Iraq Vote Carries Seeds For Oil Conflict

14 October 2005

Iraqis are set to vote Saturday on a new draft constitution intended to usher in a new era, which should see the country edge closer toward the establishment of state institutions and adoption of new laws, including in the oil sector.

However, all this will do little to unite a divided country — and it could even instigate new conflict over the distribution of oil wealth, analysts say.
Around 15.5 million voters from Iraq’s total population of 26 million are registered to decide on the constitution. It will be adopted if a majority of voters approve the text and if two-thirds of voters in three or more provinces do not reject it.

Iraqi lawmakers on Wednesday approved a set of last-minute amendments sealing a compromise designed to win Sunni support and boost chances for a positive vote in tomorrow’s referendum. However, the deal — brokered with US mediation — only served to split the Sunnis. The Iraqi Islamic Party, a major grouping of Sunni Iraqis, said it would back the new version, but the influential Association of Islamic Scholars said it would campaign for a boycott or rejection of the constitution.

Under the new deal, a clause was introduced in the draft constitution introducing a mechanism that gives Sunnis the opportunity to seek a review of the charter once a new parliament is elected in December. Any proposed amendments would need first the support of a majority of lawmakers and then the backing of Iraqis in another referendum.

Whether Sunnis can succeed in weakening the considerable autonomous power that Shiite and Kurdish mini-states would have under the constitution is doubtful, analysts say. Firstly, as this week showed, divisions among the Sunnis have undermined their already limited influence in Iraqi politics today. As they stand divided, the Sunnis’ chances of defeating the draft constitution through a two-thirds majority in three of Iraq’s 18 provinces are minimal, although theoretically they have control over four provinces.

Secondly, their split is likely to persist in the upcoming vote for a new National Assembly in December, preventing them from building an influential block within parliament. The majority Shiites and Kurds would oppose any new constitutional amendments limiting their powers in their regions. The Sunnis have only 17 members in the current 275-member parliament after largely boycotting the Jan. 30 elections.

Sunnis oppose the federal provisions of the draft constitution, which they fear could lead to the break-up of the country, giving control of vast oil wealth to the Shiites and Kurds in the south and north, and leaving them with an impoverished central region.

The constitution states that oil and gas are the property of all the Iraqi people, but that the central government will only manage oil and gas extracted from currently producing wells, in cooperation with governments of producing regions and provinces. These revenues, it adds, should be distributed fairly throughout the country according to the population size of each region. Strategies to develop new oil and gas reserves will be a drawn up jointly by the federal and regional governments, with the latter given the right to exercise legislative, executive and judicial powers.

If the constitution is adopted, Iraqis will be looking to a last milestone on Dec. 15 when a new parliament would be elected, to be followed by the creation of the first “permanent” government following a series of interim and transitional administrations that have run the country since the overthrow of the Baath regime in 2003.

That’s when key issues would be determined such as the balance of power, relations between the central government and regions or provinces in a federalist structure, and new legislation including a petroleum law and a law setting up a body to ensure that natural resources and revenues are shared fairly.

The creation of a Supreme Federal Court must also be approved by two-thirds of the parliament. The court will oversee the constitutionality of laws, interpret the constitution, settle problems stemming from the application of federal laws, and rule in disputes between regions or provinces and the government in Baghdad.

If judicial posts are distributed along ethnic or religious lines — a feature in Iraqi politics since the ousting of the Saddam Hussein regime — the court’s decisions will also have an ethnic influence. This could trigger a sectarian conflict over the control of oil, analysts warn — especially if Shiites in the oil-rich south form a super-region of up to nine provinces that would begin to resemble an independent state, or if the Kurds in the three provinces that form autonomous Kurdistan demand and obtain a bigger share of revenues from oil resources in their region.

The current National Assembly is dominated by the United Iraqi Alliance, a Shiite coalition with 146 of the 275 seats, followed by the Democratic Patriotic Alliance of Kurdistan with 77.

By Ruba Husari, Dubai

(Published in International Oil Daily Oct. 14, 2005)

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