Loukas Christodoulou | ukwatch.net

Europe's Forgotten Occupation

Ellie Keen — Sun, 30 Sep 2007 00:41:53 +0000

Since the 1999 NATO intervention the former Yugoslav province of Kosovo/Kosova¹ has been administered by a series of international agencies. During this period the area has been subject to economic re-structuring, so as to transform socially-owned property into private businesses. The British government has been active in this area, providing privatisation consultants in a role strikingly similar to their role in Iraq.

The United Nations Interim Administration Mission in Kosovo (UNMIK), which runs Kosovo, pending a final decision on the area's status, has the aim of handing over power to local politicians, after setting up viable government mechanisms. Linked to this aim is the UNMIK project of creating a viable Kosovan economy: 'Supporting the reconstruction of key infrastructure and other economic reconstruction' as UN resolution 1244(1999) put it when it set up the interim administration. UNMIK has expanded this to a mission to 'promote economic prosperity in Kosovo and the welfare of its people through the development of a market economy'.

There is an urgent need for development of the economy in Kosovo. Unemployment is estimated at 50% and the 2 billion Euros in aid received since 1999 is the main source of foreign funds for the area. However, the introduction of mass privatisation and other neo-liberal measures, such as deregulation, do not seem designed to help the local population. Rather, they suggest that the aims of UNMIK are to pave the way for Kosovo's integration into the European economy under the very worst terms for its people.

For example, the Euro was set by UNMIK as the local currency, without local consultation and the World Bank has noted approvingly that 'Kosovo is one of the most liberal trading regimes in the world with a zero and 10 percent tariff rate and no quantitative barriers.' The Bank also went on to set out exactly why integration of Kosovo into the global market is in the interests of European governments and corporations:

The mining and energy sectors are potential key sources of future growth. Kosovo has abundant resources of lignite, lead, zinc, ferronickel, magnesite, and crushed stone, as well as relatively low transportation costs to the Western European markets.'

So far only a small fraction of Kosovo's mining industry has been set in motion again, to the understandable frustration of the Kosovan miners themselves, who would prefer privatisation with jobs to pit disuse and unemployment. The relatively large exception to this has been the sale of the Feronikeli mines to mining giant International Mineral Resources (IMR)/Alferon. Hailed as 'One of the most important events in the privatisation process in Kosovo' by the Kosovan Minister for Trade and Industry, the investment of 30 million euros by IMR represents a success for the UNMIK plan. It also represents a success for IMR, which is part of Eurasian Natural Resources, one of the biggest mining groups in the world. IMR's boss, Alexander Mashkevich, who lives in the UK, is close to the Labour party - in 2003 Labour peer Lord Levy, currently involved in the 'cash for honours scandal' met with Mashkevich during a trip to Khazakstan. Mashkevich is also close to other pro-Labour corporate chiefs, such as Lakshmi Mittal. The man who made the deal for Feronikeli, IMR chair Johannes Sittard, was Mittal's second in command during 1995-2001. It is likely that Mashkevich, who made his fortune as a corporate raider during the chaotic privatisation of the former USSR's industry, spies similar bargain basement prices for rich resources in the case of Kosovo.

Meanwhile the UK Department for International Development (DfID) has been sponsoring privatisation consultants' work in Kosovo. Money paid so far is as follows: £340,980 to Enterplan; £171,730 to Birks Sinclair and Associates; £1,269,127 to Atos Origin and £1,622,350 to WYG International. As the talks over the province's political future move on, the UK government is working to make sure that any future Kosovan state will be run along neo-liberal lines.

Future Corporate Watch investigations will look more in depth at the privatisation process, and the role of UK consultants in this. If you have any information relating to corporations in Kosovo, please get in touch.

1. The choice between using Serb 'Kosovo' or the Albanian 'Kosova' for this area is politically loaded. In this article we use, 'Kosovo', as it is the standard international usage. This is not to take any position on the question of the rightful ownership of the area, nor to attempt to deny the very real suffering of the Albanian Kosovars under the Yugoslav state.

