Contractors face prospect of losing immunity in Iraq

Contractors working in Iraq could soon face the prospect of operating in a war zone with no guarantee of immunity from local laws.

The Bush administration is nearing a deal with the Iraqi government that would outline the U.S. presence in Iraq once the current status-of-forces agreement expires at the end of the year. The new pact would include an "aspirational timetable" for the removal of U.S. troops by December 2011.

Foreign contractors could be stripped of their immunity from local criminal laws as part of this agreement, potentially placing thousands of American workers in the crosshairs of Iraq's judicial system, a number of media outlets have reported.

Lawrence Peter, director of the Private Security Company Association of Iraq, said the terms of such an agreement have not yet been made public and many critical details about the legal framework that would apply to contractors remain unanswered.

"The question is, 'What kind of legal remedies are out there that can satisfy the government of Iraq's desire to hold individuals accountable in a proper way, but will also guarantee the person that is charged with the Western-style legal due process that he grew up with?" Peter said.

The new agreement would revoke a controversial edict known as Order 17. Handed down by the Coalition Provisional Authority shortly after U.S. forces assumed control of Iraq in 2003, the law grants the employees of all U.S. contractors immunity from prosecution in Iraqi courts for actions taken in the course of performing their jobs.

Order 17 does not protect contractors from acts committed while off-duty or from prosecution in U.S. courts.

The rule remained somewhat under the radar until September 2007 when guards for Blackwater Worldwide, a North Carolina private security contractor, fired into a crowd of civilians in Baghdad's Nisour Square, killing 17 and injuring two dozen others. Media reports in late August said the Justice Department is close to indicting six of the guards involved in the shooting.

Shortly after the Nisour Square incident, the Iraqi government announced it was revoking Order 17 and in October 2007 the Cabinet for Iraqi Prime Minister Nouri al-Maliki voted to repeal the rule. However, the Iraqi Parliament never ratified such a change.

While most significant for the armed private security industry, the repeal of Order 17 could create a legal, personnel and insurance nightmare for all contractors operating in Iraq.

Contractors will likely demand higher compensation for the greater legal risk they are assuming, not to mention an expected rise in insurance costs, several experts said.

In addition, contract employees would have to decide if the legal risks would trump any financial benefit.

According a recent Congressional Budget Office report, there are roughly 190,000 contractor employees working in Iraq, although fewer than 39,000 are from the United States. CBO reported there are 25,000 to 30,000 private security guards in Iraq, with 30 percent to 40 percent working directly for the U.S. government as prime contractors. The remainder work for the Iraqi government, other coalition governments or private corporations.

Nearly all private security guards for the U.S. government were hired through a State Department contract and are employed by one of three companies: Blackwater, DynCorp International of Falls Church, Va., and Triple Canopy of Herndon, Va.

The three companies have been relatively tight-lipped about how they would react to the repeal of Order 17.

A Triple Canopy spokeswoman said the company "always abides by the laws and regulations in the countries where they work and will continue to do so.

"With regard to the immunity issue, the key to success for security contractors working in Iraq is a properly crafted status-of-forces agreement," the spokeswoman said. "At this time the company will wait and see what is agreed upon by the U.S. and Iraqi governments and evaluate the situation."

Anne Tyrell, a Blackwater spokeswoman, declined to speculate on the issue, noting that the company had not been briefed on or seen a copy of the new agreement.

DynCorp has not been briefed on the new agreement, either, but the company remains "confident that it will meet all of its contractual obligations," spokesman Douglas Ebner said. He added that the repeal of Order 17 would place a premium on contractors who are able to operate in a responsible and professional manner.

In 2007, a DynCorp spokesman was somewhat less optimistic about the potential implications of losing immunity.

"It would be difficult to recruit people if they could be tried before an Iraqi court," spokesman Greg Lagana told Government Executive. "I can't see us being able to recruit people who might have to make life-and-death decisions if they knew that they could be prosecuted in Iraq in what could be a highly charged atmosphere."

Contractors, however, are likely going to take a wait-and-see approach and watch how the situation plays out over the next few months before making any final decisions, Peter said.

"Some of them will look at this new agreement and say, 'I can live with this. Let's see how it's implemented the first time,'" he said. "Some of them will look at that new agreement and say, 'I can't live with that. I am going to go.' Some people will say, 'I saw what happened the first time and I can no longer live with that. We just don't know."