IRAQ - Why Iraqis Oppose US-Backed Oil Law.

Across the political spectrum in Washington, members of Congress are demanding that the Iraqi government meet certain benchmarks to show it is really in charge. But there is a big problem with the most important benchmark: the federal petroleum law, which is unpopular in Iraq. Congress has been told the law is a way to share oil wealth among Iraq's regions and religious sects.

Nationalist Iraqis see it differently. They say the law will turn over the oilfields to IOCs, giving them control over setting royalties, deciding production levels, and even determining whether Iraqis get to work in their own petroleum industry. Most vocal among the opponents of the proposed law are Iraq's oil unions.

Under Washington's guidance, the Iraqi government wrote the petroleum law in secret deliberations. It needed secrecy to obscure the fact that it gives IOCs control through PSAs. But locally PSAs are seen to be disadvantageous and have been rejected by most oil-producing states in the region, including Iran, Kuwait, Saudi Arabia and the UAE.

Leading the Iraqi opposition to the petroleum law are the industry's workers. In early June, the Iraqi Federation of Oil Unions shut pipelines from the Rumeila fields in the south to Baghdad and the rest of the country. Their main demand was that petroleum remain in public hands, although they also sought to force the government to improve conditions for workers.

Units of the Army surrounded the strikers at Sheiba, near Basra. US aircraft buzzed the strikers, while Maliki issued arrest warrants for the unions' leaders. But, facing the possibility the strike would escalate into shutdowns on the rigs, cutting off oil exports, Maliki blinked. He agreed to hold off implementation of the petroleum law until October, giving the unions a chance to propose alternatives.This increased Maliki's troubles in Washington, where failure to move on the law benchmark has been held as evidence of weakness and incompetence. In Baghdad, however, Maliki faces a fact US policymakers refuse to recognise: The petroleum industry is a symbol of Iraqi nationhood.

Because of their actions, the oil workers unions have become the strongest voices of Iraqi nationalism, protecting the only source of income capable of financing the country's reconstruction. Nationalists also say US legislators trying to impose the petroleum law must note they are requiring Baghdad to betray one of the few reasons Iraqis have for supporting Maliki - his ability to keep petroleum revenue in public hands.

Some of the oil workers' other demands reflect their desperate situation under US-led occupation. They want their employer, the Oil Ministry, to pay wage increases and promised vacations, and give permanent status to thousands of temporary employees. In a country where housing has been destroyed on a huge scale and workers often live in primitive conditions, the unions want Baghdad to turn over land for building homes. Every year, the Oil Institute, a national technical training college for the industry's workers and technicians, has miraculously continued holding classes. Yet the ministry would not give work to graduates, despite the industry's desperate need for skilled labour.