Operation Oil Immunity

July 29th, 2003 - by admin

by Steve Kretzmann and Jim Vallette – TomPaine.com / Institute for Policy Studies


WASHINGTON (July 28 2003) — During the initial assault on Baghdad, soldiers set up forward bases named Camp Shell and Camp Exxon. Those soldiers knew the score, even if the Pentagon’s talking points dismissed any ties between Iraqi oil and their blood.

The Bush/Cheney administration has moved quickly to ensure US corporate control over Iraqi resources, at least through the year 2007. The first part of the plan, created by the United Nations under US pressure, is the Development Fund for Iraq, which is being controlled by the United States and advised by the World Bank and the International Monetary Fund (IMF). The second is a recent Bush executive order that provides absolute legal protection for US interests in Iraqi oil.

In May, the UN Security Council unanimously adopted Resolution 1483, which ended sanctions and endorsed the creation of Development Fund for Iraq, to be controlled by Paul Bremer and overseen by a board of accountants, including UN, World Bank and IMF representatives. It endorsed the transfer of over $1 billion (of Iraqi oil money) from the Oil-for-Food program into the Development Fund. All proceeds from the sale of Iraqi oil and natural gas are also to be placed into the fund.

In the creation and expected implementation of this Development Fund for Iraq, one finds the fingerprints of the global economic structural adjustment that has attracted so much protest in recent years. World Bank and IMF programs, backed by the rigged rules of the World Trade Organization, have imposed dramatic financial restructuring upon much of the world. Developing countries have amassed huge debts in exchange for selling out their natural resources to powerful Northern corporations. This paradigm cloaks corporate welfare and neocolonialism in terms of “poverty alleviation,” and now in Iraq as “humanitarian assistance.”

New debt for Iraq will accrue through the very program that President Bush pledged would “benefit the people of Iraq.” The Development Fund, derived from actual and expected Iraqi oil and gas sales, will apparently be used to leverage US government-backed loans, credit and direct financing for US corporate forays into Iraq. Besides financing reconstruction projects, some of the funds will also be used as collateral for projects approved by the US Export-Import Bank (ExIm), whose mission is not development or poverty alleviation, but rather the creation of US jobs and the promotion of American business abroad.

ExIm recently announced that it was open for business in Iraq and would begin considering applications by subcontractors (that is, companies hired by Bechtel and Halliburton) in Iraq. Corporations have found it next to impossible to obtain private bank credit for work in Iraq, due to the ongoing insecure environment. But ExIm has stepped in to take a lead role in facilitating US business in Iraq.

“The primary source of repayment,” explained an ExIm release, “is the Development Fund for Iraq, or another entity established under the auspices of the Coalition Provisional Authority with access to foreign exchange and protection from claims of creditors of the former regime.” In other words, the US government is happy to provide credit to any US business wishing to do business in Iraq — especially because the money comes from Iraq.

But for the Bush/Cheney administration and their allies in the oil industry, this was not enough. Hours after the United Nations endorsed US control of the “Development Fund” for Iraq, Bush signed an executive order that was spun as implementing Resolution 1483, but in reality went much further towards attracting investment and minimizing risk for US corporations in Iraq.

Executive Order 13303 decrees that “any attachment, judgment, decree, lien, execution, garnishment, or other judicial process is prohibited, and shall be deemed null and void,” with respect to the Development Fund for Iraq and “all Iraqi petroleum and petroleum products, and interests therein.”

In other words, if ExxonMobil or ChevronTexaco touch Iraqi oil, it will be immune from legal proceedings in the United States. Anything that could go, and elsewhere has gone, awry with US corporate oil operations will be immune to judgment: a massive tanker accident; an explosion at an oil refinery; the employment of slave labor to build a pipeline; murder of locals by corporate security; the release of billions of tons of carbon dioxide into the atmosphere. The president, with a stroke of the pen, signed away the rights of Saddam’s victims, creditors and of the next true Iraqi government to be compensated through legal action. Bush’s order unilaterally declares Iraqi oil to be the unassailable province of US corporations.

In the short term, through the Development Fund and the Export-Import Bank programs, the Iraqi people’s oil will finance US corporate entrees into Iraq. In the long term, Executive Order 13303 protects anything those corporations do to seize control of Iraq’s oil, from the point of production to the gas pump — and places oil companies above the rule of law.

Steve Kretzmann and Jim Vallette are analysts with the Sustainable Energy & Economy Network of the Institute for Policy Studies.