Iraqi Oil Minister Hussain al-Shahristani has ordered the ministry’s companies and departments to cease dealings with the oil unions.

“The trade unions in Iraq now are illegal till the new law is passed by the Parliament,” Shahristani told UPI, referring to a new labor law called for in the Constitution but that has not materialized.

Ashti Hawrami, minister of natural resources for the Kurdistan Regional Government, told UPI his region’s law has incorporated local worker requirements, and unions are key to that.

“Our key objective is maximize returns for Iraq,” Hawrami said, “so we have no problems with unions and professional organizations, because in a democratic society we must be inclusive of all these requirements.”

Iraq’s oil workers were banned from unionizing by Saddam Hussein, one of the few Saddam-era laws kept by the U.S. Coalition Provisional Authority and subsequent Iraqi governments.

Regardless, the workers organized and successfully blocked plans to privatize parts of the oil and other sectors.

More recently, the Iraqi Federation of Oil Unions, an umbrella group based in the oil capital Basra in southern Iraq, have called for Shahristani’s resignation and threatened to strike if a controversial oil law is approved by Parliament.

The unions’ demands include improved working conditions.

But they also oppose a type of model oil contract that would allow foreign oil firms in what has for decades been a nationalized oil sector.

The KRG and the unions have a common enemy -- Shahristani -- but appear to be bitterly opposed on the oil law contracts.

The KRG has already signed a small handful of such deals and says it is the course they are charting to develop their oil sector -- a bane to the federal government, which has not approved a federal oil law and says the KRG is moving unilaterally.

“We must win the unions over and not label them being illegal,” Hawrami said.

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Ben Lando, UPI Energy Editor

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(e-mail: blando@upi.com)