Over the past week, international affairs have unfolded in a manner reminiscent of Francis Ford Coppola’s 'The Godfather'. Osama bin Laden went down like Don Barzini. Unlike Moe Greene, Muammar Gaddafi, in his Libyan Las Vegas palace, narrowly escaped death but reportedly lost members of his family. One can almost imagine President Obama wearing a pin-striped suit with a carnation in the lapel, stoically participating in the christening of a nephew while the enemies of his country are systematically dispatched. This is a President who intends to be taken seriously.
However, perhaps parallels with the movie (and of course the wonderful book by Mario Puzo) are more cogent than might at first be imagined. Michael Corleone is taking revenge and sorting out threats to the ‘family’ business. Carlo, his brother-in-law, had played a part in the killing of Sonny, Michael’s brother, and needed duly to be garrotted. The other dons of the New York families were muscling in on Corleone business interests and regime adjustments were necessary.
Osama was not a business decision. He was Carlo and his death was a matter of justice for capital crimes committed. Just as Carlo’s death in The Godfather is really rather a straightforward and inevitable affair, so might be considered the demise of Osama. Now, I suggest, is also not a good time for any of Osama’s henchmen to loiter under street lamps on public corners.
But what of Gaddafi? This is more complicated; was the targeting of his family compound revenge or business? Can we accept at face value the words of justification offered by the British Prime Minister, David Cameron, “It is in line with UN Resolution 1973 and it is about preventing a loss of civilian life by targeting Gaddafi’s war-making machine. That is obviously tanks and guns and rocket launchers, but also command and control as well.”?
Let us accept that international efforts undoubtedly have lessened the violent suppression of Libyan citizens who dared to oppose Gaddafi and his family. A laudable outcome. However, not an outcome that would be any less desirable in Syria, where over 500 people reportedly have been killed, many in the southern city of Deraa, for opposing the rule of President Bashar al-Assad. Nor in Bahrain, where a ruthless persecution of protestors proceeds smoothly with only mild international calls for “restraint”... if you don’t mind please. Nor in Yemen, where protestors have been fired upon and killed. Need we mention the Democratic Republic of Congo and the fate of human rights advocates and activists such as Floribert Chebeya?
Moreover, why have governments been happy to lift sanctions and conduct business with Libya in recent years when it remained under the control of such a tyrannical ruler? Has Gaddafi only recently become somewhat unacceptable on the question of human rights? Well, his supporters might point to the Al-Gaddafi International Prize for Human Rights, which was established in 1988 by Muammar Gaddafi with a $US10 million grant to a Swiss-based foundation called North-South (the award was won in 2010 by Turkish Prime Minister Recep Tayyip Erdoğan).
However, Gaddafi’s detractors would no doubt embarrassingly recall numerous reports over several decades by Amnesty International on the disappearance and assassination of dissidents in Libya and throughout the world, including in Britain and the USA. Had Western governments forgotten about Pan Am Flight 103 that came down in Lockerbie, noting that Britain sent home on compassionate medical grounds Abdelbaset Mohmed Ali al-Megrahi, the convicted Libyan terrorist responsible for the bombing? Did they forget also Yvonne Fletcher, the British policewoman gunned down in 1984 by shots fired at anti-Gaddafi protestors from the Libyan People’s Bureau in London? For much of the last decade, all seemed to have been forgiven. Blind eyes and deaf ears no longer heeded reports of human rights abuse in Libya.
Now, that has all changed. UN justification for military intervention is focused on the need to protect civilians from a monstrous despot who is prepared to kill his own people to stay in power. But there are so many villainous, brutal governments around the world who happily slaughter their people while their envoys drive to UN meetings in plush limousines to be met at the door with smiles and a warm hand shake. Why such a forceful response in Libya now and not earlier, and why not elsewhere where civilians are being arrested, beaten and killed by State security forces? Did something change the game in Libya?
