The
British Companies Making
A Fortune Out Of Iraq
By Robert Verkaik
13 March 2006
The Independent
British
businesses have profited by at least £1.1bn since coalition forces
toppled Saddam Hussein three years ago, the first comprehensive investigation
into UK corporate investment in Iraq has found.
The company roll-call of
post-war profiteers includes some of the best known names in Britain's
boardrooms as well many who would prefer to remain anonymous. They come
from private security services, banks, PR consultancies, urban planning
consortiums, oil companies, architects offices and energy advisory bodies.
Among the top earners is
the construction firm Amec, which has made an estimated £500m
from a series of contracts restoring electrical systems and maintaining
power generation facilities during the past two years. Aegis, which
provides private security has earned more than £246m from a three-year
contract with the Pentagon to co-ordinate military and security companies
in Iraq. Erinys, which specialises in the same area, has made more than
£86m, a substantial portion from the protection of oilfields.
The evidence of massive investments
and the promise of more multimillion-pound profits to come was discovered
in a joint investigation by Corporate Watch, an independent watchdog,
and The Independent.
The findings show how much
is stake if Britain were to withdraw military protection from Iraq.
British company involvement at the top of Iraq's new political and economic
structures means Iraq will be forced to rely on British business for
many years to come.
A total of 61 British companies
are identified as benefiting from at least £1.1bn of contracts
and investment in the new Iraq. But that figure is just the tip of the
iceberg; Corporate Watch believes it could be as much as five times
higher, because many companies prefer to keep their relationship secret.
The waters are further muddied
by the Government's refusal to release the names of companies it has
helped to win contracts in Iraq.
Many of the companies enjoy
long-standing relationships with Labour and now have a financial stake
in the reconstruction of Iraq in Britain's image. Of the total profits
published in the report, the British taxpayer has had to meet a bill
for £78m while the US taxpayer's contribution to UK corporate
earnings in Iraq is nearly nine times that. Iraqis themselves have paid
British company directors £150m.
The report acknowledges that
British business still lags behind the huge profits paid to American
companies. But, in two fields, Britain is playing a critical and leading
role.
The threat from the Iraqi
insurgency means British private security companies are in great demand.
Corporate Watch estimates there are between 20,000 and 30,000 security
personnel working in Iraq, half of whom are employed by companies run
by retired senior British officers and at least two former defence ministers.
The biggest British player,
Aegis - run by Tim Spicer, the former British army lieutenant colonel
who founded the security company Sandline - has a workforce the size
of a military division and may rank as the largest corporate military
group ever assembled, according to the report. Other private security
companies have sprung up overnight to protect British and American civilians.
Britain is also playing a
leading role in advising on the creation of state institutions and the
business of government. PA Consulting, which has also received a contract
for advising on the Government's ID cards scheme, worth around £19m,
is now a key adviser in Iraq.
Adam Smith International,
a body closely linked to the right-wing think-tank used by Margaret
Thatcher, has been heavily involved in the foundation of the Iraqi government
and continues to influence its newly formed ministries. According to
the Tory MP Quentin Davies, who visited Iraq, the advisers are "reordering
Iraqi government operations at the most basic level, to help restructure
some of the Iraqi ministries, in fact physically restructure them, even
suggesting how the minister's office should be laid out".
Another favourite of the
Thatcher governments, now involved in Iraq, is Tim Bell, who ran the
Tories' election campaigns in 1979, 1983 and 1987. His PR firm Bell-Pottinger
has been involved in advising on the 2004 elections and a strategic
campaign to promote bigger concepts such as the return of sovereignty,
reconstruction, support for the army and police, minority rights and
public probity.
Loukas Christodoulou, of
Corporate Watch, has been monitoring British business relations with
Iraq since the invasion. He says in his conclusion to our joint report:
"The presence of these consultants in Iraq is arguably a part of
the UK government's policy to push British firms as lead providers of
privatisation support. The Department for International Development
has positioned itself as a champion of privatisation in developing countries.
The central part UK firms are playing in reshaping Iraq's economy and
society lays the ground for a shift towards a corporate-dominated economy.
This will have repercussions lasting decades."
In five years, the £1.1bn
of contracts identified in the report will be dwarfed by what Britain
and the US hope to reap from investments. Highly lucrative oil contracts
have yet to be handed out.
