[Media-watch] Iraqis paying reparations to corporations - Guardian/Klein - 16/10/2004

[Julie-ann Davies]

http://www.guardian.co.uk/Columnists/Column/0,5673,1328888,00.html

 Why is war-torn Iraq giving $190,000 to Toys R Us?

Naomi Klein Iraqis are still being forced to pay for crimes committed by 
Saddam

Saturday October 16, 2004
The Guardian

Next week, something will happen that will unmask the upside-down morality 
of the invasion and occupation of Iraq. On October 21, Iraq will pay $200m 
in war reparations to some of the richest countries and corporations in the 
world.
If that seems backwards, it's because it is. Iraqis have never been awarded 
reparations for any of the crimes they suffered under Saddam, or the brutal 
sanctions regime that claimed the lives of at least half a million people, 
or the US-led invasion, which the UN secretary general, Kofi Annan, recently 
called "illegal". Instead, Iraqis are still being forced to pay reparations 
for crimes committed by their former dictator.

Quite apart from its crushing $125bn sovereign debt, Iraq has paid $18.8bn 
in reparations stemming from Saddam Hussein's 1990 invasion and occupation 
of Kuwait. This is not in itself surprising: as a condition of the ceasefire 
that ended the 1991 Gulf war, Saddam agreed to pay damages stemming from the 
invasion. More than 50 countries have made claims, with most of the money 
awarded to Kuwait. What is surprising is that even after Saddam was 
overthrown, the payments from Iraq have continued.

Since Saddam was toppled in April, Iraq has paid out $1.8bn in reparations 
to the United Nations Compensation Commission (UNCC), the Geneva-based quasi 
tribunal that assesses claims and disburses awards. Of those payments, $37m 
have gone to Britain and $32.8m have gone to the United States. That's 
right: in the past 18 months, Iraq's occupiers have collected $69.8m in 
reparation payments from the desperate people they have been occupying. But 
it gets worse: the vast majority of those payments, 78%, have gone to 
multinational corporations, according to statistics on the UNCC website.

Away from media scrutiny, this has been going on for years. Of course there 
are many legitimate claims for losses that have come before the UNCC: 
payments have gone to Kuwaitis who have lost loved ones, limbs, and property 
to Saddam's forces. But much larger awards have gone to corporations: of the 
total amount the UNCC has awarded in Gulf war reparations, $21.5bn has gone 
to the oil industry alone. Jean-Claude Aimé, the UN diplomat who headed the 
UNCC until December 2000, publicly questioned the practice. "This is the 
first time as far as I know that the UN is engaged in retrieving lost 
corporate assets and profits," he told the Wall Street Journal in 1997, and 
then mused: "I often wonder at the correctness of that."

But the UNCC's corporate handouts only accelerated. Here is a small sample 
of who has been getting "reparation" awards from Iraq: Halliburton ($18m), 
Bechtel ($7m), Mobil ($2.3m), Shell ($1.6m), Nestlé ($2.6m), Pepsi ($3.8m), 
Philip Morris ($1.3m), Sheraton ($11m), Kentucky Fried Chicken ($321,000) 
and Toys R Us ($189,449). In the vast majority of cases, these corporations 
did not claim that Saddam's forces damaged their property in Kuwait - only 
that they "lost profits" or, in the case of American Express, experienced a 
"decline in business" because of the invasion and occupation of Kuwait. One 
of the biggest winners has been Texaco, which was awarded $505m in 1999. 
According to a UNCC spokesperson, only 12% of that reparation award has been 
paid, which means hundreds of millions more will have to come out of the 
coffers of post-Saddam Iraq.

The fact that Iraqis have been paying reparations to their occupiers is all 
the more shocking in the context of how little these countries have actually 
spent on aid in Iraq. Despite the $18.4bn of US tax dollars allocated for 
Iraq's reconstruction, the Washington Post estimates that only $29m has been 
spent on water, sanitation, health, roads, bridges, and public safety 
combined. And in July (the latest figure available), the Department of 
Defence estimated that only $4m had been spent compensating Iraqis who had 
been injured, or who lost family members or property as a direct result of 
the occupation - a fraction of what the US has collected from Iraq in 
reparations since its occupation began.

For years there have been complaints about the UNCC being used as a slush 
fund for multinationals and rich oil emirates - a backdoor way for 
corporations to collect the money they were prevented from making as a 
result of the sanctions against Iraq. During the Saddam years, these 
concerns received little attention, for obvious reasons.

But now Saddam is gone and the slush fund survives. And every dollar sent to 
Geneva is a dollar not spent on humanitarian aid and reconstruction Iraq. 
Furthermore, if post-Saddam Iraq had not been forced to pay these 
reparations, it could have avoided the $437m emergency loan that the 
International Monetary Fund approved on September 29.

With all the talk of forgiving Iraq's debts, the country is actually being 
pushed deeper into the hole, forced to borrow money from the IMF, and to 
accept all of the conditions and restrictions that come along with those 
loans. The UNCC, meanwhile, continues to assess claims and make new awards: 
$377m worth of new claims were awarded last month alone.

Fortunately, there is a simple way to put an end to these grotesque 
corporate subsidies. According to United Nations security council resolution 
687, which created the reparations programme, payments from Iraq must take 
into account "the requirements of the people of Iraq, Iraq's payment 
capacity, and the needs of the Iraqi economy". If a single one of these 
three issues were genuinely taken into account, the security council would 
vote to put an end to these payouts tomorrow.

That is the demand of Jubilee Iraq, a debt relief organisation based in 
London. Reparations are owed to the victims of Saddam Hussein, the group 
argues - both in Iraq and in Kuwait. But the people of Iraq, who were 
themselves Saddam's primary victims, should not be paying them. Instead, 
reparations should be the responsibility of the governments that loaned 
billions to Saddam, knowing the money was being spent on weapons so he could 
wage war on his neighbours and his own people. "If justice, and not power, 
prevailed in international affairs, then Saddam's creditors would be paying 
reparations to Kuwait as well as far greater reparations to the Iraqi 
people," says Justin Alexander, coordinator of Jubilee Iraq.

Right now precisely the opposite is happening: instead of flowing into Iraq, 
reparations are flowing out. It's time for the tide to turn.

·Naomi Klein is the author of No Logo, and Fences and Windows