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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.

Iraqi trade unions attack plans for foreign company control of oil

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.

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 pressuring 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. back to top

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