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Comment
Last Updated: 02/11/2004
Escaping Oil
Joe Schumacher

Executive Order 13303 comes in for scrutiny reinforcing the belief that George W Bush has a tendency to be supportive of the US oil industry.


 

On March 24th 1989 the Exxon Valdez oil tanker ran a ground off the coast of Alaska, damaging its hull, spilling 38’000 tonnes of oil onto the Alaskan coast. Although not even amongst the largest 50 oil spills of the last 30 years, the combination of location and the ecological vulnerability of the Alaskan wilderness caused an unprecedented ecological disaster. 15 years on the malignant after-affects of the spill are still being felt. What followed was one of the largest legal actions against an oil company, resulting in Exxon Inc having to pay over 1.2 billion dollars in fines and compensation.

      Were a similar disaster to occur today, involving an oil company with operations in Iraq, U.S courts would have no choice but to dismiss any legal actions against the oil company, recognizing the blanket immunity from any legal action recently granted to the oil industry by the U.S Presidential Executive Order 13303.

      On May 22nd last year, the UN Security Council passed resolution 1483 lifting the decade old sanctions on Iraq, in its place creating a Development Fund to be governed by the U.S controlled Coalition Authority. The Authority is mandated with allocating the revenue from Iraq’s oil wealth for the rebuilding of the country. The resolution also provided limited immunity to corporations involved in oil and gas dealings in Iraq until 2007. The reasoning behind this limited immunity is to protect Iraq’s oil wealth, the vital component in Iraq’s recovery, from lawsuits from Iraq’s many creditors. Iraq’s foreign debt is currently between 110 and 130 billion dollars, not counting compensation claims arising from the first Gulf war.

However, 1483 has some important limitations; aside from the four-year temporal provision, it also does not extend beyond the initial sale to the purchaser, does not cover misconduct beyond ‘privileges and immunities generally enjoyed by the United Nations’ and importantly does not cover ecological accidents.

       On the same day in far less publicized surroundings US president George Bush signed Executive Order 13303. This order reconfirms SC res 1483, but it does away with all the limitations, stating “…any…judicial process is prohibited, and shall be deemed null and void”, for any entity with direct or indirect interests in Iraq’s petroleum industry. President Bush signed EO 13303 using his powers under the International Emergency Economic Powers Act, effectively tying the security of Iraqi oil to a state of emergency in the US: “The threat of attachment or judicial process against the Development Fund for Iraq, Petroleum and Petroleum products, and interests therein…constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States”.

 

It wasn't for another two months after the ink had dried that the order became public knowledge when the Washington based Institute for Policy Studies, a liberal think tank, discovered EO 13303, and released a scathing attack on its validity.

Since then a flotilla of legal briefs as to the illegality and the surreptitious character of the Presidents order have been produced by NGO’s and liberal public interest organizations, though EO 13303 and its ramifications have largely gone uncommented upon by the mainstream press.

     Some commentators aghast at what they see as a discarding of the right to regress at the heart of justice system point out, that in theory US oil companies could use slave labor to build a pipeline and be immune from prosecution, as would any firm which catastrophically polluted the environment in the aftermath of tanker spill or refinery explosion. Tom Devine, director of US Democratic legal think-tank, Government Accountability Project, who has been the orders most conspicuous critic, has contend that 13303 cancels the concept of corporate accountability and abandons the rule of domestic and international law. “It is a blank cheque for corporate anarchy.”

      In response US officials charged with overseeing EO 13303, have argued the such scenarios are absurd and that the regulations are an humanitarian necessity to ensure the Iraqi people the best chance of rebuilding their shattered country. Explaining the need for the EO 13303 and its overlap and strengthening of the intentions of SC res. 1483, U.S Treasury official Griffin Taylor said, “The executive order protects revenue from the Development Fund for Iraq. We knew we were going to issue regulations… and we had to be broad,” Griffin continued “We wrote it broad to protect all the money”. In response to critics concerns at the immunity for environmental disasters, officials at the Treasury’s Office of Foreign Assets Control have issued assurances that regulations are being drafted to address the issue. Although nine months on those regulations are yet to be released, and were an oil spill to happen tomorrow its hard to see the oil industry not taking advantage of its current legal right to escape liability.

 

 

 

 

 

 

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