Seminar on Practical federalism in Iraq

Reports - Erbil, 10-16 July 2007

Draft Informal Summary Of Discussion: Natural Resources (Oil, Gas, Water) And Revenue Collection And Public Spending (Fiscal Federalism)
Wednesday, 11 July, 10:00 – 11:30

Chair: Hon Adnan Mufti, Speaker of the Kurdistan National Assembly; Rapporteur: Hon Azhar Abd AL Majid AL Samerai, Member of the Iraqi National Parliament from AL Tawafuq
Interventions by:
Dr Ali Al Dabbagh, Spokesman of the Iraqi Government; H.E. Ashti Hawrami, Minister of Natural Resources for the Kurdistan Regional Government; Hon Uday Abd AL Hamid Hussein, Special Advisor to the Committee on Oil, Gas, and Natural Resources to the Iraqi National Parliament, from AL Tawafuq; Mr Jonathan Morrow, Senior Legal Advisor to the Kurdistan Regional Government.
Discussants Hon Paul Dewar, Member of the Federal Parliament, Canada; Prof Clark Lombardi, Professor of Law, University of Washington, United States; Prof Andrew Apostolou, Historian and Senior Fellow at the Brookings Institution, United Kingdom
Main Points of Discussion
Speakers agreed upon the need to enhance cooperation and communication between the Iraqi National Parliament and the Kurdistan Regional Parliament. A detailed study of the legal framework within which these two bodies relate to one another should be supplemented by the opening of representative offices; one of the Kurdish Regional Parliament in Baghdad and one for the Iraqi National Parliament in Erbil, and a standing committee dedicated to maintaining communication by meeting on a regular basis.
Four speakers were invited to discuss these issues with the aim of putting a place a framework by the end of the Conference, and asked to present a report of their discussions.
A comprehensive report was presented, detailing options for the distribution of powers within Iraq. It was noted that the proposal had much in common with other federal countries.
Recommendations included:
Healthcare is a federal issue in terms of funding, but management decisions are best made locally
Ports and airports represent benefits for the entire country, and so should be federal in their administration. The federal impact of regional infrastructure development, for example dams or ports, should therefore also be considered
The federal government has an obligation to ensure adequate housing is available for all Iraqis, and decisions associated with this are best made at the central government level
The fiscal system and macroeconomic policy should be dealt with on the central government level
Tax collection should consider the experiences of other countries, many of which have found that taxes are most effectively be collected locally, then transferred to the central government
Education, it was suggested, should feature regional curricula, though it is at present centralised. Higher education however should be subject to a single national curriculum
Social security is also a national issue, though regions might supplement national plans with their own programmes
As Iraq moved towards Federalism, some speakers noted that it was important that some revenue remains in the hands of regions. It was noted that regional Governates are being encouraged to spend their allocated budgets, with an incentive scheme in place to encourage this and consequently build and promote regional administration.
There was some disagreement amongst speakers on the Future Fund, some suggesting it might be used to compensate for budget deficits arising from an unexpected fall in the price of oil, others suggesting it should be considered as the excusive property of future generations. Concerns were expressed that lack of clarity about its role might represent a weakness in the current draft laws.
The environment should always be considered when discussing oil and gas extraction. This is a national concern, and so there should be strict guidelines in place to ensure no region is unfairly burdened by the costs of resource extraction.
A number of speakers also noted that most federal systems struggle with the issue of fiscal balance. The revenues and expenditure of regions and national parliaments must be balanced in a way that does not unfairly burden one level of government. These issues can ultimately affect national unity if left unaddressed.
Ongoing discussions of the draft oil law were presented, and many speakers noted that all draft laws must be carefully checked for compatibility with the constitution. They must ensure that the distribution of oil revenues is fair, and caters to the national interest as a whole. The example of the UAE, it was argued, suggests that investing oil revenue in national resources can achieve a great deal in terms of development.
Speakers disagreed on the proposed role of foreign investment in oil production, some noting its importance if Iraq is to reach its full production potential and maximise its oil production revenues, others concerned that it would lead to large amounts of revenue leaving the country as profit for foreign firms. The type of contracts awarded should consequently be carefully considered so as to ensure a balance between these two objectives. It was noted that many figures presented are poorly substantiated and that an emphasis should be placed on accuracy in order to avoid destructive scaremongering.
Some participants said that the current draft of the oil law contains concessions from the Kurdistan Regional Government and is as such a good example of cooperative federalism.
It was pointed out that constitutional amendment is difficult in Iraq and might not happen for some time. Suggestions that the proposed oil law should wait until constitutional amendments are completed are therefore highly risky, given the importance of passing the oil law. Revenue sharing is however perhaps the most important law under discussion, and should be passed as a matter of urgency, even without the accompanying oil law. The US is a good example of how a failure to provide a framework for revenue sharing can lead to tensions between regions and tensions between regions and the central government. Revenue sharing provides an important assurance that there will be comparable standards of living across regions, regardless of present or future developments.
With respect to constitutional amendment, some participants noted that article 115 was central to the federal agreement that secured the Iraqi constitution. This therefore does not have to be amended in order to secure the continued viability of the Iraqi state.
The importance of achieving clarity in laws legislating oil was emphasised by a number of speakers. Clarity can be given either on the question of how the resource is to be managed, or on the question of who is to be responsible for making decisions about the management of the resource. Clarity on one of these questions is however crucial, and some speakers expressed concern that the current draft oil law does not achieve this.
There was some disagreement on how new oil fields might be administered. Some suggesting these be reserved for potential foreign development, others arguing the government should ensure it has a share in all new and promising fields. Iraq should look to successful examples for attracting foreign investment in the oil sector.


