By David Bacon CorpWatch December 15, 2003
In 1958, Iraqi nationalists and radicals threw out the king imposed on them by the British after World War One. Over the next five years of relative freedom and democracy, Iraq began putting together a nationalized, planned economy, based on its oil wealth. Hundreds of factories were eventually constructed, making it the most industrialized country in the Middle East. A new deepwater port was built on the Persian Gulf, Umm Qasr, which became a lynchpin in that plan. From its piers Iraq began to ship the goods from those factories to buyers in other countries throughout the region. The port became a symbol of progress and independence, an achievement of the Iraqi revolution.
Today Umm Qasr, under the US military occupation of Iraq, has become war booty. It was the first Iraqi enterprise to be turned over, not just to a private owner, but to a foreign one. Even before US troops had reached Baghdad, in Washington DC the Bush administration gave the concession for operating the port to Stevedoring Services of America, a politically-connected firm handling cargo around the world that has a long history of anti-labor policies. To Iraqis, instead of a symbol of national pride, Umm Qasr now represents the new era of foreign domination. And as a foreign corporation has taken over the operation of what once was a crown jewel of the Iraqi economy, the status of the people whose living depends on the jobs the port provides hangs in the balance.
Free Enterprise at Gun Point
The free trade ideologues of the Bush administration see the occupation of Iraq as a beachhead into the Middle East and south Asia. Their first objective is the transformation of the state-dominated economy of what was once one of the region's wealthiest countries. Tom Foley, a Bush fundraiser put in charge of implementing this vision on the ground, said his goal is a "fully thriving capitalist economy." Privatizing Umm Qasr began the transformation of the Iraqi economy -- from one based on nationalization and production for domestic welfare, to one based on ownership by transnational corporations, sending their profits out of the country.
Stevedoring Services of America, now SSA Marine, is spearheading this transformation. The company, which has a history of tight political connections with the White House, received a $4.8 million no-bid contract to operate the port of Umm Qasr on March 24. According to the USAID website, the contract, may reach as high as $14.3 million by its completion. It covers the assessment of the port's needs, assistance in making it operational, but then also the ongoing management of dockside operations.
San Francisco's Bechtel Corp. began dredging the harbor in May. Then, on July 16, SSA began accepting commercial cargo, including container, break-bulk, and roll-on/roll-off shipments. Despite its dilapidated state, Umm Qasr is still a highly developed facility, with 23 berths for ships, four modern container cranes, and a grain and cement dock. (Oil exports are handled through another, unrelated port.)
The possibilities for the profitable employment of these facilities weren't lost on other port operators, who would have liked the plum themselves. The British shipping giant, Peninsular and Oriental Steam Navigation (the famous "P&O"), thought it was entitled to run Umm Qasr, inasmuch as the British were given responsibility for occupying and administering the south of Iraq. The firm complained bitterly that only US companies were getting the profitable concessions created by the occupation. Alan Larson, US undersecretary of State, responded that giving SSA the port was "the responsible thing to do." Even other US firms complained that the company seemed to have the inside track, since it didn't have the normally-required security clearance. Instead of rejecting SSA, however, USAID dropped the security requirement.
US shippers have since complained of "gross profiteering" at the high tariffs charged for handling cargo in the port. SSA denies that it profits from the tariffs themselves, and says they're set by USAID. But in a privatized port, the tariffs will eventually flow into the pockets of whatever private operator holds the concession, and SSA advises USAID on the rates required to make the port "self-sustaining." When USAID was slow in taking SSA's "advice" in July, the agency got a call from Congressman Norm Dicks (D-WA), telling them to pay more attention to the company's recommendations. SSA, which was originally brought in just to assess damage and get the facility operational, is now positioned to operate the port as a permanent concession.
SSA's Friends in High Places
The process by which SSA became Iraq's port operator says a lot about the company's relationship with the Bush White House. SSA Marine is a $1 billion-a-year, family-owned business, with over 10,000 employees worldwide. It has profited from its political connections for years: Between 1990 and 2002, for instance, its government contracts were worth $86,117,000.
