Iraq and Gulf Analysis

An Iraq Blog by a Victim of the Human Rights Crimes of the Norwegian Government

Eide to Galbraith: Give the Money from the Tawke Award to the Children of Kurdistan

Posted by Reidar Visser on Friday, 8 October 2010 12:03

Earlier this week, an international court of litigation in London ruled that the former US diplomat Peter Galbraith should receive compensation from the Norwegian oil company DNO in the region of some 35 million US dollars for lost profits from Galbraith’s involvement in DNO’s Kurdistan investments. Galbraith and another claimant, the Yemeni millionaire Shahir Abd al-Haqq (who will receive the same amount from DNO), were squeezed out of the deal between DNO and the Kurdistan Regional Government (KRG) when the latter renegotiated the production sharing contract for the Tawke oilfield in 2008.

The Norwegian business daily Dagens Næringliv (DN) has been in the lead in investigating Galbraith’s role in Kurdistan and yesterday for the first time published comments on the affair by the Norwegian diplomat Kai Eide, with whom Galbraith fell out due to differing views on the conduct of the Afghanistan elections in 2009. At the time, Galbraith supporters conjured up a conspiracy theory to the effect that the revelations were part of a Norwegian plot against him motivated by the Galbraith–Eide spat in Afghanistan – a somewhat far-fetched proposition which in any rate would not have changed the facts of the case, which relate to actions by Galbraith in Kurdistan in the 2004–2008 period, long before Eide had anything to do with Afghanistan. Nonetheless, until now, Eide has been reluctant to comment publicly on the Tawke-gate affair.

In yesterday’s interview, Eide for the first time provides his own take on Galbraith’s involvement. Perhaps most importantly, Eide suggests Galbraith should give the award money to children in need in Kurdistan. Additionally, he also goes quite far in suggesting a main issue between himself and Galbraith at the time when they both served in Afghanistan was Galbraith’s alleged preference for bending or even ignoring Afghan rules and regulations that were in place at the time.

In Iraq, of course, it was different, since Galbraith played an not inconsiderable role in framing the rules himself. Nonetheless, even the highly decentralist Iraqi constitution of 2005 makes it clear that the oil and gas of the country belongs to the entire people, in all regions and governorates. Accordingly, whilst Eide’s proposal is constructive, it would be more in the spirit of the constitution if Galbraith gave the money to needy children in all of Iraq, and not only to those living in the KRG areas.

But he is probably not going to do that, is he? Galbraith’s latest passion appears to be alternative energy, reportedly a main plank of his strategy to win a seat in the Vermont senate in November. In early comments on the award, he promises to use the money to invest in alternative energy “in Vermont and Kurdistan”. And presumably he may think he can do so freely without consulting Baghdad, since controlling the wind and the sun is not listed among the exclusive prerogatives of the central government in the constitution!

On a more serious note, though, the Tawke award should be of obvious relevance to the ongoing negotiations between Maliki and his National Alliance and the Kurds. The Kurdistan oil deals are controversial precisely because so much of the profit is expected to leave Iraq altogether to the benefit of foreign investors (remember, Galbraith was just “Mr. Five Percent” and still was awarded some 35 million USD). In fact, some of the few Iraqi politicians that have dared protest Galbraith’s simultaneous triple role –  investor in Kurdish oil, author of key Iraqi constitutional provisions on energy management and adviser to the US Senate on American policy in Iraq – come from Maliki’s own party. Abd al-Hadi al-Hassani and Hussein al-Shahristani have opposed both the Tawke deal specifically and Kurdish attempts to circumvent the central government more generally. The latest development here is a claim by the Kurdish politician Ali Hassan Belo to the effect that the Kurds can export gas from the region freely to Europe, and that interference by Baghdad would be unconstitutional! The claim by Belo is wild, since the constitution at least provides for a shared role between Baghdad and the provincial authorities in devising a strategic policy for the country’s energy resources: If starting gas exports to the EU is not “strategic” then nothing is. Nonetheless, the statement (and indeed the whole Galbraith/Tawke-gate affair) is probably a bellwether of high Kurdish expectations for the forthcoming government negotiations and as such indicates the uphill struggle that Maliki faces if he wants to secure the premiership and pay attention to his electorate at the same time.