Draft Informal Summary Of Discussion: Report from the Constitutional Review Committee
Tuesday, 10 July 2007, 15:30 – 17:30

Chair: Hon. Arif Tayfour, Deputy Speaker of the Iraqi National Assembly
Rapporteur Hon. Afram Abdulallahad, Rapporteur of the Iraqi National Parliament
Interventions by:
Hon. Hamid Majeed Mousa, Member of Parliament and Secretary General of the Iraqi Communist Party
Hon. Bahaa Al Aaraji, Member of the Iraqi National Parliament, President of Legal Committee of Iraqi National Parliament
Hon. Safia Taleb Al Suhail, Member of the Iraq National Parliament
Hon. Foursat Ahmed, Chairman of Constitutional Committee the Kurdistan Regional Parliament
Hon. Hasan Al Shamari, Member of the Iraqi National Parliament, President of the AL Fadila Group
Discussants Ambassador Mokhtar Lamani, Senior Visiting Fellow of the Centre for International Governance Innovation
Main Points of Discussion
The Iraqi Constitution was adopted following a referendum in 2005 in which over 12 million Iraqis voted. Further to Article 142, a review Committee was established to evaluate potential amendments to the constitution. The Committee has issued a report containing a series of recommendations to which some groups have expressed their opposition. These recommendations therefore remain the subject of ongoing discussion.
Some speakers remain quite sceptical, while others expressed their optimism about the prospects for negotiations however, noting that the atmosphere in which negotiations are taking place are markedly better than when they began. It was suggested as indicative of this, for example, that the committee is no longer discussing whether federalism should be Iraq’s political system, but rather what kind of federalism it should be.
Speakers also noted however that a number of issues remain unresolved, amongst them some of the most controversial issues facing Iraqi society. The main issues of discourse remain very political, mainly the oil law, the question of Kirkuk, Art. 69, though some participants also mentioned the issues of family law and the rights of women as being particularly undeveloped, with some speakers lamenting also the limited input that has been received from the women of Iraq.
Other participants expressed less optimism in the review process, noting in particular that a failure to act within the deadlines outlined by the Constitution has resulted in substantial disillusionment with the process. Confidence in the outcome of discussions could only be achieved, it was argued, by carefully following the provisions and steps outlined in the Constitution.
Many regional representatives noted their desire to work with the central government, but noted that this would have to occur within an agreed framework. To this extent they shared the view of the importance of following strict procedural guidelines before amending any aspects of the Constitution, especially those affecting the relationship between the central and regional governments, including in particular by asking the Iraqi people through referendums and votes before undertaking any amendments.
Some speakers expressed the concern that federalism might be considered new to the people of Iraq, while others noted it had been part and parcel of the discussions ever since the quest for independence began in the early 20th century.
There was broad agreement on the general need for more understanding of the concept qnd potentials of federalism, with many expressing the concern that many people in Iraq still perceive it as potentially dividing, rather than as a unifying, system. To this end, many participants urged greater education and media coverage of the complexities of federalism.
Crucially, it was emphasized that the discussion process should be gradual and undertaken in phases, with an opportunity to learn from other experiences of other countries in how they have addresses specific problems, but that it was impossible to import of clone entire systems wholesale. Patience and flexibility are crucial elements.
It was noted that there is a sense among some Iraqis that concerns on Constitutional issues may have added to the security problems in the country, but that may be a shield to cover problems and deadlines can be used to delay the process.
A meeting such as this one is important as it takes for its basis dialogue and reciprocal respect.
It is important not only to live together, but to have confidence in each other, to try to collaborate and to understand the positions of others. There is a need to avoid a maximalist approach, but rather it is important to demonstrate the willingness to make concessions and compromise.
Even if processes are delayed and deadlines are not met, it is important to persevere. Clearly questions must be asked, but the process cannot be interrupted, it should simply be delayed, because the important thing is for the people to accomplish their mission.

