1. Introduction [1]

Nearly one year ago a small coalition of States led by the United States of America and the United Kingdom invaded Iraq and overthrown the regime of Saddam Hussein. Since the coalition force gained effective control over the territory of Iraq, accompanied by the official end of hostilities, Iraq must be regarded as occupied territory. This means a specific set of rules comes into force under which all forms of belligerent occupation shall be executed. It is important to notice that it is completely irrelevant with regard to the applicability of the rules of belligerent occupation whether the act of occupation, the use of force and how hostilities were conducted are consistent with international law.

This paper tries to introduce the legal framework under which an occupying power must execute its occupation concerning the specific question of use of property under occupation with special emphasis on hydrocarbon resources. The major focus lies on the legal provisions and their development over time rather then on an in dept examination of the current situation in Iraq. Nevertheless a final conclusion will try to reconcile the legal arguments with some of the problems arising from the effect of belligerent occupation in Iraq at this time.

2. General Principles Governing Belligerent Occupation

Under belligerent occupation, private and public property, including natural resources can not be used by the occupying power beyond the limits imposed by the Regulations respecting the Laws and Customs of War on Land as annexed to the Hague Convention IV of 1907, and by the provisions stipulated in the Fourth Geneva Convention relative to the Protection of Civilian Persons in Times of War of 12 August 1949. To understand to range in which property can be used by an occupying power it is indispensable to bear in mind the principle facts regarding the legal regime of occupation. A simple invasion of whole or parts of the territory of another state does not qualify as occupation, because the provisions regulating the rights and duties of an occupying power only come into force when the territory which shall be considered as occupied actually is placed under the control of the occupying power to the extant that this power is able to exercise authority within this territory.[2] An occupant furthermore does not displace the legitimate sovereignty of the territory under occupation but merely executes his de facto authority as administrator over the occupied territory.[3] This is a crucial and fundamental fact to remember when later considering the legal status of hydrocarbon resources and their use by the occupant.

3. Property Rights under Belligerent Occupation

In addressing the notion of property rights under belligerent occupation, of which natural resources in general and hydrocarbon resources in particular are part, four different types of property can be distinguished: Private property[4] and public property[5], sometimes also referred to as “State property”[6], and both types of property can either have the form of moveable property or immovable property.[7] The occupying power possesses different rights and duties with regard to the above specified possible types of property. In addition two other concepts has to be taken into account, the concept of munitions de guerre[8] and the modification of the ability of a belligerent occupant to exploit natural resources in the aftermath of the doctrine of permanent sovereignty over natural resources which emerged as economic part of the right to self-determination of people under colonial rule from 1950 on.[9]

Principally private property is protected against confiscation by virtue of Art. 46 of the Regulations on the Laws and Custom of War on Land. Hence there are certain circumstances which allow limited confiscation of movable private property[10]. The purpose of legitimate requisition of private moveable property must be to support the military forces of the occupying power engaged in the occupation and the occupant must ensure that the requisition is proportionate and does not exceed the level of what a country can bear.[11] Whereas the requisition of movable private property is allowed under some circumstances the seizure of immovable private property, such as sale or transfer of title of immovable private property is prohibited.[12]

Concerning public property the provisions of Art. 53 of Hague IV regulate the use of public movable property without giving any definition[13] of the term in providing that it can be more freely taken by the occupying power, requiring that it could be used in military operations.[14] This conclusion which actually limits the right of the occupant to use movable public property for merely military purposes is based on an examination of the overall context of the Hague Regulations[15], whereas other authorities have read the provisions of Art. 53 as simply identifying the type of property the occupant can use.[16]

Regarding immovable public property the principle observation that the occupying power does not displace the legitimate sovereign of the territory occupied and therefore can not deal with public owned immovable property at will is reflected in Art. 55 of Hague IV which regulates the status of immovable state property. Art. 55 read:

“The occupying State shall be regarded only as administrator and usufructuary of public buildings, real estate, forests, and agricultural estates belonging to the hostile State, and situated in the occupied country. It must safeguard the capital of these properties, and administer them in accordance with the rule of usufruct.”

