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• 6 • Information and liaison bulletin n° 261 • December 2006 Minister’s Dawa party. While the Sunni Arabs are in agreement with the report’s assessment, they are not about the solutions proposed. They consider the idea of involving Syria in the search for a solution particularly “positive”. However, the solutions proposed, “are not up to the analysis of the situation”, deplored the Ulema’s Association, through its spokesman Sheikh Mohammed Bashar al-Fayadh. The same tune from Falah Shanshal, a Shiite Member of Parliament of the Sadrist Bloc: “Iraq is capable of building its own army without the help of others”, he retorted. The ISG’s report invites the US Administration to develop diplomatic relations with Syria and Iran to bring stability to Iraq. It also advocates direct negotiations between Israel, Syria, the Lebanon and the Palestinians, considering that a settlement of the Israeli-Arab conflict would improve the situation in Iraq. Thus Syria, on 7 December, reacted favourably to the Baker-Hamilton report, welcoming the importance the document gave to settling the Israeli0Arab conflict and reiterating Damascus’ determination to recover the Golan, annexed by Israel. According to a leading official of the Foreign Ministry speaking off the record, but quoted off by the Syrian official news agency, the Iraq Study Group’s report is “positive since it deals with the role of Iraq’s neighbours in bringing security and stability to Iraq”. He explained that Damascus could help ease the situation in Iraq in exchange of the return to its sovereignty of the Golan, occupied by Israel since 1967. “Syria’s priority is to totally recover the occupied Arab Golan Plateau”, he indicated. The US President had replied to the ISG’s suggestion of negotiating with Syria and Iran that “the countries that take part in discussions must not finance terrorism, must help the young democracy to survive and must help the country’s economy”. Iran reacted cautiously to the ISG’s proposals. “The United States’ decision to withdraw from Iraq do not require negotiations with any other country of the region”, considered, on 7 December the Iranian Foreign Minister, Mr. Manushehr Mottaki, on the Al- Jazzier TV channel. “This report contains certain important points (…) it seems that certain aspects of American policy in Iraq are considered to be mistakes” he pointed out. If the ISG’s conclusions intensify the pressure on the White House in favour of reorienting the present policy in Iraq — already demanded by the American electors in November — George Bush is not bound to follow its recommendations. All the more so as other options are at present being studied by the Pentagon, the State Department and the National Security Council. Furthermore, according to a report of the International Crisis Group (ICG), published on 19 December, Iraq is on the point of “disintegrating”. The ICG considers, in particular, that Prime Minister Nuri al-Maliki’s National Unity Government is not representative. “The country and its institutions are in danger of sinking into chaos”, threatening the stability of the whole region, says in alarm the Chairman of the ICG, Gareth Evans, in this report. “The Baker- Hamilton Commission, and the renewal it represents of American policy in Iraq, are, a first important step, but radically insufficient if we want to avoid the collapse of Iraq and a regional war”, the ICG considers. “All the Iraqi political actors involved in violence must be brought to the negotiating table and put under pressure until they accept a compromise”, the ICG stresses. “The Iraqi government and the security forces cannot be considered allies that we support: they are simply part of the many part of the many actors in the conflict”, notes the organisation. The Baker Commission talks about a “government of national union representing the Iraqi people” — “this is not at all true” according to the ICG, that proposes “a new multilateral approach that really puts pressure on the national actors”. IRAQI KURDISTAN: A PROVISIONAL AGREEMENT WITH BAGHDAD ALLOWS NEGOTIATION OF CONTRACTS WITH FOREIGN INVESTORS O n 19 December, Iraqi leaders reached a provisional agreement regarding a draft law on the country’s oil resources, which allow the regions to negotiate contracts with foreign investors but leave the last word with the central government, according to sources close to the negotiations. The Kurdistan region, for its part, has accepted to reexamine the contracts that it has already made with foreign oil companies regarding its oil fields, to check their conformity with the law. Amongst these companies is the Norwegian DNO. Iraq has great need of foreign investment to put back on its feet a very sick economy that remains
