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Unravelling the Carbon Web is a project by PLATFORM. We work to reduce the environmental and social impacts of oil corporations, to help citizens gain a say in decisions that affect them, and to support the transition to a more sustainable energy economy.

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النفط في العراق
عقود مشاركة الإنتاج: التنازل عن مصدر سيادة العراق
PLATFORM news / press releases on oil in Iraq
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Crude Designs: The rip-off of Iraq's oil wealth
About production sharing agreements
The General Union of Oil Employees (Basra)
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Iraqs untold story

Report on PLATFORM’s Trip to Iraq 
Published in Issue 1 of the Carbon Web newsletter
July 2005

“Iraq is a rich country, but its people are poor,” Hassan Juma’a tells me as we sit in the sparse living room of his crumbling rented house in Basra.

Hassan is lucky: he earns just over 300,000 Iraqi dinars (IQD) per month (about £120). With that he is just able to pay rent of 50,000 IQD and provide food for his family – which with current shortages can cost more than 250,000 IQD. Many oilworkers earn just 100,000 IQD, and if it weren’t for successful campaigns by the trade union Hassan leads, the lowest wage would be only 69,000 IQD.

Hassan is President of the General Union of Oil Employees (GUOE). With 23,000 members - more than half the oilworkers in southern Iraq - the union has built an impressive base in the two years it has existed. Wisely, it has remained independent of all political parties and factions.

Unions were banned by Saddam Hussein in 1987 – with the exception of the phoney ‘yellow’ unions which served as part of the dictator’s security apparatus. In fact, many of the GUOE’s leaders, including Hassan, were imprisoned by Saddam for criticising his regime.

As a result, Hassan tells me, many people in the south of Iraq actually welcomed the American/British invasion, which ousted Saddam. But their support quickly evaporated in the face of the occupiers’ thuggish self-interest.

In the first two months of the occupation, workers were not paid. By June 2003, they’d had enough. About a hundred refinery workers blockaded the fuel collection point of the British army’s tankers, sitting down in front of the trucks.

While soldiers threatened them, they bravely sat firm and told them to shoot if they wanted to. The protest spurred frantic negotiations, and within hours, all salaries were paid. Following that incident, the union’s membership leapt from 100 to 3,000.

However, the Americans tried to assert control over the oil industry, through Halliburton subsidiary KBR. In August 2003, the union called a strike, which for two days completely shut off southern Iraq’s oil production. The following month, when US administrator Paul Bremer proposed a table of wages for oilworkers, the threat of further strikes forced a negotiation, in which the bottom two wage levels were abandoned.

But the union’s primary aim was to organise workers to repair oil facilities and bring them back into production, following the invasion. The Iraqi Drilling Company is a good example. The publicly- owned IDC was decimated after the invasion by four months of looting. While British and American soldiers looked on, drilling rigs were stripped of their equipment, leaving just steel skeletons. By July 2003, many were writing IDC off as incapable of recovery.

That the looting went on for so long casts doubt on the popular account that occupation forces had simply made a mistake in not anticipating the problem. According to Ghaflah Talib, a union organiser in the drilling company, “It was as though they had placed bets that in a short space of time IDC could be declared a failure”.

However, starting in August 2003, workers proved the sceptics and privatisers wrong. Cobbling together components where they could be found, workers had the first drilling rig up and running within 45 days.

The oil multinationals’ culture is a long way from the Iraqi socialist model, and the workers’ strong sense of collective pride in their industry. That model of course has its problems – such as corruption and political patronage. But many in Iraq are talking about ways to solve these problems within the public sector – such as through revenue transparency. And given the way America and Britain want Iraq to be the blueprint for other major oil-producing countries in the region (what George Bush refers to as introducing democracy to the Middle East), it is a key battleground against the expansion of the western oil majors.

That cultural gap can be seen clearly in the Basra refinery, walking around the plant, the equipment has a clear look of age. Many of the pipes are rusty, and the computer screens of the control room look like something from a 1970s movie.

In many refineries, the failure of old pipes and valves under pressure has been a key cause of accidents. So I ask the manager if there are a lot of safety problems. He looks quite surprised by the question. Accidents are very rare, he says, because everything is constantly checked. “For the operator, the refinery is part of him”, he explains.

Contrast this with the appalling safety record in British and American refineries, where extensive downsizing leaves much unchecked, and faulty parts are often not repaired or replaced.

But now the western companies are hoping once again for access to the oil they have been denied since the nationalisation of 1972.In the next few months, they will know if they have been successful. The new Iraqi Constitution, which should be drafted by mid-August, will set out the framework of ownership over natural resources. It will be closely followed by a Petroleum Law, which will give the details.

Last September, US-appointed Interim Prime Minister Ayad Allawi pre-empted the January elections and the Constitution, by setting oil policy on his own course. His plan was to part-privatise the state oil company, while handing development of Iraq’s substantial undeveloped fields exclusively to foreign companies, through the mechanism of production sharing contracts.

From September, the Oil Ministry began developing these policies, aiming to set a process in train that would be difficult to reverse. This process can only have been helped by the ten-week delay in forming a government after elections, and the inevitable subsequent rushing of the Constitution’s drafting.

As it turned out, the elections presented no threat to this agenda, as the Oil Minister post went to Ibrahim Bahr al-Uloum, who in 2002 participated in the US State Department’s Future of Iraq working group, and is sympathetic to foreign investment in Iraqi oil.

But the privatisers may face a greater political challenge in the oil-workers. As one puts it, the oilworkers have themselves rebuilt the industry following the three wars of the last twenty years. As a result, the workers have a deep sense of ownership of the industry - to them it is unthinkable that it could become the property of foreign companies.

This is the struggle that will take place over the coming months.