Spoils of war

[Pete C]

Spoils of war
US plans to sell off Iraqi businesses are simply the modern equivalent
of pillage, says Brian Whitaker
Brian Whitaker
Monday October 13 2003
The Guardian


For centuries, pillage by invading armies was a normal part of warfare:
a way in which to reward badly-paid or unpaid troops for risking their
lives in battle.

Nowadays, at least in more civilised countries, we do not let armies
rampage for booty. We leave the pillaging to men in suits, and we don't
call it pillaging any more. We call it economic development.

Today, the men in suits are gathering at Olympia, in London, for a
two-day conference and exhibition entitled Doing Business in Iraq.
Protesters will be gathering outside.

The event, which is sponsored by the US-Iraq business council, is one
of a series being held in different parts of the world over the coming
12 months (another will take place in Moscow in December), culminating
in a grand spoils of war exhibition in Baghdad towards the end of next
year.

According to the organisers, speakers at the London conference will
include several US government officials as well as a representative from
Trade Partners UK, the British government's export promotion department.

This fits in neatly with plans announced in June by Paul Bremer, the
head of Iraq's provisional authority, to sell off the country's
state-owned industries (excluding, for the time being, oil, gas and minerals)
and turn it into a US-style capitalist wonderland.

Last month, Mr Bremer issued CPA order number 39, giving foreign
investors unrestricted rights to establish businesses in Iraq and/or buy up
Iraqi companies.

The order also allows foreign investors to repatriate profits,
dividends, interest and royalties immediately and in full. In other words, they
can make a fast buck if they want to, without putting anything back.

While few would disagree that Iraq's industry needs modernisation and
restructuring, two questions arise: has Mr Bremer the legal powers to do
this, and is he going about it in the right way?

He has already acknowledged that his plans will create large-scale
unemployment, at least in the short term. His earlier decision to disband
the Iraqi army exacerbated the country's fragile security situation by
leaving several hundred thousand disgruntled ex-soldiers with nothing
better to do than cause trouble.

That is now widely regarded as a major blunder, and Mr Bremer now seems
intent on repeating the exercise with the civilian population.
According to the UN, the current level of unemployment in Iraq is around
50-60%: the last thing the country needs is more job losses.

Mr Bremer shows little interest in drawing lessons from the problems
caused by economic "shock therapy" reforms in the former Soviet Union,
and in Iraq - with the added factor of military occupation - this can
only fuel hostility towards the US.

His order number 39 is also, almost certainly, illegal. The Hague
regulations of 1907 spell out the obligations of an occupying power under
international law.

Article 43 says that, when occupying forces take over a country, they
must "ensure, as far as possible, public order and safety, while
respecting, unless absolutely prevented, the laws in force in the country".

This means that Mr Bremer is not allowed to change Iraq's existing
laws, including those that govern investment, unless it is "absolutely"
essential to do so.

Article 55 says that an occupying power is only the "administrator and
usufructuary" of state property. "It must safeguard the capital of
these properties, and administer them in accordance with the rules of
usufruct," it adds.

Mr Bremer, therefore, appears to have no right to sell off nationalised
industries.

In the House of Lords last week, Baroness Williams of Crosby tried to
ascertain the British government's view of Mr Bremer's approach. She
asked whether the government "regard current policies in Iraq to be
consistent with the legal advice the prime minister received from the
attorney general".

She received the unilluminating reply that "it has been the practice of
successive governments not to publish advice from the attorney
general".

Fortunately, however, we already have a good idea of what the attorney
general, Lord Goldsmith, thinks about the matter. A memo that he wrote
to the prime minister, Tony Blair, on March 26, a week after the
invasion of Iraq began, was leaked to the press some time ago.

"My view," the attorney general wrote, "is that a further security
council resolution is needed to authorise imposing reform and restructuring
of Iraq and its government.

"In the absence of a further resolution, the UK (and US) would be bound
by the provisions of international law governing belligerent
occupation, notably the fourth Geneva gonvention and the 1907 Hague regulations."

He went on to note that the Hague regulations impose an obligation to
respect the laws in force in the occupied territory "unless absolutely
prevented".

"Thus, while some changes to the legislative and administrative
structures of Iraq may be permissible if they are necessary for security or
public order reasons, or in order to further humanitarian objectives," he
said, "more wide-ranging reforms of governmental and administrative
structures would not be lawful."

The restrictions imposed by the Hague regulations, as the attorney
general suggested, can only be over-ridden by a UN security council
resolution.

Interestingly, the preamble of Mr Bremer's Order No 39 claims just such
backing. It states that the order is "consistent" with security council
resolution 1483, approved last May, which lifted sanctions against
Iraq.

But although the resolution talks vaguely (in paragraph 8e) about
"promoting economic reconstruction and the conditions for sustainable
development", there is nothing in it that can sensibly be construed as giving
Mr Bremer permission to make sweeping changes to the investment law.
Indeed, paragraph five calls upon "all concerned to comply fully" with
the Hague Regulations.

The legality - or otherwise - of Mr Bremer's order is unlikely to
trouble the Bush administration, although future US administrations may have
to grapple with the consequences arising from it.

The prevailing view in Washington was set out with astonishing
bluntness four years ago by John Bolton, now chief hawk at the state
department, when he said: "It is a big mistake for us to grant any validity to
international law, even when it may seem in our short-term interest to do
so - because, over the long term, the goal of those who think that
international law really means anything are those who want to constrict the
US."

