Khor az-Zubayr, a port in southern Iraq, didn’t seem like a struggle prize when the Saddam Hussein’s regime was ousted in April 2003. Its waters have been clogged with ships wrecked within the Iran-Iraq war; it was a lot smaller than the close by port Umm Qasr; and far of it was too shallow for ocean-going ships to navigate.
But Danish port operator and delivery giant A.P.Moeller Maersk noticed past the flaws. Maersk knew that Khor az-Zubayr was one of just two retailers on Iraq’s quick Gulf coastline that opens the country to world commerce. Throughout the wetlands that backed the port city was a huge oil refinery with pipelines leading straight to Khor az-Zubayr.
It took a month or so for Maersk to gain permission and control of the port, however by May they had been in enterprise. But, as these items often are, the transactions were fairly murky:
… There isn’t a evidence on whether or not this was legal [or not] however many have speculated that the take-over was rigged to reward Denmark and Maersk for their help of the United States invasion of Iraq. What is known is that a senior Maersk worker was additionally working for the government authority that was accountable for the port on the time.
“Maersk had discovered themselves a jewel, if they could get that port up and running,” U.S. Ambassador Darrell Trent instructed our reporting staff in November 2005. Trent, who had served under Presidents Nixon and Reagan, was accountable for Iraq’s transport ministry till the summer season of 2004.
“Tons of individuals had been making an attempt to utilize the chaotic state of affairs to get themselves profitable contracts,” mentioned Trent. “However Maersk were essentially the most blatant of them all and openly took benefit of the state of affairs. (They) offered us with a contract that had been signed by a low-ranking officer of the U.S. army who had no authorization to make such a deal.”
He known as the phrases of the contract so favorable to Maersk that it was “nearly ridiculous.” Maersk received 93 percent of all port fees plus almost $15,000 a day.
Not bad for a small country, eh? Especially a small nation with an enormous firm that cleverly positioned itself for this coup. Its container ships , starting in August, 2002, had begun delivering U.S. equipment to the area in preparation of the invasion Kinetic Energy Refinery Equipment of Iraq. Denmark’s partnership in the “coalition of the willinghelped its ties with Washington. Coincidentally, on the same day May 1, 2003 that President Bush declared the Iraq struggle at an end, the then-ambassador from Denmark to Syria was appointed because the governor and regional chief of the American-led administration of southern Iraq. Guess what happened then?
Maersk’s declare on the port of Khor az-Zubayr soon followed.
Simply when, how, or even if, Maersk took over the port of Khor az-Zubayr is subject to a lot dispute. However there just isn’t a lot doubt that the enormous delivery firm began jockeying for profitable reconstruction contracts properly before Saddam Hussein’s fall.
Maersk’s Govt Vice President Knud Pontoppidan informed our [Corp Watch] reporting team that Maersk started managing the port as early as May 2003. However Governor Ole Woehlers Olsen, who was in command of the world, mentioned he was “shocked” to hear Maersk’s claim. “I myself did not have the authority to signal such a contract however I passed on the supply to Baghdad with my recommendations,” says Woehlers. When i left Iraq once more on July 18, Maersk’s supply on the management of the port had not yet made its means by means of the bureaucracy in Baghdad.”
Oh, effectively. Small matter. Maersk had possession of the port, and nobody appears to understand how the company finessed their manner into the deal.
In June, Ambassador Trent and his deputy. Frank Willis arrived in Baghdad to run Iraq’s transport authority. One among the primary issues he encountered was complaints from Iraqi port employees. Some Danish firm was conserving them out of their workplace and was claiming CPA authorization. So Willis was sent to investigate:
Frank Willis said he couldn’t consider his eyes when he noticed the Maersk contract. “The first thing that stunned me was that it had not been signed by the CPA. It was signed by a few low-ranking officers that no one had heard of. It was very unusual. They actually had no mandate to signal a contract like that. It merely was not valid, and we made that clear to Maersk soon after,” said Willis, who took the document to the CPA’s attorneys.
