Using Asia's Poor to Build U.S. Bases in Iraq

By David Phinney, CorpWatch. Posted October 15, 2005.

Jing Soliman left his family in the Philippines for what sounded like a sure thing -- a job as a warehouse worker at Camp Anaconda in Iraq. His new employer, Prime Projects International (PPI) of Dubai, is a major, but low-profile, subcontractor to Halliburton's multi-billion-dollar deal with the Pentagon to provide support services to U.S. forces.

But Soliman wouldn't be making anything near the salaries -- starting $80,000 a year and often topping $100,000 -- that Halliburton's engineering and construction unit, Kellogg, Brown & Root (KBR) pays to the truck drivers, construction workers, office workers, and other laborers it recruits from the United States. Instead, the 35-year-old father of two anticipated $615 a month -- including overtime. For a 40-hour work week, that would be just over $3 an hour. But for the 12-hour day, seven-day week that Soliman says was standard for him and many contractor employees in Iraq, he actually earned $1.56 an hour.

Soliman planned to send most of his $7,380 annual pay home to his family in the Philippines, where the combined unemployment and underemployment rate tops 28 percent. The average annual income in Manila is $4,384, and the World Bank estimates that nearly half of the nation's 84 million people live on less than $2 a day.

"I am an ordinary man," said Soliman during a recent telephone interview from his home in Quezon City near Manila. "It was good money."

His ambitions, like many U.S. civilians working in Iraq, were modest: "I wanted to save up, buy a house and provide for my family," he says.

That simple dream drives hordes of low-wage workers like Soliman to travel to Iraq from more than three dozen countries. They are lured by jobs with companies working on projects led by Halliburton and other major U.S.-funded contractors hired to provide support services to the military and reconstruction efforts.

Called "third country nationals" (TCN) in contractor's parlance, they hail largely from impoverished Asian countries such as the Philippines, India, Pakistan, Sri Lanka, Nepal, and Pakistan, as well as from Turkey and countries in the Middle East. Once in Iraq, TCNs earn monthly salaries between $200 to $1,000 as truck drivers, construction workers, carpenters, warehousemen, laundry workers, cooks, accountants, beauticians, and similar blue-collar jobs.

Invisible Army of Cheap Labor

Tens of thousands of such TNC laborers have helped set new records for the largest civilian workforce ever hired in support of a U.S. war. They are employed through complex layers of companies working in Iraq. At the top of the pyramid-shaped system is the U.S. government which assigned over $24 billion in contracts over the last two years. Just below that layer are the prime contractors like Halliburton and Bechtel. Below them are dozens of smaller subcontracting companies -- largely based in the Middle East -- including PPI, First Kuwaiti Trading & Contracting and Alargan Trading of Kuwait, Gulf Catering, Saudi Trading & Construction Company of Saudi Arabia. Such companies, which recruit and employ the bulk of the foreign workers in Iraq, have experienced explosive growth since the invasion of Iraq by providing labor and services to the more high-profile prime contractors.

This layered system not only cuts costs for the prime contractors, but also creates an untraceable trail of contracts that clouds the liability of companies and hinders comprehensive oversight by U.S. contract auditors. In April, the Government Accountability Office, an investigative arm of the U.S. Congress concluded that it is impossible to accurately estimate the total number of U.S. or foreign nationals working in Iraq.

The GAO's investigation was prompted by concerns in Congress about insurance costs that all U.S.-funded contractors and subcontractors in are obligated by law to carry for their workers -- costs which are then passed on to the government.

"It is difficult to aggregate reliable data," said the GAO report, "due in part to the large number of contractors and the multiple levels of subcontractors performing work in Iraq."

The menial wages paid to TCNs working for the regional contractors may be the most significant factor in the Pentagon's argument that outsourcing military support is far more cost-efficient for the U.S. taxpayer than using its own troops to maintain camps and feed its ranks.

But there is also a human cost to this savings. Numerous former American contractors returning home say they were shocked at conditions faced by this mostly invisible, but indispensable army of low-paid workers. TCNs frequently sleep in crowded trailers and wait outside in line in 100-degree-plus heat to eat "slop." Many are said to lack adequate medical care and put in hard labor seven days a week, 10 hours or more a day, for little or no overtime pay. Few receive proper workplace safety equipment or adequate protection from incoming mortars and rockets. When frequent gunfire, rockets and mortar shell from the ongoing conflict hits the sprawling military camps, American contractors slip on helmets and bulletproof vests, but TCNs are frequently shielded only by the shirts on their backs and the flimsy trailers they sleep in.

David Phinney is a journalist and broadcaster based in Washington D.C., whose work has appeared in The Los Angeles Times, New York Times and on ABC and PBS. Lucille Quiambao and Howie Severino reported from the Philippines for this article. Additional research by Pratap Chatterjee.

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