An Iraqi worker shuts down a pumping tube at the Iraqi Pipelines Company is Basra on June 5. Employees there recently went on strike, shutting down two pipelines carrying oil and gas products inside Iraq.

Iraqi Unions Fight the New Oil Law

“Written in the United States,” the law would permit joint ownership of many Iraqi oil fields by foreign companies

BY David Moberg

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Iraq’s proposed oil law, which would open up control of the country’s oilfields to multinational corporations, is one of the Bush administration’s top political priorities. On July 3, Bush called Iraqi Prime Minister Nuri al-Maliki to encourage him and other leaders to move “aggressively forward” on it, and as In These Times went to press, its latest draft appeared headed to the Iraqi Parliament for debate. Even if it passes, however, enacting it won’t be easy, as it faces strong opposition from Iraqi oil workers.

“It doesn’t serve the interests of the Iraqi people,” says Faleh Abood Umara, general secretary of the Basra-based Southern Oil Company Union and the Iraqi Federation of Oil Workers’ Unions. Umara recently toured the United States, advocating both national control of Iraqi oil assets and immediate withdrawal of U.S. troops from Iraq.

Umara says that the law–“written in the United States”–would permit joint ownership of many Iraqi oil fields by foreign companies, which could export much of the oil and profits from these fields for up to 35 years under what are called “production sharing agreements.”

“We want the national Iraqi oil company to make service contracts with the companies, not partnerships,” Umara said in an interview, shortly after dedicating a plaque that extolled international labor solidarity at the Chicago monument to the Haymarket workers, whose protests in 1886 led to the declaration of May Day as the international workers’ holiday.

“We want new technology for the production of oil but to have foreign companies work with Iraqi workers and professionals for a limited time,” he says. “We are not opposed to being developed with advanced and imported technology, but we would like to be sole owner of our wealth and use it to develop our country and cities.”

The proposed oil law partly would govern distribution of revenue, which Umara says the oil workers’ unions want directed to a national redevelopment fund. But the Bush administration has long wanted to give foreign oil companies as much control as possible over Iraqi oil fields. Under the law, the Iraqi national company would have to compete with foreign companies for production rights, Umara says. Antonia Juhasz, an analyst for the watchdog group Oil Change International, says that the law gives foreign oil companies great flexibility, with no requirement to hire or invest profits locally, and opens the door to the long-term production-sharing agreements that other Middle East oil-producing nations have rejected as exploitative.

The oil workers’ opposition to the law could prove a serious obstacle to the already much-delayed legislation. In June, oil pipeline workers struck for a week “for the rights of workers and against the proposed law,” including demands on companies to live up to promises for profit-sharing, affordable housing construction and other benefits, Umara says. Although the government had frozen union assets, issued warrants for union leaders’ arrests and even worsened the old labor law from Saddam’s era–preserved by the Provisional Coalition Authority–Umara says the 23,000-member union, representing 36,000 workers, is growing stronger. In 2003, the union forced Halliburton out of the oil fields, which inspired port workers to oust the Danish shipping company Maersk from the docks.

The oil workers’ union also wants U.S. troops to start withdrawing immediately. “I’d rather they withdraw yesterday than today,” Umara says. “I assure you, chaos will not happen, and even if it happened, I’m very sure we can solve our own problems.”

Different religious and ethnic groups cooperate now in a Basra controlled by the Iraqi security forces, he says. While the average oil worker still worries about security, their main concern is the future of Iraq’s oil.

“Most important,” says Umara, “is not to let that new oil law pass.”


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David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at davidmoberg@inthesetimes.com.

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