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All's Fair in Love and War?

Katy Brown looks at some of the companies profiting from the invasion of Iraq

It is now widely accepted that the invasion of Iraq in 2003 was motivated by US desire to control the country’s oil fields. In fact many big oil companies were given an unprecedented strategic role in planning the invasion and occupation.

Phillip Carroll, head of Fluor Corp, a major contractor hired by the Department of Defence for Iraq reconstruction, drafted a Pentagon strategy for the development of the Iraqi oil industry in the Autumn of 2002, while the UN inspectors were still in Iraq looking for weapons of mass destruction. Also prior to the invasion, BP tutored British troops in maintaining and running the oil fields, which were later seized in southern Iraq. US giant Halliburton, which provides services to corporations for the exploration, development and production of oil and gas, was given the task of repairing and rebuilding the oil infrastructure, accompanying the troops into the oil fields in this capacity.

Other aspects of the ‘corporate invasion of Iraq’ have been given less attention; the speed and intensity with which Western corporations were encouraged to enter the reconstruction economy has been largely ignored by the mass media. The Coalition Provisional Authority (CPA) quickly delivered around $20 billion in Iraqi reconstruction funds (mainly money generated from Iraqi oil confiscated during the sanctions regime and from oil sold during the occupation) to corporations from the coalition states. It has been estimated that Iraqi companies received just 2%of the value of those contracts.

Also largely unreported is the open deployment of private military and private security companies (PMCs and PSCs) which has been on a scale unprecedented in recent history. It is estimated that 30,000 private military and armed security personnel are currently employed by Western PMCs in Iraq.

The UK’s Special Relationship?

The UK expected to reap huge rewards for its prominent role in the invasion of Iraq; however, to a large extent this has not happened. The ‘prime contractors’ which won the bids for reconstruction were all US firms; only one British company, AMEC, was able to benefit by forming a partnership with the American Fluor Corporation.

With UK companies pushed to the fringes of the reconstruction market they have adapted to supporting roles in the corporate invasion, and in these areas have played an almost equal role to the US. British companies have been very prominent in the expanding market of PMCs; on average 30% of reconstruction contracts are spent on private security and armed escorts, so this is a lucrative business.

UK companies have also provided the propaganda, intelligence, knowledge and the communications systems to sustain the corporate invasion and enable a smooth transition to a free market economy, allowing Western corporations to gain access to formerly nationalised markets.

The profits accrued by British business as a result of the occupation have now been documented by Oxford-based research group Corporate Watch. A recently released report: ‘Corporate Carve Up: the role of UK companies in Iraq since 2003.’ details the involvement of 89 of the British companies that have profited from the invasion to the tune of a total £1.1 billion. This figure is almost certainly an underestimate. Many of the companies listed are private security and consultancy firms with unfamiliar names.

One could argue that these companies are helping the Iraqi people by rebuilding their infrastructure. This begs the question, however, that if the invasion of Iraq was intended to help its people, then why is it that Western and not Iraqi companies are profiting?

As yet it has not been decided which companies will win the jackpot prize of direct exploitation of Iraqi oil but it is likely that two British companies, BP and Shell, will be heavily involved.

According to Dave Whyte, a criminology lecturer at the University of Stirling, who worked on the Corporate Watch report, ‘The transformation of the Iraqi economy has allowed British and American companies to plunder Iraq’s oil wealth; but this wasn’t just an act of plunder and theft, it was also a war crime - the transformation of the economy by the British and American governments is illegal under the Hague and Geneva conventions.’

Action

Iraq is considered to be an oppressive regime by Ethical Consumer (ECRA) due to its poor track record on human rights. The invasion and occupation have not changed this despite claims by the US that its interference would bring democracy and Western human rights ideals to the country. ECRA criticises company involvement in any oppressive regime and urges consumers to consider avoiding products made by such companies.

Links

The full report costs £5 and can be downloaded from www.corporatewatch.org or ordered from Corporate Watch 16b Cherwell Street, Oxford, Oxfordshire, OX4 1BG. Corporate Watch can also be contacted on 01865 791 391 or mail@corporatewatch.org
There are also organisations campaigning on the involvement of US companies in Iraq: www.opensecrets.org – this site focuses particularly on the fact that the six most successful companies in bidding for prime contracts were also major donors to the Bush administration. Also see www.publicintegrity.org/wow

The following are the UK companies which have profited most so far from the occupation:

1. AMEC £500m
2. Aegis Defence Services £246.52m
3. Erinys (Private security) £86m
4. Petrol Resources (Anglo-Irish) £56.6m
5. HSBC - £36.88m
6. Cummins UK (Power) £25.8m
7. PB Power - £24.88m
8. Control Risks (Private security) £23.5m
9. MerchantBridge (Financial) £22.07m
10. Global Strategies Group (Private security) £15.48m

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