As for the Tawke-gate details themselves, one interesting point that emerged in a Boston Globe interview with DNO subsequent to the award was the suggestion that Galbraith was excluded during the revision of the contract in 2008 because the KRG assumed his participation in the deal would make Baghdad less sympathetic to the deal. There is no direct quote for that particular piece of information and it is unclear whether it is the journalist or the DNO representative that is doing the thinking, but it is nonetheless interesting – alongside the strongest indication yet that Galbraith was indeed part of the original PSA (which he has so far denied):

But subsequently, as the situation in Iraq evolved, the company was forced to renegotiate its contact. Galbraith and another third party – a Yemeni company – were cut out, apparently because Kurdish officials knew that the central government in Baghdad would not approve of their involvement.

“It wasn’t our decision to do that,” Bratlie said. “It was a revision of the production sharing agreement by the Regional government of Kurdistan. DNO was approved as a partner and the other parties were not. “

It is also interesting that the Kurds apparently thought of submitting the contract for review back then and likely deemed Galbraith’s name a potential eyesore.

About these ads

20 Responses to “Eide to Galbraith: Give the Money from the Tawke Award to the Children of Kurdistan”

  1. Tore said

    “The latest development here is a claim by the Kurdish politician Ali Hassan Belo to the effect that the Kurds can export gas from the region freely to Europe, and that interference by Baghdad would be unconstitutional! The claim by Belo is wild, since the constitution at least provides for a shared role between Baghdad and the provincial authorities in devising a strategic policy for the country’s energy resources: If starting gas exports to the EU is not “strategic” then nothing is. “

    Does there not exsist a signed deal that says that if the hydrocarbon law was not passed within a certain timeframe (summer of 2007, I think) then the KRG could go ahead with their own oil deals? That’s allegedly why they signed all the later PSCs in the summer/fall of 2007. The document has never been published, though.

  2. Reidar Visser said

    That would seem to be a unilateral Kurdish threat and as such uninteresting from the constitutional point of view. The more the Kurds violate the constitution by not coordinating strategic oil policy with Baghdad, the more their behaviour assumes a de facto separatist character. Starting regular exports of gas would certainly be seen as a red line from Baghdad and I would imagine the oil subsidies from Baghdad to Arbil would be discontinued immediately, even under a second Maliki premiership…

  3. gabri133 said

    Just to remember in the iraqi constitution
    Article 141:
    Legislation enacted in the region of Kurdistan since 1992 shall remain in force, and
    decisions issued by the government of the region of Kurdistan, including court decisions
    and contracts, shall be considered valid unless they are amended or annulled pursuant to
    the laws of the region of Kurdistan by the competent entity in the region, provided that
    they do not contradict with the Constitution.

  4. Reidar Visser said

    The last sentence is the key:
    provided that they do not contradict with the Constitution.

    Unilateral energy deals are in conflict with the constitution if they are entered into outside the strategic policy of the oil ministry in Baghdad, as per article 112 second:

    تقوم الحكومة الاتحادية وحكومات الاقاليم والمحافظات المنتجة معاً برسم السياسات الاستراتيجية اللازمة لتطوير ثروة النفط والغاز، بما يحقق أعلى منفعةٍ للشعب العراقي، معتمدةً احدث تقنيات مبادئ السوق وتشجيع الاستثمار.

  5. gabri133 said

    Article 112:
    First: The federal government, with the producing governorates and regional
    governments, shall undertake the management of oil and gas extracted from
    present fields, provided that it distributes its revenues in a fair manner in
    proportion to the population distribution in all parts of the country, specifying an
    allotment for a specified period for the damaged regions which were unjustly
    deprived of them by the former regime, and the regions that were damaged
    afterwards in a way that ensures balanced development in different areas of the
    country, and this shall be regulated by a law.
    Second: The federal government, with the producing regional and governorate
    governments, shall together formulate the necessary strategic policies to develop
    the oil and gas wealth in a way that achieves the highest benefit to the Iraqi people
    using the most advanced techniques of the market principles and encouraging
    investment.

