British firms make billions from Iraq war

LONDON - British business has profited by at least £1.1 billion ($2.95 billion) since Saddam Hussein was toppled three years ago, the first comprehensive investigation of UK corporate investment in Iraq has found.

The company roll-call includes some of the best known names in Britain's boardrooms and many who would prefer to remain anonymous.

They come from private security services, banks, PR consultancies, urban planning consortiums, oil companies, architect offices and energy advisory bodies.

Among the top earners is construction firm Amec which has made an estimated £500 million from a series of contracts restoring electrical systems and maintaining power generation in Iraq over the last two years.

Aegis, which provides private security, has earned more than £246 million 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 £86 million, a substantial portion of which was from the protection of oil fields.

Evidence of massive investments and the promise of more multi-million-pound profits to come are uncovered in a joint investigation by Corporate Watch, an independent watchdog and the Independent.

British company involvement at the very top of Iraq's new political and economic structures means that 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 contracts and investment in the new Iraq. But our figure is just the tip of the iceberg. Corporate Watch believes it could be as much as five times the £1.1 billion figure, because many firms prefer to keep their relationship secret.

The waters are further muddied by the Government's refusal to release the names of companies that it has helped to win contracts in Iraq.

Many firms 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 this report, the Iraqis themselves have had to pay British company directors £150 million for contracts won.

The threat from the Iraqi insurgency means that British private security companies are in great demand. Corporate Watch estimates that there are between 20,000 to 30,000 security personnel working in Iraq, half of whom are employed by firms run by retired officers and at least two former Ministry of Defence ministers.

The biggest British player, Aegis, run by Sir Tim Spicer, the founder of Sandline, has a workforce the size of a military division and may rank as the largest corporate military ever assembled, according to the report.

Britain is also playing a leading role in advising on the creation of state institutions and the business of the new Iraqi Government.

The Adam Smith International, which is closely linked to the right-wing think tank used by Margaret Thatcher, has been busily involved in the foundation of the US-led Iraq government, and continues to influence the newly elected Ministries.

Another favourite of the Thatcher governments is Loukas Christodoulou of Corporate Watch, which has been monitoring British business in Iraq since the invasion.

In his conclusion in the report, he says: "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."

He said one such consultancy, DfID, had positioned itself as "a champion of privatisation in developing countries".

"The central part that British companies 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 after the end of the military occupation."

Graham Hand of the British Construction Consultants Bureau, which represents the interests of dozens of firms working in Iraq, says the profits are high because the risks are great.

"These are multi-million contracts. Companies and consultancies are not going to be there for the kind of margins you would expect from working in Enfield High Street. There are risks in Iraq so they need to be rewarded with proper money," he said.

"I can't identify [the companies] because that's not what the companies want and the senior directors on the boards have given me explicit instructions not to."

But some of the British companies profiting from these contracts with Iraq have protected themselves from the risk by advising and training Iraqis from Britain. The town-planning agency which has been awarded a contact to redesign the devastated city of Najaf is doing so from its headquarters in London.

The £1.1 billion will be dwarfed by what Britain and America hope to reap from their investments in five years, and oil contracts have yet to be handed out to the world's oil giants.

Shell and BP are known to be holding back on making massive investments until a safe pro-corporate environment and reliable legal framework has been created.

"If the corporate occupation of Iraq succeeds in creating a neo-liberal Iraq, then control over these immense natural resources passes firmly into the hands of US/UK-backed corporations and becomes further fuel for the cycle of war, invasions and environmental catastrophe, that will have repercussions for the global population," said Christodoulou.

SPOILS OF WAR

* Tim Spicer, ex-SAS, chief executive of Aegis, which won a US$430m Pentagon contract to oversee all private security operations.

* Nicholas Soames, Tory MP, grandson of Winston Churchill, a non-executive director of Aegis.

* Major-General Jeremy Phipps, ex-SAS; former head of British special forces 1989-1993. Head of Aegis operations in Iraq.

* Malcolm Rifkind, Tory MP, former Secretary of Defence, a non-executive director of Armor Group, which has £11.5m of public contracts in Iraq.

* Harry Legge-Bourke, ex-Welsh Guards, brother of the former nanny to Prince William and Prince Harry. Operations chief for Olive Security.

* General Sir Michael Rose, Former commander of the 22nd SAS regiment. Non-executive director of Control Risks Group, which has profited by £23.5m from supplying guards for British civil servants in Iraq.

* Sir Jeremy Greenstock, one of Britain's foremost diplomats, is a non-executive director of De la Rue, a financial services company which has won one of the biggest contracts in Iraq for printing the new Iraqi Dinar.

* Lord George Robertson, the former Secretary-General of Nato and former Labour Defence Secretary, is a non-executive director of Weir, a British based engineering company with contracts for oil assessments.

- INDEPENDENT