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traditional Machiguenga house in the Lower Urubamba River, Peru

pipeline profits

gats good news for global corporates like halliburton

halliburton, us

US energy giant Halliburton stands to make impressive profits from services liberalization under the WTO’s GATS agreement and the Free Trade Area of the Americas. Halliburton’s influence on the GATS negotiations through its connections with the heavyweight services industry lobby group, the United States Coalition of Services Industries, is backed by its extremely close ties to the Bush administration.

With annual revenues of more than US$13 billion in 2001 and 85,000 employees worldwide, Halliburton is a giant in the oil services industry. Its global operations – building and operating oil drilling operations, pipelines, refineries and export platforms – make it the world’s secondlargest oil services company. But Halliburton is more than just a major force in the fossil fuel industry. Its business practices have been highly controversial, and the company has been accused of environmental damage and business dealings with human rights abusers. And Halliburton has become the ultimate insider in US military contracting with its mega-deal to rebuild the oil sector in Iraq.

cosying up to the wto
Halliburton’s knack of gaining influence is presumably not hurt by the fact that its former CEO, Dick Cheney, is now Vice President of the United States. From its position as a key energy sector representative on the US Trade Representative’s (USTR) Industry Sector Advisory Committee on Services, Halliburton has also has been one of the major business actors pressing for energy services liberalization under the WTO General Agreement on Trade in Services (GATS).

In 1999, US energy corporations founded the Energy Services Coalition (ESC) to promote GATS negotiations on energy. E. Joseph Hillings, a vice president of Enron, and Donald A. Deline, a director of Halliburton, jointly chaired the coalition. Halliburton is also a member of the powerful US services industry lobby, the US Coalition of Services Industries (USCSI).

The official USTR position on energy services virtually mimics the position advanced by industry through the US Coalition of Services Industries (USCSI) lobby group, including the proposal that an entirely new GATS category be created to cover the entire energy sector, ranging from drilling and pipelines to refining and electricity distribution. GATS negotiations in energy services could provide foreign multinationals like Halliburton with significantly expanded access to the oil industry in any countries that that make such commitments in the negotiations.

The USCSI’s boast that it “played a major role in shaping” the WTO GATS agreement is supported by WTO Director General Dr. Supachai Panitchpakdi, who stated that the USCSI, “with its extensive global network and influences in the world… has successfully served to advance and secure the interests of its members, more importantly, in shaping US policies and promoting US interests within the international fora, thereby ensuring progressive global market liberalization”.

Halliburton has also been implicated in business dealings with corrupt and oppressive dictatorships. Most notably, in Burma during the 1990s, the company and its subsidiaries provided services to two controversial gas pipelines despite the fact that the Burmese military committed numerous human rights violations. Halliburton is also the subject of an investigation by the US Securities and Exchange Commission concerning its accounting practices in the late 1990s, during Cheney’s tenure at the firm.

war profiteering
The company’s close ties to the Bush administration and US military have also provoked controversy. The recent awarding of a US government contract worth as much as US$ 7 billion to Halliburton subsidiary Kellogg Brown & Root (KBR) for operation of the oil fields in Iraq has come under intense scrutiny, particularly given the company’s relationship with Vice President Cheney. Halliburton was given the contract without competitive bidding based on its ability to carry out an operational plan that the company wrote itself for the US military.

controversy over camisea
Recently, Halliburton’s global activities have extended to participation in the Camisea project, a highly destructive gas extraction, pipeline and export scheme in ecologically sensitive areas in Peru which are home to indigenous peoples. The $1.5 billion project will extract gas from the Nahua-Kugapakori Reserve, which is intended to protect nomadic indigenous peoples who have had little or no contact with the outside world. Halliburton has also been the lead company seeking to develop an export terminal for the gas in the buffer zone of Paracas, Peru, an area protected under the Ramsar Convention on Wetlands. The Secretariat of Ramsar recently wrote to the government of Peru and to several international financial institutions alerting them that siting the export terminal in Paracas is a violation of the Convention. Yet Halliburton is not easily swayed from its plans, and the company continues to pursue its project in these pristine areas which many people call home.

a dirty history
Providing a business like Halliburton with increased rights to operate multinationally raises many questions given the company’s environmental and social record. Halliburton has admitted that one of its foreign subsidiaries paid $2.4 million to a Nigerian government official’s company in 2002 in order to get favorable tax treatment. Now, a French judicial investigation is examining allegations that Halliburton participated in a massive bribery operation involving the development of a gas field in Nigeria in the late 1990s.

more information:
War Profiteers website: www.warprofiteers.com/
“Enron-Style Corporate Crime and Privatization: A Look at the U.S. Coalition of Service Industries”, www.polarisinstitute.org