    => every thing made by the oil minitry only isn’t in accordance with the iraqi constitution, in kurdistan
    => there’s no oil and gas law til now
    The ministry and the KRG will have to make a deal

    Pending that, the KRG have a share of 17% in all the oil produced in the country

  6. Tore said

    From a speech Jalal Talabani made on June 1st 2009 (automatic translation from arabic):

    “There is another fact, namely that
    the contracts held by the Kurdistan Regional Government is the
    constitutional and legal contracts, according to the constitutionality
    of paragraph “b” of Article 112 of the Iraqi Constitution, and legal in
    accordance with the agreement reached by the Kurdistan Regional
    Government with the Government of National Unity headed by Maliki’s
    brother years ago, where provided that if the paragraph is not the
    month of May 2007 to pass a law on oil and gas in the province of
    Kurdistan Parliament Vovernmp the right to sign contracts with the oil
    and gas companies and assets in accordance with the law
    , this fact
    being obscured attempts, is trying to deny, attempts are being
    photographed, and vice versa if the Kurdistan Regional Government such
    contracts at its option on forgetting that fact that this resolution
    passed by the Iraqi Council of Ministers unanimously.”

  7. Reidar Visser said

    Gabri133, I’m afraid your legal reasoning is like Swiss cheese.
    Baghdad isn’t doing anything in Kurdistan, but the absence of cooperation does not make KRG’s unilateral action any more legal or constitutional.

    Tore, I’m trying to figure out what he is trying to say but you cannot really rely on anything on Iraq that is not written in Arabic (and certainly not Google translate – but please post the original if you have it and I’ll comment on it). Additionally note that Talabani is notorious for being a compulsive liar who often exaggerates the degree to which other people agree with him (I do not mean that as an insult: It is a fact; Sistani’s people once had to publicly correct him after a meeting in Najaf when he said something to the effect that Sistani agreed with him on federalism!)

    If the alleged agreement is not even in the public domain then it is really very hard to evaluate it… If there was such an agreement, why has Shahristani kept quarreling with the Kurds in the 2008-2010 period?

  8. Reidar Visser said

    Tore, I did some Google searches in Arabic and think I found the story that you’re referring to, from 2007. There were rumours about such a secret agreement at the time, and Jabir Khalifa Jabir of the Fadila party who had some issues with Maliki back then appears to have played a key role in spreading them. Note that several Kurdish politicians refuted the story, including Mahmud Uthman:

    تناقلت أوساطً برلمانية تداعيات الأنباء التي تحدثت عن توقيع رئيس الوزراء نوري المالكي وثيقة سرية مع رئيس الجمهورية جلال طالباني ورئيس إقليم كردستان مسعود بارزاني تتيح لإقليم كردستان توقيع عقود نفط مع شركات أجنبية من دون الرجوع إلى الحكومة. وفيما رفض أي من مستشاري رئيس الوزراء العراقي نوري المالكي التعليق حول الموضوع على الرغم من اتصالات (النور) المتكررة بهم، نفى محمود عثمان عضو البرلمان عن التحالف الكردستاني ما تردد من أنباء حول توقيع المالكي اتفاقية سرية مع الرئيس طالباني ورئيس إقليم كردستان مسعود البارزاني تتيح لحكومة الإقليم توقيع عقود نفطية مع شركات أجنبية من دون الرجوع إلى حكومة المالكي، مضيفاً ان لا صحة لما ادعاه أحد الأعضاء في البرلمان حول توقيع رئيس الوزراء نوري المالكي اتفاقية سرية تتيح لحكومة الإقليم توقيع عقود نفطية مع شركات أجنبية من دون الرجوع إلى الحكومة المركزية. وأوضح عثمان في تصريح لصحيفة (النور) ان نفي الطرفين في حكومة بغداد وفي حكومة الإقليم دليل على عدم صحة تلك الانباء، واصفاً ان ما تسرب من معلومات على لسان أحد الأعضاء بأنها ادعاء خطير مشيراً إلى انه لو كان لمقرر لجنة النفط دليل على ذلك فليعرضه على البرلمان.

    More importantly, perhaps, just for the sake of the argument, let’s imagine there was such a deal; it would then presumably apply only to the 2007-2010 period or whenever the powers of the current government expire. You cannot change the constitution by doing secret deals!

