Who judges among the judges: a reading of the Kurdistan Regional Council's statement on the oil and gas law of the Kurdistan Region?

Doctor Nabil Mahdi Aldharabi

Faculty of Law, National University of Malaysia (UKM)

The relationship between the central government and the Kurdistan Regional Government occupies an important place among the main files in Iraqi affairs locally and regionally. This relationship caused a number of political crises after 2003. Although the outstanding files between the center and the region are numerous and thorny, the file of natural resources in general and oil and gas in particular is the most important file in this relationship, as it draws its borders and gives its parties strength and weakness.  The region prioritizes financial independence from the Baghdad government, an independence that will make it rich from Baghdad, which needs its intervention in political crises. On the other hand, the central government seeks to introduce the natural resources in the region within the system that governs the natural resources in the country, which was one of the most important factors for Iraq's unified, if not the most important, in addition to the fact that reducing the economic power of the region will eventually reduce its political influence.

The oil and gas file in the region went through many turns after 2003 at different political, economic and legal levels, each of which had an impact on this file and on the relationship between the center and the region. Perhaps the crisis of forming the recent government has had a different impact on this file. The crisis of forming the current government has dropped a Kurdish dictum that was intended to remain a milestone in the Iraqi political system: that the Kurds are part of the solution, not part of the problem. The Kurds are not used to being as divided and ununified as they are today.  Nor are they used to being part of a dispute to which they are not a party, as is the case today with the larger bloc.

This division was reflected on the legal aspect of the oil and gas file when the Federal Court issued its decision in the two unified lawsuits, lawsuit No. 59/Federal/2012 and lawsuit No. 110/Federal/2019,  in which the court ruled "the unconstitutionality of the Kurdistan Regional Government's Oil and Gas Law No. (22) of 2007 and its cancellation for violating the provisions of Articles (110,   111). , 112, 115, 121 and 130)  of the Constitution of the Republic of Iraq of 2005. In response to this decision, the Judicial Council of the Kurdistan Region issued a statement attempting to refute the grounds on which the Federal Court based its decision above. At the end of the statement, the region's Judicial Council questioned the constitutional legitimacy of the Federal Supreme Court. Both the decision and the statement raised a wave of legal controversy, in which we are trying to guide us, following the textual analysis approach according to the views of the scientific school in the interpretation of the law and trying to stay away from the impact imposed by the societal context on the text because of this impact of caveats, perhaps the most important of which is siding with a party in a dispute that is still the subject of political and social controversy. In this briefing, we will address three important points, the first of which is the constitutional texts in question, the second is the decision of the Federal Court, and the third is the statement of the Kurdistan Region. After reviewing these points, we will analyze the subject from a legal point of view.

First: The constitutional texts in question

We do not bring anything new when we say that the Iraqi constitution of 2005 did not see the light of day until after a difficult labor that was normal in a country that had to pay a heavy bill of political, economic and social costs for a dictatorship that had perched on its chest for decades. The constitutional document was characterized by a number of milestones, perhaps the most important of which is the method of open endings, which legislators rely on to resolve the differences that dominated the discussions of writing the constitution.  The drafters of the constitution were content to postpone many controversies to a later stage, hoping that their political power would allow them to impose their interpretation on the articles that contained these open ends.

Perhaps the most important point to which this statement applies is the file of natural resources. Contrary to the usual constitutions, the first chapter of the constitution, which regulated the main principles on which the new republic is based, did not address natural resources, as the authors of the constitutional draft decided to transfer the principle related to oil and gas to the fourth chapter, which discussed the competencies of the federal authorities, where Article 110 came to multiply exclusive competencies, among which there was no jurisdiction explicitly related to oil and gas. Article 111, which stipulates that (oil and gas is the property of all the Iraqi people in all regions and provinces)  is alien to the context of the articles of Chapter IV, as the subject of the article and its formulation has nothing to do with the terms of reference, as it is consistent with the articles of Chapter One, which dealt with the general principles on which the state was built. Misplacing the article reflects a compromise between two parties within the constitution-writing committee, each of which wanted to draw fire to its disk.  The Kurds were satisfied with this text because it is ultimately more theoretical than practical, it contains a theoretical principle and does not include an organizing rule for a particular behavior. On the other hand, the proponents of the central state accepted the position of the text after the exclusive competences of the federal authority with a clear formulation that all the people are equal to the possession of all wealth.

If we turn our face to the section of Article 112, we find it another manifestation of the settlement between the two parties. The first paragraph of the article stipulates that the federal government (with)  the governments of the producing regions and governorates shall manage the oil and gas extracted from the existing fields at the time of writing the text that is termed current. The mere involvement of regional governments in this file was enough for the Kurds, while the advocates of centralism were content to use the text instead of sympathy. In terms of language, this use means that this participation is not on an equal footing between the centre and the region. On the other hand, the second paragraph stated that the central and regional governments should participate in formulating strategic development policies.

After the statement of joint competencies, Article 115 establishes a rule for all exclusive or joint competencies of the federal authorities that are not provided for in the Constitution to be within the powers of the regions and governorates. Article 115 also emptied  the provisions on joint competences of their content when it gave the right to regions and governorates to enact laws that would have priority in regulating these joint competencies.