British businesses have profited
by at least £1.1bn since coalition forces toppled Saddam Hussein
three years ago, the first comprehensive investigation into UK corporate
investment in Iraq has found.
The company roll-call of
post-war profiteers includes some of the best known names in Britain's
boardrooms as well many who would prefer to remain anonymous. They come
from private security services, banks, PR consultancies, urban planning
consortiums, oil companies, architects offices and energy advisory bodies.
Among the top earners is
the construction firm Amec, which has made an estimated £500m
from a series of contracts restoring electrical systems and maintaining
power generation facilities during the past two years. Aegis, which
provides private security has earned more than £246m from a three-year
contract with the Pentagon to co-ordinate military and security companies
in Iraq. Erinys, which specialises in the same area, has made more than
£86m, a substantial portion from the protection of oilfields.
The evidence of massive investments
and the promise of more multimillion-pound profits to come was discovered
in a joint investigation by Corporate Watch, an independent watchdog,
and The Independent.
The findings show how much
is stake if Britain were to withdraw military protection from Iraq.
British company involvement at the top of Iraq's new political and economic
structures means Iraq will be forced to rely on British business for
many years to come.
A total of 61 British companies
are identified as benefiting from at least £1.1bn of contracts
and investment in the new Iraq. But that figure is just the tip of the
iceberg; Corporate Watch believes it could be as much as five times
higher, because many companies prefer to keep their relationship secret.
The waters are further muddied
by the Government's refusal to release the names of companies it has
helped to win contracts in Iraq.
Many of the companies enjoy
long-standing relationships with Labour and now have a financial stake
in the reconstruction of Iraq in Britain's image. Of the total profits
published in the report, the British taxpayer has had to meet a bill
for £78m while the US taxpayer's contribution to UK corporate
earnings in Iraq is nearly nine times that. Iraqis themselves have paid
British company directors £150m.
The report acknowledges that
British business still lags behind the huge profits paid to American
companies. But, in two fields, Britain is playing a critical and leading
role.
The threat from the Iraqi
insurgency means British private security companies are in great demand.
Corporate Watch estimates there are between 20,000 and 30,000 security
personnel working in Iraq, half of whom are employed by companies run
by retired senior British officers and at least two former defence ministers.
The biggest British player, Aegis - run by Tim Spicer, the former British
army lieutenant colonel who founded the security company Sandline -
has a workforce the size of a military division and may rank as the
largest corporate military group ever assembled, according to the report.
Other private security companies have sprung up overnight to protect
British and American civilians.
Britain is also playing a
leading role in advising on the creation of state institutions and the
business of government. PA Consulting, which has also received a contract
for advising on the Government's ID cards scheme, worth around £19m,
is now a key adviser in Iraq.
Adam Smith International,
a body closely linked to the right-wing think-tank used by Margaret
Thatcher, has been heavily involved in the foundation of the Iraqi government
and continues to influence its newly formed ministries. According to
the Tory MP Quentin Davies, who visited Iraq, the advisers are "reordering
Iraqi government operations at the most basic level, to help restructure
some of the Iraqi ministries, in fact physically restructure them, even
suggesting how the minister's office should be laid out".
Another favourite of the
Thatcher governments, now involved in Iraq, is Tim Bell, who ran the
Tories' election campaigns in 1979, 1983 and 1987. His PR firm Bell-Pottinger
has been involved in advising on the 2004 elections and a strategic
campaign to promote bigger concepts such as the return of sovereignty,
reconstruction, support for the army and police, minority rights and
public probity.
Loukas Christodoulou, of
Corporate Watch, has been monitoring British business relations with
Iraq since the invasion. He says in his conclusion to our joint report:
"The presence of these consultants in Iraq is arguably a part of
the UK government's policy to push British firms as lead providers of
privatisation support. The Department for International Development
has positioned itself as a champion of privatisation in developing countries.
The central part UK firms are playing in reshaping Iraq's economy and
society lays the ground for a shift towards a corporate-dominated economy.
This will have repercussions lasting decades."
In five years, the £1.1bn
of contracts identified in the report will be dwarfed by what Britain
and the US hope to reap from investments. Highly lucrative oil contracts
have yet to be handed out.
© 2006 Independent News
and Media Limited