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Guarding the Oil Underworld in Iraq

by Jim Vallette and Pratap ChatterjeeSpecial to CorpWatch
September 5th, 2003

Erinys
 

When unidentified saboteurs struck the vital Kirkuk-Ceyhan pipeline in northern Iraq recently, one in a number of recent attacks on the Middle Eastern nation's oil production and transport, the United States government announced that a company called Erinys would be brought in to train 6,500 Iraqis to guard oil pipelines, wellheads, and refineries, as well as water and electrical facilities.

"We are deploying Iraqi resources to protect the facilities and the military will continue to hunt down those trying to attack Iraq's interests," said a coalition spokesman.

Erinys' yearlong $39.5 million contract to protect 140 Iraqi oil installations, for which it beat out larger and more established competitors, will start this October. The Johannesburg-based company will be also offering its protection services to contractors Bechtel and Halliburton's subsidiary Kellogg Brown and Root.

According to Erinys' own publicity, the company is currently the exclusive providers of "guarding and protective services, secure warehousing, security escorts, visit logistics and protective escorts, transportation and logistics for land access from neighbouring countries."

Handmaidens of Occupation

But the coalition's relationship with Erinys is not exactly transparent. The coalition apparently contracted the company through an "oil security" solicitation issued on July 17, but the details of this solicitation, and the subsequent award to Erinys, are unavailable from the Coalition Provisional Authority (the entity created by the United States government to oversee the occupation of the country).

In Greek mythology, the Erinys were three goddesses, attendants of Hades and Persephone, who guarded the Underworld. Here on modern earth, the company has main offices in Johannesburg and Dubai, and opened a field office in Baghdad in May. A South African news report said Erinys is already providing security and risk management services to "two large multinational companies" operating in Iraq.

While the company does not appear in international business directories and is only a year old, its website names five managers and directors, but does not identify its ownership structure: most of whom have been affiliated with Armor Holdings, a Florida-based security company and Defence Systems Limited, a British company which merged with Armor in 1997.

A former British Special Air Services (SAS) officer, director Alastair Morrison was co-founder and CEO of Defence Systems from 1981 to 1999. Morrison is currently affiliated with Armor Holdings, in which he holds $2.1 million worth of stock. Fraser Brown, who directs Erinys' security operations, has worked for DSL/Armor since 1999. Jonathan Garratt, Erinys' managing director, has worked for DSL and Armor since 1992. The two other Erinys officials named on the website have no apparent ties to either company: Sean Cleary is a South African risk management expert while Bill Elder previously worked as Bechtel's corporate security manager.

Private Security and Oil Protection

Erinys' website touts "management experience" in providing security services for dozens of transnational corporations, such as Ashanti Gold and BP-Amoco. These companies' past security actions hint at what awaits Iraq.

Last month, for example, the Ghanaian NGO, Wassa Association of Communities Affected by Mining (WACAM), released a report detailing alleged human rights abuses at an Ashanti gold mine. It relays eyewitness accounts of Ashanti Gold security personnel torturing, beating, and killing local small-scale miners between 1994 and 2002. WACAM further alleges that corporate security used guard dogs to feed on trespassers.

Private security firms DSL and Armor have also long worked in oil-rich regions for multinational corporations that have been accused of complicity in human rights violations, like the Niger Delta and Angola.

Guarding BP Pipeline in Colombia

DSL was active in Colombia for many years, providing security training to protect British Petroleum's oil operations from Marxist rebels, who repeatedly dynamited Colombia's oil pipelines. With BP approval, DSL's subsidiary Defence Systems Colombia trained Colombian national police in counter-guerilla tactics, including lethal-weapons handling, sniper fire and close-quarter combat. These police, in turn, allegedly kidnapped, tortured and murdered opponents of BP's operations.

An internal DSL fax dated October 1996 announced: "The effects of the training team are noticed in a positive manner." Another DSL fax states: 'The police morale is high and they have expressed their enjoyment of the training they have received. Good job to whoever was involved."

