End of Immunity Worries U.S. Contractors in Iraq

By JAMES RISEN, New York Times

WASHINGTON — The thousands of American contractors in Iraq who have been above Iraqi law since the war began are suddenly facing a new era in which their United States passports will no longer protect them from arrest and imprisonment.

When the Iraqi government ratified an agreement last week setting new terms for a continued American presence in Iraq, private contractors working for the Pentagon faced the inevitability that they would be stripped of their immunity from Iraqi law. That immunity had been granted by the Coalition Provisional Authority before a postwar Iraqi government was established.

Now that the contractors’ legal protection is to lapse, officials in the defense contracting industry are trying to come to grips with how their operations will change in Iraq, how many of their American employees will be sent home, and whether the weak and often corrupt Iraqi judicial system will become an impediment to recruiting Western workers. If it is approved by Iraq’s Presidency Council, as expected, the agreement will go into effect on Jan. 1.

So far, no major company working in Iraq has announced plans to withdraw from the country. Some industry experts said that while the corporations would stay, they would be forced to rely much more on Iraqi employees, rather than on Americans and other foreigners who might fear working without legal protection.

Spokesmen for many of the major contracting companies declined to comment on the change in legal status in Iraq, while others said it was premature to predict the impact. Some said Americans working in Iraq would be watching how the Iraqi government dealt with its new power, and would wait and see whether there were arbitrary arrests or court rulings tainted by corruption before deciding whether to stay.

“I think the question of what this means for recruiting American employees is complicated,” said one official close to the contracting industry who was not authorized to speak on the record about the issue. “I think it will depend on the first case, and whether it is handled in a responsible fashion, or whether someone is left in an Iraqi jail without recourse. If that happens, word will get around, and that could have a chilling effect on recruiting.”

More than 170,000 contractors now work for the military and other American agencies in Iraq, more than the total number of American troops in the country. Only about 17 percent of the contractors are Americans, according to administration figures; about half are Iraqis, and one-third are workers from third countries. The proportion of Americans could drop quickly with the loss of legal immunity.

One of the biggest concerns for contractors is the lack of details on how the security agreement with Iraq will work.

The legal immunity for contractors was eliminated in negotiations between the Bush administration and the Iraqi government on the agreement, which set the terms for the continued American military presence while also establishing a withdrawal date. Contractors were not involved in the talks.

A major question is whether under the pact the Iraqi government will be able to prosecute Americans for past crimes. The Iraqi government’s insistence on an end to legal immunity for contractors was fueled largely by the shootings of Iraqi citizens by guards working for private security firms, including Blackwater Worldwide, which has a contract to protect United States diplomats in Baghdad.

In September 2007, Blackwater security guards were involved in a shooting in downtown Baghdad in which at least 17 Iraqis were killed. After the shooting, the Iraqi government demanded that Blackwater be expelled from the country and that its guards be held accountable.

Despite the protests, the State Department has continued to use Blackwater in Baghdad, although the Justice Department has been conducting a criminal investigation of the shooting.

The fact that Blackwater continued to operate in Iraq contributed to the Iraqi government’s hard-line stance on the legal immunity issue in the negotiations. Whether the Iraqi government will now begin its own criminal investigation of the Blackwater shooting is unclear, administration officials and contracting industry executives said.