Challenges of privatisation and social protection policy in Iraq

Report of an ICFTU seminar for Iraqi trade unionists in Amman, Jordan in April 2006 by Ian Cuthbert, CWU

The conference was held on the 2nd to the 4th April 2006 in Amman, Jordan. There were 19 representatives from all of the trade union federations in Iraq including the two Kurdish organisations. The ICFTU insisted that each of the federations included women in their delegations and this was adhered to by all, so there were 6 women trade unionists present.

Sunday 2nd April

During the opening remarks by Ralf Erbel in which he spoke of the difficulties experienced in getting some of the delegates from Iraq (flights cancelled at last minute) and introductory remarks by each of the non-Iraqi attendees, the aim of the conference was described as being twofold. One was to arrive at a common programme regarding privatisation/social policy and secondly to facilitate the coming together of all f the representatives of workers in Iraq.

The opening key address was given by Dr. Mohsen Ben Chibani. He commenced by outlining the ICFTU view of privatisation and of the impact of foreign investment on the public sector. These were very real issues for Iraq. He then went on to cite many examples of the consequences of privatisation globally referring particularly to the dismissal of workers and the privatisation of water in Pakistan; privatisation of mail services in Japan; the controversy over health and education in Britain; and the industrial action in Greece over privatisation in both banking and telecommunications sector. In terms of social protection reference was made to the recent strike action in Britain by public sector workers over pension issues.

He then went on to give an outline of the Iraq economy. Iraq had been a founder member of the International Monetary Fund (IMF) however relations were severed in the 80s. They were subsequently restored in 2004. Iraq was then asked to repay the accrued debt of some $436 million. The World Bank and IMF agreed a plan to cancel some 80% of Iraq debts on a phased basis. This was however contingent on Iraqi Government 'respect for economic liberalisation'. Effectively the World Bank's 'strategy for improvement' in the Iraqi economy was privatisation (nb almost all major economic activities were under the control of the state during the reign of the former regime). Examples were given of similar exercises throughout the Arab world beginning in 1985 including Egypt, Lebanon, Algeria and Sudan. The approaches in each country had differing characteristics dependant on the strength of the indigenous trade unions.

As indicators of the Iraq economy, the following figures were cited. Over 25% of Iraqi people live under the poverty level. There is an unemployment level of around 65% in Baghdad.

In 2003, the Authority in Iraq (prompted by Bremer) decided to sell some 186 Public institutions. The decree was issued on the 20th September 2003 but the important point is that this did not attract extra foreign investment, it was in exchange for the Iraqi debt. There was no consultation with the Iraqi people or their trade union representatives. Indeed the first decree following this was to significantly decrease the rights of workers.

Dr Mohsen's conclusions were very much that the correct stance was against privatisation which only served the market and would destroy social protection.

There then was a general question and answer session followed by a debate. What emerged were differing views on how to react and on the issue of privatisation. For instance, given the doubly isolated position the Kurdish people had been in since 1992, they took a less sanguine view of privatisation. Some argued that in terms of public sector activities they did not have an infrastructure to privatise. The only way this would be built was with private finance. The problem in the Kurdish areas was that they had been under-developed for 70/80 years. The delegates from that region were adamant however that oil and gas should remain in the public sector.

Others from elsewhere in Iraq stressed the need to be realistic since a) the Iraqi government does not recognise trade unions and b) the security situation makes it difficult to do much of what they would want.

Greg Muttitt, a researcher on oil sector privatisation working for Platform (an NGO based in London), explained some of the characteristics of oil privatisation throughout the world. In particular he explained the concept of Production Sharing Agreements. Effectively this type of agreement, whilst appearing to keep state control of the sector, in reality handed power to foreign investment. Decisions on oil will be taken very shortly with the Iraqi Authority drawing up an Oil Law. He pointed to the insistence by the IMF that it be involved.

Greg outlined that the involvement of oil companies generally meant a decrease in jobs; importation of foreign workforce especially of technicians and managers; and anti-union policies. He talked too of the safety records of private oil companies.

The lifetime of Production Sharing Agreements are generally 25 years and include so called stabilisation clauses which preclude governments from introducing any law that could impact on the profitability of the oil companies.

Ian Cuthbert (CWU) attending on behalf of the TUC outlined his experience of privatisation of telecoms in the UK. He described in detail how, once a company was privatised less profitable parts or those not regarded as core activity were further sold on. A warning was given that the act of privatisation had to be seen as the beginning of a process rather than the end.

Currently the Iraqi CPA had issued Requests for Proposals (RFPs) to companies for the provision of mobile services. Essentially the terms of tendering process prevent any company with more than a 10% government holding from bidding. This, added to other terms, would favour immensely US companies who had more experience in regional contracts. This in turn opened up the danger of Iraq being saddled with a technology not compatible with its neighbours. The US standard technology is Code Division Multiple Access whereas most of the rest of the world utilises Global System Mobile. Significantly the incumbent Iraqi Telecoms and Postal Company (state owned) will be precluded from tendering for all or even part of these contracts although Iraq is predicted to spend some $6.4 billion annually on information and communication technology by 2008.

