Under
Sustained US Pressure, Iraqi Cabinet Sends Oil Law To Parliament
By James Cogan
06 July, 2007
WSWS.org
Iraqi
Prime Minister Nouri al-Maliki went before the media on Tuesday to announce
that his cabinet had “unanimously” approved US-backed draft
legislation covering the future development of Iraq’s vast oil
resources. The parliament, he declared, would begin debating the oil
law the following day. He trumpetted his achievement as a key step towards
finalising the “most important law in Iraq”.
The legislation embodies
the criminal aims and objectives of the US invasion of Iraq more than
four years ago. Behind the false claims about Iraqi “weapons of
mass destruction” and links to terrorism were the ambitions of
American energy conglomerates to access the country’s huge reserves—estimated
at between 115 and 215 billion barrels of oil.
While the oil law has a number
of implications, the most fundamental is that it would end the Iraqi
state monopoly in the development of oil fields. While the Iraqi people
will still constitutionally “own” the resources, foreign
oil companies will gain contracts that give exclusive rights to exploration
and production for periods as long as 20 years. The law leaves open
the possibility for “production-sharing agreements” (PSAs)
which guarantee the investing company against losses and lead to even
higher rates of return.
Importantly, as far as Washington
is concerned, all contracts entered into by the previous regime of Saddam
Hussein—such as agreements with French, Russian and Chinese corporations—will
be rendered void. US companies will be able to move in and appropriate
development rights over the fields.
The propaganda surrounding
the oil law is completely cynical. It is universally presented in Washington
as a policy aimed at guaranteeing that oil revenues are shared by “all
Iraqis”. The reality is that the entry of US and other energy
giants into Iraq’s oil industry will lead to wholesale plunder.
Iraq’s oil minister has predicted that as many as 65 of the 80
known undeveloped oil fields will come under foreign control. If the
oil industry was developed to its full production potential, it could
pump 6 million barrels a day and generate annual revenues of more than
$130 billion, with the profits as high as 20 percent for the transnational
companies.
It is this prize that has
cost the lives of over 700,000 Iraqis and close to 4,000 occupation
troops and left the country’s infrastructure devastated. Washington’s
perspective is to transform Iraq into a lucrative source of wealth for
American corporate interests and a military base in the Middle East
to extend US domination over the resource-rich region. To achieve this,
it requires both a fig leaf of legality from the puppet Iraqi parliament
in Baghdad and an end to the anti-occupation insurgency wracking the
country.
The centrality of the oil
law to the objectives of the US occupation is underscored by its prominent
place in the Bush administration “benchmarks” for the Iraqi
government. Since the draft legislation was first revealed on February
26, senior figures of Bush’s cabinet, ranging from Secretary of
State Condoleezza Rice, Vice President Dick Cheney to Defence Secretary
Robert Gates, have visited Baghdad to bully the various Iraqi factions
in the US-backed parliament to accept its terms. The White House is
pressuring Maliki to push through the legislation and other key benchmarks
well before September, when a report to Congress on the progress of
the latest US military “surge” is due.
Little progress had been
made until this week. The Kurdish, Shiite and Sunni parties that previously
dominated the cabinet continued to wrangle over aspects of the proposed
law, as each has sought to secure a portion of the economic spoils.
Without cabinet approval, the legislation could not be placed before
parliament.
Over the past two months,
however, two of the legislation’s key opponents—the Shiite
Sadrist movement led by Moqtada al-Sadr and the Iraqi Accordance Front
coalition of Sunni Arab parties—have withdrawn their ministers
from the cabinet in protest against the occupation and the government.
Maliki exploited this on Tuesday to push through the legislation in
a session attended by just 24 out of 37 ministers.
President Bush was so pleased
with the result that he rang Maliki personally to congratulate him.
Maliki is gambling that the Sadrist and Sunni boycotts will enable the
oil law to be rammed through the parliament as well. The sessions slated
to debate the bill this week are unlikely to be attended by more than
150 out of the 275 legislators elected in December 2005. On top of more
than 80 boycotters, dozens of Iraqi politicians live outside the country
due to the lack of security. A number of previous sessions have lapsed
after failing to reach the required quorum of 138.
The law’s passage through
parliament is far from certain, however. The fact that the legislation
was not tabled yesterday, as promised, suggests that the horse-trading,
arm-twisting and pay-offs is continuing to ensure its acceptance by
the remaining factions attending parliament. According to the latest
reports, it will be presented today and sent to a committee of review
for at least a week.
The White House is depending
on the Shiite fundamentalist parties that remain loyal to the Maliki
government and the Kurdish nationalist parties that govern northern
Iraq through the Kurdish Regional Government (KRG). The Kurdish parties,
however, are insisting that the KRG, not the Baghdad government, retains
power over new oil development within its territory. On Tuesday, the
KRG warned that it would not accept the new legislation if it departed
from the original February document that enshrined Kurdish demands.
Under pressure from Washington,
a cabinet review committee in April wrote in annexes into the document
that substantially reduced the power of regions and provinces over oil.
The annexes sought to give financial guarantees to the Sunni parties,
as part of a series of US overtures aimed at convincing elements of
the largely Sunni armed resistance to make a deal with the occupation.
The bulk of Iraq’s
untapped oil lies in the Kurdish north and the largely Shiite southern
provinces. One factor behind the armed resistance is the fear of the
Sunni establishment that regionalism will lead to the marginalisation
and impoverishment of the Sunni-populated and oil-poor western and central
provinces. The Shiite Sadrist movement, with its main power base in
Baghdad, has also consistently upheld central control over oil production.
If the annexes have been
removed by Maliki as part of a deal with the Kurdish parties, it will
dramatically widen the divisions between the rival factions. Khalaf
al-Ilyan, a representative of the Sunni Iraqi Accordance Front, told
Iraqi television: “Any draft law that is approved in the absence
of the Iraqi Accordance Front only represents the groups that approved
it. If there are some who want to cancel the voices of half of the Iraqi
people then they take the responsibility.” The Sadrist movement
has pointedly demanded the insertion of a new clause banning the signing
of contracts with any company based in a country with troops in Iraq.
A Kurdish politician, Firyad
Rwandzi, told the Washington Post on Wednesday that he was confident
that “everything is moving forward and there is no problem”
between Maliki and the KRG. With both the Sunni and Shiite opponents
of regionalism boycotting the parliament, the Bush administration may
well have instructed Maliki to swing back to giving Iraqi regions and
provinces jurisdiction over new production.
In the final analysis, the
White House is not primarily concerned with which layers of the local
Iraqi elite receive a minor share of Iraq’s oil profits, but with
creating the legal and political framework for its exploitation and
plunder by US corporate interests.
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