n° 261 • December 2006 Information and liaison bulletin • 7• very dependent on the export of crude oil, of which the country has the third largest reserves in the world. Sources close to the negotiations indicate that Prime Minister Nuri al-Maliki has “signalled his approval” of the draft, which, however, still needs the green light from the political parties and be adopted by the government. The Bill envisages the creation of a National Oil Council (directed by either the Prime Minister or the Deputy prime Minister) that would have the power of rejecting any contract proposed for a field. The regions, in the presence of a representative of the national oil organisation, would negotiate in accordance with specific parameters and investment models decided by the National Council, which would be responsible for oil policy. In the event of a refusal, or if the region insisted on a contract, a commission of experts would be charged with arbitrating. The Oil Minister, the Governor of the Central Bank, a representative of each of the regions and oil, financial and economic experts would sit on the National Oil Council. A contract would only become effective if the National Council accepted it. If it rejected a project within a 60-day deadline, the contract would not be effective. The Bill also provides for the two national Iraqi oil companies to be transformed into a single holding company with several operating subsidiaries to manage the various stages of production. The Bill also calls for the setting of Iraqi oil policy at national level and recommends that the Ministry of Oil be restructured and transformed into a regulatory body and that all oil revenue be centralised in a single fund. On 2 December, the Kurdistan Prime Minister had made public the failure of discussions with the central government in Baghdad regarding an agreement on the budget and the sharing of oil revenues. “We have been unable to reach agreement on the budget, on the oil law or on the sharing of oil revenue. I hope that the situation will not become more acrimonious”, Nechirvan Barzani had said at the time, during a Press Conference in Irbil. The Kurdistan Prime Minister had met the Iraqi Prime Minister, Nuri al- Maliki, and the Oil Minister, Hussein Shahristani in Baghdad to discuss what percentage of the oil revenues, Iraq’s principal source of budgetary revenue, should be allocated to Iraqi Kurdistan. “The government proposes to allocate us 13% of these revenues but we have replied that this is not enough — we want 17%”, Mr. Barzani had explained. The Iraqi Constitution allows for each of the country’s regions receiving a share of the oil revenues. At the same time the government of the autonomous region of Kurdistan asked Baghdad to be able to continue signing oil contracts with foreign countries, from which it would retain the benefits. The two parties also failed in their efforts to reach an agreement on the application of Article 140 of the Constitution that foresees the organisation of a referendum to enable certain Kurdish regions to join Kurdistan. On another level, on 14 December, thirteen trucks loaded with domestic fuel oil arrived at Suleimaniah from neighbouring Iran. “Trucks carrying Iranian produced fuel oil arrived following an agreement between the local authorities and the city of Kermanshah last September”, announced the governor of Suleimaniah, Zana Mohammed Saleh. “Thirteen trucks, transporting the first part of this fuel oil, arrived today”, he indicated, pointing out that each truck contained 30,000 litres of fuel oil intended for domestic heating and cooking. Seven other trucks were also expected to arrive from Iran the next day. The agreement between the Iraqi Kurdish leaders and the Iranian authorities covers the importing of 300 million litres of Iranian fuel oil over a period of three months, to deal with a shortage of refined oil products in Iraqi Kurdistan. Despite having some of the world's greatest oil reserves, Iraq is suffering from a shortage of refined products, mainly due to a weakness in refinery infrastructures and to sabotage by the insurgents. TURKEY-E.U.: FREEZE OF NEGOTIATIONS WITH ANKARA, WHICH REFUSES TO NORMALISE ITS RELATIONS WITH NICOSIA O n 14 December, the heads of states and governments, in summit meeting, agreed to freeze eight of the 35 chapters of the negotiations taking place with Ankara, because of Turkey’s refusal to normalise its trade with Cyprus as it had committed itself to do in “the Ankara protocol”. The Foreign Ministers of the E.U. countries had, on 11 December, already decided to suspend discussions on eight chapters mark out the discussions with the Turks because of Ankara’s persistent refusal to open its sea and air ports to Greek Cypriot traffic. The 25 first agreed to suspend the eight chapters, thus de facto slowing down Ankara’s advance towards membership of the E.U. (already
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