Greg Muttitt worked for many years with the arts and social justice charity Platform, exposing the global impact of the oil industry. His first book, based on almost a decade of research, is Fuel on the Fire: Oil and Politics in Occupied Iraq. It provides a forensic, behind-the-scenes account of the struggles over Iraq’s oil prior to the 2003 invasion and during the ensuing occupation.

This is the second of a three-part interview with NLP’s Ed Lewis. In the first part, Muttitt argues that the Iraq war was driven by a concern to expand oil production in Iraq in order to bring down the price of oil. Here, he builds on that analysis, discussing the dynamics of the occupation in relation to oil and its ideological underpinnings.

Let’s talk now about how the aims that you’ve outlined – of expanding oil production and of facilitating multinational involvement as part of that strategy – were manifested during the occupation and how it has been manifested since.  In the very first phase, you have the Coalition Provisional Authority (CPA) under Paul Bremer.  The CPA did engage in widescale privatisation, illegal under international law, but they don’t privatise the oil at this point. Why not?

There were, as there always are, tensions within the US administration, and I think it would be a big mistake to see the US government as monolithic. A lot of people on the left do tend to see it in that way; I think that’s misleading. On this question of oil, one thing that comes out very strongly in the documents I’ve read is that there is a tension between those two oil objectives I mentioned, or perhaps between variants of them – between a long-term and a short-term variation of them. What’s quite clear to me as I’ve tried to explain is that in the long-term, the US and Britain have an interest in Iraq’s oil industry being run by foreign multinational companies, rather than remaining in the Iraqi public sector.

In the short term there was an interest in the oil sector working and running effectively. Because in the short term if it were disrupted that would push up oil prices – as in fact happened. Iraq was a significant producer – even before 2003, it was producing about 2 million barrels a day – 2.5-3% of the world’s total, which is significant from the oil markets’ perspective. What I saw both in the pre-war planning documents and in the discussions about how to make Iraqi oil policy under the occupation was tension between the idea of keeping Iraq’s oil running effectively so that it doesn’t disrupt oil markets in the short term and the idea of completely disrupting it to clear the ground for foreign investment.  For example, in pre-war planning documents in the Pentagon, they predict that there would be war damage to the oil facilities. These planners in the Pentagon in late 2002 and early 2003 were saying, ‘should we repair it?’. The downside of repairing it after it’s all bombed, they said, is that it might weaken the case for foreign investment! Whereas since Iraq didn’t have much money at the time, it might be forced by economic necessity to bring in the foreign companies to provide this investment, to rebuild these damaged pipelines and oil wells and pump stations and so on. So this debate was going on.

In the early stages of the occupation, and certainly the direct occupation, I think they didn’t privatise the oil for two reasons. The first was that the advocates of stable oil markets in the short term won the arguments, and the second was that the multinationals, the BPs and Shells and Chevrons, were saying very clearly that ‘we’re not going to invest now in any case, because it would never be legally sustainable. Any Iraqi future government could tear up the contract and we wouldn’t have a leg to stand on. Therefore we’re not going to invest.’ So there’s an argument against disrupting the oil industry and there’s also an argument that there’s not much point in doing so, at least if you want these big companies to be in control.

So that’s why it didn’t happen then. What instead happened during that period was the laying of the groundwork. Firstly, they changed the staffing of the Iraqi oil ministry, making sure people were at the top who reflected Western interests in the oil, and supporting and promoting and working with those while marginalising the others and, at the very least, condoning them being cleared out by their Iraqi friends.

Meanwhile, they were packing the oil ministry and all the other Iraqi ministries with Western advisers who would develop that policy, and so during the course of 2003-4 and somewhat during 2005, Western advisers were writing the policy. Iraqis who were happy to accept it were promoted, given positions in government.

And this isn’t just oil, these practices occurred across the board. That’s what happened during the early stage of the occupation.

That starts to change in late 2005 early 2006. The election of a permanent government took place in December 2005. That’s the point where you see American officials, you see the World Bank, and a bit later on you see British officials, saying ‘ok, now we need a law which will reverse the nationalisations and will legitimise bringing in foreign companies to run the oil industry. And that law needs to be passed by a constitutionally elected parliament and that will give the multinationals the legal confidence they need,’ in contrast to if it were done by a direct occupation power.

You refer at one point in the book to the idea held by some US planners that occupation would be fairly brief, followed by the installation of a new, compliant government. Did the US and UK expect, in contrast to what has happened, to get a new model for Iraq’s oil in place quite quickly?

