Selling off Iraq

with a little help from the UN


Resolution 1511 was passed unanimously by the Security Council on 16 October.  It


1.       paves the way for the occupying powers in Iraq to privatise state assets, and


2.       transforms the occupying forces in Iraq into UN forces in all but name, and authorises them to use force to put down resistance to the occupation.


The chief opponents of the invasion – France, Germany and Russia – voted for these measures, and so did Syria and Pakistan.


Order 39

The 1907 Hague Regulations and the 1949 Geneva Conventions put strict limits on what occupying powers can legally do.  They have no right to rewrite the laws or remodel the economic system of the state they are occupying.  As the Attorney-General Lord Goldsmith warned Blair in a memo dated 26 March (and later leaked to the New Statesman):


“The imposition of major structural economic reforms would not be authorised by international law.”


Article 43 of the Hague Regulations says:


“… the [occupying power] shall take all the measures in his power to restore, and ensure, as far as possible, public order and safety, while respecting, unless absolutely prevented, the laws in force in the country [our emphasis].”


Iraqi law bars non-Arab foreigners from owning Iraqi companies and forbids the privatisation of key state assets.  Nevertheless, on 19 September, Paul Bremer, the head of the Coalition Provision Authority (CPA) in Iraq, signed Order 39 on Foreign Investment.  This permits 100% foreign ownership of Iraqi companies and assets (apart from natural resources) in economic sectors that have hitherto been publicly owned, and the repatriation of 100% of the proceeds of asset sales.  200 Iraqi state companies are to be privatised.


Since there is no plausible excuse for not respecting Iraqi law on these matters, on the face of it, the occupying powers are acting way outside the Hague Regulations.  As a result, there is a real possibility that contracts entered into by, for example, buyers of Iraqi state assets could be legally unsound and could be overturned without compensation by a future Iraqi government.  Such uncertainty does not generate buyers.


Not the CPA

The US/UK are attempting to get around this difficulty by saying that the Iraqi finance minister, Kamel al-Keilami, is responsible for the measures, not the CPA itself.  Like other Iraqi ministers, Kamel al-Keilami was appointed by the 25-member Iraqi Governing Council, appointed by the CPA, so it is not obvious that he is part of an Iraqi government with the authority to remake the laws of Iraq and remodel its economy at the stroke of a pen.  Is this what George Bush means by exporting democracy to the Middle East?


Happily, for the US/UK, the Security Council has now come to their assistance in resolution 1511.  Paragraph 4 of it makes it clear that from now until there is a representative government of Iraq, Iraqi sovereignty lies with the CPA-appointed Iraqi Governing Council and the ministers appointed by the Council.  It says:


“[The Security Council] Determines that the Governing Council and its ministers are the principal bodies of the Iraqi interim administration, which, without prejudice to its further evolution, embodies the sovereignty of the State of Iraq during the transitional period until an internationally recognized, representative government is established and assumes the responsibilities of the Authority;”


So, the Security Council has declared the Council and its ministers to be the sovereign Iraqi body, which can change its laws and sell off its assets at will.  Though appointed by the CPA, with this help from the Security Council, it can apparently do what the CPA itself is barred from doing under the Hague Regulations.


Farfetched proposition

This may seem a rather farfetched proposition, but it is certainly the UK Government’s view of the matter, as explained by Hilary Benn, the new International Development Minister, in the Guardian on 20 October 2003:


“The measures on foreign investment in Iraq were introduced by the finance minister, Kamel al-Keilami, with the support of the Coalition Provisional Authority, and were supported by the governing council – which is recognised by the UN in the resolution approved unanimously last Thursday as embodying the sovereignty of the state of Iraq during the transition to representative government”


Thanks to the Security Council, it looks as if the US/UK will be able to sell off publicly owned Iraqi assets at will.  Formally, the sales contracts will be with the finance minister appointed by the Governing Council, which the Security Council has declared to be the owner of all state assets in Iraq.  As a consequence, potential buyers can be reasonably confident that their contracts are legally watertight.  In the absence of paragraph 4 of resolution 1511 to give that confidence, buyers would have been more than a little reluctant to buy.


UN forces now

Resolution 1511 also transforms the occupying forces in Iraq into UN forces in all but name, and authorises them to use force to put down resistance to the occupation.  In March, the US/UK failed to get Security Council authorisation for the invasion of Iraq, but they have now got Security Council authorisation to use force to maintain it.


