Interview with Hassan Juma’a Awad, president of the Basra Oil Union
By Greg Muttitt of Platform.
Following the elections at the end of January, the way may now be open to privatise Iraq’s biggest and most strategic asset: oil. But while the UK and USA are carefully playing the politics at a government level, Iraq’s occupiers may face a greater obstacle in the oil industry’s workers.
The Basra Oil Union – which is independent of any political or religious affiliation – represents 23,000 workers in the oil industry in the south of Iraq. It grew out of the South Oil Company (SOC) Trade Union, and now combines ten trade union councils in nine Iraqi oil companies in Basra, Amara and Nassiriyah. South Oil Company is Iraq's biggest oil producer, responsible for the giant Rumailah field.
'The opinion of all [Iraqi] oilworkers is that they are against privatisation', states Hassan. 'We see privatisation as economic colonialism. The authorities are saying that privatisation will develop our sector and be useful. But we do not see it as development at all; we view any plan to privatise the oil sector as a big disaster.’
Sovereignty over its oil reserves is key to Iraq’s future development, Hassan argues. ‘Oil must stay in the hands of Iraqis, because oil is the only national resource that we have which is of great value, and our economy depends on it'.
While this remains the union’s long-term focus, it has achieved some notable successes in improving conditions for its members. Following the disastrous early months of the Occupation, on 10th August 2003, the union organised a strike, stopping oil exports for three days from Iraq’s largest oil company.
In September 2003, US Administrator Paul Bremer issued an Order setting the wage levels for all public sector employees. These not only reduced the levels from those of the Saddam era, they also abolished the crucial allowances for work in remote locations or in dangerous conditions. Bremer’s scale started at just 69,000 dinars (US$40-45) per month. 'You can’t afford to eat on such a wage', Hassan points out – just renting a cheap house costs 50,000 dinars. In response, the SOC Union issued its own recommended wage table, based on the true cost of living.
Fearful of another strike, the Governing Council (GC) entered negotiations with the Union, and in January 2004 the GC conceded. The three lowest wage levels in Bremer’s scale were abolished, leaving a minimum wage for oilworkers of 102,000 dinars. Furthermore, the risk and location payments were reinstated, adding a significant further amount for many workers.
Meanwhile, when a Halliburton subcontractor, the Kuwaiti construction company Al Khorafi, brought in 1,200 foreign workers with it – despite Iraq’s enormous levels of unemployment – the union organised a demonstration outside Al Khorafi’s offices. Although the protesters were met with tanks, they bravely persisted, and in subsequent discussions the company agreed to replace 1,000 of the foreign workers with Iraqis. However, the struggle over the control and ownership of Iraq’s oil continues. Hassan explains, 'There are two stages of this war. First, the military occupation. Then the economic war, and the destruction of Iraq’s economy'. Iraq holds the world’s second largest oil reserves. Now, with declining opportunities elsewhere, the companies are keen to get back into Iraq, for the first time since the 1970s. Oil was excluded from the mass privatisations imposed by the Coalition Provisional Authority. Most oil companies wanted to wait for elections before signing major contracts, to ensure that they had a legal legitimacy which could not be challenged in international courts. In October 2004, Oil Minister Thamer Ghadban told Shell’s internal magazine that 2005 would be the 'year of dialogue with the international oil community'. The Occupation forces argue that Iraq needs the technology, expertise and investment of western oil companies in order to develop its oil, and hence its economy. Hassan disagrees. 'We are fully able to reconstruct our own workplaces because we have a high level of expertise and technological skills. We want to develop our workplaces and our skills, yes, but we can rebuild our country without privatisation'. Hassan believes that modern technology can be obtained by hiring foreign companies, under 'service agreements', where the state remains in control. This model is common in the Middle East. 