Minister Criticises Security and Insurance Companies

By Gavin Jones, Director of Iraq Business News, and Partner at consultancy firm Upper Quartile.

Without doubt the security situation has improved significantly since I was last in Iraq, and made great strides in the south, where the first time I worked in Basra in 2007 we were never allowed into the city of Basra – now we are staying in a modern hotel with a room overlooking the Shatt al-Arab, from which I can see a flower-show in full swing on the other side. We are using a regular 4-wheel-drive vehicle with a local driver and move around the town with ease.

This meshes with the Minister of Construction's views on security companies who are, he believes, right in the middle of trying to justify their existence and stretch out a bad situation by making Iraq sound more dangerous than it is, and keep their fees and security staff employed. Insurance companies are just as bad, and both are slowing development by adding significant costs onto any project.

As Minister Mohammed Sahib al-Darraji told me, “security is necessary in Iraq but not at the levels that the security companies and insurance industry claim; it makes working here very expensive and hinders development greatly”.


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4 Responses to Minister Criticises Security and Insurance Companies

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    12th April 2012 at 22:00 #

    AAIB CEO William Wakeham writes:

    "Whilst I have the utmost respect for Minister Mohammed Sahib al-Darraji's comments, insurers can only quote on the information that they have available to them. So, where foreign companies engage with western insurance brokers who are often based in London or even in Dubai (and who have never even seen the associated risks to operations in Iraq firsthand), they can only have themselves to blame when their premiums are high. An insurance broker's job must be to provide the best possible terms for the clients. It is not always easy to do this remotely, particularly where neither the broker nor the insurer have ever even seen the reality on the ground in Iraq.

    "Iraq has a proud history of insurance. As recently as 1979 Iraq generated the highest gross written premium from any country in the Middle East. The Iraqi insurance industry is slowly getting back on its feet. With sensible reinsurance available, and some broking activity now in the market, foreign companies should not discount the option of accessing the local market for competitive rates and strong reinsurance."

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    William Wallace
    13th April 2012 at 21:11 #

    There are very few regions of Iraq that currently require the level of protection that the PSCs advise. Parts of Anbar, Ninevah, Kirkuk, Diyala and Salah ah Din are potentially risky for international companies. Basra is safe and international companies operating in the province know this, PSCs will have no business in Basra soon.

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    19th April 2012 at 13:13 #

    People have very short memories and should not blindly go on the advice of this article. I remember the Southern Oil Company telling people at the first Basra Oil & Gas Fair that there had been no incidents in Basra for three years, said within months of major car bomb attacks in the city, how naive you would would have been listening to that advice.

    Even now there is a low level of attacks on going (Not against western interests) and the kidnap threat is still high. There has been12incidents in thepast week alone and although the Cheif of Police has announced Basra is Al Qaeda free they only arrest 15 out of 30 suspects, AQ will soon replaced arrested memebers as they do elsewhere.

    Without the protection of Private Companies western companies would not be able to operate safely ,the Iraqi Security Forces do not have the same level of training and experience to adequately satify HSE requirements for western commercial intersts.

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    19th April 2012 at 13:47 #

    Meanwhile on the next page, not mentioning the number of VBIED attacks across the country today...

    You would be very foolish indeed to think this country is 'safe' for western companies, it is the most volitile it has been for a long while. With the kidnap threat still high and extant, going by releases of information by both FCO and DoS. Security companies report facts and information as it happens to clients, hyped? It does not need to be.

    At a guess, did you yourself travel in B6 vehicles during your stay, and did you not see the 75+ armed guards protecting you while you slept in the lavish hotel?