  9. Tore said

    The autotranslated quote about the deal between KRG and Bagdad, is from the speech that Jalal Talabani made during the ceremony on the day of the start of kurdish exports, on June 1st 2009.

  10. Reidar Visser said

    Thanks, I’ll try to find the original then, though I suspect it may be in Kurdish perhaps given the context of the speech? It should be reported in the Arabic press in a more legible format than the autotranslate though.

  11. Reidar Visser said

    OK, I found it so let me try a quick “human” translation below, along with some comments on the problems in Talabani’s claims:

    وشدد على أنها “دستورية على وفق الفقرة ب من المادة 112 من الدستور العراقي، وقانونية على وفق الإتفاق الذي توصلت إليه حكومة إقليم كردستان مع حكومة الوحدة الوطنية برئاسة الأخ المالكي قبل سنتين”، موضحا أن “الاتفاق نص على أنه إذا لم يتم إقرار قانون النفط والغاز من قبل البرلمان لغاية شهر أيار مايو 2007 فلحكومة إقليم كردستان الحق في توقيع العقود النفطية والغازية مع الشركات الأجنبية”.

    “He [Talabani] insisted on the constitutionality [of the contracts signed by the KRG] based on article 112 b. of the constitution”

    Comment: This is just plain wrong since article 112b demands cooperation between the central government and the provinces/regions in devising the strategic oil policy

    “And their legality in accordance with the agreement which the KRG entered into with the government of national unity headed by brother Nuri al-Maliki more than two years ago. The agreement says that if no agreement on an oil and gas law is arrived at by parliament before the end of May 2007 then the KRG will have the right to sign its own contracts with foreign companies.”

    Comment: Two problems here. Even if there was such an agreement, presumably it would apply only to deals signed in the period between May 2007 and the end of the Maliki government’s term. More fundamentally, any such arrangement would still violate 112b of the constitution, and the Maliki government cannot change the constitution without a two-thirds majority vote in parliament. The overarching problem in all of this is that the role of the Iraqi parliament and the federal supreme court is apparently conveniently forgotten by Talabani. As so many times before, the Kurds are trying to create the impression of constitutionality even in contexts where they are on very thin ice indeed (for example, they similarly claimed that the marginalisation of the Kurds in the Nineveh provincial council was “unconstitutional”, which is a made-up claim entirely).

  12. gabri133 said

    The new iraqi constitution was enacted in 2005.
    According to article 141 : Legislation enacted in the region of Kurdistan since 1992 shall remain in force, and decisions issued by the government of the region of Kurdistan, including court decisions
    and contracts, shall be considered valid unless they are amended or annulled pursuant to
    the laws of the region of Kurdistan by the competent entity in the region, provided that
    they do not contradict with the Constitution.
    So contracts shall remain in force … provided that they don’t contradict the constitution.
    In 2002 the leaders of kurdistan signed a PSC with turkey’s Genel energy. According to the 141 the constitution validate the pre-existing PSC’s, already signed at that stage.
    Now, what the constitution says about oil => article 112b
    “The federal government, with the producing regional and governorate
    governments, shall together formulate the necessary strategic policies to develop
    the oil and gas wealth in a way that achieves the highest benefit to the Iraqi people
    using the most advanced techniques of the market principles and encouraging
    investment.”
    So there’s no oil and gas law + the federal government can’t destroy the PSc’s signed before 2005.

    My point is the contract’s with similars conditions (with the ones before 2005) can’t by refused. What is true for one licence area with Genel is not true for an adjacent area with similar PSC? Don’t buy it.
    The federal goverment will have to make a deal!!!!!

  13. Reidar Visser said

    Gabri, you keep repeating your same old arguments and your personal Never Never Land concoctions (“So there’s no oil and gas law + the federal government can’t destroy the PSc’s signed before 2005.”) Please come back when you have some genuinely new, empirically-founded and legally coherent arguments! To someone who has no vested interests in the region, it seems perfectly clear that the pre-2005 KRG deals are indeed unconstitutional since they violate the principle of coordination with Baghdad as far as strategic energy policy is concerned.