'I’m not so afraid of foreign companies coming in – and then leaving. In terms of redevelopment, a foreign company can provide some skills, some resources, but the administration of the development must be controlled by Iraqi people'. This last condition clashes with American and British plans. Their talk of 'investment' refers to long-term production contracts. Companies like Shell have been arguing throughout the Occupation for the use of 'Production Sharing Agreements' (PSAs) – and with some success. In September 2004, US-appointed Interim Prime Minister Ayad Allawi pre-empted the January elections and subsequent writing of the Constitution, by setting Iraqi oil policy on his own course. His plan was that all new reserves should be developed by foreign multinationals through PSAs, and that the national oil company (which manages existing fields) should be part-privatised. In a sinister remark, he added that these issues should not be debated in the Iraqi parliament, as that would slow progress. Although used in many smaller oil-producing countries, PSAs do not exist in any of the major oil producers of the Middle East. PSAs fix the sharing of oil revenues, for up to 50 years, and restrict governments’ right to introduce any new laws that affect the companies’ profitability during that period. If Iraq signs PSAs, it could be signing away its best chance for development. Hassan Juma’a and his colleagues will continue to oppose these moves. Indeed, the oilworkers may be the biggest block to the US/UK plans to grab Iraq’s reserves. But the workers’ best chance of success will be with international support. 'We hope that all the activists in Britain will stand with us in our struggle. By doing this, you would be doing a great service to the Iraqi people. We will remember this forever.' For more info on the Southern Oil Company Union appeal:
www.iraqoccupationfocus.org.uk/socu.htm
Meanwhile, when a Halliburton subcontractor, the Kuwaiti construction company Al Khorafi, brought in 1,200 foreign workers with it – despite Iraq’s enormous levels of unemployment – the union organised a demonstration outside Al Khorafi’s offices. Although the protesters were met with tanks, they bravely persisted, and in subsequent discussions the company agreed to replace 1,000 of the foreign workers with Iraqis. However, the struggle over the control and ownership of Iraq’s oil continues. Hassan explains, 'There are two stages of this war. First, the military occupation. Then the economic war, and the destruction of Iraq’s economy'. Iraq holds the world’s second largest oil reserves. Now, with declining opportunities elsewhere, the companies are keen to get back into Iraq, for the first time since the 1970s. Oil was excluded from the mass privatisations imposed by the Coalition Provisional Authority. Most oil companies wanted to wait for elections before signing major contracts, to ensure that they had a legal legitimacy which could not be challenged in international courts. In October 2004, Oil Minister Thamer Ghadban told Shell’s internal magazine that 2005 would be the 'year of dialogue with the international oil community'. The Occupation forces argue that Iraq needs the technology, expertise and investment of western oil companies in order to develop its oil, and hence its economy. Hassan disagrees. 'We are fully able to reconstruct our own workplaces because we have a high level of expertise and technological skills. We want to develop our workplaces and our skills, yes, but we can rebuild our country without privatisation'. Hassan believes that modern technology can be obtained by hiring foreign companies, under 'service agreements', where the state remains in control. This model is common in the Middle East. 'I’m not so afraid of foreign companies coming in – and then leaving. In terms of redevelopment, a foreign company can provide some skills, some resources, but the administration of the development must be controlled by Iraqi people'. This last condition clashes with American and British plans. Their talk of 'investment' refers to long-term production contracts. Companies like Shell have been arguing throughout the Occupation for the use of 'Production Sharing Agreements' (PSAs) – and with some success. In September 2004, US-appointed Interim Prime Minister Ayad Allawi pre-empted the January elections and subsequent writing of the Constitution, by setting Iraqi oil policy on his own course. His plan was that all new reserves should be developed by foreign multinationals through PSAs, and that the national oil company (which manages existing fields) should be part-privatised. In a sinister remark, he added that these issues should not be debated in the Iraqi parliament, as that would slow progress. Although used in many smaller oil-producing countries, PSAs do not exist in any of the major oil producers of the Middle East. PSAs fix the sharing of oil revenues, for up to 50 years, and restrict governments’ right to introduce any new laws that affect the companies’ profitability during that period. If Iraq signs PSAs, it could be signing away its best chance for development. Hassan Juma’a and his colleagues will continue to oppose these moves. Indeed, the oilworkers may be the biggest block to the US/UK plans to grab Iraq’s reserves. But the workers’ best chance of success will be with international support. 'We hope that all the activists in Britain will stand with us in our struggle. By doing this, you would be doing a great service to the Iraqi people. We will remember this forever.' For more info on the Southern Oil Company Union appeal:
www.iraqoccupationfocus.org.uk/socu.htm