Ian went on to describe the changes that privatisation had forced upon his own union. From dealing with one single employer the union had to re-organise to deal with up to 60 bargaining units across the industry. This could not be done without clear, united and co-ordinated machinery. There was a necessity to train and develop activists to recruit and organise across the industry. This is only possible to do effectively with one organisation. He described the process of union amalgamation that was necessary.

Monday 3rd April

The day was spent discussing Social Protection Policies. Dr. Mohsen Ben Chibani opened the discussion by outlining the history of ILO conventions and of social security. He described how the World Bank intended privatising social security in Iraq with no reference either to the indigenous workers organisations or the ILO. The document introduced by the World Bank was produced only in English to prevent real scrutiny locally.

Delegates then spoke of social security policies of the previous regime which although limited did provide some basic cover. Since the invasion these had effectively stopped. All social security funds had in practice been frozen since 2003. This amounted to some 300 million Iraqi dinars which, because of inflation and generally collapse of the economy, would only now provide for 1 month's general social security were it to be reinstated.

The delegates then split into three working groups to discuss what actions were necessary and reports given. The combined statement is set out later in this document.

A session was then held so that each federation could describe their own organisation. They were asked specifically to cover:

• the name of Federation
• the number of members
• the number on the Executive/leadership
• the number of women included in the leadership
• the number of affiliates in federation
• affiliation fees
• bank account
• last congress / conference / election of leaders.

The reported responses were as follows

General Federation of Oil Workers (3 representatives present)

There are 10 affiliates - committees for each Oil company. 14 elected members of the Executive bureau including 5 women. Last congress was March 2005. No affiliation fees. They hold a bank account with Middle Eastern Bank for Investment.

Federation of Workers Councils (FWCUI) (2 representatives)

Six unions affiliated - Service, Mechanics, Health, Agriculture, Transport and Building. 4,000 members paying a one-off 250 dinars. No bank account held. 11 people on the Executive including 4 women. Last congress was April 2004 and next will be April 2007. The leadership is elected on a four yearly basis.

Iraqi Kurdish Workers Union (IKWSU) (3 representatives)

Six unions affiliated - Mechanics, Transport, Agriculture, Services, Oil and Foodstuffs. A membership of 120, 000 claimed. There are 10 on the Executive including 3 women. The current fee is 3000 dinars per year. The next congress is October 2006.

Kurdish General Workers Union (KGWSU) (3 representatives)

7 Unions affiliated - Service, Transport, Agriculture, Oil, Construction, Mechanics and Textiles. 70,000 members claimed. The Executive has 9 members including 5 women. They do have a bank account. Affiliation fees are - 1% of salary for permanent workers or 6000 dinars for freelance workers. The last elections were 1997.

It was reported in this discussion that the two Kurdish federations are currently in discussion with a view to merging.

General Federation of Iraqi Workers (GFIW) (8 representatives)

Reported that there were 800,000 members (350,000 in public sector, 450,000 in private). Fees were 1% of salary but only 250,000 were paying. Their bank account had been frozen by the government. There were 15 on the Executive but no women. There was a Women's Affairs Bureau with 15 members drawn from the affiliated Unions. These were Mechanics, Publishing, Textile, Construction, Transport and Agriculture. There was also a general union covering workers in health, education, banking, oil, tourism , electricity and railways. The GFIW is affiliated to ICATU - the Arab Confederation.

In general, during the discussions, there were palpable tensions between the federations although it was hoped - some day - they would unite.

Kamalam, Director for Equality and Youth, ICFTU held separate meetings at lunch times with the women delegates to promote more co-ordinated work.

Tuesday 4th April

After much discussion, debate and iteration a final draft statement/ demands was agreed by the Iraqi delegates. The following is a synopsis although the document was being circulated to all of the federations with a call to publicise widely amongst members.

The statement was basically directed to three separate entities.

To the Iraqi Government

• To accelerate the publishing of the Labour Law
• Work on enacting a law on pensions and social security for all workers in Iraq
• Necessity to consult with unions before privatising public companies or restructuring of public sector
• No privatisation or foreign control (through PSAs) of the oil sector
• No privatising basic services
• To support the development of ration cards
• Adoption of a developmental national strategy for decent job opportunities
• Upholding national labour standards
• Respect for the rights of trade unions
• Government must nullify the 2005 decree which confiscated moveable/immoveable assets of trade unions
• Demand the Ministry of Labour retrieves the social security payments of workers from Ministry of Finance

To the International Financial Institutions

• World bank to consult workers in Iraq on any proposals
• World bank to finance projects to create employment
• No privatisation of social security

To International Trade Unions

• Increase solidarity and co-operation
• Convey attitude of Iraqi trade unions to International Financial Institutions that a social aspect needed to be integrated into policies
• The ICFTU to intervene with the World Trade Organisation to prevent the liberalisation of basic services.

Finally

The conference was both interesting and demanding. It is clear that progress on moving forward on this agenda relies in great part on the ability and willingness of the workers organisations to come together. I believe that the acceptance of a common programme as outlined above was recognised as a major step in this journey. There is also a clear need for the Global Union Federations to build links with groups of workers.