But if the People were stunned by the contract, they had been aghast at its phrases. “The contract gave Maersk something like a monopoly in the port, and it was binding for at the very least five years. We on the CPA would by no means have signed an settlement like that. We have been liable for the future of the Iraqi individuals, and we would by no means have tied the country down for thus long or on such onerous phrases even when we had had the right to do so,” Willis says.
By late summer season, the CPA was fed up with the run-round they were getting from Maersk. The Authority known as a gathering for October. Maersk agreed after which cancelled. Finally, Trent ran out of persistence and ordered a helicopter to fly him to the port. Nevertheless, conditions there have been so dangerous that the military personnel refused to attend round while the meeting was held and took off. Trent stayed and met with firm officials anyway:
“The Maersk folks informed us at the time that they had spent hundreds of thousands of dollars on the renovation of the port,” he says. Maersk assured Trent that it was curious about getting issues so as regarding the contract, and a system for future communications was set up.
That, nevertheless, was the last time the ambassador heard from Maersk. The management in Khor az-Zubayr systematically ignored all approaches by the CPA in Baghdad…
One reason might have been that the corporate was overwhelmed by the scale of the challenge. Maersk’s port director, Tony Maynard, says that Khor az-Zubayr was bigger than any other Maersk port and had the potential to handle 1,000,000 containers at a time.
But Trent says this still does not make sense. “I simply do not perceive that a company with an excellent repute like theirs would behave like that with the consent of their top management,” he explains, stressing his interest in signing a legal contract. “We gave them each likelihood to regularize the agreement in good religion however they ignored every little thing.”
“All we could do was inform folks that it was not true when Maersk claimed that they had the rights to the port. We had our own disasters and emergencies to deal with in all places we regarded. Maersk merely took advantage of the chaos of struggle, and if that they had been less greedy about it they would have gotten away with it, too,” says Frank Willis. Violence in Iraq was on the rise, and CPA had trouble in all corners/p>
Then, in 2004, Trent returned to America.
Meanwhile, the Iraqis grew increasingly dissatisfied with Maersk’s greedy contract and the lock-out of Iraqi workers. When Iraq introduced that they would be inviting bids for the ports, CorpWatch thinks that Maersk started to look for tactics to get out of Iraq:
In early 2005 the excuse arrived. Iraq’s new unions for oil and port employees had been pressuring Maersk for a very long time. Amongst different things they wanted jobs for the various staff laid off at Maersk’s arrival. The unions and the port authorities, just just like the Individuals, tried to pressure Maersk into presenting a valid contract, says Haidar Abdul Zahra, who’s the financial supervisor in UPW, the port staff’ union.
“Maersk saved telling us that that they had a valid contract till the top of March 2005 but they refused to provide it even though they had been demanding hundreds of dollars from the port authorities for the operation and securing of the port. In addition they refused to let me and the port chief into our places of work to work, and so they prohibited all union actions within the port,” Zahra says.
Tensions escalated. There were demonstrations, fights between Iraqi factions, even a kidnapping. Jacob Bentsen, a former Danish police sergeant deputy, had initially arrived in Iraq to prepare police officers. As a substitute, he became chief of security for Maersk at the port.
The situation continued to deteriorate, with extra violence anticipated among Iraqi factions and in opposition to Maersk.
By March four, 2005, Maersk’s excellent Iraqi adventure was over. “I used to be the last individual to go away the port. I turned off the lights and closed it off,” says Bentsen who is now again in Denmark as a excessive ranking official within the police power.
Just like the Iraqi unionists, deputy transport minister Atta interprets Maersk’s departure in a distinct approach: “It was a peaceful demonstration. Maersk had been on the lookout for an excuse to run off and they jumped at it.”
All that was left was an empty port, a pending lawsuit, and anger on all sides.
Ultimately, Iraq regained management of the port of Iraqis now run the port of Khor az-Zubayr. The Iraqi authorities lawsuit towards Maersk was settled in December; each sides have agreed to drop the matter.
Maersk claims that the outgoing Iraqi authorities signed a new agreement in 2005 for the corporate to return, but there aren’t any plans to do so until they can get correct security and arrange insurance.
Unusual story, isn’t it? There must be hundreds extra prefer it in Iraq. This is just one among them, and it happens to be about the Danes.