For an understanding of the range of rights and duties under the regulations in Art. 55 it is indispensable to examine the concept and meaning of usufruct. Generally speaking the obligation that the occupant has to act in accordance to the principles of usufruct limits his power. Usufruct as such is an old doctrine originated in the Roman law and defined in the “Institutiones Iustiniani”.[17] The rule means that the occupant has the right to make use of the property and enjoy their products. These rights are without prejudice to the principle that it may not take title to them. Hence the occupying power may utilize public land and buildings, sell the crops on public land but shall not exercise his rights in a wasteful or negligent way and moreover has no right of disposal or sale.[18] To give a generalised summary over the rights an occupant possesses under the Hague Regulations to interfere in the economic activity of occupied territory by requisition, seizure and use of particular categories of property academics have argued that such a interference is generally only legal for the purpose of protecting the interests and well-being of the inhabitants; or to meet its own military/security needs;[19] or to defray the expenses involved in the belligerent occupation.[20]

The applicability of the Hague Regulations becomes increasingly difficult; with the attempt to unambiguous crystallize a guidance which is capable to determine the parameters in which the occupant might execute legitimate power over natural resources. The core question we are concerned with in this paper is inhowfar non-renewable resources, of which hydrocarbon resources are one category, can be used by the party executing effective control in the territory of the hostile state. Several problems evolve around the question of how to classify hydrocarbon resources, in our case more precisely oil. This question comprises an analysis clarifying if oil is a private or public property, if it is already extracted and the concept of munitions de guerre might kick in or not, and if oil shall be classified as movable or immovable property. It is reasonable to look on the interpretation of usufruct as a civil law concept in the legislation of civil law countries to evaluate if fluid natural resources (such as oil or water) shall be regarded as movable or immovable property, no matter if privately owned or in public hands. Fluid natural resources, and therefore also the object under examination – oil, if these resources are still in situ, have to be considered as immovable property.[21] In this regard, many civil law countries consider water resources, like all appurtenances to real estate, to be immovable property.[22] One consequence of the fact that oil in situ is an immovable natural resource is that the occupant can not claim to use it under the determinants of considering it as munitions de guerre. To consider a good as munitions de guerre it must be susceptible of direct military use, whereas crude oil in the ground would first have to be extracted and further processed to be of direct military use.[23] Although this is a narrow interpretation of the concept of munitions de guerre, it is arguable that earlier case law determined a similar narrowness of the concept of munitions de guerre.[24]

4. Natural Resources under Belligerent Occupation

With the focus on resources that still have to be extracted we have elaborated the question of munitions de guerre and concluded that in situ oil can hardly be subsumed under this rule. Hence the question remains if and to which extant oil can be exploited under the traditional rule of usufruct and moreover what role the doctrine of permanent sovereignty over natural resources posses in considering the particular case of oil, especially with regard to the current occupation of Iraq. There is little doubt that the rules of Art. 55 of the Hague Regulations grant the occupying power the right to use also natural resources to a certain amount by virtue of the concept of usufruct.[25] But the concept of usufruct can be interpreted in a broader or narrower way and which kind of interpretation should be regarded as most appropriate is particularly crucial when dealing with non-renewable resources such as oil. While it can be agreed that any use of natural resources can only be legitimate when its purpose is to meet the needs of the occupation itself. With regard to oil this means that the occupant may continue to exploit existing oil wells.[26] Nevertheless this right is not without any restriction; because oil is a non-renewable resource and the rule of Art. 55 Hague IV provides that the occupying State “must safeguard the capital of these properties”, the use of existing oil wells can only be lawful in a manner which is proportionate as compared to the degree the wells were exploited before the occupation.[27] This is particularly important when dealing with hydrocarbon resources, which are inherently non-renewable and a widespread use of such resources could peak in a decline of the capital of these properties. On the other hand the rules of Art. 55 have been read in a very liberal sense in arguing that not only the exploitation of existing wells but moreover the right to exploit new oil field would be in the framework of Art. 55 because such an approach aims in the benefit of the occupied population from the fruits of the drilled oil.[28] To assist in a more comprehensive final observation on the rule of use of hydrocarbon resources as one part of natural resources it seems helpful to regard the concept of permanent sovereignty over natural resources especially in territories administered and/or occupied by a third States. The doctrine recalls the principal assumption that an occupying state must fulfil its obligation to ensure also the material well-being of the inhabitants of the territory occupied[29].  This means export and exploitation[30] for the general grant of the home economy[31] or the grant of oil concessions[32] to foreign companies[33] is prohibited. One point which strengthens this observation is the fact that peoples whose territory is occupied nevertheless keep their permanent sovereignty over their natural resources.[34] This stipulates that read in conjunction with the provisions of the Hague Regulations it reaffirms in a narrower way, that natural resources can only be take on a amount that is necessary to meet the cost of occupation.[35]