The timescale of the occupation, especially during those first couple of years, was constantly changing. If you remember Paul Bremer thought that the constitution would be written while he was running the country, before any elections. It would be written by Iraqis whom he appointed, and overseen by him.

Now that became politically impossible for him, in particular because of Ayatollah Sistani, the Shia religious leader, whose opposition immediately delayed the process of writing a constitution. Once there was a constitutional parliament, they expected the oil law to happen very quickly in 2006 but it didn’t happen, it kept getting delayed because of opposition to it, and it still hasn’t happened now in 2011.

Lots of things have taken longer, partly because of Iraqi political and often popular resistance to the Americans wanted to do things. But there were also differences within the US administration. There were those, for example the neo-cons in the US, who thought it could all be very quick as Iraqis would embrace US concepts of democracy and economic liberalism, against ‘realists’ who saw them as naïve and thought a long and aggressive occupation was needed. Some American economic libertarians were less concerned about making sure it was Exons and Chevrons who got the deal as they just wanted it to be privatised, they didn’t care who gets it, it could just be a small company from Texas. That contrasts say with Cheney, who was very much into the strategic significance of these American (and British) champions. So one thing that did change the timescale was when it became clear that the neocons’ predictions about ‘freedom’ were wrong, that all you have to do is bomb Iraq and freedom will germinate.

A kind of natural neo-liberalism will sweep through because that’s what people intrinsically desire.

I think it’s this idea that in all countries there are seeds of American-style freedom, neo-liberalism, and in dictatorships like Iraq you’ve got all of these weeds above the ground, like the Saddam regime. All you have to do is apply this weed-killer of carpet bombing onto Iraq, which will create a bare earth, and all these seeds will start germinating. Of course it doesn’t work like that. You can’t create a fresh start with no history or culture or context, for one, and for another, most Iraqis don’t share this American vision of a kind of neo-liberal, capitalist paradise. Attitudes are much more statist, much more public sector, much more collectivist.

Presumably this reflects some of the ideas you discuss early in the book, such as that of Islamic economics, as developed by Muqtada al-Sadr’s cousin – Mohammed Bakr al-Sadr. It was interesting to learn about a sophisticated type of political thought emanating from Iraq - we get very little sense from the mainstream that it would be home to anything like that. We see it as responding to external pressures, as being riven by struggles for power, but positive or inspirational developments which grow out of Iraqi society – they are very much hidden from view.

Yes. If I achieve one thing with my book I would like to change the way some people think about what Iraqis are like – Iraqi society, Iraqi people, Iraqi culture.

I think there are two very prevalent views of Iraqis in the European and American mainstream and both of them are fundamentally racist ones.  The more generous of the two, which is perhaps the more popular view here in Britain, is that poor Iraqis are helpless victims. They had this terrible dictatorship and this terrible occupation. They just can’t sort anything out for themselves and we’ve got to give them a helping hand. This of course is old-style paternalistic thinking. The even more offensive view of Iraqis is that they’re all still fighting fights that started in the 7th century, and that’s all they think about, they only have communal identities, sectarian and ethnic identities. That’s the only way they think – all Shia think alike, all Sunnis think alike, all Kurds think alike, and they’re basically barbarians who are fighting out these ancient hatreds. That view is clearly offensive but I find the patronising, paternalistic view almost as offensive as well. And actually what you find, if you spend time with Iraqis – and this is probably the biggest thing I take from the work I’ve done over the last few years in Iraq – you find a really sophisticated political culture. You find people who are really keen to discuss political issues, to discuss issues that affect them. They are really eager and really able – and this is what I talk about in the book in relation to the oil law – to organise, to change the situation.

So you have this old bigotry that Arabs don’t do democracy and one of the things I try to do in the book is to kick out this old idea. Apart from the corrupt politicians they unfortunately have to deal with – the ones that we installed, of course – I think Iraqi people have greater capacity for democracy, to generalise, than British people do. I think their political culture puts us in Britain to shame, in terms of their political engagement, their willingness and ability to organise, and that for me was a source of great inspiration and fundamentally at odds at how people think about Iraqis.

And that perception you’ve got comes in part from the struggle around the oil law.

Yes, that’s the area I worked mostly on and that’s the struggle that the book tells the story of. But I’ve talked to people both in other civil society organisations and ordinary members of the public who I meet in a café or whatever, so I see it more broadly, I’m not just saying that the activists are great activists. I’m also saying people more generally have a much greater propensity to engaqe in social and political issues and ideas than people over here.

Tell us more about the oil law, the mechanism through which the US and UK hoped to realise their new model for Iraqi oil. 