While the shipping industry as a whole has been a heavy political contributor, giving 68% of its $4.3 million in campaign contributions to Republicans in the 2000 election cycle alone, SSA has not spread the same big bucks. In 2003 the company paid $40,000 to Denny Miller Associates for lobbying services. And according to the Center for the Study of Responsive Politics, SSA contributed $24,825 (77 percent to Republicans) between 1999 and 2002, of which President Bush received a mere $1,000.
But these (relatively) small expenditures don't give an accurate picture of the real relations between SSA and the White House. Those were revealed in 2002, during the negotiations of the labor agreement between the Pacific Maritime Association and the International Longshore and Warehouse Union. SSA was widely viewed, especially by the union, as the most anti-union employer in the Association. PMA's director, Joseph Miniace, who came on board promising to bring the union to heel, was SSA's man, according to industry insiders.
Weeks before the contract expired on July 31, the administration began to intervene directly. Homeland Secretary Tom Ridge, and then Labor Secretary Elaine Chao, both told the union's bargaining committee that the administration would prevent any strike. They made clear that Bush would begin by invoking the Taft-Hartley Act, under which striking longshoremen would be prevented from stopping work for 80 days. They then threatened that Bush would call on Congress to place the union under the Railway Labor Act, instead of the National Labor Relations Act, which would effectively make future strikes impossible. In addition, they said, the union's coastwise bargaining structure might be declared an illegal monopoly, meaning that if the union struck one port, shippers could simply load and unload their cargo in another, making strikes pointless.
Finally, the Bush officials said, the government would replace striking longshoremen with Navy personnel in the huge cargo cranes that load and offload the giant shipping containers.
These threats were the end product of a months-long process in which administration officials met secretly with the PMA, along with the large corporations dependent on trans-Pacific shipping, like The Gap, Mattel and Home Depot. The government then set up a task force, headed by White House advisor Carlos Bonilla, which produced the strategy for massive Federal intervention.
All the Bush proposals had the same immediate intent -- removing the union's bargaining leverage by making a waterfront strike impossible. But their long-term strategy extended far beyond the docks. They began defining threats to national security in economic terms, rather than as interruptions in vital life-dependent services. Using their new definition, any halt in the operation of an industry or large profitable enterprise could be defined as a national security threat, and made illegal. The administration's legal brief voicing this startling new philosophy was elaborated by Defense Secretary Donald Rumsfeld.
When the ILWU avoided being provoked into a strike, the PMA locked workers out of the terminals in late September, 2002. The employers then demanded Bush invoke the Taft-Hartley Act, and after 10 days, got what they wanted. Despite the fact that they themselves had closed the gates of their own terminals, the Bush administration got a Federal judge to order the union to work under its old contract, with no interruption, for 80 days. The union, which then had to negotiate under the Federal no-strike order, compared it to having to bargain in a "barbed-wire straitjacket."
Developing Relationship
The close relationship developed between SSA and the Bush administration during the west coast dispute developed a life of its own. In Bangladesh, the company proposed building a new, private container terminal to compete with government-operated docks. When longshore workers and popular organizations protested the $500 billion deal, US Ambassador Mary Ann Peters threatened that US investors would boycott the country if the contract didn't go through.
SSA started rubbing shoulders with the Bush national security apparatus in other areas as well. In May, 2003, the company was a founding member of the Marine Terminal Discussion Agreement, a forum in which shippers talk with US government authorities about "security issues." The group was ostensibly created to make shipping containers more secure from tampering by terrorists or narcotics smugglers, but the initiative gives SSA an even closer relationship with the government in an area with a great impact on the jobs of longshore workers.
