Iraq’s Natural Resources Industry Plagued by High Corruption Risks
Widespread Corruption Threatens Iraq’s Oil Sector
Companies operating in Iraq’s natural resources industry face extremely high corruption risks, according to a recent report. The widespread corruption and lack of transparency in oil revenues have become major problems for the country.
A Cycle of Corruption
The state-led oil sector, which accounts for over 90% of government revenue, is also the top commodity on the black market. Criminal networks involving staff from the oil ministry, high-ranking political and religious figures are reportedly involved in a cycle of corruption linked to mafia networks and criminal gangs smuggling oil and generating large profits.
EITI Progress Stalled
Despite Iraq’s membership in the Extractive Industry Transparency Initiative (EITI), which aims to improve transparency in extractive industries, progress has been stalled due to a lack of funds for implementing the initiative. The government submitted its 2013 report related to the initiative, but the committee mandated with implementing it was not allocated any funds in both 2015 and 2016.
Anti-Corruption Laws Not Enforced
Iraq’s main anti-corruption law is the Accountability Act, which criminalizes active and passive bribery, attempted corruption, extortion, money laundering, and abuse of office. However, the government does not implement anti-corruption laws effectively, and officials engaged in corruption with impunity.
Factors Contributing to Corruption
The poor enforcement of anti-corruption laws can be traced back to:
- Lack of agreement on institutional roles
- Absence of political will
- Unclear governing legislation
- Regulatory issues
- Poor transparency
Threats to Freedom of Expression
Freedom of expression is protected by Iraq’s Constitution, but vague laws leave ample room for the government to crack down on journalists. The media environment is hostile and dangerous, with fear of reprisal from authorities leading to broad self-censorship among journalists.
Internet Access Restrictions
Internet access is restricted in Iraq, and there were reports of government monitoring of online content without legal authority.
Press Environment Not Free
Iraq’s press environment is described as “not free.” The Iraqi Constitution provides freedoms of assembly and association, and the government generally respects these rights. However, civil society is weak, and domestic and international NGOs are generally able to operate without legal restrictions, but safety concerns severely limit their activities in many areas.
Sources
- World Bank & IFC: Doing Business 2017
- US Department of State: Human Rights Practices Report - Iraq 2016
- Freedom House: Freedom in the World - Iraq 2016
- Bertelsmann Foundation: Transformation Index - Iraq 2016