Naseer Al-Nahr, Asharq Al-Awsat

BAGHDAD, 11 December 2003 — An international dispute erupted yesterday over a US decision to award Iraq reconstruction contracts to firms from only those countries that supported Washington in the war.

Russia hinted it may refuse to restructure Iraq’s debt and Canada threatened to stop aid as nations opposed to the Iraq war denounced the decision.

Germany, another leading opponent of the war, called the decision “unacceptable,” and government spokesman Bela Anda said it went against “a spirit of looking to the future together and not to the past.”

The European Union said it will study whether the US decision violates free trade rules of the World Trade Organization.

UN Secretary-General Kofi Annan suggested the decision was divisive and unhelpful in stabilizing the country.

Critics said the policy could also discourage countries from contributing to the rebuilding of Iraq and complicate American efforts to restructure the estimated $125 billion which Iraq owes to other countries. Much of the debt is owed to France, Germany, Russia and other nations whose companies are excluded under the Pentagon directive.

Defending the new policy, the White House said that countries wanting a slice of that lucrative pie must participate militarily in the postwar effort.

White House spokesman Scott McClellan said the policy was “appropriate and reasonable.”

“Prime contracts for reconstruction funded by US taxpayer dollars should go to the Iraqi people and those countries who are working with the United States on the difficult task of helping to build a free, democratic and prosperous Iraq,” McClellan said.

The directive from Deputy Defense Secretary Paul Wolfowitz, dated Friday and posted on a Pentagon website Tuesday, limits bidders to firms from the United States, Iraq, their coalition partners and other countries which have sent troops to Iraq. It says restricting contract bids “is necessary for the protection of the essential security interests of the United States.”

McClellan said that other nations that want to be eligible for a slice of the $18.6 billion pie that Congress approved last month for the reconstruction of Iraq can do so by participating militarily.

He said companies from anti-war countries can compete for contracts being financed by a separate international fund that the White House estimates will be worth $13 billion. The ban does not prevent such companies from winning subcontracts.

That prospect did little to assuage international anger over the directive.

Canada’s deputy prime minister, John Manley, said the decision would make it “difficult for us to give further money for the reconstruction of Iraq.” Canadian officials said the country has contributed $225 million to the rebuilding effort.

Meanwhile in Baghdad, a special tribunal was established yesterday to try ousted leader Saddam Hussein and his associates. Iraq’s Governing Council said the United States would hand over key members of the former regime to the tribunal and Saddam could face trial in absentia.

“We agreed that those who have been accused and detained would be handed over to this historic court,” Abdel Aziz Al-Hakim, president of the council, told a news conference. He called the creation of a tribunal to try crimes against humanity and genocide a “great achievement for the Governing Council in Iraq”.

Iraqis endured atrocities under Saddam for 24 years. Tens of thousands were jailed, tortured, killed and buried in mass graves. US officials in Iraq have announced the discovery of 260 suspected mass graves which could contain up to 300,000 bodies.

Hakim said Iraqis who had committed crimes against humanity during the 1980-1988 war with Iran and the 1990 invasion of Kuwait could also face the tribunal.

Ahmad Chalabi, a senior member of the council, said: “Saddam Hussein will be accused and charged with committing crimes against humanity and the Iraqi people. He will certainly come under the jurisdiction of this court.”

The death penalty, which was often used under Saddam’s rule, has been suspended in Iraq. But Chalabi suggested it could still be applied against Saddam and his closest aides if they were convicted.

— Additional input from agencies.