Global Policy Forum

Why Iraqis Oppose US-Backed Oil Law


Workers Think Foreign Firms Will Take Over

By David Bacon*

San Francisco Chronicle
August 19, 2007

Across the political spectrum in Washington, members of Congress are now demanding that the Iraqi government meet certain benchmarks, which presumably would show that it's really in charge. But there's a big problem with the most important benchmark: the oil law. It is extremely unpopular in Iraq. Congress has been told the law is a way to share oil wealth among Iraq's regions and religious sects. Iraqis see it differently. They say the law will turn over the oil fields to foreign companies, giving them control over setting royalties, deciding production levels, and even determining whether Iraqis get to work in their own industry.

Under Washington's guidance, the Iraqi government wrote the oil law in secret deliberations. It needed secrecy to obscure the fact that it gives foreign corporations control over exploration and development in one of the world's largest oil reserves, through agreements called "production-sharing" contracts. Such deals are so disadvantageous that they have been rejected by most oil-producing countries, including Kuwait, Saudi Arabia, the United Arab Emirates and otherwise conservative regimes throughout the Middle East.

The leaders of the Iraqi opposition to the oil law are the industry's workers. In early June, the Iraqi Federation of Oil Unions shut pipelines from the Rumeila fields near Basra, in the south, to Baghdad and the rest of the country. Their main demand was that oil remain in public hands, although they also sought to force the government to improve conditions for workers. Iraqi Prime Minister Nouri al-Maliki responded by calling out units of the 10th Division of the Iraqi army and surrounding the strikers at Sheiba, near Basra. U.S. aircraft buzzed the strikers as well, while al-Maliki issued arrest warrants for the union's leaders. Facing the possibility, however, that the strike would escalate into shutdowns on the rigs themselves, cutting off oil exports, al-Maliki blinked. He agreed to hold off implementation of the oil law until October, giving the union a chance to propose alternatives.

This undoubtedly increased al-Maliki's troubles in Washington, where failure to move on the oil law benchmark has been held as evidence of weakness and incompetence. In Iraq, however, al-Maliki faces a fact that U.S. policymakers refuse to recognize: The oil industry is a symbol of Iraqi nationhood. Because of its actions, the oil workers union has become one of the strongest voices of Iraqi nationalism, protecting an important symbol of Iraq's national identity, and, more important, the only source of income capable of financing the country's post-occupation reconstruction. U.S. legislators trying to impose the oil law might note that they are requiring the Iraqi government to betray one of the few reasons Iraqis have for supporting it - its ability to keep oil revenue in public hands.

Some of the oil workers' other demands reflect the desperate situation of workers under the occupation. They want their employer, the government oil ministry, to pay wage increases and promised vacations, and give permanent status to thousands of temporary employees. In a country where housing has been destroyed on a huge scale and workers often live in dilapidated and primitive conditions, the union wants the government to turn over land for building homes.

Every year, the Oil Institute, a national technical training college for the industry's workers and technicians, has miraculously continued holding classes. Yet the ministry won't give work to graduates, despite the war-torn industry's desperate need for skilled labor. The union demands jobs and a future for Iraq's young people. Fighting for these demands makes the union even more popular and further enhances its nationalist credentials. Many Iraqis see it defending the interests of the millions of workers who have to make a living and keep their families eating in the middle of a war zone. Conversely, the United States, which imposed a series of low-wage laws at the beginning of the occupation, looks bent on enforcing poverty.

Iraq has a long labor history. Union activists, banned and jailed under the British and their puppet monarchy, organized a labor movement that was the admiration of the Arab world when Iraq became independent after the revolution of 1958. When Saddam Hussein came to power, though, he drove its leaders underground, killing or imprisoning the ones he could catch. When Hussein fell, Iraqi unionists came out of prison, up from underground and back from exile, determined to rebuild the labor movement. Miraculously, in the midst of war and bombings, they did. The oil workers union in the south is now one of the largest organizations in Iraq, with thousands of members on the rigs, pipelines and refineries. The electrical workers union is the first national labor organization headed by a woman, Hashmeya Muhsin Hussein. Together with other unions in railroads, hotels, ports, schools and factories, they've gone on strike, held elections, won wage increases and made democracy a living reality. Yet the Bush administration, and the Baghdad government it controls, has outlawed collective bargaining, continuing to enforce a decree originally issued by Hussein in 1987 banning unions in the public sector.

The al-Maliki government has seized all union funds and turned its back on a wave of assassinations of union leaders. After the June strike, Iraq's oil minister ordered oil industry officials to refuse to recognize or bargain with the oil worker unions. Iraq's oil industry was nationalized in the 1960s, like that of every other country in the Middle East. The Iraqi oil union became, and remains, the industry's most zealous guardian. When Halliburton Corp. went into Iraq in the wake of the troops in 2003, the company tried to seize control of wells and rigs, withholding reconstruction aid to force workers to submit. The oil union struck for three days in August 2003, stopping exports and cutting off government revenue. Halliburton then closed its Basra offices and left the oil region. The oil and port unions compelled other foreign corporations to give up agreements under which the U.S. occupation gave them control of Iraq's deepwater ports. Muhsin's electrical union is still battling to stop subcontracting in the power stations, a prelude to corporate takeover of a public resource.

Iraqi nationalists make sharp accusations that the occupation has an economic agenda, including the wholesale privatization of the Iraqi economy. Paul Bremer, formerly head of the Coalition Provisional Authority, published lists in Baghdad newspapers of Iraqi public enterprises he intended to auction off. Arab labor leader Hacene Djemam bitterly observed, "War makes privatization easy: First you destroy society, then you let the corporations rebuild it." Hassan Juma'a Awad, president of the oil workers federation, wrote a letter to the U.S. Congress on May 13. "Everyone knows the oil law doesn't serve the Iraqi people," he warned. The proposed new statute "serves Bush, his supporters and foreign companies at the expense of the Iraqi people. ... The USA claimed that it came here as a liberator, not to control our resources."

The unions have vowed to strike if the law is implemented. At the occupation's end, the government in Baghdad will need control of the oil wealth to rebuild a devastated country. That gives Iraqis a big reason to fight to protect public ownership and control of the oil industry.

About the Author: David Bacon is author of "The Children of NAFTA" (University of California, 2004) and "Communities Without Borders" (Cornell University, 2006) and reported from Iraq in 2003 and 2005. He was the board chairman of the Northern California Coalition for Immigrant Rights. Contact us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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