Comment
on the National Council for Reconstruction and Development in Iraq
International Oil Daily-IOD[1]
reported on July 16th that the Iraqi
government will soon submit a draft law to the legislative council on setting
up a National Council for Reconstruction and
Development- NCRD with the prime purpose of speeding up contract awards for
strategic projects, including oil field development contracts. In addition to
the Premier and one of his deputies, the 10-person NCRD will include the Ministers
of Housing and Reconstruction, Finance and Planning and Development
Cooperation, and five experts. IOD report was based on information given by
former Oil Minister and energy advisor to the premier Mr. Thamir Al-Ghadban,
and one of the three authors of the still proposed Oil and Gas Law-OGL.
The mentioned above announcement and the proposed NCRD deserves attention and critical assessment since this council might add to the already confusing and chaotic environment surrounding the reconstruction efforts in the country.
In their legitimate and understandable pursuit to develop the country in an attempt to return it to normality, the Iraqi decision makers tend to adopt quick fixes without being aware that such attempts might backfire and could be counterproductive.
In the following I will elaborate briefly on this new NCRD and raise few related questions:
First, the prime purpose of the NCRD is to “speeding up contract awards for strategic projects”. There are many pressing questions here: were such “strategic projects” properly evaluated, selected and harmonised within the national plan that was refereed to in the International Compact with Iraq-ICI Annual report 2008 presented in Stockholm on June 9th ? Is the plan referred to in the ICI differs from the “annual plans” of NCRD, which is according to Mr. Al-Ghadban like “inner cabinet”? Have such “strategic projects” been delayed to the extent that it became imperative to create special council to “speed up contracts awards”? Finally, if NCRD is responsible for “speeding up contract awards” on the national level why this council has only three ministries, and one of them is sector-specific, i.e., housing and reconstruction?
Second, Oil field development
contracts fall within the mandate of the NCRD. The question now is what happens
if the proposed Oil and Gas Law was approved and enacted by the Council of
Representatives-CoR? Obviously there will be conflict between NCRD and the
Federal Oil and Gas Council- FOGC since both of them deal with hydrocarbon
projects. How then this potential and very serious conflict would be sorted
out? Does the establishment of NCRD imply that Council of Ministers –CoM had
given up on OGL? Or is it the final nail in the coffin of the ill-fated FOGC
and thus it will be deleted from the proposed OGL? Or NCRD is a transitional
body until the CoR enacted OGL and FOGC undertakes the same functions?
In many earlier occasions[2]
I questioned, on various grounds, the role, composition and functions of the
FOGC within the proposed OGL, and addressed the role of both OGL and the
Constitution in the national petroleum policy. Most of my assessment of the
FOGL applies also to NCRD. However, and for the time being it is vital that the
issues of NCRD and FOGC should be sorted out by the Iraqi decision makers
sooner than latter.
Third, as was
the case with FOGC, does this new NCRD meant to by-pass the CoR and thus
undermines CoR’s constitutional role as the representative of the sole owner of
the country’s natural resources, entrusted to ensure the highest benefits to
the Iraqi people regarding concluding contracts that have direct and
significant relation to the utilisation of the country’s hydrocarbon resources?
Fourth, the role of the Ministry of Oil-MoO is very
diluted and ambiguous since MoO is not member of NCRD. Furthermore, the
statement of Mr. Al-Ghadban on this matter has many big “ifs” and lacks
specificity on when the MoO gets “involved in the oil sector projects” and to
do what? Moreover, it is not very clear whether the current and future efforts
by MoO to conclude technical service contracts to enhance the country’s oil
production capacity fall under the domain of NCRD or not? Finally, is the NCRD
responsible also for oil projects in Kurdistan Iraq?
The Minister of Oil, on the other hand, believes “The council will not be involved in oil-field development
contracts” and “Oil-field
development contracts will follow the procedure in place”, “so there is no
requirement from the council to speed up those contracts.” [3]
Fifth, one of the core Constitutional principles is the “FRP
co-management” (federal, regional and provincial levels). No mention was made
on this principle. Why? And how constitutional, then, are the formation and the
functions of this NCRD?
Sixth, Surprisingly, no mention was made to the
Central Bank of Iraq-CBI or its role within NCRD. Will CBI be included within
NCRD or no? If yes how, and if not why?
Seventh, the composition of NCRD with “expert”
holding 50% of the membership raises many questions. Are all or some of them
Iraqis? Those who advocate the inclusion of foreign advisors or experts within
this NCRD should read, and read properly, the evaluation of the Development
Board of the 1950s and the post invasion contributions of such foreign advisors
on the development efforts in the country and specific sectors, especially oil
sector. Are the experts or some of them from within the government? How long is
their term in office? What are the modalities of their work? etc.
Finally, many projects, strategic or not, might
require foreign investment or involvement one degree or the other. Considering
what has been said so far would this state of affairs attract or detract
foreign investors to get involved in the national reconstruction efforts?
To sum up, there has been good deal of confusion,
contradiction and conflicting statements by many Iraqi senior officials and
ministers, especially regarding oil issues. This does not at all create the
viable environment for productive, cost-effective and coherent reconstruction
efforts. Furthermore, this generates good deal of legal uncertainty, increases
risk potential and detracts foreign investment and involvement. Iraqi
decision makers should be aware of this and have to address the issues in
consistent and coordinated manner instead of quick fixes.
Ahmed M. Jiyad,
Norway.
Email: Mou-jiya@online.no
Phone: (+47) 5659 5699
[1] International Oil Daily, Iraq to Establish Body to Speed up Awards, Wednesday, July 16, 2008.
[2] For detailed assessment of the drafts of the proposed Oil and Gas Law
and Iraq’s petroleum policy see the following articles by the author:
Ahmed M.
Jiyad, (2008a), Federal Petroleum Policy
in Iraq: Feasibility and Challenges. Paper presented before the
3rd Annual Conference of the International
Association of the Contemporary Iraqi Studies-IACIS, held at School of Oriental and African Studies
SOAS- University of London, UK, 16th- 17th July 2008. http://www.iraqistudies.org/English/conferences/2008/abstracts/ahmed_jiyad_IACIS3abstract.pdf
_________(2008b),
‘Key
Questions Over the Oil and Gas Law in Iraq’, in International Journal of
Contemporary Iraqi Studies-IJCIS, Vol.2 Nr. 1, 2008. Pp. 7-30. Intellect books,
UK. http://www.intellectbooks.co.uk/authors.php?author=3373
________ (2007a),
‘Oil and Gas Law in Iraq: Comprehensive and Critical Assessment’, http://www.nasiriyeh.net/Maqalat-1Oct07/AhmedMJiyad-15oct07.htm
________ (2007b), ‘Oil and Gas Law in Iraq: New Draft Same
Flaws and Shortcomings’, Althakafa
Aljadida, Vol. 322/3, Baghdad, Iraq, pp. 42-62. In Arabic.
[3] Petroleum Intelligence Weekly, Iraq's Al-Shahristani Steps Up The Pace. Monday, July 28, 2008