Can Erbil resist court ruling to hand over oil revenues to Baghdad?

By Ibrahim Saleh

BAGHDAD (AA) – The Iraqi judiciary has resurrected an old dispute between Baghdad and northern Iraq’s Kurdish Regional Government (KRG) regarding the powers granted by the constitution to each party in managing oil revenues.

Last week, the Federal Supreme Court, based in Baghdad, ruled the unconstitutionality of the oil and gas law, which was legislated by the KRG Parliament and ordered Erbil to allow Iraq’s Ministry of Oil and the Federal Office of Financial Supervision to follow up on the conclusion of contracts for the sale of oil and gas in the region, and to deliver crude oil to Baghdad.

Rulings issued by the Federal Supreme Court are final and can’t be appealed.

Ali Al-Tamimi, an Iraqi legal expert, told Anadolu Agency that the Federal Court's decision makes the oil and gas law in the Kurdish region “null and void for violating constitutional provisions."
“The ruling orders the KRG to hand over oil revenues in a retroactive effect from the date of conclusion of contracts, and allowing the Ministry of Oil and the Office of Financial Supervision to review these contracts," Al-Tamimi explained.

He noted that Erbil will have its share of the budget cut by Baghdad if the KRG ignores the court ruling.

The legal expert pointed out that the Federal Court relied on Article 111 of the Constitution, which considers oil and gas as belonging to the Iraqi people.

"Iraq is a federal country, not a confederation, and Iraq’s State Organization for Marketing of Oil (SOMO) has exclusive jurisdiction in exporting oil," Al-Tamimi said.

He added, "The decision of the Federal Court is binding and it is not possible, as some suggest, to go to international courts since this decision relates exclusively to the sovereignty of the state."

- KRG rejects

Following the Baghdad-based court ruling, Erbil was quick to reject it as "unfair, unconstitutional, contrary to the constitutional rights of the KRG, and unacceptable," vowing to take “all constitutional, legal and judicial measures to ensure and protect all contracts in the oil and gas field."

It cited Article 112 of the Iraqi constitution stipulating that the oil and gas field is not an exclusive authority of the federal government, which recognized the right of the KRG to extract and develop its oil and gas resources.

"We reject this court's decision,” KRG spokesperson Jotiar Adil told Anadolu Agency. “This is unacceptable for us, but we will continue our negotiations with the Iraqi government on this issue."

Adil said during the era of former Prime Minister Nouri Maliki, both Baghdad and Erbil agreed that they can invest in the oil and natural gas field until a new law is passed.

"This is why the KRG has invested and developed new oil wells,” he said, terming the Federal Court’s decision as “political”.

"This case had been in court since 2012. Why a decision was taken now in a case that had been adjourned for 10 years? Undoubtedly, this depends on several factors and has several political dimensions." he said.

"In this decision, the interests of the KRG were not looked after, and the future of Iraq was not taken into account……I think that this ruling by the Federal Court will endanger the political future of Iraq too."

Baghdad has not issued a clear position on the issue, but has long reiterated its exclusive right to manage oil revenues.

Baghdad has agreed to give the KRG its 12.67% share of the Iraqi budget for 2021 in exchange for Erbil’s delivery of 250,000 barrels of crude oil a day to Baghdad.

The KRG has been unilaterally exporting its oil produced since 2009, as approved by its parliament in 2007. Baghdad considers this a violation of the federal constitution.

Shia political parties in parliament have put pressure on the government to urge Erbil to deliver all its oil and customs revenues to the central government, a demand rejected by the KRG.

- Political decision

For political analyst Duraid Al-Nasser, the Federal Court's decision regarding the region's oil was “politicized”.

"The political forces largely control the implementation of such decisions, and therefore the federal government will not seek to work on implementing this decision, especially since it is now a caretaker government," Al-Nasser told Anadolu Agency.

He casted doubts that the court decision will be implemented by the next government, especially if it came through a coalition government between the Sadrist movement, the Kurdistan Democratic Party, and the Sovereignty Alliance.

Shia cleric Muqtada al-Sadr’s Sairoon Alliance won 73 seats in the 329-member parliament during the Oct. 10 elections, while the Sovereignty Alliance (a coalition of Sunni parliamentary groups) won 71, and the KDP 31 seats.

Iraq has been unable to form a new government since the Oct. 10 parliamentary elections amid differences between different political parties.

* Writing by Ibrahim Mukhtar and Seda Sevencan in Ankara