Whether the British government, which tends to be more squeamish about
such matters, agrees with this is still unclear, though the presence of
its official from Trade Partners UK at the investment conference in
London suggests that it does.

The US, however, has made no bones about its intentions, regardless of
what the Hague regulations say, to make as many structural changes as
possible in Iraq while it has the chance.

Its hope, of course, is that these will have gone too far to be undone
once a proper Iraqi government takes over. On the other hand, the
changes may go so far that a future Iraqi government feels obliged to
overturn them in order to establish its popular credentials.

In that case, the invasion - with its phoney goals of removing Saddam
Hussein and disarming him of weapons that he didn't possess - may be
just a prelude to the real battle for Iraq yet to come.

Copyright Guardian Newspapers Limited

Up for this thread, up up up. Too important to miss. up, up, up.

[Monte Smith]

Used to be when you were plundering, you didn't bring billions of your own gold coin and the tools to create infrastructure.

[Uli]

Originally posted by Monte Smith
Used to be when you were plundering, you didn't bring billions of your own gold coin and the tools to create infrastructure.

No, but it's not all new. Make an investment of public money from which your private buddies get the interest.

[Monte Smith]

You might also say, "Build something for the Iraqis and make money doing it."

But that way of describing an incentive for rebuilding sounds much less sinister than "repatriating profits" or "modern pillage."

[Uli]

Originally posted by Monte Smith
You might also say, "Build something for the Iraqis and make money doing it."

Yeah. mho is that it should be up to the Iraqis what is built and who makes the money. Obviously, that's also the intent of international law. It's clear you guys have not much respect for international law. But I have already argued that to the tilt.

[Monte Smith]

Fine: so long as we are in the sensible realm of deciding "who builds what," and not the hysterical Guardian fantasy of "this is pillage."

Originally posted by Monte Smith
Fine: so long as we are in the sensible realm of deciding "who builds what," and not the hysterical Guardian fantasy of "this is pillage."

While we're at it, can we also return to the sensible realm of "with whose money" alluded to in Uli's original post? Why is it that alleged free-marketeers fall silent on the question of using public funds to reap private profit?

Gordon? Gordon? Gordon? Bueller? Bueller?

[lynn]

Where's the payout for the American public who is investing at gunpoint in this sick adventure into modern nationbuilding.

Oh, that's right - national security and world peace.





Right!

[Monte Smith]

Originally posted by Alex
Why is it that alleged free-marketeers fall silent on the question of using public funds to reap private profit?

We fall silent on that question when private firms are doing the construction work, not nationalized industries controlled by the proletariat. This, for example, is the case on Earth.

[bluenoter]

Originally posted by Monte Smith
We fall silent on that question when private firms are doing the construction work, not nationalized industries controlled by the proletariat. This, for example, is the case on Earth.

Didn't you read the article? Like it or not, the Iraqi industries in question were nationalized ("controlled by the proletariat" is a red herring, so to speak). And under international conventions, their usurpation is patently illegal--

[Paul Bremer's] order number 39 is also, almost certainly, illegal. The Hague regulations of 1907 spell out the obligations of an occupying power under international law.

Article 43 says that, when occupying forces take over a country, they must "ensure, as far as possible, public order and safety, while respecting, unless absolutely prevented, the laws in force in the country".

This means that Mr Bremer is not allowed to change Iraq's existing laws, including those that govern investment, unless it is "absolutely" essential to do so.

Article 55 says that an occupying power is only the "administrator and usufructuary" of state property. "It must safeguard the capital of these properties, and administer them in accordance with the rules of usufruct," it adds.

Mr Bremer, therefore, appears to have no right to sell off nationalised industries.

Fortunately, however, we already have a good idea of what the attorney general, Lord Goldsmith, thinks about the matter. A memo that he wrote to the prime minister, Tony Blair, on March 26, a week after the invasion of Iraq began, was leaked to the press some time ago.

"My view," the attorney general wrote, "is that a further security council resolution is needed to authorise imposing reform and restructuring of Iraq and its government.

"In the absence of a further resolution, the UK (and US) would be bound by the provisions of international law governing belligerent occupation, notably the fourth Geneva gonvention and the 1907 Hague regulations."

He went on to note that the Hague regulations impose an obligation to respect the laws in force in the occupied territory "unless absolutely prevented".

"Thus, while some changes to the legislative and administrative structures of Iraq may be permissible if they are necessary for security or public order reasons, or in order to further humanitarian objectives," he said, "more wide-ranging reforms of governmental and administrative structures would not be lawful."

The restrictions imposed by the Hague regulations, as the attorney general suggested, can only be over-ridden by a UN security council resolution.

[Al in NYC]

This all shows, yet again, that this is really an ideological quest these guys are on. All the BS about peace, security, and liberation is turning out to be just the smoke blowing that many of us pretty much knew it was.

Of course not all ideologies are so potentially profitable at so low a cost to investors...

[Uli]

Originally posted by Monte Smith
We fall silent on that question when private firms are doing the construction work, not nationalized industries controlled by the proletariat. This, for example, is the case on Earth.

Of course what BN alredy sed. In addition, I've read that such nationalized industries as health care are privatized. An industry here in the states that has more people uninsured as there are Iraqis in an economie where the average income is probably a multitude of the Iraqis.

[mke]

Originally posted by Monte Smith
Used to be when you were plundering, you didn't bring billions of your own gold coin and the tools to create infrastructure.

But the stated aim is to underwrite all this with Iraqi oil. Whether or not this is realistic, it throws into question who's "gold coin" is in play.