Iraq's clans extort oil companies as poverty reigns

Iraq's clans extort oil companies as poverty reigns
6 min read
13 September, 2021
In-depth: Heavily armed Iraqi tribes are blackmailing oil companies who make lucrative profits from investments on seized land, as the Iraqi state stands by powerless to intervene.

While Basra governorate lies on an ocean of oil - receiving foreign investments to the tune of hundreds of millions of dollars per year - local people live in grinding poverty and suffer high unemployment

They are also left vulnerable to the violent disputes which frequently erupt between armed tribes in a region where the state and security forces are almost absent.

Last year, Muhammed Al-Waeli and his family were forced to leave their home in Abu Sakhir, northern Basra, in fear of their lives due to ongoing clan disputes, Fadhil al-Gharawi, a member of the Iraqi High Commission for Human Rights (OHCHR Iraq) told Al-Araby Al-Jadeed, The New Arab's Arabic-language sister publication. Many fall victim to clashes they have no connection to.

General Amjad Qasim, who heads the Basra police force, confirms that 13 families have left their homes in the city for the same reasons. Mezar Hammadi Al-Sultan, Chairman of the Reconciliation and Clans Committee in the Iraqi Parliament, says that this type of displacement is spiralling out of control due to the proliferation of weapons within the tribes and the weakness of the security apparatus.

"The primary driver of clan conflict is over access to employment in oil companies, or compensation if oil is discovered on tribal lands"

In the last two years, Basra alone witnessed 280 armed disputes which left 35 dead and 74 injured, according to Muhammed al-Zaydawi, head of the Clan Dispute Resolution Committee in Basra. He explains that the security forces issued 1,400 arrest warrants between 2019 and 2021, and says the problem is growing: 15 armed disputes broke out in the first three months of this year, killing 11 people.

Where are clan disputes happening?

Around 85% of clan conflicts occur in the Basra districts of Al Hartha, Al-Qurna and Al-Midaina. This is because they are close to the oilfields: the primary driver of clan conflict is over access to employment in oil companies or compensation if oil is discovered on tribal lands.

The situation is deteriorating despite Basra’s reputation as the country’s 'Oil Capital'. Last year, oil investments in Basra reached $560 million, according to Alaa Abdul Hussein, Chairman of Basra Investment Commission during a press conference on 31 January 2021, where he said that 15 investment proposals were approved in Basra in 2020, bringing the total to 161.

Iraq's clans extort oil companies as poverty reigns
Workers at Tuba oilfield, west of Basra. Despite having the largest oil reserves in the country, this has not brought benefits to locals in the region [HAIDAR MOHAMMED ALI/AFP via Getty Images]

This situation pushes the clans to demand work opportunities for their children by threatening and blackmailing the companies operating in the fields. In November 2019, for example, the Bayt Wafi clan in Basra took action to close the Majnoon oilfield. Two companies were operating there - the China Petroleum Engineering and Construction Corporation (CPECC) and Petrofac (a British company).

Clan members demanded financial compensation in exchange for access to the land which had previously belonged to them. On 26 October 2020, the same clan blocked access to the fields, preventing workers from reaching them. They were demanding work opportunities for their children, according to Lieutenant-Colonel Qusay Al-Tai, a member of the police force in Basra governorate.

Daewoo Engineering & Construction, a South Korean company contracted to do building work on the Grand Al-Faw port in southern Basra, was forced to pay 10 million Iraqi dinars ($7,000) to the al-Fadoul clan on 10 January 2016 to compensate a clan member after a fight with a company employee.

The tribe demanded that the company pay the tribal fasel (the compensation agreed upon in customary clan reconciliations), as well as granting the employee two months paid leave in return for him dropping charges, according to al-Zaydawi.

"In the last two years, Basra alone has witnessed 280 armed disputes which have left 35 dead and 74 injured"

Law No.84 of 1985 on the preservation of Hydrocarbon Wealth grants the Ministry of Oil the right to seize tribal land for oil projects, as long as the landowners are compensated financially. Al-Sultan explains that clan unrest and blackmailing are becoming repellent factors for foreign investors in southern Iraq.

For example, Petronas, a Malaysian company, threatened to leave the Garraf oilfield in Dhi Qar on 18 October 2020 because of pressure from clans in the area, who wanted the company to employ their children, according to the previous head of the Dhi Qar Energy Committee, Yahia Mishrafawi.

Why the escalation?

Usually, when a dispute arises between a company and a clan, companies will solve the disputes by coming to a mutual arrangement, either through paying a settlement or offering work to clan members. They rarely file official legal complaints - aiming to avoid armed retaliation, according to economic consultant, Dirgham Muhammed, who believes that this policy of appeasement is one reason the phenomenon is increasing. 

Perspectives

However, it is clear that the deterioration in general living conditions plays a primary role in the escalation: in Basra, the poverty rate is 40% according to OHCHR. The body stated on 26 June 2020 that "poor economic conditions have exacerbated the poverty rate in the governorate and the area's natural resources are bringing nothing to the residents except disease, unemployment and the seizure of their farmland".

A formidable arsenal

During search operations of clan areas in southern Iraq, the Security Services found weapons like BKCs (Iraqi versions of Russian PKM machine guns), RPGs, and Kalashnikov rifles, according to former Basra Operations Commander, Major General Akram Saddam, who said: "Some clans cooperate with the security services and hand over what they have; others refuse".

Abdul Mohsen Al-Ali, a sheikh from the Al Jasib clan in Maysan governorate, acknowledges that some of the clans own a much more formidable arsenal than that of the security forces.

"Clan unrest and blackmailing are becoming repellent factors for foreign investors in southern Iraq"

Kate' Al-Rikabi, a member of the Parliamentary Security and Defence Committee, says the clans built up their weapons stocks by seizing those left behind as the Iraqi army withdrew in the face of the US-led invasion in 2003.

However, security specialist Ahmed al-Sharifi says the clans expanded their stocks by accessing weapons smuggled from Iran to support the war against the Islamic State (IS). Others, like Iranian Shaher and Sayad sniper rifles, were bought from weapons seized by the Popular Mobilisation Forces (PMF) during clashes with IS.

Market prices of the weapons depend on their model and make, according to retired Brigadier General Habib el-Adly - a Russian Kalashnikov is between $800 and $1,000; a handgun costs around $2,500 dollars; a BKC is around $4,000 and an RBG-7 is around $7,000.

Government action?

The Interior Ministry has tried to deescalate the clan conflict in the south. For instance, the Ministry's Tribal Affairs Directorate has formed committees whose task is to intervene as arbitrators to resolve disputes between tribes.

Additionally, according to the spokesman for the Iraqi Ministry of Interior, Major General Khaled Al-Muhanna, 250 people accused of starting clan conflicts were arrested in the first quarter of 2021 and 5,000 firearms in Basra and Nasiriyah were confiscated during search operations in 2019 and 2020.

However, Al-Rikabi does not think the Ministry's weapon-control measures will be effective: "The situation is out of control. We would not have reached this stage if it had not been for the state’s weakness and inability to apply the law".

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Political agendas

Political parties also help clans access weapons to gain their votes during elections, by using the Arms Law No. (51) of 2017, which states that the Minister of the Interior can grant firearms permits to certain groups.

Al-Sharifi stresses the partisan nature underlying many of the clan conflicts, with political actors exploiting the tribal element in regional disputes to mobilise support and win clan loyalty, or backing tribal sheikhs in return for their allegiance. He says that many of the clan disputes in the current escalation of violence have a political motivation.

This is an edited translation from our Arabic edition. To read the original article click here.

Translated by Rose Chacko