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4 US eyes still on the
Iraqi prize By Michael Schwartz
other hand, Iraq would have no
trouble attracting vast amounts of finance capital
to develop reserves that could well be worth in
excess of $10 trillion, and hence would have no
need whatsoever for PSAs.
Based on leaked
information, journalists reported that the PSAs
envisaged by the Iraqi petrochemical law contained extremely
favorable provisions for the
oil companies, in which they would be entitled to
70% of profits until development expenses were
amortized and 20% afterward. This would have
guaranteed them at least twice the typical profit
margin over the long run and many times that
figure during the initial years.
There are
other elements in the law (and the possible PSA
contracts) that have also roused resistance inside
Iraq. Among the most controversial:
Insofar as PSAs or their legal equivalent were
enacted, Iraq would lose control over what levels
of oil the country produced with the potential to
weaken substantially the grip of Organization of
Petroleum Exporting Countries on the oil market.
The law would allow the oil companies to
repatriate fully all profits from oil sales,
almost ensuring that the proceeds would not be
reinvested in the Iraqi economy.
The Iraqi government would not have control
over oil-company operations inside Iraq. Any
disputes would be referred instead to pro-industry
international arbitration panels.
No contracts would be public documents.
Contacting companies would not be obliged to
hire Iraqi workers, and could pursue the current
policy of employing American technicians and South
Asian manual laborers.
Several African
countries with vast mineral riches have been
subjected to these sorts of conditions, with large
multinational companies extracting both minerals
and profits while returning only a tiny fraction
of the proceeds to the local population. As the
resources are taken out of the ground and the
country, the local population actually becomes
poorer, while the potential for future prosperity
is drained.
The draft petrochemical law,
if enacted and implemented, could ensure that Iraq
would remain in a state of neo-liberal poverty in
perpetuity, even if order did return to the
country.
The resistance The
petrochemical law is hardly assured of successful
passage, and - even if passed - is in no way
assured of successful implementation. Resistance
to it, spread as it is throughout Iraqi society,
has already shown itself to be a formidable
opponent to the dwindling power of the US
occupation.
Parliament itself may be the
first line of defense. It challenged the original
IMF agreement and has refused to consider the bill
for two months, already missing a March deadline
for passage that American politicians of both
parties had pronounced an important "benchmark" by
which to judge the viability of Prime Minister
Nuri al-Maliki's government.
In addition,
the government officials responsible for
administering the oil industry could prove
formidable opponents. Rafiq Latta, a London-based
oil analyst, told Nation reporter Christian
Parenti, "The whole culture of the ministry
opposes [the law] ... Those guys ran the industry
very well all through the years of sanctions. It
was an impressive job, and they take pride in
'their' oil."
Perhaps most formidable of
all is the Federation of Oil Unions, with 26,000
members and allies throughout organized labor. The
oil workers overturned contracts in 2003 and 2004
that would have placed substantial oil facilities
under multinational corporate control; and they
initiated a vigorous campaign against the
US-sponsored oil program as early as June 2005 -
calling a conference to oppose privatization
attended by "workers, academics, and international
civil-society groups".
In January 2006,
they convened a convention composed of all major
Iraqi union groups in Amman, Jordan, which issued
a manifesto opposing the entire neo-liberal US
program for Iraq, including any compromise on
national control of oil production.
At a
second Amman labor meeting last December, the
Federation of Oil Unions announced its opposition
to the pending law even before it was released.
Iraq's trade unions, speaking in a single voice,
declared:
Iraqi public opinion strongly
opposes the handing of authority and control
over the oil to foreign companies that aim to
make big profits at the expense of the people.
They aim to rob Iraq's national wealth by virtue
of unfair, long-term oil contracts that
undermine the sovereignty of the state and the
dignity of the Iraqi people.
When the
bill was made public, oil-union president Hassan
Jumaa denounced it before yet another protest
meeting, stating:
History will not forgive those who
play recklessly with our wealth ... We consider
the new law unbalanced and incoherent with the
hopes of those who work in the oil industry. It
has been drafted in a great rush in harsh
circumstances.
He then called on the
government to consult Iraqi oil experts (who had
not participated in drafting the law) and "ask
their opinion before sinking Iraq into an ocean of
dark injustice".
If the oil workers and
their union allies decide to organize protests or
strikes, they are likely to have the Iraqi public
on their side. Fully three-quarters of Iraqis
believe that the United States invaded to gain
control of Iraqi oil, and most observers believe
they will surely agree with the oil workers that
this law is a vehicle for that control. Even Iyad
Allawi has now publicly taken a stand opposing it,
perhaps the best indication that opposition will
be virtually unanimous.
Finally - and no
small matter - the armed resistance is also
against the oil law. The Sunni insurgency
underscored its opposition by assassinating vice
president Adel Abdul Mahdi, a major advocate of
the pending law, on the day the bill was made
public. The significance of the opposition of the
Sunni insurgency is amplified by the stance of the
Sadrists, the most rebellious segment of the
Shi'ite majority. Sadr spokesman Sheikh Gahaith
al-Temimi warned journalist Christian Parenti that
while the Sadrists would "welcome" foreign
investment in oil, they would do so only "under
certain conditions. We want our oil to be
developed, not stolen. If a bad law were to be
passed, all people of Iraq would resist it."
It seems clear that what the oil law has
the power to do is substantially escalate the
already unmanageable conflict in Iraq. Active
opposition by Parliament alone, or by the unions
alone, or by the Sunni insurgency alone, or by the
Sadrists alone might be sufficient to defeat or
disable the law. The possibility that such
disparate groups might find unity around this
issue, mobilizing both the government bureaucracy
and overwhelming public opinion to their cause,
holds a much greater threat: the possibility of
creating a unified force that might push beyond
the oil law to a more general opposition to the US
occupation.
Like so many US initiatives in
Iraq, the oil law, even if passed, might never be
worth more than the paper it will be printed on.
The likelihood that any future Iraqi government
that takes on a nationalist mantle will consider
such an agreement in any way binding is nil. One
day in perhaps the not so distant future, that
"law", even if briefly the law of the land, is
likely to find itself in the dustbin of history,
along with Saddam's various oil deals. As a
result, the Bush administration's "capture of new
and existing oil and gas fields" is likely to end
as a predictable fiasco.
Michael
Schwartz, professor of sociology and faculty
director of the Undergraduate College of Global
Studies at Stony Brook University, has written
extensively on popular protest and insurgency, and
on US business and government dynamics. His books
include Radical Protest and Social Structure
and Social Policy and the Conservative
Agenda (edited, with Clarence Lo). His email
address is Ms42@optonline.net.
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