Leaders of Iraq’s labour movement today criticised government plans to “hand control” over the country’s oil production to multinational companies.

At a meeting in Amman, Jordan, leaders of Iraq’s five trade union federations – between them representing hundreds of thousands of workers – called for a fundamental rethink of the forthcoming oil law, which is designed to allow foreign investment in the oil sector. The law has been prepared by an Iraqi cabinet committee, and is expected to be presented to the Iraqi parliament for ratification in the coming weeks.

The opposition by Iraq’s powerful trade unions will dismay the US government, which is keen to see the law in place by the end of the year. Since the summer, US officials have been calling for an oil law to encourage foreign investment in Iraq’s oil – a call reiterated by the Baker-Hamilton Iraq Study Group in its report last week. [1]

The labour leaders criticised the major role for foreign companies in the draft law, which specifies that up to two thirds of Iraq’s known reserves would be developed by multinationals, under contracts lasting for 15 to 20 years. [2] This policy would be a radical change for Iraq’s oil industry, which has been in the public sector for more than three decades – and would break from normal practice in the Middle East among Iraq’s neighbours.

In a joint statement, the trade unions rejected “the handing of control over oil to foreign companies, whose aim is to make big profits at the expense of the Iraqi people, and to rob the national wealth, according to long-term, unfair contracts, that undermine the sovereignty of the state and the dignity of the Iraqi people”. The statement added that this was a “red line” they would not allow to be crossed. [4]

They were also angry at their exclusion from the drafting process, and called for a delay to the law, to allow proper consultation. “The Iraqi people refuse to allow the future of oil to be decided behind closed doors”, they stated.

Hasan Jum’a, President of the Federation of Oil Unions, commented, “This law has a lot of problems. It was prepared without consulting Iraqi experts, Iraqi civil society or trade unions. We reject this draft and
demand more time to debate the law.”

’Adnan Saffar, member of the Executive Committee of the General Federation of Iraqi Workers, added, “The Iraqi national interest is surrendered in this law which allows foreign companies investment terms that exploit Iraq's oil wealth. They benefit the foreign investors more than they benefit Iraqi workers, through long term oil contracts that negatively impact Iraq's sovereignty and national independence”.





Notes



1: For example, in October, US Ambassador to Iraq Zalmay Khalilzad and General George Casey, head of US operations in Iraq, listed the passing of such a law as one of the “milestones” they were ressuring the Iraqi government to deliver. Similar calls have been made by Secretary of State Condoleezza Rice (see eg www.state.gov/secretary/rm/2006/75418.htm) and Energy Secretary Sam Bodman (eg AFP, 18 Jul 06, ‘US wants new Iraq oil law so foreign firms can take part’).

Secion II.B.5 of the Iraq Study Group Report (pp.83-85) recommends that the US government both advise on writing an oil law, and encourage international oil companies to invest.

2: See eg Dow Jones Newswires 6 Dec 06, ‘Iraq's Draft Hydrocarbon Law Recommends PSAs’


***Washington Post Article***

Iraq unions against oil privatization
 http://www.washingtontimes.com/upi/20061214-042209-6267r.htm
Dec. 14, 2006 at 7:29PM

Five Iraqi trade union federations have condemned federal oil law negotiations for being too corporation-friendly.

The leaders of the five federations meeting in Amman released a statement Thursday urging a pause in negotiations over a law to govern Iraq's 115 billion barrels of oil reserves, the third largest in the world.

Negotiations in some form have been ongoing since the invasion of Iraq, officially and earnestly since earlier this year. News reports and comments from those familiar with the talks say privatization of some form is a major component of a draft law. This was confirmed last week by Iraq's U.N. Ambassador Hamid Al Bayati, who told United Press International the "intention is to allow foreign companies to invest in all sectors, including oil." The handling of control over oil to foreign companies, whose aim is to make big profits at the expense of the Iraqi people, and to rob the national wealth, according to long-term, unfair contracts, that undermine the sovereignty of the state and the dignity of the Iraqi people" is a "red line" not to be crossed, the unions said in a joint statement. They also shot at the context of negotiations, which happen behind closed doors and won't be made public until the Parliament votes, according to a release from the social and environmental issues group Platform.

"This law has a lot of problems," said Hasan Jum'a, president of the Federation of Oil Unions. "It was prepared without consulting Iraqi experts, Iraqi civil society or trade unions. We reject this draft and demand more time to debate the law." Iraq's oil law is seen as a major hurdle and step for the country: Kurds and some Shiite factions favor more regional control than the Sunnis and other Shiites want, a major stalling factor in the talks. But oil revenue makes up nearly all of Iraq's budget, money that could go towards improving the oil sector specifically and security in the country as a whole, along with other reconstruction.A law is needed to decide how any of this takes place.