Brown's New Team: an Audit

eddie — Wed, 11 Jul 2007 14:11:18 +0000

_A new UK Prime Minister, a new cabinet, but the same corporate connection. Gordon Brown has made it a priority to boost corporations during his times as UK Chancellor of the Exchequer. The former head of the Confederation of British Industry, Digby Jones, is now Minister for Trade and Investment. Behind this high-profile hiring are a slew of other corporate-related figures in the new Brown government_

*The Securicrats*

Brown's appointment of Lord Stevens as international security advisor, and Sir Alan West as Security Minister, seem to be designed to mimic similar US posts dealing with anti-terror operations and homeland security. The Guardian commented that the two appointments were 'likely to ensure that the fight against terrorism will take on a high profile under the new administration. Both Stevens and West are also connected to what we might call the security-industrial complex, which, during the shadowy 'war on terror' is seeing demand for its services booming.

In April 2005 Stevens became a director of LGC Group Holdings, a company, which performs 'forensics science' services for business and state. LGC has hence been a beneficiary of the increasingly wide-spread seizure of suspects' DNA by the UK police. Stevens is also the chair of Quest Ltd, which provides private 'security, investigations and risk management' services. Stevens is also a director of Invicta Capital, an investment and legal services firm which last year ceased funding the British film, when Gordon Brown himself closed a tax loophole that they were using. Stevens' other directorships, as declared on his Register of Interests, are with money transfer company Travelex and the elusive 'Mercer St Consulting' which does not seem to have a website!

Alan West, for his part, is a former Admiral and Sea Lord and currently chairs QinetiQ's Defence Advisory Board. Did someone say 'Qinetiq? Another of Brown's new appointees played a crucial part in privatising the former Defence Evaluation and Research Agency in 2001, as

*QinetiQ energy*

Shriti Vadera is the new Parliamentary Under Secretary of State in the Department for International Development. She spent fourteen years at UBS Warburg., a giant investment bank, heavily involved in privatisation across the globe (in fact, chosen as Privatisation Advisor of the Year in 2002). Vadera was heavily involved in managing the Qinetiq sell off, as an advisor of Gordon Brown. Meanwhile, her old firm, UBS was also involved in advising the government on the Qinetiq sale. The then head of privitisation at UBS was one James Sassoon – who later joinedthe Treasury under Brown, and who now works as 'Representative for Promotion of the City'.

Apart from these UBS veterans, Brown's people also include another investment banker - Jeremy Heywood, who was Managing Director and co-head of Morgan Stanley from December 2003, and is now Brown's head of 'domestic policy and strategy'.

Fistfull of Dinars

eddie — Sat, 08 Apr 2006 15:57:47 +0000

Iraq is not only undergoing a military occupation, but also an economic invasion and UK corporations are in the vanguard.

To date, Corporate Watch has uncovered evidence for about £1.1bn worth of contracts for UK companies, from the US and UK reconstruction budget, and from the Iraqi ministries (see breakdown below). Despite the billions spent on reconstruction, services such as water and electricity are mostly worse than during the Saddam era. IMF-style reforms have also contributed to mass unemployment and rocketing poverty. US and UK aid - taxpayers' money - has been channeled towards US and UK corporations in what amounts to welfare for the corporate elite.

The value of several large UK contracts is not known. These include the printing of the new Iraqi Dinar by De La Rue and Datasat's 'major telecomms contract', plus the money that successful security forms such as Hart, AK Group and Olive have made. It is also hard to gauge the revenue and influence that the banks HSBC and Standard Chartered have gained through their operations in Iraq.

The real UK total is certain to be far less than the Iraq profits of US corporations, but 'British' corporations are playing a key role in two sectors: consulting, especially privatisation support and private security, including private military companies. The UK government and British-based trade associations, have also played a key role in facilitating corporate access to Iraq's markets, services and resources. For more on all these sectors see the full report on our website.

TOP TEN UK PROFITEERS FROM IRAQ

1. AMEC £500m (approx)

www.amec.com/

Since 2004 construction giant AMEC have been working with US company Fluor on several huge US reconstruction contracts, for power generation and water projects.

2. Aegis £246.5m+

www.aegisworld.com/

In June 2004 this private security and 'risk management' company won a three-year $430m Pentagon contract to coordinate the major private military/security companies in Iraq. In 2005 this contract was extended by another year. The turnover of Aegis has gone from £554,000 in 2003 to £62m in 2005. Three-quarters of this is from work in Iraq.