5. Conclusion

Finally all these findings shall be applied to the situation of an occupied Iraq and the legality of the use of oil within this territory. Iraq is occupied by coalition forces who took over the administration of the country, while the sovereignty, including the sovereignty over natural resources such as oil, remains on the State of Iraq and its people.[36] The occupation authority is bound by the provisions of The Hague and Geneva Conventions and therefore has to follow the rules introduced in this paper. This means in practice that there might be some dispute over the practical implementation and interpretation of certain provisions, but not concerning their applicability.[37] The Iraqi oil can only be used to meet the cost of the occupation and for the benefit of the Iraqi people. The use of the existing oil wells should not significantly exceed the amount of drilled oil before the occupation. Under no circumstances is the use of hydrocarbon resources for the benefit of the home economy of the occupying powers or another theatre of war permissible and moreover a disproportionate exploitation of immovable natural resources which significantly reduces the capital of these properties is inconsistent with the object and purposes of Art. 55 of the Hague Regulations. The occupying power will violate these principles when starting to grant private non-Iraqi companies major contracts for the exploitation of Iraqi oil.[38] One contract, in the area of repair and reconstruction of Iraq’s Oil infrastructure was recently granted to the US companies Kellogg Brown and Root of Arlington.[39] Here kicks one other major problem under the legal regime of belligerent occupation in. The occupying power has to respect the law of the state which remain in force despite the fact of actual occupation.[40] Iraqi law bans foreign investment, and the establishment of companies in Iraq by foreigners who are not citizens of Arab countries.[41] In fact the Coalition Provisional Authority adopted an order (Order Number 39), which replaces all existing foreign investment laws in Iraq.[42] This provision clearly and unambiguous violates the rules set out in Art. 43 of Hague IV[43] and should be abolished or not enforced before the occupation ended and a freely elected Iraqi sovereign might adopt such a legislation. Although it was stipulated that hydrocarbon resources might be used to a certain extent by the belligerent occupant under the rules of Hague IV, the development of the doctrine of permanent sovereignty over natural resources and the shown case law affirms that the provisions to administer public property under the guidance of usufruct, and the concept of usufruct itself shall be read and applied in a narrow way.

[1] LLM Student in International Human Rights Law, University of Essex. Former International Political and Legal Advisor at Arab Association for Human Rights.

[2] See Art. 42 of the 1907 Hague Regulations Respecting the Laws and Customs of War on Land, hereafter Hague IV; Scobbie, Iain, “Natural Resources and Belligerent Occupation: Mutation through Permanent Souvereignty”, in: Bowen, Stephen (Ed.), “Human Rights, Self-Determination and Political Change in the Occupied Palestinian Territories, The Hague / Boston / London 1997, pp.221-290, here p. 223; Dinstein, Yoram, “The International Law of Belligerent Occupation and Human Rights”, in: 8 Israeli Yearbook on Human Rights (1978), pp. 104-143, here p. 104/105; Roberts, Adam, “What is Military Occupation?”, in: 55 British Yearbook of International Law (1984), pp. 249-306, here p. 255-257.

[3] See Art. 43 and Art. 55 of Hague IV; Cassese, Antonio, “Powers and Duties of an Occupant in Relation to Land and natural Resources”, in: Playfair, Emma (Ed.), “International Law and the Administration of Occupied Territories. Two Decades of Israeli Occupation of the West Bank and Gaza Strip”, Oxford 1992, pp. 419-442, here 421; Clagett, Brice / Johnson, Thomas, “May Israel as a Belligerent Occupant Lawfully Exploit Previously Unexploited Oil Resources of the Gulf of Suez?”, in: 72 American Journal of International Law (1978), pp. 558-585, here p.559/560; Scubbie, Iain, supra note 2, p. 233.

[4] See Art. 46; Art. 56 Hague IV and Art. 53 of the 1949 Geneva Convention IV Relative to the Protection of Civilian Persons in Times of War (hereafter Geneva IV).