Perhaps, to understand what is going on we need to leave Libya and travel back in time to 1948 at the University of Chicago. There, an immigrant German professor called Hans Morgenthau published a book entitled Politics Among Nations. His thesis established the ‘realist’ school of international relations, which was to become enormously influential, especially amongst senior American decision-makers. Morgenthau argued that the actions of States will be governed by the importance of “national interest” defined primarily in terms of power. He wrote, "The statesman must think in terms of the national interest, conceived as power among other powers. The popular mind, unaware of the fine distinctions of the statesman’s thinking, reasons more often than not in the simple moralistic and legalistic terms of absolute good and absolute evil." This is not to suggest that any of the leaders who decided to intervene in Libya were acting only as a ‘political man’ with no genuine concern for the good people of Benghazi and other cities. Rather, Morgenthau’s thesis suggests that such heart-felt concern nevertheless would be unlikely to have galvanised into military action unless such efforts would ultimately advance the national interests of the intervening parties.
So, one explanation for the move against Gaddafi and his family might be that they took some decisions that were against the interests of the Western powers. You know, nothing personal, it’s just business. Or as Michael Corleone reminds us, “Never hate your enemies. It clouds your judgement”.
Intuitively, many people will knowingly nod their head an utter “It’s all about the oil”. Well, maybe, but what about it? Libya was happy to export its oil and could not unilaterally drive prices in a manner that was unfavourable to importing, industrialised countries. And besides, Libya had oil back when governments were content to relax sanctions and do business.
No. To understand a shift in international policy towards Libya, Morgenthau’s logic urges us to look back over the last few years to see if anything changed that might be detrimental to the national interest of the intervening powers.
And this brings us to the new ‘Exploration and Production Sharing Agreement – IV’ (EPSA-IV) petroleum contracts introduced by the Libyan National Oil Corporation (NOC) in 2005. Under the tough new agreements, 100% of exploration costs and 50% of production costs are to be borne by the international oil companies. However, these companies are to enjoy only a flat 12% of production share regardless of location. This is well below the minimum of 20% that most international companies would look for to ensure an adequate return to shareholders. Also, according to cables recently released by Wikileaks, in the second round of EPSA-IV bidding, international oil companies had each been forced to pay the Libyan NOC a compulsory US$1 billion “bonus” upon the signing of their respective contracts. In a recent Wall Street Journal article, the former president of ConocoPhillips in Libya (2005-2006) said the Libyan NOC EPSA-IV contracts “contained the toughest terms in the world”.
And the oil companies that had led the way earlier in development of Libya’s oil fields were not spared. In 2007, petroleum operators with older contracts that had been signed under more generous terms were also required to “renegotiate” under the new EPSA-IV provisions. Having spent millions on exploration, those companies were reluctant simply to walk away. According to Wikileaks cables, the international oil companies “have so far swallowed hard and signed up.”
Another factor that could be relevant is that the NOC kept Libya's bigger and mature producing fields off-limits to foreign investors, insisting that they remain in the hands of NOC subsidiaries such as Sirte Oil. Such a restriction closed the door on international oil companies for re-development, enhanced oil recovery, or production-sharing contracts for significant fields such as Sarir.
Taken in isolation, the new Libyan EPSA-IV measures were a nuisance but hardly likely to affect the global viability of oil majors. However, what if the new EPSA-IV terms were to be copied by other State-owned oil companies? Would that potentially harm the “national interest” of other industrialised powers? Also, might international oil companies have influence over senior decision makers in their home governments, and could they have used that influence to press such an argument?
Gaddafi presided over the introduction of the EPSA-IV contract, and under Gaddafi, the Libyan NOC took a tough, no compromise stand on its introduction. Maybe a grateful and struggling rebel government would be more reasonable? The National Transitional Council has already established the ‘Libyan Oil Company’. And even if there is no change in national oil and gas policy within Libya, might the example of “all necessary measures to protect civilians” be sufficient threat for other countries to think twice before following Libya’s tough new line on capturing national oil wealth? Perhaps, in the future, international oil companies need only bluster the sound “Gaddafi” whilst pretending to sneeze for the message to be understood, “we are making an offer that can’t be refused”?
“An offer he couldn’t refuse”…“What was that?” asked Michael Corleone’s wife Kay. Michael replied, “Luca Brasi held a gun to his head, and my father assured him that either his brains or his signature would be on the contract.”