Draft Preliminary Report: Elections And Representation: National, Regional And Provincial (Including Article 65)
Thursday, 12 July 2007

Chair: Hon Bahal AL Araji, Member of the Iraqi National Parliament
Rapporteur Mr Jasim EL Hilfi, Iraqi Communist Party
Interventions by: Hon Faraj AL Hayderi, President of the Independent Election Commission; Hon Qusay Abed AL Wahab, Member of the Iraqi National Parliament from the AL Sadriene Group; Dr Kamel Abu Jaber, former Minister of Foreign Affairs of Jordan
Hon Younadim Kana, Member of the Iraqi National Parliament, President of the Assyrian Democratic Movement
Discussants Hon Jan Loones, Member of the Flemish Regional Parliament, Belgium; Prof. Ash Narain Roy, Coordinator of the International Studies Division, Institute of Social Sciences, New Delhi, India
A brief history and overview of the work of the independent electoral commission of Iraq was given, emphasizing the independence of the institution, that it is not connected to any government party, and the powers that it has been given to strengthen the democratic process and make it successful.
Participants expressed the desire that the law on elections be discussed openly, and that in order to build the country on the principles of the constitution, people should be open to learn from the mistakes that have been committed in the past. A specific example was that of the governorates, which, it was suggested, are not at the moment adequately represented, with representatives from outside the governorate who are not necessarily familiar with its needs
The mutual distrust, both for historical reasons and because of recent events, between the INA and the governorates should be overcome.
Some participants suggested that elections should start from the most local level – from the municipality, then sub-district, then district, then governorate council in order to ensure that the representation at the governorate level is the best.
Participants noted the importance of passing the law on provincial councils as soon as possible, pointing out that there are currently many aspects of the situation that could hinder the progress of the commission, among which the lack of administrative borders, and issues related to the displacement of people, and the establishment of the structure of the system. Overcoming these problems should be a priority, and while it is not desirable to set a specific deadline, the commission should be able to resume the process by early next year.
Participants suggested that real democracy is flexible, and adaptable to changing circumstances so as to best respond to the needs of the population.

Preliminary Draft Report: Region Formation (including Article 140)
Wednesday, 11 July, 11:45 – 14:00 and Thursday, 12 July, 10:00 – 11.15