Article 121, contained in Title V, entitled Powers of the Regions, enumerated a set of important competencies that gave the authorities of the Regions relatively broad powers that Article 115  was not sufficient as a constitutional basis for enjoying such as the power to modify the application of federal law and the power to establish offices in diplomatic missions abroad.

Lastly, article 130, which was included in the final provisions, established a well-known legal principle, namely that legislation in force before the Constitution remains in force until it is amended or repealed on the basis of the provisions of the Iraqi Constitution. Perhaps it goes without saying that the term  "legislation in force" used by the article is not limited to ordinary legislation, but includes subsidiary legislation such as instructions and regulations.

Second: Federal Court Decision

On 15/2/2022, the Federal Supreme Court issued its decision in the two unified lawsuits, lawsuit  No. 59/Federal/2012 and  lawsuit No. 110/Federal/2019.    Apart from the other issues addressed in the resolution, the most important thing mentioned in the decision is the ruling on the unconstitutionality of the Kurdistan Regional Government's Oil and Gas Law No. (22) of 2007. Apart from the details of the pleadings, the defenses presented by the litigants and the judgmental paragraphs, the decision was based on several evidences to reach the conclusion of unconstitutionality. It can be summarized that this law violates  Article 121 / I which granted the authorities of the region the right to exercise the powers conferred on them by the Constitution with the exception of the exclusive federal powers set forth in Article 110 of the Constitution. The Federal Court has diagnosed the paragraph violated by law with the first paragraph of Article 110, which stipulates that the federal authorities are exclusively competent to  formulate foreign policy and diplomatic representation, negotiate international treaties and agreements, borrowing policies, sign and conclude them, and formulate sovereign foreign economic and trade policy. The court also considered that regulating trade policy across the borders of regions and governorates, setting the state's general budget, and drawing up monetary, financial and customs policy is one of the exclusive competencies of the federal authorities, based on the text of Article 110/III of the Constitution. In addition, the court relied on the text of Article 111 of the Constitution, which stipulates that oil belongs to the Iraqi people in all regions and governorates. The Tribunal concluded a provision of the said article, namely, that oil imports must be distributed equally and fairly to all Iraqi people, including non-producing areas. The Tribunal has stated that this requires the knowledge of the Iraqi people of the amount of oil and gas revenues, as they are the owners of them. In the most pertinent argument, the decision was based on the text of Article 112/  I of the Constitution, which relates to the management of oil and gas in (current)  fields with the governments of the producing regions and governorates. Finally, the decision was based on the fact that the management of the Iraqi Ministry of Oil for Oil and Gas is supported by the laws in force, in particular  the Law Organizing the Ministry of Oil No. 101  of 1976 and the Law on the Preservation of Hydrocarbon Resources No. 84  of 1985, the court considered that these laws are in force and applicable in accordance with the provisions of Article 130   of the Constitution.

Undoubtedly, this decision marked a milestone in the legal aspect of the relationship between the Centre and the region. This necessitated a counter-action from the region, which has suffered a severe blow with regard to its ability to manage the oil and gas file in the region alone. Despite the issuance of many reactions rejecting the decision in the region, these responses were not enough alone, which necessitated a legal counter-action represented in the statement of the Judicial Council in the Kurdistan Region No. 1511 on 30/5/2022.

Third: Statement of the Judicial Council in the Kurdistan Region

The statement issued by the Judicial Council in the Kurdistan Region was the strongest response to the federal decision, and the reason for this lies in three reasons, the first of which is that it was issued by a non-political technical point and the second is that it did not only include protest and rejection of the decision, but also discussed the legal grounds on which the court relied in its decision. As for the third and most important reason, the statement questioned the legitimacy of the Federal Supreme Court as a way to refute the decision and invalidate it as it was issued by an illegitimate court.

The statement began by saying that the exploration, production and export of oil and gas were not within the exclusive powers of the federal authorities, which makes the oil and gas law issued by the region constitutional legitimacy. The statement also stated  that the application of Article 112 of the Iraqi Constitution is conditional on the equitable distribution of imports in a manner commensurate with the population distribution, as this decision indicated that this distribution did not take place, hinting that equitable distribution is a prerequisite for allowing the application of Article 112 of the Constitution. 

But the most important point raised by the statement is the scope of application of Article 112, which entrusted the federal authority with the management of oil and gas, as the statement referred to the restriction of this administration to be for the fields that existed at the time of the referendum on the Iraqi constitution, which used the term (current fields), which is an explicit indication that the fields that began production after this date are not covered by the aforementioned text.

Finally, the Judicial Council in the region concluded its statement by discussing the legitimacy of the Federal Court, where it indicated that Article 92/2  of the Iraqi Constitution required the enactment of legislation for the Federal Court, which will not be established in accordance with the provisions of the Constitution in the absence of this law, and since this law has not yet been enacted, the Federal Court, which issued the decision on the unconstitutionality of the Oil and Gas Law, lacks constitutional legitimacy.

