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CONSTITUTIONAL SAFEGUARDS FOR IRAQ’S OIL
REVENUES KEY TO FUTURE STABILITY
May 2005
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the full report 
NEW YORK, May 26—Iraq’s future peace and security
depend on instituting constitutional safeguards that guarantee
financial accountability and the equitable division of oil
revenues, says a report by Iraq Revenue Watch, a project of
the Open Society Institute.
Protecting the Future: Constitutional Safeguards for Iraq’s
Oil Revenues comes as the new Iraqi government prepares
to draft the country’s first permanent constitution since
Saddam Hussein was ousted. The report urges lawmakers to protect
against oil-sector corruption and mismanagement.
“Without such laws in place, ruling elites can evade
financial accountability and divert resource revenues into
their pockets, instead of supporting economic and human development,”
said Cristina Posa, a lawyer at Manatt, Phelps & Phillips
in New York who was Oxfam's Humanitarian Protection Advisor
in Iraq in 2003 and a contributor to the report. “Iraq’s
Parliament now has the opportunity to ensure that Iraq’s
oil is used to benefit its people.”
The report also warns of civil conflict unless oil revenues
are fairly distributed among Iraq’s ethnic and religious
groups. In Iraq, rifts over oil revenues run deep, as Iraqi
Kurds, Arabs, and Turkmen struggle for control of oil-rich
Kirkuk.
Following the elections in January, the drafting of a permanent
constitution remains the most significant challenge to establishing
a democratic Iraq. Iraq’s citizens are due to vote in
referendum on the constitution on October 15.
Without constitutional provisions that protect its oil revenues,
Iraq is likely to follow the path of so many other natural
resource-rich nations that are dogged by corruption and bad
governance. Most oil-dependent states have “ultra-presidential”
governments, which enable the executive branch to use resource
revenues as it sees fit.
Protecting the Future explores ways that Iraq can
avoid this trap by embedding measures for accountability into
the future Iraqi constitution. The report recommends provisions
that make clear which agencies are responsible for the development
and implementation of the Iraqi budget, and grant oversight
of oil revenues to all branches of government—executive,
legislative, and judicial.
“Saddam Hussein squandered the nation’s natural
resources on unwinnable wars and lavish lifestyles for himself
and his cronies,” said Posa. “With Saddam gone,
Iraqis have reason to believe that their country’s wealth
can provide them with a better life.
Read
the full report
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