Executive Order 13303, signed by President Bush on May 22, 2003, appears to provide blanket legal immunity for oil companies doing business in Iraq. How and why did this come to pass, especially for a war that was purportedly not about oil?

ERI and other groups, including the Government Accountability Project (GAP) and the Sustainable Energy and Economy Network (SEEN) are deeply concerned that EO 13303 grants total immunity to oil companies for any activities and profits generated by their work in Iraq. This would mean that legitimate lawsuits, including claims brought by injured people under the Alien Torts Claims Act (ATCA), would be cut off by 13303.

The stated purpose of EO 13303 is to enable Iraqi reconstruction. The Treasury Department, which is currently drafting regulations to implement13303 through its Office of Foreign Assets Control (OFAC), has strenuously claimed that 13303 was never intended to protect corporations. Both the purpose and impact of 13303, says Treasury staff, is to shield money—and only money—generated from the sale of Iraqi oil, so that it can go into the Development Fund for Iraq.

Treasury rejects the interpretation that 13303 protects companies and eliminates ATCA (and other) suits. However, a recent article by Paul Rosenzweig, a fellow at the Heritage Foundation, supports this reading. Rosenzweig argues that ATCA is a barrier to Iraqi reconstruction; US companies will not go into Iraq out of fear that they will be “harassed” with an ATCA lawsuit arising out of “ anything [they] do using Iraqis in [their] work force.” As wrongheaded and alarmist as this view is—fewer than 2 dozen cases have been filed against corporations under ATCA for human rights abuses, and no ATCA case has yet led to a judgment against a corporation—it explains why an executive order about "Iraqi reconstruction" might be viewed as an opportunity to eliminate related ATCA suits.

Treasury Department spokesman Taylor Griffin said in an LA Times article that 13303 “does not protect the companies' money. It protects the Iraqi people's money." Reading EO 13303 either as a layperson or a lawyer leads to a different conclusion. This Executive Order, signed on the same day as UN Security Council Resolution 1483 (which lifts sanctions against Iraq and also protects oil-generated revenue),is far broader than 1483. The main differences between 1483 and 13303 are noteworthy:

• 1483 protects “petroleum, petroleum products, and natural gas”; 13303 protects “Iraqi petroleum and petroleum products, and interests therein, and proceeds, obligations, or any financial instruments of any nature whatsoever arising from or related to the sale or marketing thereof, and interests therein,” a much larger category of protected items.

• 1483 provides protection from legal proceedings only until December 31, 2007; 13303 is unlimited in time and provides immunity indefinitely into the future.

• 1483 only provides protection until “title passes to the initial purchaser” (in other words, until the oil is sold for the first time); 13303 grants immunity at any time for any transaction “arising from or related to the sale or marketing,” which means the oil and oil assets are protected from sale to sale to sale.

• 1483 protects oil profits and “obligations” from lawsuits and judgments to the extent the UN is protected from suit, except in the case of an ecological accident, including an oil spill; 13303 protects a larger category of items (see point #1 above) without reservation.

If, as the Treasury Department claims, EO 13303 only protects the Iraqi people and not US companies, ERI urges Treasury to rapidly clarify both the intent and the impact of 13303 through its regulations. Even better, the Administration should send a loud signal that 13303 is not doing what Paul Rosenzweig would like it to—eliminating ATCA suits—by issuing a new, improved, and narrower executive order.