Clearing a path for the privateers

Early in the morning of July 21 police stormed the offices of the Iraqi Electrical Utility Workers Union in Basra, the poverty-stricken capital of Iraq's oil-rich south. 

A shamefaced officer told Hashmeya Muhsin, the first woman to head a national union in Iraq, that they'd come to carry out the orders of Electricity Minister Hussain al-Shahristani to shut the union down. 

As more police arrived, they took the membership records, the files documenting often atrocious working conditions, the leaflets for demonstrations protesting against Basra's agonising power outages, the computers and the phones. 

Finally Muhsin and her co-workers were pushed out and the doors were locked.

Shahristani's order prohibits all trade union activity in the plants operated by the ministry, closes union offices, and seizes control of union assets from bank accounts to furniture. 

The order says the ministry will determine what rights have been given to union officers - and take them all away. 

Anyone who protests, it says, will be arrested under Iraq's Anti-Terrorism Act of 2005. 

So ended seven years in which workers in the region's power plants have fought for the right to organise a legal union, to bargain with the electrical ministry and to stop the contracting-out and privatisation schemes that have threatened their jobs. 

The Iraqi government, while it seems paralysed on many fronts, has unleashed a wave of actions against the country's unions that are intended to take Iraq back to the era when Saddam Hussein prohibited them for most workers, and has arrested activists who protested. 

In just the last few months, the Maliki government has issued arrest warrants for oil union leaders and transferred that union's officers to worksites hundreds of miles from home, prohibited union activity in the oil fields, ports and refineries, forbidden unions from collecting dues or opening bank accounts and even kept leaders from leaving the country to seek support while the government cracks down.

At the US embassy, the largest in the world, an official says mildly: "We're looking into it. We hope that everybody resolves their differences in an amicable way." 

While the US command withdraws combat troops from many areas, it is beefing up the military and private security apparatus it maintains to protect the wave of foreign oil companies coming into Basra to exploit the wealth of Iraq's oil fields.

Is destroying Iraq's labour movement a way to ensure an environment in which giant oil corporations can operate freely and enable the Iraqi government to institute further market-based reforms? 

That was a logical question during the Bush administration, when its neoconservative advisers openly predicted Iraq would become a beachhead for privatising the public sector of countries throughout the Middle East. 

The neocon policy has not ended with the change in administration. And today Iraqi labour is paying for its devastating consequences.

Iraq's history highlights the bitterness unions might feel over this situation. In 1963 Iraq's Ba'ath Party mounted a coup. To help it into power, the CIA gave it lists of thousands of Iraqi leftists and union activists, who were imprisoned and murdered. 

After a decade of more coups and counter-coups, Saddam seized control. 

Despite years of repression, Iraq's nationalists were still strong and popular enough to force the nationalisation of oil in 1972.

To deal them a death blow in 1987 Saddam issued the infamous Public Law 150. Unions were banned in public enterprises, from oil and power plants to factories, schools and hospitals. 

Union activists were sent to prison, went underground or left the country.

It's hard to understand why some Iraqi leftists and union activists were willing to see the 2003 US invasion as a step towards democracy. But most saw the end of the Saddam regime as the precondition for any change.

The occupation's programme for transforming the Iraqi economy was announced by Paul Bremer, who was appointed by president Bush to head the coalition provisional authority in mid-2003. 

It included the privatisation of state-owned industry, especially transport, ports, communications and most manufacturing.

In September 2003 Bremer issued orders 29 and 30. They lowered base wages from $60 to $40 a month, ended subsidies for food and housing, allowed private ownership by foreigners of state enterprises - except oil - and permitted the total repatriation of profits outside the country. 

Bremer kept in force Public Law 150. As a result Iraq's new unions were illegal. 

When power was handed over to an "independent" government in June 2004, the transitional law froze the Bremer orders into place.

Nationalist sentiment in Iraq views the public sector, especially oil, as a guarantee of sovereignty and a key to future economic development. Iraq's unions quickly became privatisation's most vocal critics.

Union organising seemed spontaneous, but in reality it relied on workers' memories of years of underground activity. 

In ports and power plants, organisers from Iraq's old unions, who'd come back into the country or reappeared from the underground, helped workers come together.

The unionisation of the south was the leading edge of a wave that spread across Iraq. 

Since most Iraqi workers still work for government enterprises or services, almost all of them came up against Public Law 150. 

After elections resulted in a new government and Bremer's coalition authority was dissolved, a new constitution promised labour law reform.

Instead, the government not only failed to repeal Law 150 but passed a succession of others designed to stop labour activity.

In 2005 Decree 870 gave the government the ability to take over unions and prohibited them from setting up bank accounts or collecting dues.

Unions continued to function based on the willingness of workers to support them, but the government sought to deny them the resources to grow.

In 2007, as the US was pressing for a new oil law designed to ensure that the multinationals would gain access on the most favourable terms, the oil union mounted what was, in effect, a political strike. 

