Andreas Carleton-Smith, Regional Director for the Middle East for Control Risks, says security concerns shouldn’t put companies off Iraq
The situation is steadily improving.” That’s the main message from Andreas Carleton-Smith Middle East Regional Director for British security and risk consultancy firm Control Risks. When the headline news from Iraq shows continuing bomb attacks in Baghdad, and messages from the private security industry tend to err on the side of negative, it makes for refreshing listening.
“There has been a fundamental change in the security situation, especially in the South,” Carleton-Smith says. “Over the last six to nine months there has been a steady decline in incidents, and most incidents now are within the bracket of criminal activity. I think the oil companies can largely enjoy freedom of movement, and can get on with their business largely unhindered.”
Security Review
Carleton-Smith explains that Control Risks has recently conducted a thorough analysis of the threats country-wide, driven by the company’s impression that conditions were improving.
“On the back of that, we concluded that we can dramatically reduce our profile,” he explains. “What that in effect means is that in those areas that we deem are reasonably benign we’ve gone to all Iraqi personnel, we’ve disarmed a number of our expatriate staff, we’re moving in much smaller convoys. We’ve also relaxed the basis under which people wear helmets and body armour. That’s now more on a voluntary basis.”
Though the situation is not the same everywhere. “Places like the north west remain volatile, places like Mosul are still quite dangerous, so one adjusts one’s profile accordingly,” he says.
The benefits of Control Risks’s review, says Carleton-Smith, include lower costs for clients and an improved perception within local communities through which oil companies and the firms that support and service them travel.
Clients which still request heavier security details can still have them, but Carleton-Smith says that he is now making the point to existing customers and new entrants to Iraq that the conditions have changed purely from a security point of view and as such the required security profile has changed.
Improvements to the South’s security should not foster complacency, and experience teaches that things can change at any time. “We hope that the trend that we are seeing is enduring, but there are a number of flashpoints that could turn things in a completely different direction,” says Carleton-Smith, giving the potential for civil war in Syria to have a “worrying” effect on the adjoining Anbar province.
“We can all begin to downscale, de-arm and move into soft-skin vehicles and normalize business, but everybody should have a plan B up their sleeve, and the ability to scale up and to provide the necessary protection if things change,” he says. “We’re not out of the woods yet.”
Threats Remain
Criminal activity is on the rise, and kidnapping is a threat to which companies in the south to must remain alive. The recent kidnapping of four contractors from engineering services firm CCC, reported by Iraq Oil Report, is a prime example. After being taken at a fake checkpoint near the Rumaila field, the men were held for over a month before being released on the payment of $500,000 ransom, IOR reports.
“There are still sporadic shootings, targeted assassinations, and bombings , and in some areas there is a kidnap threat. It really depends where you are,” says Carleton-Smith. “Generally, travelling outside of what are now reasonably secure oil fields is still a high risk activity and one needs to take precautions”
Checkpoints, especially in metropolitan areas, remain a “painful, tedious and disruptive process.”
“Because of the situation in Baghdad specifically there is a lot of confusion on the ground as to who has responsibility,” says Carleton-Smith.
The addition of a security force answerable to Prime Minister Nouri Al-Maliki has not helped. “Over the last six months, for Control Risks its improved dramatically , but for others I think the operating conditions remain quite challenging. So much so that companies are leaving the relative safety of the international zone and seeking more high–risk locations, simply to reduce bureaucracy and harassment,” he says.
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Kirkuk
Kirkuk has recently re-entered industry news on the back of a provisional deal between BP and the North Oil Company to rehabilitate the Kirkuk field, one of Iraq’s largest natural resources and perhaps the most abused and neglected oil field under the rule of Saddam Hussein.
The Kirkuk field is one of Iraq’s oldest, and currently pumps 280,000 bpd. With rehabilitation, Baghdad hopes production can be doubled.
“Kirkuk remains an emotive and significant flashpoint,” says Carleton-Smith. “Politically it’s a dynamite situation. Inevitably there are going to be a number of tensions and complications for people operating there.”
The key to Kirkuk, as with doing business in any part of Iraq, is taking the time and effort to understand where companies are operating and ensuring active engagement with Iraqis at a local level.
“This is something we have seen quite a lot in the south, a reasonable amount of disquiet with some of the local communities,” says Carleton-Smith. “Local engagement is being done but with varying degrees of success. Some companies do it very well, whereas others ignore it and I think do so at their peril.”
It’s about finding common ground. Iraqis want to work, and see their services improve. Carleton-Smith says oil companies have been training Iraqis, providing medical assistance, and have tried to employ Iraqis where possible.
“There’s only so much any organisation can do, but those that have tried have ensured their position is understood, and the position and concerns of the people in the area they operate and move around in are understood too,” he says, and due diligence – right from the macro level to local reputation issues – and hiring capable Iraqi staff is invaluable in developing good relationships and understanding.
Today, says Carleton-Smith the real challenge in Iraq is not a security one, and more often its concerns over Byzantine bureaucracy and corruption that keep companies at bay, both of which can easily cause misunderstandings.
Iraqi staff can ensure this doesn’t happen. “Human resources and talent in Iraq is a real challenge for everybody,” he says. “Good Iraqis who know how to manage their way around the bureaucracy, who know how to handle corruption, that’s where one needs to spend a bit of effort and time.
To effectively manage your way through the bureaucracy and to avoid corruption which courses its way through most aspects of life in Iraq you have to invest in really good Iraqis who understand your company, your ethos and that bribes can’t be paid. It’s an opaque operating environment so you have to have patience, tenacity and stamina to develop strong relationships with key local stakeholders’, explains Carleton-Smith.
Oil Price
While he says Iraq now generally has a “coherent, joined-up, and professional security apparatus,” the Oil Police has a long way to go.
“They are at the bottom rung of the security chain; you’ve got a raw recruit there, who requires still a lot of training, education and support,” he says.
“There’s a real opportunity here to take a step back and provide a much more holistic approach to the Oil Police, recognizing they are the future and it is where the industry is going,” Carleton-Smith acknowledges. “They have a role to play. They are not yet at the standards for people to really feel comfortable, and there is an opportunity here for a joined-up approach to training.”
The Future
Control Risks’s role in Iraq is set to change from a “rather gritty, muscular armed protection business” – something Carleton-Smith call “a little anomalous” to what the company does elsewhere – to more of an unarmed consultancy-based risk management and security company.
“That will I’m sure involve training and we would like to get involved with the South oil Company in training the Iraq Oil police and the oil community generally,” Carleton-Smith explains.
“We see ourselves as advisors where we envisage a few people working with oil companies helping them to manage their entire security portfolio which will be run by Iraqis.
“That’s the way in which we Control Risks is managing its business going forward, its how we’ve described our business to the authorities going forward, and I think it’s absolutely the right thing to do.”