This is contained in paragraph 13 of the resolution, which reads:


“[The Security Council] Determines that the provision of security and stability is essential to the successful completion of the political process as outlined in paragraph 7 above and to the ability of the United Nations to contribute effectively to that process and the implementation of resolution 1483 (2003), and authorizes a multinational force under unified command to take all necessary measures to contribute to the maintenance of security and stability in Iraq [my emphasis]”


Paragraph 14 urges states to contribute to the “multinational force”:


[The Security Council] Urges Member States to contribute assistance under this United Nations mandate, including military forces, to the multinational force referred to in paragraph 13 above;”


Lest there be any doubt that the entity referred to as “a multinational force under unified command” is, in fact, the occupying forces commanded by the US, paragraph 25 says:


“[The Security Council] Requests that the United States, on behalf of the multinational force as outlined in paragraph 13 above, report to the Security Council on the efforts and progress of this force as appropriate and not less than every six months;”


And here is what US Ambassador, John Negroponte, said after the vote:


“ … the resolution establishes a United Nations authorized multinational force under unified United States command”


The ostensible reason given in paragraph 13 for authorising the occupation forces to use force is so that security and stability can be restored and the UN can function in Iraq.  It has become impossible for the UN to play any role, separate from the occupying powers, since UN employees on the ground are going to be killed without their protection.  That is the inevitable result of the fact that, after the event, the UN has endorsed the US/UK invasion.  The chief opponents of the invasion – France, Germany and Russia – have not yet gone so far as to supply occupation forces, but they have sanctioned the occupation in successive Security Council resolutions. 


That began with resolution 1483, passed on 22 May, which mandated the CPA to govern Iraq and sell its oil for the foreseeable future.  1511 goes very much further. 


War on terror

Resolution 1511 also goes along with George Bush’s portrayal of the invasion as part of his “war on terror”.  It has numerous references to “terrorism” in Iraq, and the need to combat “terrorism” in accordance with resolution 1373, passed after the events of 11 September 2001.  George Bush was, therefore, able to welcome the resolution in the following terms on 28 October 2003 (transcript here):


“Our coalition against terror has been strengthened in recent days by UN Security Council Resolution 1511. This endorses a multinational force in Iraq under US command, encourages other nations to come to the aid of the Iraqi people.”


With popular support for his Iraqi adventure falling rapidly, not least because of the absence of “weapons of mass destruction”, every time Bush speaks about Iraq these days, he yokes it together with Afghanistan, and by implication therefore with 9/11.  His message to the American people is that the war in Iraq is an essential part of preventing a repeat of 9/11.  As he told an audience in Alabama on 3 November 2003:


“… a free and peaceful Iraq are important for the national security of America. A free and peaceful Iraq will make it more likely that our children and grandchildren will be able to grow up without the horrors of September the 11th. We'll defeat the terrorists there so we don't have to face them on our own streets.”


The Security Council has given credence to this baloney in resolution 1511.


Burden sharing

The US/UK hoped that as a result of resolution 1511 being passed more states would assist them with money and troops.


Their success with regard to money has been limited.  At the conclusion of the donors’ conference in Madrid on 24 October, according to the US State Department, more than $33 billion had been promised over the next 4 years.  In reality, only about $27 billion was in the form of donations; the rest was loans from the World Bank and the IMF.  And 75% of this $27 billion was promised by the US/UK, $20 billion from the US itself and $450 million from the UK.  The only other significant contributors were Japan: $5 billion, Spain $300 million, Italy $235 million, South Korea $200 million and Canada $150 million.


As regards troops, the US/UK have had no success.  Turkey was their best hope.  The Turkish Government expressed its willingness to send troops and it was said that they were going to serve under US command west of Baghdad, where they were bound to take casualties.  However, that prospect has disappeared in the face of opposition from the Iraqi Governing Council.  Perhaps, the Turkish Government made the offer in the knowledge that it would be refused.


Over 90% of the troops in Iraq are from the US/UK, 140,000 from the US and 11,000 from the UK.  There are supposed to be nearly 15,000 troops from 30 other countries, based in the southern zone under British command and in the central zone under Polish command.  Up to now they have taken very few casualties.  There has been very little press coverage about them, so it is very difficult to find out what they are actually doing.  Are these troops committed for the long term?  Probably, not.  The odds must be that if they begin to take significant casualties they will be quietly withdrawn and not replaced, and the US/UK will have to bear an even greater share of the burden in future.


Happily, the invaders are having to pay the bulk of the costs of reconstruction, as well as the military costs of invasion and occupation.  It would be too much to hope that they will have to pay off the debts of the previous Iraqi administration as well: these stand at some $130 billion plus $27 billion for reparations from the Iraqi invasion of Kuwait, with a further $172 billion of reparation claims yet to be dealt with.  The illusion that Iraqi oil was going to pay for everything has disappeared.


Vietnam, only worse?

The US/UK have very little option but to continue to pay up.  They cannot withdraw until some sort of stable democratic government is established – which might take forever, since Iraq is a wholly artificial state. 


Withdrawal from Iraq may turn out to be more difficult than withdrawal from Vietnam, where there was never any doubt that a stable Vietnam state would emerge afterwards, albeit under Communist control.  With Iraq, stability may be impossible to achieve.



Labour & Trade Union Review

November 2003