Iraq's Oil Law: Who is Khalilzad trying to fool?

Writing a gushing piece about Iraq's new oil law for the Washington Post, US ambassador to Iraq Zalmay Khalilzad makes one glaring omission: the fact that multinational oil companies and foreign governments will be raking in substantial amounts of money as a result.

As Enad Mekay of IPS notes:

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.
[...]
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.

al Maliki just announced an upcoming cabinet shuffle within two weeks (handy timing considering the upcoming regional summit is planned for March 10 and the need to get this law passed as quickly as possible) to supposedly root out corruption in his government and to get rid of cabinet ministers loyal to al Sadr. That ought to streamline the way for al Maliki to get his oil law passed.

There are very strong and legitimate concerns, however:

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.
[...]
"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."

It was horrendous enough that Iraqis suffered at the hands of Saddam Hussein who lived in unrestrained opulence while they starved but to now have foreign governments and multinational corporations inflicting the same kind of torturous policies so they can live high off of the spoils of war is just unconscionable.

"Freedom's untidy, and free people are free to make mistakes and commit crimes and do bad things." –Donald Rumsfeld on looting in Iraq after the U.S. invasion, adding "stuff happens"

This new oil law is looting taken to the extreme. Maybe Khalilzad should have ended his editorial with "stuff happens".