The U.S.-backed Iraqi cabinet approved a new oil law Monday that is set to give foreign companies the long-term contracts and safe legal framework they have been waiting for, but which has rattled labour unions and international campaigners who say oil production should remain in the hands of Iraqis.
Independent analysts and labour groups have also criticised the process of drafting the law and warned that that the bill is so skewed in favour of foreign firms that it could end up heightening political tensions in the Arab nation and spreading instability.
For example, it specifies that up to two-thirds of Iraq's known reserves would be developed by multinationals, under contracts lasting for 15 to 20 years.
This policy would represent a u-turn 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.
According to local labour leaders, transferring ownership to the foreign companies would give a further pretext to continue the U.S. occupation on the grounds that those companies will need protection.
Union leaders have complained that they, along with other civil society groups, were left out of the drafting process despite U.S. claims it has created a functioning democracy in Iraq.
Under the production-sharing agreements provided for in the draft law, companies will not come under the jurisdiction of Iraqi courts in the event of a dispute, nor to the general auditor.
The ownership of the oil reserves under this draft law will remain with the state in form, but not in substance, critics say.
On Feb. 8, the labour unions sent a letter in Arabic to Iraqi President Jalal Talbani urging him to reconsider this kind of agreement.
"Production-sharing agreements are a relic of the 1960s," said the letter. "They will re-imprison the Iraqi economy and impinge on Iraq's sovereignty since they only preserve the interests of foreign companies. We warn against falling into this trap."
Ewa Jasiewicz, a researcher at PLATFORM, a British human rights and environmental group that monitors the oil industry, told IPS in a phone interview from London that, "First of all, it hasn't been put together in any kind of democratic process... It's been put through a war and an occupation which in itself is a grotesquely undemocratic process."
The law was prepared by a three-member Iraqi cabinet committee, dominated by the Kurds and the Shiites. It is now expected to be ratified by parliament because the powerful faction leaders in the government have cleared it.
The first draft was seen only by the committee of the Iraqi technocrat who penned it, nine international oil companies, the British and the U.S. governments and the International Monetary Fund. The Iraqi parliament will get its first glimpse next week.
Concerns about the process are compounded because of the ongoing disputes in Iraq over the legitimacy of the Iraqi cabinet and the Iraqi parliament, which have been constructed by the occupation-created governing council, which itself was created in 2004 along sectarian lines.
In a speech earlier this month by Hassan Juma, head of the Iraqi Oil Labour Union, posted on the union's website, he called on the Iraqi government to consult with Iraqi oil experts and "ask their opinion before sinking Iraq into an ocean of dark injustice."
The content of the law has also worried both international campaigners and local Iraqi groups who say that it puts Iraqi oil wealth firmly on the path to full privatisation.
"The hydrocarbon law reflects the process of readying Iraq's oil for privatisation," said Jasiewicz. "Drafted in secret, shaped by foreign powers, untransparent, undemocratic and forced through under military occupation."
Jasiewicz said the law can be regarded as the economic goal of the war and occupation and that "it will be viewed by most Iraqis as not just illegitimate, but a war crime."
But officials from the Iraqi government, who have already sent the draft oil law to parliament for consideration, say it represents a step forward for the war-torn country. Under the law, oil revenues would be distributed to all 18 provinces based on population size, and regional administrations have the authority to negotiate contracts with international oil companies.
Prime Minister Nouri al-Maliki, a close ally of Washington, called the law "another founding stone in state-building."
"This law will guarantee for Iraqis, not just now but for future generations too, complete national control over this natural wealth," Oil Minister Hussain al-Shahristani has reportedly said.
Initial drafts of the law starting eight months ago saw squabbles between the Kurdish factions who control the northern part of Iraq and the Shiite-led regime, as they both vied for bigger shares of the country's oil wealth, estimated at 115 billion barrels. That they have finally come to a final agreement may be a sign of long-sought stability.
Yet critics, including Iraqi oil professionals, engineers and technicians in the unions, are instead advocating for technical service contracts, meaning a company would come in and offer services such as building a refinery, laying a pipeline, or offering consultancy services, get their fees and then leave.
"It is a much more equitable relationship because the control of production, development of oil will stay with the Iraqi state," said Jasiewicz.
"That is the model that Saudi Arabia, Iran, Kuwait generally operate. There's no other country in the Middle East with the kind of oil reserves that Iraq has that would consider signing a production-sharing agreement," she said. "It's a form of privatisation and that's why those countries haven't signed these because it's not in their interests."