During the McCarthyite hysteria of the early 1950s, dockworkers were required to hold security clearances in order to get on the piers and work. Communists and other left-wingers, especially the ILWU's most active members, were denied clearances and couldn't do their jobs. Although that procedure was eventually ruled unconstitutional, after 9/11 it came back from the dead. Proposals have been floated in Washington to create a new set of security requirements for longshore workers. Putting the drafting of those requirements into the hands of companies like SSA allows the union's worst enemies to determine which of its members can hold a job.
The battles over the ILWU longshore contract finally ended with a new agreement in December, 2002. By then the administration was already ramping up its preparations for the invasion of Iraq. The relationship established between SSA and the administration during the longshore labor war was undoubtedly a key element in winning the company the contract to reopen the port of Umm Qasr, once troops seized it just a few months later.
Iraq on the Block
In Iraq, the occupation authorities, known as the Coalition Provisional Authority, have taken other important steps to benefit foreign operators like SSA. In an October 8 phone press conference, Tom Foley, who now directs private sector development for the CPA, announced a list of the first state enterprises to be sold off, including cement and fertilizer plants, phosphate and sulfur mines, pharmaceutical factories and the country's airline. In preparation, on September 19, the CPA published Order No. 39, which permits 100% foreign ownership of businesses, except for the oil industry, and allows repatriation of profits.
Order No. 37, also issued on September 19, suspends income and property taxes for the year, and imposes a flat tax on individuals and corporations in the future of 15%. Rightwing ideologues haven't been able to get the US Congress to pass a flat tax proposal despite years of advocacy, but Iraq has become the free-marketeers' playground.
Meanwhile, conferences take place once or twice a week in Washington and London, in which Iraqi enterprises and contracts are put on display, and transnational corporations come to examine profit-making opportunities. Just one conference scheduled for December 10 at Washington's National Press Club by Equity International, a business consulting service, features the attendance of executives from Lockheed Martin, Raytheon, Rockwell Automation, Foster Wheeler, The Livingston Group, Nissan Motor Co, M/A-COM, Federal Security Systems, Danimex Communications, Global Transportation Systems, Applied Industrial Technologies, Comprehensive Health Services, Washington Group International, International Truck and Engine Corporation and diplomats from countries participating in the occupation coalition.
Equity International meetings to showcase Iraqi concessions began as early as May 5, and featured speakers included U.S. Assistant Secretary of State Lincoln Bloomfield; U.S. Treasury Under Secretary John Taylor; Congressman Curt Weldon, Vice Chairman, House Armed Services Committee; Congressman Christopher Shays, Chairman, House Subcommittee on National Security, Emerging Threats and International Relations; as well as executives from Kellogg Brown & Root, BearingPoint, Creative Associates and USProtect; and top officials from the Coalition Provisional Authority, U.S. Army Corps of Engineers, U.S. State Department, U.S. Treasury Department, U.S. Export-Import Bank, U.S. Commerce Department, U.S. Small Business Administration and the United Nations.
Hostility to Labor
Iraqi workers look at the prospect of privatization with dread. Dathar Al-Kashab, manager of Baghdad's Al Daura oil refinery, predicted that privatization would have an enormous effect. "A worker starting here today has a job for life, under the old system," he explains, "and there's no law which permits me to lay him off. But if I put on the hat of privatization, I'll have to fire 1500 [of the refinery's 3000] workers. In America when a company lays people off, there's unemployment insurance, and they won't die from hunger. If I dismiss employees now, I'm killing them and their families." The privatization of the Umm Qasr docks would undoubtedly have the same effect on the port's longtime workforce.
Iraqi workers, however, haven't simply waited for the ax to fall. In June, 400 labor activists held a conference in Baghdad, and laid plans for organizing unions in twelve of the country's principal industries, including longshore and transportation. They set up an umbrella labor group, the Workers Democratic Trade Union Federation.
[....]
http://www.corpwatch.org/issues/PID.jsp?articleid=9408
__________________________________ Do you Yahoo!? Protect your identity with Yahoo! Mail AddressGuard http://antispam.yahoo.com/whatsnewfree