3. Erinys £86m+

www.erinysinternational.com/

Another major private security company, Erinys has received $50m from the US Army Corps of Engineers and $100m to protect oil fields (2003-2004)

4. Petrel Resources (Anglo-Irish) £56.6m

www.petrelresources.com/

This petroleum company was awarded one of the biggest oil development contracts since Saddam: $197.4m (£113.17m) to develop the Subba and Luhais oil fields (Iraq Ministry of Oil, September 2005). Will share this 50/50 with partners Makman.

5. HSBC £36.88m (stake in Dar es Salaam bank)

www.hsbc.com/

The major bank has bought 70% of Dar es Salaam Investment Bank, (which has assets of $91.1m). HSBC profit from Middle East business rose 25% in 2004.

6. Cummins UK £25.8m+

www.cummins.com/eu/pages/en/distributors/uk/index.cfm

In their own words: 'To date we have supplied four power stations: 2MW for the Forum in Baghdad, 4MW for the El Rasheed Hotel (USAID), 5MW for the airport and 8MW for the US army.'

7. PB Power £24.88m

www.pbworld.com/ In March 2004 they received $43.4m in US reconstruction money to 'provide program management office support for the electrical services sector'.

8. Control Risks £23.5m+

www.crg.com/

One of the biggest private security companies In Iraq, with over 250 operatives there. CR is a preferred provider of security for UK government personnel (along with Armor Group). Most of the known money comes from Foreign Offcie and DfID contracts. However, CR have also received an unknown proportion of Parsons' $500m USAID contract(March 2004).

9. MerchantBridge £22.07m (capitalisation)

www.mbih.com

Acted as 'lead advisor' to the Iraq Ministry of Industry and Minerals for factory lease programme (2004). Launched Mansour Bank (Sep 2005), capitalised at $38.5m; 90% from Iraqi investors.

10. Global Risk Strategies £15.4m+

www.globalrisk.uk.com/

Another major private security form, with a reported 2,000 staff in Iraq. Received $27m as part of the contracts to distribute the new Dinar (May 2004). Also guarded part of Baghdad airport (May 2004).

CONSULTANTS: CREATING A NEW IRAQ

Just as privatisation and the private finance initiative (PFI) in the UK opened up a new arena of profits, so the restructuring of Iraq's economy is providing fertile opportunities for an army of consultants.

After the ejection of the British-backed monarchy in 1958, much of Iraq's economy was taken over by the state. The US and UK occupiers assume that post-Saddam Iraq will be transformed into a market economy. In their terms this means an economy run according to 'free market' principles, which is to say, dominated by corporations. Already laws have been passed by the Coalition Provisional Authority (CPA) to allow the privatisation of over 200 state owned enterprises (SOE). However, to transform the running of an entire country means changing the entire political and economic management system. DfID recognise that the new Iraqi government will have to undertake 'politically sensitive' reforms. The UK government is helping this process as best it can, aided by privitisation consultants.

A leader in this field is Adam Smith International (ASI), an offshoot of the right-wing think-tank Adam Smith Institute, which provided the Thatcher governments with much of their ideological backing. In the period 1998-2003 ASI received payments of over £34m from DfID for its 'development' work across the world, including pushing the failed water privatisation scheme in Tanzania. In Iraq ASI has been involved in the foundation of the US-led Iraq government and are involved in Iraqi government operations at a very basic level, working 'to help restructure some of the Iraqi ministries, in fact physically restructure them, even suggesting how the ministers office should be laid out', as one MP found on a fact-finding mission.

This is an edited exerpt from the Corporate Watch report Corporate Carve-up: the role of UK corporations in Iraq, March 2003-March 2006. This formed the basis for an Independent front page story on 13th March 2006, prompting a reply in the letters page from DfID minister Hilary Benn and also causing Jeremy Corbyn MP to ask Prime Minister Tony Blair a question in the House of Commons.

*References*

TOTAL MONEY FOUND: £1.16bn

SOURCES OF THE MONEY

USAID £556,743,161

Pentagon £332,540,000

Iraq £165,650,340

DfID/FCO £78,532,490

Unknown £28,800,000

BREAK DOWN BY SECTOR

Power/water £501,237,311

Private security £382,971,284

Petroleum £76,339,726

Financial £62,161,871

Construction £24,815,441

Consultants £13,867,795

Telecomms £10,000,000

Education £9,470,451

Procurement £7,992,112

Services £7,500,000

Software £4,500,000

Materials £20,000