WASHINGTON, May 25 (IPS) - When the U.S. state department shyly released a human rights report two weeks ago amidst an international outcry over U.S. soldiers' abuse of Iraqi prisoners, it slipped in some tough talk on media freedom -- against the practice, not for it as would be expected.
Lorne Craner, deputy assistant secretary for democracy and human rights, told reporters that Arab TV network AlJazeera was inciting violence against U.S. troops in occupied Iraq.
"AlJazeera, from what I understand from CPA (the U.S. Coalition Provisional Authority in Iraq) and others, is quite different in what they do. They go a lot further than 'New Yorker' Magazine or CBS. And that's my point. We are extremely tolerant, we have been for over 200 years in this country, of criticism, but incitement of violence is something else."
The accusations from Craner, the man whose job includes promoting media freedom worldwide, were the last in a series of high-level U.S. moves to muzzle the TV network, which has so far managed to outpace many U.S. news sources in covering the U.S.-led attack and occupation of Iraq, starting more than one year ago.
Although AlJazeera, which started broadcasting in 1996, irked both the U.S. media and the Bush administration even before Washington invaded Iraq as the first step in its plan to remake the Middle East on a "democratic" model, the attacks turned vicious after the channel aired lived coverage of civilian casualties of the U.S. military's heavy bombardment of the town of Fallujah in April.
AlJazeera correspondent Ahmed Mansour was apparently the only reporter in the city when U.S. forces were enforcing a crippling siege.
According to medics in Fallujah, the U.S. offensive claimed the lives of at least 700 Iraqis, mostly women and children, and left up to 1,500 others injured.
The senior U.S. military spokesman, Mark Kimmitt, suggested that Iraqis who saw civilian deaths on AlJazeera, "change the channel to a legitimate, authoritative, honest news station. The stations that are showing Americans intentionally killing women and children are not legitimate news sources. That is propaganda, and that is lies."
But Defense Secretary Donald Rumsfeld went further. "I can definitively say that what AlJazeera is doing is vicious, inaccurate and inexcusable."
"But you know what our forces do," he added, "They don't go around killing hundreds of civilians. That's just outrageous nonsense! It's disgraceful what that station is doing."
Secretary of State Collin Powell, the outwardly dovish face of the administration, went further and earlier this month formally demanded that visiting Qatari Foreign Minister Sheikh Hamad Bin Jassim Bin Jabr al-Thani tighten the screws on the 24-hour network, which is based in his country.
Powell said in statements after meeting al-Thani in Washington that relations between the two countries were being harmed by AlJazeera's coverage.
The channel has also taken some heat on the ground. On May 21, Rashid Hamid Wali, assistant cameraman and fixer for AlJazeera, was killed by gunfire in the Iraqi city of Karbala, the latest in a string of journalists who have been killed in Iraq.
On several occasions, the channel's correspondents have also been banned from government offices and news conferences in Iraq.
Media analysts here say that Washington's attack on AlJazeera, under the pretext of fighting the promotion of violence, has negative implications both for media freedom and for U.S. political strategy.
"To say that running false stories if they could inflame the conflict is grounds for ending the media outlets' right to report, is to say that no major U.S. media outlet should be allowed to report anymore," said Jim Naureckas, editor of media watch dog magazine 'Extra'.
The 'New York Times', for example, ran a story quoting Iraqi defectors saying the country possessed weapons of mass destruction, which was one of many articles published by the U.S. media that inflamed the conflict, he added.
Washington also risks losing more of its credibility over its attack on the Arab TV network.
"Officials in Washington keep saying they want to encourage democratization in the Middle East, but the Bush administration's moves to throttle AlJazeera certainly indicate otherwise," said Norman Solomon, executive director of the Institute for Public Accuracy.
Others see the U.S. attack as emblematic of its political and military woes in the region.
"The U.S. is losing the war in Iraq and is increasingly isolated politically in the Arab world, so what's its response? Blame the media. The U.S. media wouldn't accept such an argument from Bush the candidate, so why accept it from Bush the commander in chief?" said Reese Erlich, a foreign correspondent who has covered the Middle East extensively for 20 years.
The best way to control AlJazeera and other media outlets that defy Washington's control is to stop atrocities on the ground, analysts say.
"There are ways that the U.S. government could legitimately reduce the negative coverage it gets on AlJazeera. For instance, if President Bush wants AlJazeera to stop airing grisly footage of dead Iraqi civilians, as commander in chief he could order U.S. troops to stop killing them," Erlich said.