later by a memo, the fruit of bitter negotiations in which American officials were directly involved. These shuttle meetings were aimed at resolving objections to certain articles from the Kurdish parties, especially those articles concerning the central Iraqi government and the oil union ministry’s administration received revenues and their redistribution. While the Kurds were fighting for the complete sovereignty of Kurdistan in this regard, the Americans defended the centralized formula, attempting to put tools in place that would allow them overall control over the process.

The law provides “participant contracts” to the giant oil corporations—especially the American ones—in current and future oil fields. This ends, in all practical terms, the historic step represented in nationalizing Iraqi oil. Moreover, this is in distinct contradiction to what the Iraqi government has claimed. The law is not related to drilling contracts or developing fields, but about putting a practical hand on them.

In order to realize the significance of this matter [the law], US Secretary of State Condeleezza Rice presented it before Congress at the beginning of the year as part of her defense of the achievements made by the Bush administration in Iraq. She described it as a “noteworthy and considerable” law. According to the study conducted by Mr. Fouad Amir, some US congressional representatives were cynical about the “important achievement” because it was still under wraps at the time, considering it as merely part of other Bush administration justifications. Actually, they were wrong in their interpretation about why there was so little revealed information, because they had not yet realized that their administration behaves like a mafia more than an authority whose actions are propelled by ordinary standards.

Furthermore, we should also note Rice’s surprise visit to Iraq on February 17, which came in tandem with the issuance of the second draft, rejected once again by the Kurds. This was presumably the visit that resolved obstacles to the issuing of the subsequent memo on the second draft, which is used today as a primary appendix to the final agreement. This visit was portrayed as one that took place in order to deal with the difficult issues facing the security plan. However, according to the same aforementioned sources, we cannot underestimate the discussion over the new oil and gas draft law and the pressures being exerted to accept it. This seemed to be the primary, albeit undeclared, motive of Rice’s visit.

What is noteworthy is that Mr. Eyad Alawi, who is considered the US’s trusted man in Iraq—who does not have any official standing after his failure in the most recent representative elections—was directly involved in these negotiations and in the moves towards reaching an agreement between the ruling parties in Iraq.

The Iraqi House of Representatives is supposed to ratify the draft in a period not exceeding next May. In preparation for this, the council announced days ago that it had reached a consensus to accept it. This seems to have happened in compliance with US will, which does not oppose voices within the ruling parties that publicly show their dissatisfaction or opposition.

Now, returning to Mr. Alawi, we must note the characteristics that distinguish this man and make him so appealing to the Americans. This digression takes us beyond the specifics of the Iraqi context. Rather we can compare it with similar cases in the region that show the mechanisms of American pragmatism and that show clearly that they can preserve their strategic cohesion and never act randomly.

The Americans keep Alawi and struggle towards the eventual handing over of responsibility to him, precisely because he does not have a collective political career; he has no roots in any popular base to which he would have to answer to or consider their interests. This plays more of a role than his modernity or his secularity, and compels the Americans to give him continuous support at all levels. If, at a later stage, they fail to boost him up in a way that would allow him to take charge from other personalities such as al-Haydari and the current Prime Minister, al-Maliki, they will adapt to the reality and put responsibility on the latter to carry out their plans to the maximum possible, because ultimately, these plans require an authority with real influence and legitimacy.

Hence, the Americans understand that passing the new fuel and gas law, given its significance, needs such characteristics in a leader. Therefore, they are using the current Iraqi government for this purpose. Perhaps, they are preparing for the government’s demise once its tasks are finished and its forces lose favor. This has already begun. So, in light of the expected overall opposition, is this interpretation enough to understand the support for this bright man?

There are two important characteristics left to present at this stage:

The first is the wave of resistance that was launched from within Iraq itself against this project. The oil labor unions in al-Basra took action along with the support of all the workers in this sector—both laborers and cadres, and with the participation of intellectuals, experts, university professors and the overall public. Studies were conducted and public meetings were held. Plans were made to frustrate the American attempt to pass this law. This is a battlefield that the Iraqis are fighting in spite of the horrifying violence around them, which aims to dismember the fiber of their society and force it to its knees, or at least render it completely useless. This opposition, and the developments that will inevitably accompany it, are sources of hope that transcend the battle over the fuel and gas law, which constitutes one central point for reforming the Iraqi resistance against the occupation and against the horrific usurpation of the country, which can be considered an annihilation in all practical senses.

Second, the international networks opposed to the war and occupation of Iraq have taken over the matter and are working on organizing protest actions in various fields. Actions that aim to simply proclaim condemnation of the law are not enough. Perhaps this matter will force the movement from one of general solidarity with Iraq against the occupation into one with the ability to coordinate the necessities for resistance and into actual influence on the ground. This would benefit Iraq and would benefit the movement itself and turn it into one with true meaning.

This article was originally published in Arabic in al-Hayat, and translated into English by the Alternative Information Center (AIC) by request of the author.