Chair Hon Adnan Mufti, Speaker of the Kurdistan National Assembly
Rapporteur Hon Basim Sharif, Member of the Iraqi National Parliament of the AL Fadelah Group
Interventions by
Hon Mahmoud Othman, Member of the Iraqi National Parliament
Hon Hamid Majeed Mousa, Member of the Iraqi National Parliament and Secretary General of the Iraqi Communist Party
H.E. Mouhamad Ihsan, Kurdistan Regional Government Minister of Extraregional Affairs
Hon Hasan AL Shamari, Member of the Iraqi National Parliament of the AL Fadelah Group
Hon Khalid Shwani, Member of the Iraqi National Parliament
Hon Kamal Karkuki, Deputy Speaker of the Kurdistan National Assembly
Discussants Hon Jan Loones, Member of the Flemish Regional Parliament, Belgium
Prof Andrew Apostolou, Historian and Senior Fellow at the Brookings Institution, United Kingdom
Region formation
Participants discussed the importance of federalism and of the timing of its implementation for success.
It was pointed out that federalism is the principle of this constitution, and most Iraqis agree with this principle.
While some of the participants suggested that federalism consists in the distribution of authority and fiscal powers, others suggested it is only about authority, that when federalism as a principle is applied, the fiscal issues will follow
Participants discussed the issue of region formation relative to parts of Iraq other than Kurdistan Region, discussion about the type and boundaries of regions, how they will form, whether from 1, 3, 9 provinces.
Participants also had various ideas about the timing of the application of federalism to form regions. Some think that it is not a suitable time now to form regions, that there should not be a rush to form regions, and rushing into giving lots of authority is not a good thing, should be done step by step, to improve people’s understanding of its implications.
Participants pointed out that a better security situation is important for the implementation of the Constitution.
They also discussed the fear that regions might form according to sectarian base.
Participants warned that if federalism is not applied in the right way it will lead to problems, not solve them, and the Iraqi people will not be able to benefit.
It was generally agreed that there should be more discussion about federalism, people should have more of an idea of the kinds of federalism, as now there is concern among some Iraqis that federalism may lead to a division of Iraq.
Article 140
Many participants felt that this is the most controversial article, and presents a dilemma for implementation.
Participants pointed out that as is a constitutional and legal article, and the approach to implementing it according to its right steps should be done according to legal principles.
It was mentioned that the situation of Kirkuk is old and complicated, and many attempts have been made to solve the problem.
Some participants spoke about the historical rights of Kurds in Kirkuk and the demographic changes there under the previous regime, the harm they were subjected to, and the fact that many migrated from Kirkuk. They also discussed other elements of forced Arabization.
Some participants reiterated that Kirkuk is part of Iraq and that being in Kurdistan Region won’t contradict this.
Some participants said that not implementing Article 140 would lead to trouble; they further pointed out that they would be willing to postpone, but only if they see that there are steps being taken.
Some political groups that refuse federalism also reject Article 140: the two issues are joined.
Some participants suggested a return to the records of 1957, not necessary to have a census as is called for in the article.
Participants spoke about the dialogue and differences of ideas about Article 140 in the constitutional committee, and different ideas of how to change it, leading to possible dilemma and controversy, which, however, they hope will be settled. Though it is a legal article, the delay in implementation is due to political reasons, so there must be a dialogue with those who oppose it.
Participants reiterated that it is impossible to solve the situation of Kirkuk by force.
Some participants suggested to postpone implementation until there is a better political and security situation.
Some participants also said that most of those who refuse Article 140 either misunderstand it, or are unwilling to understand.
Participants pointed out that historical factors, including events during the previous regime, need to be borne in mind. It was further noted by some that though a committee has been established to address these issues, political will and finances are insufficient and so little has been achieved. Article 140 is considered a road map for solving the problems arising from these factors.
Some participants stressed the need for all citizens in Iraq to take responsibility and assist in solving this issue in a timely manner, as well as the need for foreign countries to refrain from interfering. The issue of a census as being a possible cause for contention was also raised.
Some participants stressed the historical reasons that underlie some people’s sense of distrust in promises made to them.
Many participants pointed out that delay in implementing Article 140 is not in the interest of any of the people of Iraq, and that implementing the article will in fact resolve many of the problems that currently beleaguer the country. While the implementation may lead to some problems, the lack of implementation would also lead to problem.
Some participants pointed out the opportunity that is presented by the fact that different people, with different, even contradictory thoughts, are sitting at one table involved in discussion and dialogue, and that therefore there is a possibility of reaching a reasonable solutions. There is no one solution that will satisfy everyone. There is no one absolute right or wrong, but there are some proportionalities in a pluralist society. There are some fears and doubts, which is normal in pluralist societies. While a lack of trust is not unexpected, the basis of democratic system is to discuss the issues and differences and come to a solution, based on enlightened self-interest.
This region has the potential to be a model for solutions relating to minority rights across the country and indeed the whole region. But in order to do so, the underlying interests that are at the basis of the positions of different groups need to be laid out on the table.
Some participants pointed out the importance of redressing past injustices.
Some participants underlined the need for consistency in the constitution, and the need to respect any deadlines that are stated within it.
Participants suggested that the Kurdistan National Assembly and the Iraqi National Parliament have an opportunity to work together practically to show that implementation of the Constitution in a reasonable time frame is possible, and show that governments can work together.
Others reiterated that the problems in implementing Article 140 can find a solution only through dialogue and education. An initiative such as this is Seminar is good to encourage a spirit of brotherhood.
Some participants observed that the majority of people now accept the idea of federalism.
Participants reiterated their commitment to living together and abiding by the Constitution.