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Newsletter 29 : 6/7 - CORPORATE CARVE UP

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Loukas Christodoulou

Iraq is not only undergoing a military occupation, but also an economic invasion and UK corporations are in the vanguard.

To date, Corporate Watch has uncovered evidence for about £1.1bn worth of contracts for UK companies, from the US and UK reconstruction budget, and from the Iraqi ministries (see breakdown below). Despite the billions spent on reconstruction, services such as water and electricity are mostly worse than during the Saddam era. IMF-style reforms have also contributed to mass unemployment and rocketing poverty. US and UK aid - taxpayers' money - has been channeled towards US and UK corporations in what amounts to welfare for the corporate elite.

The value of several large UK contracts is not known. These include the printing of the new Iraqi Dinar by De La Rue and Datasat's 'major telecomms contract', plus the money that successful security forms such as Hart, AK Group and Olive have made. It is also hard to gauge the revenue and influence that the banks HSBC and Standard Chartered have gained through their operations in Iraq.

The real UK total is certain to be far less than the Iraq profits of US corporations, but 'British' corporations are playing a key role in two sectors: consulting, especially privatisation support and private security, including private military companies. The UK government and British-based trade associations, have also played a key role in facilitating corporate access to Iraq's markets, services and resources. For more on all these sectors see the full report on our website.


  • 1. AMEC £500m (approx)


    Since 2004 construction giant AMEC have been working with US company Fluor on several huge US reconstruction contracts, for power generation and water projects.
  • 2. Aegis £246.5m+


    In June 2004 this private security and 'risk management' company won a three-year $430m Pentagon contract to coordinate the major private military/security companies in Iraq. In 2005 this contract was extended by another year. The turnover of Aegis has gone from £554,000 in 2003 to £62m in 2005. Three-quarters of this is from work in Iraq.
  • 3. Erinys £86m+


    Another major private security company, Erinys has received $50m from the US Army Corps of Engineers and $100m to protect oil fields (2003-2004)
  • 4. Petrel Resources (Anglo-Irish) £56.6m


    This petroleum company was awarded one of the biggest oil development contracts since Saddam: $197.4m (£113.17m) to develop the Subba and Luhais oil fields (Iraq Ministry of Oil, September 2005). Will share this 50/50 with partners Makman.
  • 5. HSBC £36.88m (stake in Dar es Salaam bank)


    The major bank has bought 70% of Dar es Salaam Investment Bank, (which has assets of $91.1m). HSBC profit from Middle East business rose 25% in 2004.
  • 6. Cummins UK £25.8m+


    In their own words: 'To date we have supplied four power stations: 2MW for the Forum in Baghdad, 4MW for the El Rasheed Hotel (USAID), 5MW for the airport and 8MW for the US army.'
  • 7. PB Power £24.88m


    In March 2004 they received $43.4m in US reconstruction money to 'provide program management office support for the electrical services sector'.
  • 8. Control Risks £23.5m+


    One of the biggest private security companies In Iraq, with over 250 operatives there. CR is a preferred provider of security for UK government personnel (along with Armor Group). Most of the known money comes from Foreign Offcie and DfID contracts. However, CR have also received an unknown proportion of Parsons' $500m USAID contract(March 2004).
  • 9. MerchantBridge £22.07m (capitalisation)


    Acted as 'lead advisor' to the Iraq Ministry of Industry and Minerals for factory lease programme (2004). Launched Mansour Bank (Sep 2005), capitalised at $38.5m; 90% from Iraqi investors.
  • 10. Global Risk Strategies £15.4m+


    Another major private security form, with a reported 2,000 staff in Iraq. Received $27m as part of the contracts to distribute the new Dinar (May 2004). Also guarded part of Baghdad airport (May 2004).


Just as privatisation and the private finance initiative (PFI) in the UK opened up a new arena of profits, so the restructuring of Iraq's economy is providing fertile opportunities for an army of consultants.

After the ejection of the British-backed monarchy in 1958, much of Iraq's economy was taken over by the state. The US and UK occupiers assume that post-Saddam Iraq will be transformed into a market economy. In their terms this means an economy run according to 'free market' principles, which is to say, dominated by corporations. Already laws have been passed by the Coalition Provisional Authority (CPA) to allow the privatisation of over 200 state owned enterprises (SOE). However, to transform the running of an entire country means changing the entire political and economic management system. DfID recognise that the new Iraqi government will have to undertake 'politically sensitive' reforms. The UK government is helping this process as best it can, aided by privitisation consultants.

A leader in this field is Adam Smith International (ASI), an offshoot of the right-wing think-tank Adam Smith Institute, which provided the Thatcher governments with much of their ideological backing. In the period 1998-2003 ASI received payments of over £34m from DfID for its 'development' work across the world, including pushing the failed water privatisation scheme in Tanzania. In Iraq ASI has been involved in the foundation of the US-led Iraq government and are involved in Iraqi government operations at a very basic level, working 'to help restructure some of the Iraqi ministries, in fact physically restructure them, even suggesting how the minister’s office should be laid out', as one MP found on a fact-finding mission.

This is an edited exerpt from the Corporate Watch report Corporate Carve-up: the role of UK corporations in Iraq, March 2003-March 2006. This formed the basis for an Independent front page story on 13th March 2006, prompting a reply in the letters page from DfID minister Hilary Benn and also causing Jeremy Corbyn MP to ask Prime Minister Tony Blair a question in the House of Commons.




USAID £556,743,161

Pentagon £332,540,000

Iraq £165,650,340

DfID/FCO £78,532,490

Unknown £28,800,000


Power/water £501,237,311

Private security £382,971,284

Petroleum £76,339,726

Financial £62,161,871

Construction £24,815,441

Consultants £13,867,795

Telecomms £10,000,000

Education £9,470,451

Procurement £7,992,112

Services £7,500,000

Software £4,500,000

Materials £20,000