On June 4 the Federation of Oil Employees in Iraq shut down the pipelines from the Rumeila fields, near Basra, to the Baghdad refinery and the rest of the country. It was a limited strike to underline its call for keeping oil in public hands and to force the government to live up to its economic promises.   

Iraqi Prime Minister Nouri al-Maliki called out the army and surrounded the strikers at Sheiba, near Basra.

Then he issued arrest warrants for the union's leaders. US aircraft buzzed and overflew Basra during and after the strike, increasing pressure on the union.

In Iraq, the hostile manoeuvring of military aircraft isn't considered an idle threat by the people below. 

On June 6 the union stopped the strike. Maliki, who faced the possibility that it might escalate into shutdowns on the rigs themselves, agreed to the union's principal demand.

Implementation of the oil law would be held in abeyance while the union posed objections and proposed alternatives.

Even in the US voices were raised saying that oil privatisation was a bad idea. Congressman Dennis Kucinich charged: "Privatising Iraq's oil is theft." Nevertheless, the US threatened to withhold a billion dollars in reconstruction financing if Iraq didn't pass the Hydrocarbon Act.

Maliki faced a fact that US policy-makers refused to recognise - the oil industry is a symbol of Iraqi sovereignty, and handing control to foreign companies is extremely unpopular. 

The oil workers' union, still technically illegal, emerged as one of the strongest voices of Iraqi nationalism. Other demands reflected workers' desperate situation.

They wanted the oil ministry to give permanent jobs to thousands of temporary employees. In a country where housing has been destroyed on a massive scale, the union wanted land for building homes. It demanded jobs and a future for young people graduating from the Oil Institute. 

Fighting for these demands made unions popular - the only force in Iraq trying to maintain a survival living standard for the millions of Iraqis who have to get up and go to work every day in the middle of a war. 

The US authorities, on the other hand, seem to Iraqis like an enemy bent on enforcing poverty.

The rationale for privatising Iraqi industries like electricity and oil in the Western press is that the state-owned industries are old and inefficient. 

US engineering know-how was needed, occupation authorities said, to bring it up to modern standards. Arab labour leader Hacene Djemam bitterly observed: "War makes privatisation easy - first you destroy society, then you let the corporations rebuild it."

But in electricity they never did. US contractors raked in billions in cost-plus contracts for rebuilding the power grid - General Electric alone got $3 billion. 

Yet Basra residents only get a few hours of electricity a day, while temperatures hit 50 degrees Celcius in the summer. 

Before the first Gulf war, Iraq generated 9,300 megawatts of electricity. 

The US bombed plants and transmission lines in that war and US-imposed sanctions then kept many of them from being rebuilt. Production dropped to a third. 

Today, after seven years of "reconstruction" by US contractors, production is only up to 6,000 megawatts, two-thirds of what it was 20 years ago. 

Meanwhile, Iraq's population has grown and consumption has increased.

US contractors became notorious for supplying parts and generators to Iraqi power stations that were incompatible with existing equipment and for showing up with an entourage of gun-toting private security. 

Meanwhile Iraqi workers, who were often targeted by insurgents seeking to sabotage the system, did the actual work of keeping the plants running. 

The Iraqi Parliament, under siege by Iraq's unions and nationalist parties, was never able to finalise the Hydrocarbon Law despite intense pressure from the Bush administration.  But the Maliki government found ways to let the companies in.

In the huge oil fields around Basra it held auctions for contracts to provide services to the Iraqi National Oil Company. Those services included expanding production in existing fields, and exploring new ones and bringing them on line. The Maliki government predicts oil production could rise from its present 2.6 million barrels per day to 12.5 million within seven years.

Contracts were awarded to 18 companies, including the US Exxon/Mobil, the European Royal Dutch Shell and Eni, the Russian Gazprom and Lukoil, Malaysia's Petronas and Chinese state firms. A partnership between BP and the Chinese National Petroleum Corporation got the contract for the giant Rumaila field.

A former Iraqi Parliament member, Shetha Musawi, sued the government over the contracts, accusing it of essentially extorting loans from recipients, including $500 million from BP/CNPC, $300 million from Eni, and $400 million from Exxon Mobil, according to the Iraq Oil Report. Some loans were replaced with $100 million non-refundable "bonuses." 

The Iraqi court ruled she had to pay hundreds of thousands of dollars to hire outside oil consultants to make her case. Then she began receiving death threats. 

When the case came to a hearing she didn't appear in court and it was dismissed.

Meanwhile, the US military took over the former British base in Basra, converting it to a centre for helping oil company executives and personnel begin operations in Iraq. 

Last month US ambassador Christopher Hill invited oil executives and diplomats to the base for a fancy lunch. They talked about ways to facilitate visas for employees they intend to bring in. Hill offered help in easing the way for the billions of dollars the companies will be transferring. The Iraqi oil union, meanwhile, can't even open a bank account.

For more of David Bacon's writing visit dbacon.igc.org