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British companies profited by at least £1.1bn out war in Iraq
By Robert Verkaik
03/13/06 "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.
© 2006 Independent News and Media Limited
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