Fourth: Analysis and Conclusion

In this paragraph, we will address two separate points, the first of which is the validity of the Federal Court's ruling that the oil and gas law in the region is unconstitutional and the validity of the responses to the court's ruling in the statement of the Regional Judicial Council. The second point is the validity of the statement of the Judicial Council in the region questioning the legitimacy of the Federal Supreme Court.

We have already pointed out in the first point of the article that the constitution used the open-ended strategy in the oil and gas file. The constitution employs two tools to achieve this strategy in the oil file and elsewhere.  The first is the tool of vagueness and excessive generalization, and the second is silence about treatment and referring the subject to ordinary legislation by obliging the legislative authority to legislate a law regulating the subject. Both tools appeared  in the text of Article 112, which can be said to have represented the millstone in the constitutional organization of this file. The article included several principles, the most important of which can be said that the administration is for the federal government in relation to the fields that existed in 2005. The Kurdish oil and gas legislator misunderstood the text when he interpreted the word  "with"  in Article 112 as saying that the center and the region are equal in participating in the management of the existing fields, which is stipulated in Article  III  /III of the said law. The Federal Court struck the truth when it interpreted the cooperation led by the federal authority. However, it did not elaborate on this interpretation, as its discussion of the subject was brief, which is an Iraqi judicial approach that the Federal Court does not have the competence to summarize discussions in the body of decisions.

The KRG did not discuss the validity of the principle of federal administration in Article 112, implying its acknowledgment. The statement of the Regional Judicial Council adheres to two things: first, the principle of federal management of the file is coupled with the duty of equitable distribution, which is stated in the appendix to Article 112/I. It is a conjunction that the statement considered a conditional association, which we do not agree with the statement, since the conjunction here is not conditional as long as the second part (equitable distribution)  was not constitutionally agreed upon, but rather left to ordinary legislation, while the principle of federal administration was not linked to legislation, but rather an agreed constitutional principle. Second, Article 112 applies to the current fields, an interpretation whose validity is beyond doubt.The statement elaborated on the current fields, something that the Federal Court had to discuss because of its importance, as it had to clarify what the fate of the fields that began to be produced after the adoption of the 2005  constitution was.While we agree with the statement that Article 112/I does not apply to fields that began to be produced after 2005, we do not agree with the statement interpretation that these fields fall within the exclusive jurisdiction of the territory. Article 112/II charts a way for the management of oil and gas wealth through the formulation of the policy for development by the federal, regional and provincial governments (together), which is an implicit treatment of future fields by an open-end manner.

Article 111 was misinterpreted by the Federal Court, since it was a theoretical article that should have been appropriately included in Title I of the Constitution. The link between the article and the obligation to inform the Iraqi people about oil imports is alien to the subject matter of the lawsuit, which relates to knowledge and knowledge, but rather to the terms of reference. From our point of view, the Federal Court could have benefited from the text of Article 111 by linking the term  "Iraqi people in all regions and governorates"  mentioned in the article with the federal government, which was what the supporters of centralization in the constitution-writing committee wanted to appear.

We can say that the constitutional provisions related to the oil and gas file in Chapter IV, specifically the texts of Articles 111 and 112,  came to reflect the desire of the constitutional legislator to single out a special treatment of this file that makes it of a special nature that departs from the well-known tripartite classification of constitutional  competencies (exclusive competencies of federal authorities, joint competencies, competences of regions and governorates).  We can call this competence a non-exclusive competence of the federal authority, which is obliged to involve the authorities of the regions and provinces with it to a lesser extent than the joint competences. There is also a limitation to this competence, which is the equitable distribution of imports in proportion to the population distribution and affected territories.

We turn to the other point raised by the statement which is the legitimacy of the Federal Court. The statement pointed out that Article 92/ II of the Constitution stipulates that a law must be enacted to establish the Federal Court, and because this law has not yet been enacted, the Federal Court lacks constitutional legitimacy. The statement concluded that the Federal Court lost its legitimacy and thus the decision to rule that the oil and gas law in the region was unconstitutional for its strength.

With our agreement that there is  a constitutional defect in the formation of the  Federal Court (as the text of the first article of the law amending the Federal Court Law No. 25  of 2021, which amended the third article of the Court Law, contradicts the explicit Article 92 /  II of the Constitution, which indicated that the court consists in addition to judges of experts in Islamic jurisprudence and jurists)  But we do not agree with the ruling resulting from this defect, which is the invalidity of the decisions taken by the court because this effect will have a destructive impact on the functioning of the state as a whole, as we can apply the theory of the actual employee, which stipulates the validity of the acts issued by the employee who has no basis for his appointment, in order to preserve the public facility. In addition, the law that the House of Representatives must issue is not a constituent law of the Federal Court, as it is limited to determining the number of members of the Court, how they are selected and the work of the Court, according to the provisions of Article 92/II. The Court Act No. 30  of 2005  is still in force under article 130 of  the Iraqi Constitution, which stipulates that legislation that was legislated before the Constitution shall remain in force until it is amended and repealed.