[5] See Art. 55 Hague IV and Art. 53 Geneva IV.

[6] See, inter alia, Clagett, Brice / Johnson, Thomas, supra note 3, p. 562.

[7] See Dichter, Harold, “The Legal Status of Israel’s Water Policies in the Occupied Territories”, in: 35 Harvard International Law Journal (1994), pp. 565-594, here p. 574; Abouali, Gamal, „Natural Resources under Occupation: The Status of Palestinian Water under International Law, in: 10 Pace International Law Review (1998), pp. 414-574, here pp. 468-472.

[8] See, inter alia, Art. 53 Hague IV; and Lauterpacht, Elihu, „The Hague Regulations and the Seizure of Munitions de Guerre“, in: 32 British Yearbook of International Law (1955-56), pp. 218-243.

[9] See Schrijver, Nicolaas Jan, „Sovereignty over Natural Resources: Balancing Rights and Duties in an Independent World, Groningen 1995, especially Chapter 5 on “Permanent Sovereignty over Natural Resources in Territories und Occupation or Foreign Administration”, pp. 133-157; Scubbie, Iain, supra note 2, p. 221 and 247.

[10] See Art. 52 of Hague IV: „Requisitions in kind and services shall not be demanded from municipalities or inhabitants except for the needs of the army of occupation. (…)” and Art. 53 § 2 of Hague IV: “All appliances, (…), generally, all kinds of munitions of war, may be seized, even if they belong to private individuals (…)”; see also Bekker, Pieter, “The Legal Status of Foreign Economic Interests in Occupied Iraq”, in: The American Society of International Law Insights, July 2003; Scubbie, Iain, supra note 1, p. 229-230.

[11] See Dichter, Harold, supra note 7, p.575-576.

[12] See Case of Mustafa Dweikat et al. vs. the Government of Israel et al, 9 Israel Yearbook on Human Rights (1979), p. 345; Ayub et al. vs. Israeli Minister of Defence et al, 9 Israel Yearbook on Human Rights (1979), p. 337-342; Sassòli, Marco / Bouvier, Antoine (Eds.), “Un Droit dans la Guerre? Cas, documents et supports d’enseignement relatifs à la pratique contemporaine du droit international humanitaire”, Volume II, ICRC Geneva 2003, pp. 1011-1015.

[13] See Scubbie, Iain, supra note 2, p. 232.

[14] See Dichter, Harold, supra note 7, p. 577.

[15] See Cassese, Antonio, supra note 3, pp.419-423.

[16] See Dinstein, Y., „The International Law of Belligerent Occupation and Human Rights“, 8 Israel Yearbook on Human Rights (1978), p. 131; Cassese, Antonio, supra note 3, p. 427; Dichter, Harold, supra note 7, p. 582.

[17] „Usus fructus est ius alienis rebus utendi fruendi salva rerum substantia“, Institutiones iustiniani, in: Corpus iuris civilis II.2.4.; for a translation and explanation see Briks, Peter, “Justinian’s Institutes”, London 1987; Bagnall, Roger / Schiller, Arthur, “Studies in Roman Law”, Leiden 1986; Bruckland, William Walwick, “A textbook of Roman Law from Augustus to Justinian”, 3rd Edition, Cambridge 1963, p. 269.

[18] See British Field Manual of Military Law, “The Law of War on Land”, Part III, 1958, p. 169 § 609; House of Commons, “Iraq: Law of Occupation”, Research Paper 03/51, June 2003, p. 23; US Army Field Manual, “The Law of War on Land”, 1956, Chapter 6, Section V, p.151 § 402-403.

[19] Clagett, Brice / Johnson, Thomas, supra note 3, p. 580.

[20] Cassese, Antonio, supra note 3, p. 422.

[21] See Case N.V. De Bataafsche Petroleum Maatschappli & others vs. The War Damage Commission; Court of Appeal, Singapore, April 13, 1956, reprinted in: 51 American Journal of International Law (1957), pp. 802-815, here p. 808; The Memorandum of Law, in: 16 International Legal Material (1977), p. 742; The Case of the Singapore Oil Stocks, 84 International and Comparative Law Quarterly (1956); Brice / Johnson, Thomas, supra note 3, p. 562; Scobbie, Iain, supra note 2, p. 235-236; Cassese, Antonio, supra note 3, pp. 229-232.

