WASHINGTON, Dec. 21 (UPI) -- The International Crisis Group is urging negotiators of Iraq's oil law to adopt a new compromise that would give regional autonomy within a federal government umbrella -- all of which would be set permanently in the constitution.
In a report released Tuesday, the Brussels-based crisis prevention and resolution organization, set out a strategy to end a factional feud over control of Iraq's oil resources and revenues.
It also pushes for a temporary stay in deciding the fate of Kirkuk, a northern city flush with a power struggle and nearly 10 percent of Iraq's total proven oil reserves, the third-largest in the world.
The report comes on the heels of the Iraq Study Group report, released Dec. 6. The ISG was led by former Secretary of State James Baker and former U.S. Rep. Lee Hamilton and offered a far-reaching suggestion for U.S. strategy change in Iraq, with recommendations for Iraqi governance as well.
The ICG report, titled "After Baker-Hamilton: What to do in Iraq," however, said the ISG recommendations were too timid and couldn't stave security devolution in the country.
Violence rages daily and is increasing in Iraq, killing unknown numbers of its citizens and a lesser number of U.S.-led coalition troops. Dangers abound, affecting women, union leaders and more than 1 million-strong, post-invasion refugee population.
This may seem more significant than a backroom negotiation over a law governing Iraq's oil, but progress on a deal could lead to progress in the country.
"I think it's critically important, frankly, because the oil is money and money is what on which the world revolves," said Joost Hiltermann, Middle East project director at the Crisis Group.
Iraq's oil revenues fund an estimated 96 percent of its budget. The oil sector was misused and ill-maintained by Saddam Hussein, causing some of the need for repair today.
Iraq produces about 1.9 million barrels a day now, compared to 2.6 million before the war, and holds an estimated 115 billion barrels in reserves. It exports about 80 percent of that, mostly from the Shiite-controlled south since the northern pipeline from Kirkuk to Turkey has been rendered useless by militia attacks.
There is little trust in the negotiating room. Sunnis populate land in the center and west that has little oil. They fear regional control would limit sharing oil revenues.
Shiites want a strong central government, with the ability to control Iraq's oil wealth.
The Kurds fear exactly that after decades of deadly authoritarianism and, after a compromise, are now holding fast in negotiations over control over contracts of new oil development.
Iraq's constitution, passed last year, gave central control over current oil production and its revenue, but didn't explicitly rule on future fields, paving the way for a classic fight over federalism's reach.
"What we're proposing is that the central government lay down guidelines for contracts so that they are done in a professional manner, but that the regions have the right to issue contracts. Given that the revenues will accrue anyway to the central government there should be actually no problems with the regions being able to issue contracts," Hiltermann said.
"Management of both current and future fields should be shared and the revenues should accrue to the central government, though through a separate and independent trust fund and be distributed equally by population," he said.
A fair oil law is meaningless without two qualifiers, Hiltermann said.
The first is a central government with the ability to govern.
"At the moment we don't have a functioning oil industry. We don't have a functioning government. We have total chaos," he said, echoing the report: "No country run by a weak or non-existent central state could survive the strain of a civil war arising from an existential struggle over power and resources."
The second caveat to a quality oil law is enshrining it as an amendment to the constitution, the supreme law of all Iraq, regardless of region.
But the constitution as a whole was little more than a band-aid compromise on a power struggle caused by the war itself, "in short, a recipe for violent conflict over regional boundaries, tremendous bloodshed as minority populations are hounded out, and the country's de fact break-up," the ICG report states.
The KRG wants Kirkuk enveloped in its borders and is hoping a referendum at the end of next year, as called for in the constitution, will legalize just that.
A historically Kurdish city, it now shares identity with Turkomen, Christians, Shiites and Sunnis, and is a scene of growing factional and sectarian violence.
Hiltermann said that could turn quickly to a civil war if tensions aren't eased first. The Crisis Group report calls for a U.N.-led task force to assist a transition team to do just that.
--
(Comments to [email protected])