Firstly, the oil law is routinely mis-characterised. It’s mis-characterised primarily as being a law about how to share revenues between different sectarian and ethnic groups. In reality the oil law has one article, article 11, which is about sharing revenues, and basically all that says there will be a separate law which will governs how to share revenues. So that’s not what the oil law is about. What the oil law is about is partly reversing the nationalisation of the 1970s, but actually it’s a bit more than that.

The legal situation before 2003, and this is still the legal situation now, is that the government can sign contracts with foreign investors to run oil fields but, and this is specified in two laws in 1967, the contracts are only valid if they are specifically ratified by a separate act of Parliament. The executive branch of government can’t do it alone - they need parliament to ratify it. That’s the law in Iraq, as it stood pre-2003, as it stood in 2006 and actually as it stands today. So the real function of the oil law was to allow the executive branch, the oil ministry or the prime minister, to sign contracts without having to go to parliament for approval.

Contrary to all the rhetoric about democracy, therefore, this would amount to a massive de-democratisation. Oil accounts for 95% of government revenue and any one contract could make up 10 or 20% of that so of course you want parliament to look at it, if this is what the government revenue is depending on. Thus, the purpose of this oil law was to repeal those 1967 laws because if the parliament has to look at a real oilfield that has real revenues, real jobs attached to it, they will probably be quite sceptical and they will raise questions: ‘are we getting fair terms here?, Are the foreign companies going to behave in a reasonable way?’. In contrast, a general oil law is more abstract: it doesn’t relate to specific fields but delegates a general power from the parliament to the executive branch. While it’s at that abstract level, they thought, we can get an oil law through parliament, and leave the executive branch – who were friendly to the Americans – to make controversial decisions without parliamentary oversight. That was the idea.

In fact what happened, and this is the real story at the heart of the book, was that the vast majority of Iraqi opinion supported the situation as it was, with oil in the public sector, and they started to organise. In particular the trade unions, and especially the oil workers’ union but also the experts who had been managers in the oil industry for the previous decade. Then civil society groups, both religious and secular, they started to simply explain to Iraqis what this oil law was about and as they did so the opposition to it rapidly spread, because the idea of what they were trying to do was just so unpopular. As it spread, some of the opposition groups in parliament thought ‘well hang on a minute, this is a big political issue, and we’ve got an opportunity to make ourselves look more popular’. In some cases it was ideological too but in a lot of cases it was political.

This struggle runs from Spring 2006 to Autumn 2007, an 18 month period, where the Americans get increasingly frantic, saying you’ve got to pass this. They make all kinds of threats against the Iraqi government if they don’t get it into law. They make reconstruction funds and aid conditional on its passage. They make reduction of the Saddam-era debts, which are enormous, conditional on its passage. Every time an American official goes to Iraq which, during that period, there was a senior official - a cabinet member - going once or twice a month, every time, all they talked about was the oil law. They were constantly pressuring for it and through half of 2007 they were even saying, not in quite as many words, but quite clearly so it was understood, that the Maliki government could be removed from power if they didn’t give them the oil law.

It could be removed because they would withdraw support of the military, and that would cause its collapse.

Yes, exactly. At that time the government had no legitimacy or popularity. The country was utterly unstable and power in 2006-7 was territorial but territories were controlled either by militias or by US forces. There was a whole range of militias, of course, many of which were associated with particular political parties, but if the support of the US military had been withdrawn, it was quite clear that the government would collapse very quickly. So that’s why the Americans were able to make that threat.

It’s fascinating to see the linguistic contortions that American politicians tied themselves in. There was a really striking comment by George Bush at the climax of this struggle. This is August 2007. The Americans had set a deadline of September 2007 to pass the oil law, and they’d been pushing with everything they’d got for this September deadline. And in August 2007 in sheer frustration Bush makes a speech, in which he makes it clear that he’s talking about things like the oil law, in which he says: ‘if the Iraqi government doesn’t respond to the demands of the people, it will be removed by the people.’

Now the amazing thing about that is that the only people who were demanding the oil law were American people. And of course they were also the people who would be removing the government. So blatant was it that there was this mismatch between what he was trying to say and what he knew was really the case that he immediately followed it up, rather awkwardly, with ‘that’s for the Iraqi people to decide, not American politicians’. He had to say that because what it really meant was being yelled so loudly between the lines that he had to try and disclaim it.

So, really the American government portrayed themselves – and I think often believed it - as representing the interests of the Iraqi people, and therefore as having to tell Iraqi politicians what to do in order to meet those interests.