"Why The Privatization of Iraq is Illegal"

Aaron Mate on "What the US-UK's responsibilities are as occupier of Iraq":

On May 22 2003, the United Nations Security Council passed Resolution 1483, abolishing sanctions against Iraq and recognising the United States and United Kingdom as the country's occupying powers. The resolution called upon the US-UK authority to "comply fully with their obligations under international law, including in particular the Geneva Conventions of 1949 and the Hague Regulations of 1907." [1]

How has the CPA changed Iraq's economy and laws?
Among many changes, the US-UK Coalition Provisional Authority (CPA), has laid off hundreds of thousands of Iraqi workers, virtually eliminated trade tariffs and enacted laws that radically alter Iraq's economy. Order 39, decreed by CPA head Paul Bremer on September 20 2003, abolished Iraq's ban on foreign investment, allowing foreigners to own up to 100% of all sectors except natural resources. Over 200 state-owned enterprises, including electricity, telecommunications and pharmaceuticals have been privatised. Iraq's highest tax rate has been lowered from 45% to a flat rate of 15%. Although foreign ownership of land remains illegal, companies or individuals will be allowed to lease properties for up to 40 years. [2]

Are these changes legal?

These laws stand in clear violation of Iraq's constitution, as is openly admitted. The US department of commerce notes that "the Iraqi constitution prohibits foreign ownership of immovable (real) property," and "prohibits investment in, and establishment of, companies in Iraq by foreigners who are not resident citizens of Arab countries." [3]

Consider how the CPA's new laws and massive layoffs conform to its obligations under international law [4]:

· Hague Regulations

Art 43: The authority of the legitimate power having in fact passed into the hands of the occupant, the latter 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.

Art 46: Family honour and rights, the lives of persons, and private property, as well as religious convictions and practice, must be respected. Private property cannot be confiscated.

Art 47: Pillage is formally forbidden.

Art 53: An army of occupation can only take possession of cash, funds, and realisable securities which are strictly the property of the state, depots of arms, means of transport, stores and supplies, and, generally, all movable property belonging to the state which may be used for military operations. All appliances, whether on land, at sea, or in the air, adapted for the transmission of news, or for the transport of persons or things, exclusive of cases governed by naval law, depots of arms, and, generally, all kinds of munitions of war, may be seized, even if they belong to private individuals, but must be restored and compensation fixed when peace is made.

Art 55: The occupying State shall be regarded only as administrator and usufructuary of public buildings, real estate, forests, and agricultural estates belonging to the hostile State, and situated in the occupied country. It must safeguard the capital of these properties, and administer them in accordance with the rules of usufruct.

· Geneva Conventions:

Article 53: Any destruction by the occupying power of real or personal property belonging individually or collectively to private persons, or to the state, or to other public authorities, or to social or cooperative organisations, is prohibited, except where such destruction is rendered absolutely necessary by military operations.

Article 54: The occupying power may not alter the status of public officials or judges in the occupied territories, or in any way apply sanctions to or take any measures of coercion or discrimination against them, should they abstain from fulfilling their functions for reasons of conscience.

What is usufruct?

In accordance with Article 55 of the Hague Regulations, the US-UK are "regarded only as administrator and usufructuary" of Iraq's resources and immovable property, which it must administer "in accordance with the rules of usufruct." Bouvier's Law dictionary defines usufruct as: "The right of enjoying a thing, the property of which is vested in another, and to draw from the same all the profit, utility and advantage which it may produce, provided it be without altering the substance of the thing." [5]

As usufructary, the US-UK coalition would have the right to use Iraq's resources without altering or destroying the character of the resource itself. It is widely-recognised that agriculture, wherein crops can grow again and no serious effect is made on the soil or the land, is an appropriate usage of the right of usufruct. But oil is far different: the extraction of oil is the process of extracting the original resource itself, as the fossil fuels are not renewable and the character of the land from which it comes is severely altered, if not depleted. In addition, the responsibilities of usufruct can also apply to structural changes to a public resource or service. As Naomi Klein points out, "what could more substantially alter 'the substance' of a public asset than to turn it into a private one?"

Does the CPA know this already?

In a leaked March 26 memo that caused a stir in the UK, attorney general Lord Peter Goldsmith advised prime minister Blair that the invasion and subsequent occupation of Iraq was illegal. "My view is that a further security council resolution is needed to authorise imposing reform and restructuring of Iraq and its government," Lord Goldsmith wrote. He added that in his view "the imposition of major structural economic reforms would not be authorised by international law," and that "the longer the occupation of Iraq continues, and the more the tasks undertaken by an interim administration depart from the main objective [of disarming Saddam], the more difficult it will be to justify the lawfulness of the occupation." [6]

Notes

1. UN Security Council Resolution 1483, adopted May 22 2003.

2. Coalition Provisional Authority Order 39, enacted September 19 2003.

3. US Department of Commerce, "Overview of Commercial Law in Iraq".

4. Convention (IV) respecting the Laws and Customs of War on Land and its annex: Regulations concerning the Laws and Customs of War on Land (Hague Regulations). The Hague, 18 October 1907.

Convention (IV) relative to the Protection of Civilian Persons in Time of War (Geneva Conventions). Geneva, 12 August 1949.

5. Bouvier's Law Dictionary, cited in University of Tulsa Law Professor R. Dobie Langenkamp, What Happens to the Oil: International Law and the Occupation of Iraq", January 2003,

6. John Innes, "US and UK Action in post-war Iraq May be Illegal," The Scotsman, May 22, 2003.