# CE2004088EN.01004101.xml

| 8.4.2004 | EN | Official Journal of the European Union | CE 88/41 |
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8.4.2004

EN

Official Journal of the European Union

CE 88/41

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(2004/C 88 E/0044)

WRITTEN QUESTION E-1694/03

by Erik Meijer (GUE/NGL) to the Commission

(21 May 2003)

Subject:   Ongoing and permanent take-over of the Iraqi economy and oil reserves by US firms

Subject:

| 1. | Is the US approach of concluding contracts in Iraq creating in a situation in which US firms, such as Halliburton, SteveDoring Services, Bechtel, Parsons, Fluor, Louis Berger Group and Washington Group International, after being awarded a provisional contract of one year, may obtain an extension for an indefinite period giving them the right to manage Iraqi infrastructure permanently? |
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1.

Is the US approach of concluding contracts in Iraq creating in a situation in which US firms, such as Halliburton, SteveDoring Services, Bechtel, Parsons, Fluor, Louis Berger Group and Washington Group International, after being awarded a provisional contract of one year, may obtain an extension for an indefinite period giving them the right to manage Iraqi infrastructure permanently?

| 2. | Are efforts being made to introduce the US CDMA GSM mobile phone system in Iraq, which will mean that it will permanently differ from that used in Europe and remain dependent on US producers? |
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2.

Are efforts being made to introduce the US CDMA GSM mobile phone system in Iraq, which will mean that it will permanently differ from that used in Europe and remain dependent on US producers?

| 3. | Does the Commission consider it realistic that the total cost of the reconstruction of Iraq, estimated at between USD 25 and 100 billion, and the existing Iraqi debt burden of USD 383 billion will be covered by the resumption of oil exports? Is the lower volume of oil revenue and the provisionally limited production and export capacity being used to justify the rapid sale of underground crude oil reserves to US oil companies, such as Chevron, as a result of which the revenue from oil exploitation will no longer be available in the future to fund the activities of the Iraqi government? |
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3.

Does the Commission consider it realistic that the total cost of the reconstruction of Iraq, estimated at between USD 25 and 100 billion, and the existing Iraqi debt burden of USD 383 billion will be covered by the resumption of oil exports? Is the lower volume of oil revenue and the provisionally limited production and export capacity being used to justify the rapid sale of underground crude oil reserves to US oil companies, such as Chevron, as a result of which the revenue from oil exploitation will no longer be available in the future to fund the activities of the Iraqi government?

| 4. | Is this state of affairs rapidly bringing about a fait accompli with regard to the future management of oil reserves and the oil industry, which it will no longer possible to break up later? |
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4.

Is this state of affairs rapidly bringing about a fait accompli with regard to the future management of oil reserves and the oil industry, which it will no longer possible to break up later?

| 5. | Does the Commission consider that this approach of closely linking the economy of Iraq with sectors of the US economy is consistent with the prevailing view of free competition and transparent international trade relations or is it incompatible with the latter? |
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5.

Does the Commission consider that this approach of closely linking the economy of Iraq with sectors of the US economy is consistent with the prevailing view of free competition and transparent international trade relations or is it incompatible with the latter?

| 6. | Is the European Union opposing this approach, which conflicts with the Iraqi people's right to self-determination, may result in impoverishment and instability in Iraq and is giving the US permanent advantages vis-à-vis the rest of the world? |
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6.

Is the European Union opposing this approach, which conflicts with the Iraqi people's right to self-determination, may result in impoverishment and instability in Iraq and is giving the US permanent advantages vis-à-vis the rest of the world?

Joint answer

to Written Questions E-1693/03 and E-1694/03

given by Mr Patten on behalf of the Commission

(7 July 2003)

(7 July 2003)

The Commission has been following the contracting practices followed by United States authorities in Iraq and has examined them in the light of the United States international obligations. The Commission notes that the United Nations Security Council (UNSC) Resolution 1483 underlines that the Development Fund for Iraq shall be used in a transparent manner to meet the humanitarian and reconstruction needs of the Iraqi people. The Resolution also stresses the right of Iraqi people to control their own natural resources. The Commission expects that the Authority, which exercises the obligations and the competence of the occupying forces according to UNSC Resolution 1483, will administer the country in the interest and for the benefit of the Iraqi population. The Commission will continue to follow events in this area with a view to defend the application of the principles of transparency and of free trade in international commerce to which the Union is so strongly committed.

The Commission has indicated to the United States Government that the Union expects the United States to comply with the relevant international rules, such as the World Trade Organisation (WTO) Government Procurement Agreement (GPA) including the principles of transparency, non-discrimination, national treatment and procedural guarantees.

The Commission has examined on a case-by-case basis some of the major contracts awarded, including notably the first eight contracts awarded by United States Agency for International Development (USAID) through the ‘less than full and open competition’ procedure, and has not, thus far, determined that there has been a breach of the GPA. USAID Inspector General's investigation and correspondance with the United States Congress approving the use of the restricted procurement process, justified by reasons of time constraint and the urgent need for these contracts to be carried out have been noted.

Because of the large number of tenders it is extremely difficult for the Commission to monitor all procurement procedures launched by United States authorities for the reconstruction of Iraq with respect to their consistency with GPA rules. The large amount of daily tenders and insufficient information available to non-bidders prevent the Commission from conducting any comprehensive analysis of that sort. The initial information available through a tender notice is very limited, and more detailed information (the tender documentation) is only available upon request by a bidder. To a large extent, the Commission has to rely on the information provided, by Member States or by individual companies in order to carry out an exhaustive examination of individual cases. However, despite some vague references in the press about complaints filed by Community suppliers, no formal complaint has been submitted to the Commission. As soon as a complaint is received, it will give the necessary priority to respond timely and accurately. In any case, the Commission will continue to monitor closely this matter.

It should also be noted that the Commission has not received from the United States administration any request of co-funding in exchange for the involvement of European firms.

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