Urgent: Proposed INOC Law- Could Disintegrate Petroleum Sector and Damages the Iraqi Economy
    الأربعاء 16 مارس / أذار 2016 - 13:07
    Ahmad Mousa Jiyad
    Iraq/ Development Consultancy and Research, Norway
    Dear Friends and Colleagues,

    Warm greetings.

    At a short notice I was asked to give opinion on the text of the proposed INOC Law, which is expected to be discussed by a few people in a "consultative meeting” at the Ministry of Oil today Wednesday 16 March 2016.

    I examined thoroughly the above mentioned text and provided my initial assessment to all senior officials at the Ministry of Oil; the Parliamentary Committees for Energy & Oil and Finance and some oil professionals who were invited to attend the "consultative meeting”. My remarks were posted to the above mentioned individuals and officials at 03.00 AM (Norway time) this morning 16 March 2016.

    Due to the urgency of the matter I posted my brief assessment with detailed remarks written on the Pdf copy of the said INOC Law. I will publish my full assessment of INOC Law shortly.

    Briefly, in my humble view there are many extremely serious problems, flaws and inconsistencies in the laws, which could generate many negative consequences that could disintegrate the petroleum and upstream sector and on Iraq economy.

    The proposed Law mixes and confuses authorities by giving an upstream petroleum entity, INOC, a fiscal authority of macroeconomics nature, allocation of revenues!

    It ignores the necessary and constitutional separation of the three branches of authority and their jurisdictions and prerogatives.  

    By attaching INOC to the Parliament, the Law violates the principle of Natural justice: the conflict of interest.

    Moreover, the proposed INOC Law contravenes the established legal principles of the Law of Corporations especially those related the powers and authorities of the "general assembly”, "Shareholders votes and powers”, the "CEO and Directors”, "Voting system and delegation”,  etc.  

    The proposed INOC Law is very poor on fundamental operational modalities. The language of the proposed laws is extremely weak in using legal terminologies and many terms are stated in very different and ambiguous ways.

    The text also suffers from severe lack of cohesion with very vague and too broad objectives.

    Issues related to KRG are, by omission or intention, unfortunately very confused, unclear and, apparently, favors KRG known stands!!!!.

    The structure of positions is biased towards the highest among the bureaucratic hierarchy and apparently based on Almuhasasa/ sectarian politics (Minister, Deputy Minster; Special grade etc.)!!

    The inclusion of non-Iraqi Advisors is very alarming, dangerous, could have devastating consequences, probably politically motivated and should be removed.

    The provisions to "replace” the Service Contracts concluded by the Ministry of Oil should be removed from the Law; if the Ministry/ INOC try this it will, as former Minister Abdul Kareem Luaibi has done, be damaging and works against Iraq’s interest.  

    Some of the provisions reflect clear wrong understanding of the constitutional principles or ignoring them.

    Also this draft includes legally impermissible premises: a law for a producing entity (INOC) defines the roles and functions of its superiors; the Parliament, Federal, Regional/ provincial Governments and Federal Ministries!!!!

    Measures of efficiency, effectiveness and functional modalities are absent from this draft. No mention to transparency and staff/ workers participation are missing!!

    In short, the proposed draft is not a legal text for a law; rather it is a political manifesto like with unworkable utopian thoughts, a manifestation of populist politics and could disintegrate the petroleum sector.

    Ironically, I received formal feedback from a Director General at the Ministry of Oil indicating the Ministry has nothing to do with this proposed INOC Law!!!! 

    I call upon the Ministry of Oil to post the draft INOC Law on its website and announce in all Iraqi newspapers, STV and media sources inviting the interested people to give opinion on the draft of the law.

    Specifically, I call upon my colleagues: professionals, parliamentarians, academics, patriotic politicians, government officials, civil society organization, media and others to stand united together against these destructive tendencies that could disintegrate the petroleum sector and damage the national economy. 

    Best wishes and kindest regards,

    Ahmed Mousa Jiyad,

    Iraq/ Development Consultancy & Research


    16 March 2016
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