The legality of the Contracts is more questionable today than ever before.

The debate on Aljazeera International (Inside Iraq) 18^th Dec 2009 between two Iraqi oil ministers- the current Dr. Hussain Shahrastani and a former Mr. Issam Al-Chalabi brought once again the legality issue of the contracts that will be concluded as results of the two bid rounds.

In the debate a reference was made to a memorandum prepared by the Legal Advisor to the Prime Minister on the Rumaila contract. While Dr. Shahrastani seems to undermine the seriousness of the issues raised by the said memo, Mr. Chalabi disagrees and emphasised the seriousness of many matters raised therein.

Few days ago a former oil minister, Dr. Ibrahim Bahrul Olom, gave a very interesting interview to the Iraqi official newspaper AlSabah (14^th Dec 2009) when he also made reference to the same memo.

The 5 pages memo was signed on 15^th Oct 2009 by Dr. Fadhil Mohammed Jawad, Legal Advisor to the Prime Minister for Legal Affairs and Head of the Legal Committee. The memo mentions 65 observations regarding the Rumaila contract.

At the outset I must say that most of, if not all, the 65 observations are very serious indeed, and previously and as early as 20^th June I had covered most of them in my assessments of the Model Contracts, and many other colleagues did as well. My assessments were published and made public on many journals and websites and I personally emailed them to senior members in CoM, MoO and the Parliament.         

However, what is even more alarming and causes serious concerns are the implications of what was mentioned in the introduction of the said memo. It refers to the instruction by CoM on 13^th Oct 2009 to assess the Rumaila contract, and the Legal Committee had met on 14^th Oct 2009 for that purpose and “without having previous information on the matter”, “not having enough time” and after “preliminary reading” the Legal Committee made its 65 remarks on the contract.

My worries and concerns are generated from the followings:

1- How is it possible that and why the Legal Advisor to the Prime Minister for Legal Affairs and Head of the Legal Committee, and all members of the said Committee had no previous information on the Rumaila contract? It is worth recalling that the Cabinet had approved the award of Rumaila in its meeting number 24 dated 1^st July 2009 (a day after the auction) A time span of 105 days could have been enough to seriously and thoroughly review the contracts and suggest improvements!;

2- That means either MoO did not provide the Cabinet (the Legal Advisor to the PM or the Oil and gas Committee of Council of Ministers- CoM) with the draft of the Model contract, which the award was based on it. Or MoO did provide the Cabinet with the Model Contract but the Legal Advisor to the Prime Minister for Legal Affairs and Head of the Legal Committee, and members of the said Committee either did not actually receive the Model contract or did not pay any attention to it!

3- If MoO did not send the Model contract to CoM in spite of the fact that such Model Contract was given to IOCs between 23^rd April 2009 (the date of the last version of the contract and 29^th June 2009 (on day before the 1^st bid round), the question then is why MoO did not give the Model contract to CoM?  Furthermore, MoO did not share or officially involve the Parliament or its Oil, Gas and Natural Resources Committee in any phase of preparing or finalising the draft of such Model contracts;

4- Furthermore, the information on the CoM website regarding CoM meeting number 38 dated 13 Oct 2009 indicates in item (1) that the Committee (which Committee?) had agreed on Rumaila. This date of approval is the same date when the Legal Advisor was requested to give opinion, which he delivered on 15^th Oct 2009! Obviously something very fishy was going on.

5- The Rumaila contract was signed on 3^rd Nov 2009 without any confirmed indications that the 65 observations by the Legal Advisor had been accommodated and that the contract was redrafted accordingly before signing. The seriousness of the 65 observations requires good deal of tough negotiation to reach agreement, and my experience in contracts negotiation would let me to suspect that such negotiation took place. Furthermore, I suspect that MoO had not succeeded to amend Rumaila contract, as it should be.  

6- The above would indicate that even the authorisation by CoM was not granted clearly. And since the Parliament did not give its approval, then the legality of signing the Rumaila contract was confined to the MoO only, and this is neither permissible nor constitutional. It is too risky to leave the wealth of the nation and the rights of future generations to be handled in such a dubious way.

7-  The Constitutional Court is set for a hearing on 22^nd Dec 2009 when both Prime Minister Nouri al-Maliki and Oil Minister Hussain al-Shahrastani, as the two defendants, could have an impossible task to substantiate their claim that the approval of contracts by the CoM, as outlined above, fulfill proper and credible deal-making requirements. With the known Parliamentary stand on these contracts as more convincing than what the executive branch claims, the Constitutional Court ruling will have historical significance.

In conclusion, considering the above the legality of the oil contracts seems more questionable today than ever before.

Ahmed Mousa Jiyad,

Norway.

18^th Dec 2009