    Anyway, let’s also remember that, thankfully perhaps, in the event, it does not really matter that much what you, me, Professor James Crawford, Peter Galbraith or Jalal Talabani think about these issues, since it is for the Iraqi federal supreme court to decide (or for the Iraqi parliament to change the constitution).

  14. gabri133 said

    Reidar

    You was asserting that the Kurds break the law and constitution.
    The law? I’ll will be happy if you can find me the law regarding oil. Cause then, i’ll will be able to invest in iraq.
    The constitution? It’s clear on the constitution that everything made before 2005 is legal. “In constitutional states, the law provides only for the future: it has no retroactive effect”

    Time will tell

    Ps: I don’t have a preference for kurds or sunnis or shiis. Only for peace and money

  15. Reidar Visser said

    OK, thanks, I think readers will have acquired a pretty clear impression of your philosophy by now and no further elaboration should be required.

  16. Ara Naqsh said

    Stating that Kurds are violating and ignoring the iraqi constitution is useless. The Kurds are just playing the same gzme as the Arsbs.

    Any well informed person on iraqi issues will refer you to the constant protests and complaints by the Kurds to implement article 140 of the iraqi constitution which is designed to correct the ethnic meddling of saddam husseins arabization policy in the disputed regions between kurds and arabs, most notably the city of Kirkuk (oil capital)

    Article 140 was ment to be implimented by the end of 2007, unsurprisingly around the same time thst the DNO contract was signed.

    To place the magnifying glass over the kurds with regards to their compliance to the iraqi constitution is simply biased and one-sided. Baghdad has set the standard for disobeying the constitution, and the Kurds aren’t going to stand by naively.

    And besides there is no hydrocarbons law agreed upon yet by Baghdad. Until thats, the vague worded iraqi constitution, which noone respects, is what iraqis have go by.

  17. Reidar Visser said

    Two wrongs don’t make a right, and a major reason that there was a collapse over the Kirkuk process in 2007 was of course the unilateral KRG oil deals including DNO (signed in 2004 not 2007).

    The Iraqi constitution 112b is perfectly clear in demanding coordination for strategic oil issues. You can make up your own judicial fantasies as much as you want but in this forum we prefer legally-founded arguments.

  18. Ara Naqsh said

    I highly doubt that the Kurds deal with DNO was what made the implementation of Article 140 fall apart. Fall 2007 was beyond the deadline and the Arabs had been stalling and wasting time on an Article in a constitution that the overall majority of Iraqis approved.

    Your logic and reasoning are quite blatantly one-sided and I sense that there maybe a bit of spitefulness towards the Kurdish leadership.

    The Kurds play the Iraqi game which since the creation of the Iraqi state has been to not respect any established laws and documents.

    Maliki is a prime example of a man of not his words. So was Ibrahim Jaafari and so will the next Arab Iraqi.

    When the Kurds have invested so much in bringing the Arabs together and find a compromise with them, it is only their right to do their own thing.

    Baghdad is a mess and noone honors any agreements.

    There are no judicial fantasies because there is no such thing as a Just judicial system in Iraq.

    You should write in a more balanced manner if you wish to keep a reputation as a serious Iraqi commentator.

  19. Reidar Visser said

    The original Kirkuk deadline was 31 December 2007. You may remember there was an attempt to revise the constitution (and to pass an oil law) earlier that year. That attempt fell through thanks not least to disagreement between the Kurds and pretty much everyone else on the role of the central government in controlling the oil sector.

    I’m just trying to take the constitution seriously. If you see that as one-sided, then it is probably because Kurdish politicians, their friends and investors in Kurdistan tend to select certain clauses in the constitution that they like and pretend that other parts simply do not exist. If you read my blog, you will find that much of my criticisms deal with the ways in which the Arab politicians violate the constitution.

  20. Santana said

    Ara- I am sorry the truth hurts sometimes….The Kurds as Reidar pointed out- pick what suits them from the constitution and either ignore OR twist what doesn’t suit them to where it does-I wanna state for the record that I consider Reidar’s comments and input as the most accurate, balanced and valued reading on Iraq that one can find anywhere.
    I know many leaders (including Biden) read his commentaries- and that says a lot !

Sorry, the comment form is closed at this time.

 
Follow

Get every new post delivered to your Inbox.

Join 169 other followers