Shafaq News/ The city of Basra, Iraq’s economic hub, lies at the heart of a growing controversy in the global oil industry. Home to some of the largest oil fields, Basra’s strategic position makes it crucial for international oil companies (IOCs). However, deep grievances are rising over wage disparities between local Iraqi workers and their foreign counterparts.

Oil Wealth Meets Wage Inequality

Basra contributes significantly to Iraq’s economy, but the wealth generated by its oil fields is not equally shared. While foreign workers in the oil sector earn salaries between $10,000 and $15,000 per month, Iraqis performing similar roles typically make only $1,000 to $2,000. Local employees rarely receive housing allowances, comprehensive healthcare, or retirement benefits. This tenfold difference has led to growing frustration and protests.

Mahdi Al-Tamimi, the head of Basra’s Human Rights Office, highlighted this issue, stating to Shafaq News, “It is unacceptable that local Iraqis, are paid a fraction of what foreign workers earn. These companies must recognize their ethical responsibility to the communities from which they profit.”

Ali Al-Abadi, director of Iraq’s Centre in Basra criticized the heavy reliance on foreign labor, particularly since 2018. He also argued that foreign workers are prioritized in high-paying roles while Iraqis are left in lower-paying positions. "The foreign workforce is being prioritized at the expense of Iraqis, despite their qualifications."

Negative Role Of Foreign Oil Companies

International oil companies have faced backlash for perpetuating this wage gap by bringing in foreign workers for technical roles while relegating locals to lower-paying jobs. Many Basrans accuse IOCs of prioritizing profit over fairness, with opaque hiring practices and limited integration of local talent into senior roles.

Al-Abadi has been outspoken on this issue, stating, "Since 2018, the influx of foreign workers into high-paying roles has hindered the development of local expertise." His criticism focuses on the need for IOCs to hire and train Iraqis, enabling them to fill higher-paying positions.

Moreover, he emphasized that the over-reliance on foreign labor stifles Iraq’s domestic workforce. "Iraqis are being denied opportunities that should be available to them in their own country," he asserted, calling for policies to address this imbalance.

Nawfal Al-Mansouri, a member of the Taqeem Alliance in Basra’s Provincial Council, revealed that nearly 90,000 foreign workers are employed by oil companies in the province. “These workers collectively earn over half a billion dollars in monthly salaries,” Al-Mansouri stated.

Government Steps And Allegations Of Corruption

Mahdi Al-Tamimi, head of Basra's Human Rights Office called on Basra's leadership to take decisive action, "The provincial government must make bold decisions. Central authorities will respond to strong local initiatives. We can save our youth from the social and economic challenges they face by opening employment windows for Iraqi workers in foreign companies and protecting them from exploitation, including unjust dismissals."

In the same context, the Iraqi central government and the Basra Provincial Council have taken several steps to address the wage disparities between local workers and foreign employees in the oil sector, though the progress has been slow.

1. Legislation and regulations:

• Local employment quotas: Regulations require foreign oil companies to prioritize hiring local workers for non-specialized roles. However, enforcement is inconsistent, and foreign firms still rely on expatriates for technical positions.

• Salary caps and adjustments: The government has occasionally pushed for salary caps for foreign workers and adjustments for locals, but challenges remain due to the global nature of the oil industry.

2. Skill development and training:

Partnerships with oil companies and training programs: Improving education and vocational training tailored to the oil industry is crucial. Partnerships between oil companies and educational institutions could create a pipeline of qualified professionals, enabling Iraqis to take on roles traditionally reserved for foreign workers.

3. Incentives for local workers:

• Bonus and Benefits Programs: Local workers receive additional benefits, such as bonuses, housing allowances, and medical coverage, though not as extensive as foreign workers’ benefits.

• Subsidies for Local Businesses: The Basra Council offers tax exemptions or subsidies to companies hiring local workers, encouraging more locals in higher-paying positions.

4. Public pressure and social movements:

• Protests and Advocacy: Local workers and activists have protested for better pay and employment opportunities, pressuring both the government and companies to address the issue.

• Political Pressure: Basra politicians push for greater transparency and better salary regulations. These efforts are often clashing with the rampant corruption among certain Iraqi political elites. According to Ali Al-Abadi, director of Iraq’s Centre in Basra, the political interference by lawmakers, often exploiting the oil sector for their personal and political gains, exacerbates the crisis.

5. Taxation on expatriate salaries:

The government has considered imposing higher taxes on expatriate salaries to keep more wealth within the local economy.

6. Increasing oil revenues for local development:

The government aims to reinvest oil revenues into local infrastructure and public services, improving the economic environment and creating more local job opportunities.

Despite these efforts, challenges persist. Foreign companies are still attracting top global talent with higher salaries, while corruption and bureaucracy hinder effective policy implementation. Additionally, training progress is slow, leaving foreign workers dominant in specialized, well-paid roles.