News Release

Iraqi Oil Law Challenged


The Associated Press reports today: “Prime Minister Nouri al Maliki’s cabinet approved a U.S.-backed draft oil law and the Parliament is expected to start discussing it next week.” The law, which institutes privileges for foreign companies at a level unseen anywhere else in the Middle East, has been challenged inside and outside Iraq. The Iraqi oil workers union went on a strike last month to protest the law.

Faleh Abood Umara is the general secretary of the Federation of Oil Unions. Hashmeya Muhsin Hussein is the president of the Electrical Utility Workers Union. They are currently touring the United States. This week they will be in D.C. speaking with members of Congress and later will attend the U.S. Social Forum in Atlanta, GA.

Hashmeya Muhsin Hussein is the first woman to head a national union in Iraq. Faleh Abood Umara is a founding member of the oil workers union and worked for the Southern Oil Company in Basra for 28 years. In 1998, he was detained by the Saddam Hussein regime for his activities on behalf of his coworkers. He has served on the union’s negotiating team with both the Oil Ministry and British occupation authorities to defend the rights and interests of oil industry workers in the post-Saddam era.

Earlier in his tour, Umara told Reuters that the “proposed law amounted to a raid by the international oil cartel” and “unions representing thousands of workers in the industry would take strong measures to oppose it, including strikes if necessary. … We think the proposed oil law doesn’t serve the interests of the Iraqi people at all. It emphasizes or confirms American hegemony over Iraqi oil fields.”
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Muttitt is a researcher at the London-based organization Platform, where he has been researching Iraqi oil policy since 2003. He’s the author of the chapter titled “Hijacking Iraq’s Oil Reserves” in the recent book A Game As Old As Empire. He said today: “In the last two weeks, there have been three high-level meetings between senior U.S. administration and military figures and the Iraqi prime minister. They told the Iraqi prime minister to pass a law giving control of Iraq’s oil fields to multinational companies — or be forced from power. … The current model being pushed in Iraq is based on contracts known as production sharing agreements (PSAs). These agreements technically keep legal ownership of oil reserves in state hands while in actuality lock in multinationals’ control and extremely high profit margins — up to 13 times oil companies’ minimum target. This would completely break from normal practice in the region where all the major oil producing industries are in the public sector. Iraq would be the only major Middle Eastern oil producing nation where production is controlled by foreign companies.”

Muttitt added: “ExxonMobil, Chevron, Total and ENI are funding efforts at influencing the oil legislation in Iraq. … The oil companies and governments are planning to take advantage of the occupation and the general weak position of Iraqi state institutions to push through deals on highly profitable terms, at the expense of the Iraqi people. Future Iraqi governments could be constrained in their ability to pass new laws or policies. For example, if a future elected Iraqi government wanted to pass a human rights law, or wanted to introduce a minimum wage [and this] affected the company’s profits, either the law would not apply to the company’s operations or the government would have to compensate the company for any reduction in profits.”
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For more information, contact the Institute for Public Accuracy at (202) 347-0020; or David Zupan at (541) 484-9167.