[22] See, inter alia, Schweizerisches Zivilgesetzbuch (ZGB) (Switzerland), Art. 655; Bürgerliches Gesetzbuch (BGB) (Federal Republik of Germany), Arts. 93 & 94(1); Abouali, Gamal, supra note 7, p. 472; Brice / Johnson, Thomas, supra note 3, p. 563.

[23] See Case N.V. De Bataafsche Petroleum Maatschappli & others vs. The War Damage Commission, supra note 21; Scubbie, Iain, supra note 2, p.236, pointing out that such considerations are also contained in the British Manual of Military Law; Lauterpacht, Elihu, supra note 8, p.230-233.

[24] See Lauterpacht, Elihu, supra note 8, quoting Cases from the Military Tribunals sitting in Nuremberg, namely: Goering and others, in: Annual Digest 1946, Case No. 92; Krupp, in: Annual Digest 1948, Case No. 214; Flick, in: Annual Digest 1947, Case No. 122; Krauch (I.G.Farben Trial), in: Annual Digest 1948, Case No. 218; Weizsäcker (Ministries Trial), Annual Digest 1949, Case No. 118.

[25] See Scubbie, Iain, supra note 2, p. 239.

[26] See Langenkamp, Dobie / Zedalis, Rex, „What happens to the Iraqi Oil?: Thoughts on Some Significant, Unexamined International Legal Questions Regarding Occupation and Oil Fields”, in: 14 European Journal of International Law (2003), pp. 417-435, here p. 421.

[27] See United States: Department of State Memorandum of Law, „Israel’s Right to Develop New Oil Fields in the Sinai and the Gulf of Suez“, in: 16 International Legal Materials (1977), pp. 733-752, here p. 738.

[28] See Israel: Ministry of Foreign Affaires Memorandum of Law, „On the right to Develop New Oil Fields in Sinai and the Gulf of Suez“, in: 17 International Legal Materials (1978), pp. 432-442, here p. 433.

[29] See UN GA Resolution 2145 (XXI) of 27 October 1966, § 3.

[30] See Resolution 2248 (S-V) of 1967 and Decree No. 1 of the UN Council for Namibia, 27 September 1974, as quoted in: Schrijver, Nicholaas Jan, supra note 9, p.136; UN GA Resolution 33/40, 13 December 1978.

[31] See Abouali, Gamal, supra note 7, p. 481.

[32] See United States: Department of State Memorandum, supra note 27, p. 734.

[33] See UN GA Resolution 33/182, 21 December 1978, § 7.

[34] See UN GA Resolution 1803 (XVII) 14 December 1962; UN GA Resolution 3016 (XXVII), 18 December 1972, § 1; UN GA Resolution 3175 (XXVIII) 17 December 1973, § 1; all of which recalled in UN SC Resolution 330, 21 March 1973; UN GA Resolution 3336 (XXIV) 17 December 1974.

[35] See Schrijver, Nicholaas Jan, supra note 9, p. 146; Clagett, Brice / Johnson, Thomas, supra note 3, p. 580.

[36] See UN SC Resolution 1438, 22 May 2003, which reaffirms the “sovereignty and territorial integrity of Iraq“; stresses the right “of the Iraqi people freely to (…) control their own natural resources”.

[37] UN SC Resolution 1438 also calls upon all concerned to fully comply with the Regulations of the Geneva and Hague Conventions, see § 5.

[38] See Roushdy, Ahmad Naguib, “Follow the Oil”, in: Al-Ahram Weekly 645(2003).

[39] See US Army Corps of Engineers: New Release, Release No. PA-04-03, 16 January 2004.

[40] See Art. 43 Hague IV.

[41] See Al-Jazeerah, „Why the privatisation of Iraq is illigal, according to international law“, November 2003.

[42] SeeCoalition Provisional Authority Order Number 39, 19 September 2003, Section 3 (1).

[43] See Schwenk, Edmund, „Legislative Power of the Military Occupant under Article 43, Hague Regulations”, in: 54 Yale Law Journal (1944-1945), pp. 393-416; Case El Nazer et. Al. vs. Commander of the Judea and Samaria Region (H.C.285/81), in: 13 Israel Yearbook on Human Rights (1983), p. 369.

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