But investigations by UK media and Amnesty International brought details of this relationship to light several years ago. "In recent years members of the local community involved in legitimate protest against the impact of the oil companies, including BP, have frequently been labeled subversive and subsequently been victims of human rights violations by the security forces and their paramilitary allies," charged Amnesty International in 1997.

"The police are now ... getting more involved with patrolling activities that are the normal requirements of an infantry unit, which is definitely being seen by the population as another military force in the area," a former DSL employee told World in Action, a British documentary team. "The people are scared to death; you can see it on their faces."

For example the documentary named Carlos Arregui and Gabriel Ascencio as being among six members of the El Morro association who were murdered after the group started campaigning over damage to their road.

In 2000, the Guardian newspaper in London uncovered documents showing that that a senior DSL employee, Roger Brown, who was in charge of security for the 520-mile Ocensa oil pipeline in Colombia, in which BP is a major shareholder, was a key figure in a proposed pipeline protection project with the 14th Brigade and Israeli security company Silver Shadow, involving attack helicopters and the 'direct supply of anti-guerrilla special weaponry'. When this came to light, BP suspended Brown, who until recently continued to work for DSL.

Riot Control

The company's ability to provide one-stop shopping options for clients in search of a private army expanded in the late 1990's, when Defence Systems was bought up by Armor Holdings, riot control equipment manufacturers in Jacksonville, Florida.

Armor Holdings was originally known as American Body Armor but changed its name after it was rescued from bankruptcy caused by the failure of the Saudi Arabian government to pay a major bill and lawsuits over the effectiveness of its signature product, bullet-proof vests.

Through a subsidiary named Defense Technology of America in Caspar, Wyoming, Armor Holdings offers clients a wide array of riot control toys, such as those supplied to subdue crowds in the 1999 World Trade Organization protests in Seattle.

Defense Technology literature offers prospective buyers pepper gas generators (pepper gas is an extremely irritating chemical used by police forces which has allegedly caused over 60 deaths in custody in recent years) as well as a variety of grenades for use by police or prison wardens.

The company also offers "flameless expulsion" grenades that can be used to fill a 12-by-20 foot room with a chemical agent in four to five seconds to control unruly crowds, "rubber ball" tear gas grenades, which, unlike conventional tear gas dispensers, are hard to throw back and "Stinger Combo CS" grenades, which contain an explosive charge allowing blast dispersion of rubber pellets that contain tear gas in a circular pattern over a distance of 50 feet.

In addition Defense Technology sells grenade launchers, gas pistols and masks, riot shields, billy clubs, nightsticks, nickel plated handcuffs, leg irons, batons, special devices for breaking down doors or barricades and projectiles that explode with a loud report and a brilliant flash to distract attention.

The company's business also got a significant boost by the continued US military presence in Iraq and Afghanistan, which is creating a demand for Up-Armored HMMWVs, or 'Humvees,' produced by Armor's mobile security division in Cincinnati, Ohio.

A Lucrative Future

In Iraq, private security firms and oil corporations are operating hand-in-glove with the United States government to prevent any threats - even non-violent ones - to the free flow of oil. In addition to Erinys, the security company DynCorp is working to recruit Americans to act as a State Department organized Iraqi police force. Northrop's subsidiary Vinnell has been hired for $48 million to train a new Iraqi Army, while Bechtel and Kellogg Brown and Root have hired Armor Holdings for protection.

Nonetheless, getting the oil into the pipeline remains problematic. On top of sabotage, theft and smuggling of oil is a serious problem in Iraq, dating back to the days of Saddam Hussein when oil sale was restricted under the United Nations oil for food program.

The World Markets Research Centre offered this gloomy outlook on August 18: "The latest pipeline blast indicates that the coalition is losing the battle against what has become a guerrilla war. The saboteurs' strikes on power, water and oil facilities are aimed at undermining the coalition's authority and preventing it from exporting the country's crude. Even if the coalition beefs up security, it is unlikely to put a halt to the attacks."

Yet even if attacks on the oil pipelines continue, the private security firms will be one party that is positioned to profit handsomely.

Jim Vallette is an analyst with the Sustainable Energy & Economy Network of the Institute for Policy Studies. Pratap Chatterjee is managing editor of Corpwatch.