Iraqi Oil: A Benchmark or a Giveaway?

A strike by Iraqi oil workers in early June threw into question the conditions that some in the U.S. Congress would place on ending the U.S. occupation of Iraq. At the same time, Iraqi nationalists have grown more vocal in their accusations that the occupation itself has an economic agenda, centered on seizing control of the country's oil.

Across the political spectrum in Washington, many now demand that the Maliki government meet certain benchmarks, which presumably would show that it's really in charge in Iraq. But there's a particular problem with the most important benchmark that the Iraqi government is being pressured to meet: the oil law. The problem is, in Iraq, it may be the single most unpopular measure the United States is trying to get the government to enact.

In the United States, this law is generally presented as a means to share the oil wealth among different geographic regions of the country. Many Iraqis, however, see it differently. They look the proposed law and see instead the way its welcomes foreign oil companies into the oil fields. They see the control it would give those oil companies over setting royalties, deciding on production levels, and even determining whether Iraqis get to work in their own industry.

In early June, the Iraqi Federation of Oil Unions (IFOU) shut down the pipelines from the Rumeila fields near Basra, in the south, to the Baghdad refinery and the rest of the country. It was a limited strike to underline its call for keeping oil in public hands, and to force the government to live up to its economic promises.

Iraqi Prime Minister Nouri al-Maliki responded by calling units of the 10th Division of the Iraqi army and surrounding the strikers at Sheiba, near Basra, on June 5 and 6. According to reports in the Basra news media, U.S. aircraft flew over the strikers as well. The Prospect has asked the Combined Press Information Center in Baghdad to confirm or deny these overflights; as yet, it has not done so.

Maliki also issued arrest warrants for the union's leaders. On June 6, the union postponed the strike until June 11. Facing the possibility that a renewed strike could escalate into shutdowns on the rigs themselves -- or even the cutoff of oil exports, which would shut down the one of the few income streams that the national government can claim -- Maliki blinked. He agreed to the union's principal demand: Maliki said he would hold implementation of the oil law in abeyance until October, while the union gets a chance to pose objections and propose alternatives.

This will undoubtedly get Maliki in trouble in Washington, where his government will be accused of weakness, incompetence, and a failure to move on the oil law benchmark. In Iraq, however, Maliki faces a fact that U.S. policymakers refuse to recognize: The oil industry is a symbol of Iraqi sovereignty and nationalism. Handing control to foreign companies is an extremely unpopular idea.

The oil workers union has now emerged as one of the strongest voices of Iraqi nationalism, protecting an important symbol of Iraq's national identity, and, more importantly, the only source of income capable of financing the country's post-occupation reconstruction. U.S. legislators trying to impose the oil law might take note that they are requiring the Maliki government to betray one of the few reasons Iraqis have for supporting it -- its ability to keep the 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's oil ministry, to pay for wage increases and promised vacations, and give permanent status to thousands of temporary employees. In a country where housing has been destroyed on a massive scale, and workers often live in dilapidated and primitive conditions, the union wants the government to turn over land for building homes.

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.

But the demand that overshadows even these basic economic questions is the renegotiation of the oil law.

Iraq has a long labor history. Union activists, banned and jailed under the British and its puppet monarchy, organized a labor movement that was the admiration of the Arab world when Iraq became independent after the revolution in 1958. After Saddam Hussein came to power, though, he drove its leaders underground, killing and jailing the ones he could catch.

When Saddam 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, impounded union funds, and turned its back on a wave of assassinations of Iraqi union leaders.

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. Halliburton came into Iraq in the wake of the troops in 2003, and the company tried to seize control of the wells and rigs, withholding reconstruction aid to force workers to submit. The oil union struck for three days that August 2003, stopping exports and cutting off government revenue. Halliburton closed down its activities in the oil region.

The oil and port unions then compelled foreign corporations to give up their own agreements with the U.S occupation in Iraq's deepwater shipping facilities. Muhsin's electrical union is still battling to stop subcontracting in the power stations, a prelude to corporate takeover of a public resource.

The unions have become the biggest obstacle to the privatization of Iraq's oil. They have also become the only force in Iraq trying to maintain at least a survival living standard for the millions of Iraqis in the middle of the war.

The occupation has always had an economic agenda, which includes the wholesale privatization of the Iraqi economy. Occupation viceroy L. Paul Bremer published lists in Baghdad newspapers of the public enterprises he intended to auction off. As Arab labor leader Hacene Djemam bitterly observed, "War makes privatization easy: First you destroy society; then you let the corporations rebuild it."

Under Washington's guidance, the Iraqi government wrote the proposed new oil law in secret, deliberations from which the union was banned. Iraqi unions say the new law will ensure that foreign corporations control future exploration and development in one of the world's largest oil reserves through agreements called "production-sharing" contracts, which favor multinational oil corporations. Such contracts have been rejected by most oil-producing countries, including those of the Middle East. The unions have vowed to strike if the law is implemented.

Hassan Juma'a Awad, president of the IFOU, 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."

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.

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See related interview, Iraqi Union Leaders Call for an End to the Occupation and photo essay, Unions Struggle to Protect Iraqi Oil.

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