The War Dividend: The British companies making a fortune out of conflict-riven
Iraq
By Robert Verkaik

THE INDEPENDENT
Published: 13 March 2006

British businesses have profited by at least £1.1bn since coalition forces
toppled Saddam
Hussein three years ago, the first comprehensive investigation into UK corporate
investment in Iraq has found.
The company roll-call of post-war profiteers includes some of the best known
names in
Britain's boardrooms as well many who would prefer to remain anonymous. They
come
from private security services, banks, PR consultancies, urban planning
consortiums, oil
companies, architects offices and energy advisory bodies.
Among the top earners is the construction firm Amec, which has made an estimated
£500m from a series of contracts restoring electrical systems and maintaining
power
generation facilities during the past two years. Aegis, which provides private
security has
earned more than £246m from a three-year contract with the Pentagon to
co-ordinate
military and security companies in Iraq. Erinys, which specialises in the same
area, has
made more than £86m, a substantial portion from the protection of oilfields.
The evidence of massive investments and the promise of more multimillion-pound
profits
to come was discovered in a joint investigation by Corporate Watch, an
independent
watchdog, and The Independent.
The findings show how much is stake if Britain were to withdraw military
protection from
Iraq. British company involvement at the top of Iraq's new political and
economic
structures means Iraq will be forced to rely on British business for many years
to come.
A total of 61 British companies are identified as benefiting from at least
£1.1bn of
contracts and investment in the new Iraq. But that figure is just the tip of the
iceberg;
Corporate Watch believes it could be as much as five times higher, because many
companies prefer to keep their relationship secret.
The waters are further muddied by the Government's refusal to release the names
of
companies it has helped to win contracts in Iraq.
Many of the companies enjoy long-standing relationships with Labour and now have
a
financial stake in the reconstruction of Iraq in Britain's image. Of the total
profits
published in the report, the British taxpayer has had to meet a bill for £78m
while the US
taxpayer's contribution to UK corporate earnings in Iraq is nearly nine times
that. Iraqis
themselves have paid British company directors £150m.
The report acknowledges that British business still lags behind the huge profits
paid to
American companies. But, in two fields, Britain is playing a critical and
leading role.
The threat from the Iraqi insurgency means British private security companies
are in great
demand. Corporate Watch estimates there are between 20,000 and 30,000 security
personnel working in Iraq, half of whom are employed by companies run by retired
senior
British officers and at least two former defence ministers.
The biggest British player, Aegis - run by Tim Spicer, the former British army
lieutenant
colonel who founded the security company Sandline - has a workforce the size of
a
military division and may rank as the largest corporate military group ever
assembled,
according to the report. Other private security companies have sprung up
overnight to
protect British and American civilians.
Britain is also playing a leading role in advising on the creation of state
institutions and
the business of government. PA Consulting, which has also received a contract
for
advising on the Government's ID cards scheme, worth around £19m, is now a key
adviser
in Iraq.
Adam Smith International, a body closely linked to the right-wing think-tank
used by
Margaret Thatcher, has been heavily involved in the foundation of the Iraqi
government
and continues to influence its newly formed ministries. According to the Tory MP
Quentin
Davies, who visited Iraq, the advisers are "reordering Iraqi government
operations at the
most basic level, to help restructure some of the Iraqi ministries, in fact
physically
restructure them, even suggesting how the minister's office should be laid out".
Another favourite of the Thatcher governments, now involved in Iraq, is Tim
Bell, who ran
the Tories' election campaigns in 1979, 1983 and 1987. His PR firm
Bell-Pottinger has
been involved in advising on the 2004 elections and a strategic campaign to
promote
bigger concepts such as the return of sovereignty, reconstruction, support for
the army
and police, minority rights and public probity.
Loukas Christodoulou, of Corporate Watch, has been monitoring British business
relations
with Iraq since the invasion. He says in his conclusion to our joint report:
"The presence of
these consultants in Iraq is arguably a part of the UK government's policy to
push British
firms as lead providers of privatisation support. The Department for
International
Development has positioned itself as a champion of privatisation in developing
countries.
The central part UK firms are playing in reshaping Iraq's economy and society
lays the
ground for a shift towards a corporate-dominated economy. This will have
repercussions
lasting decades."
In five years, the £1.1bn of contracts identified in the report will be dwarfed
by what
Britain and the US hope to reap from investments. Highly lucrative oil contracts
have yet to
be handed out.