The political deadlock in Baghdad, which has prevented the formation of an Iraqi government more than six months after the parliamentary elections in March, has not prevented the administration of Nuri Kamal al-Maliki from opening the southern oilfields to the world’s giant corporations. Nor has it stopped the US Embassy and Commerce Department from reinvigorating the Bush-era program of selling the country’s public assets to corporate buyers. And because Iraqi unions have organized opposition to privatization since the start of the occupation, the Maliki administration is enforcing with a vengeance Saddam Hussein’s prohibition of public sector unions.

The United States may have withdrawn its combat brigades, but it is not leaving Iraq. And while Washington may have scaled back its dreams of nation-building, it has not given up on a key aspect of the economic agenda behind that project: encouraging corporate investment by sacrificing the rights of Iraqi workers.

Unions have been locked in conflict with the Iraqi government since the occupation began, but in the past year the battle has intensified. In March, after oil workers protested low pay and their union’s illegal status, leaders were transferred hundreds of miles from home. The Oil Ministry banned travel outside Iraq for Hassan Juma’a and Falih Abood, president and general secretary, respectively, of the Federation of Oil Employees of Iraq. They were hauled into court and threatened with arrest.

When the Bush administration pushed for passage of a hydrocarbon law that would facilitate foreign investment, the union organized widespread opposition, mounting what was in effect a political strike and shutting down pipelines in 2007. It called for keeping oil in public hands and protested poor housing and high unemployment. Maliki called in the army and, with US military overflights, increased pressure on the workers. He finally agreed to the union’s principal demand: holding implementation of the oil law in abeyance.

Iraq’s unions were already the largest nonsectarian organizations in the country. After the confrontation they also became the leading voices advocating for economic improvement and continued national ownership of oil, electricity and industry. Although the oil union doesn’t oppose all foreign investment, it has criticized the government for signing unfavorable contracts with oil corporations, in particular production-sharing agreements, in which foreign companies get a share of the oil they produce rather than receiving a fee for services. PSAs are rare, even in conservative Arab countries, because they cede a great deal of control to foreign corporations. Oil ministry spokesman Assam Jihad told the Iraq Oil Report, which uses its wide network of correspondents to track conditions in the industry, that "unionists instigate the public against the plans of the Oil Ministry to develop [Iraq’s] oil riches using foreign development."

The oil union is far from the only labor organization targeted by the government. This past July electricity and oil minister Hussein al-Shahristani expelled the Electrical Utility Workers Union from its offices in Basra. Despite billions spent on contracts to rebuild power plants (GE alone got $3 billion), Basra residents got power only a few hours a day during 120-degree heat this past summer. June demonstrations over blackouts, supported by the union—the first national union led by a woman, Hashmeya Muhsin—were put down by police, who killed one protester and injured several others. Shahristani then issued an order to shut the union down. A thousand Basra workers protested, shouting slogans asking Shahristani where the $13 billion appropriated for electricity reconstruction had gone. Within days, the union was expelled from its offices.

Also in June, longshoremen protesting the prohibition of unions in ports south of Basra were surrounded by troops, and the union’s leaders were transferred hundreds of miles from their homes. This union also has a history of opposing privatization, and in 2005 it forced shipping giants Maersk and Stevedoring Services of America to give up sweetheart concessions in Iraqi ports granted to them by occupation authorities.

In January the government threw the president of Basra’s Iraqi Teachers Union in jail. According to Nasser al-Hussain, an executive board member, the government seeks to establish control over an organization it views as far too independent. In recent union elections, Maliki’s party tried to run a slate of officers who would be more politically reliable. "Key forces within the government are using a law inherited from Saddam’s era to try to control and split trade unions," Hussain says.

Unions began to reorganize as soon as Saddam Hussein’s regime fell, but they quickly found that Washington’s vision of democracy didn’t include their rights. After the 2003 invasion, occupation czar Paul Bremer decided to keep on the books Saddam’s Law 150, which bans public sector unions. Each succeeding Iraqi administration continued the prohibition. Despite the ban, unions grew so quickly and enjoyed such widespread support that they were often able to force ministries to concede benefits. But government hostility is unabated; in August the parliamentary committee that was considering a new labor law, which would have given unions legal status and the right to bargain, discarded the project.

Meanwhile, multinational corporations are racing into Basra’s oilfields. The Maliki government has signed contracts with eighteen companies, including ExxonMobil, Royal Dutch Shell, Italy’s Eni, Russia’s Gazprom and Lukoil, Malaysia’s Petronas and a partnership between BP and the Chinese National Petroleum Corporation (CNPC). American corporations won only two of eighteen contracts; even so, the US military has protected all field operations. Gen. Ray Odierno, who just retired as head of US forces in Iraq, told reporters in July that the United States would continue to provide security, using troops and private contractors. While suspicion of the Chinese and Russians may be endemic in Washington, US policy in Basra welcomes any oil giant. "That means CNPC and Lukoil," says Kenneth Thomas, who heads the US Embassy’s Provincial Reconstruction Team. "I don’t have a prohibition." Over the summer former US Ambassador Christopher Hill invited corporate executives and diplomats to the US base in Basra. According to the Iraq Oil Report, he offered to facilitate visas for foreign workers and to help them open secure bank accounts, which would ease the transfer of billions of dollars in deposits.

In September the Commerce Department organized a trade mission for US companies, including GE, Boeing, American Cargo Transport and twelve other engineering and transport firms. The Iraqi government is offering them $80 billion in contracts for projects, including ports and power plants. At the same time, it prohibits unions in those industries.

When questioned by reporters about the union bans, an official at the US Embassy, the world’s largest, said mildly, "We’re looking into it. We hope that everybody resolves their differences in an amicable way." The Obama White House has not spoken out, and the latest State Department report on human rights plays down the oppression of Iraqi unionists, calling their situation a "limited exercise of labor rights."

Juma’a, the oil union president, says, "The government doesn’t want workers to have rights, because it wants people to be weak and at the mercy of employers." Muhsin, the electrical union leader, believes blackouts and repression are designed to create an atmosphere of desperation. "If people are desperate enough, the government believes they’ll accept anything to get electricity, including privatization," she charges. "It knows we won’t accept that, so it wants to paralyze us so we can’t speak out."

"We are in danger," Muhsin warns. In response, U.S. Labor Against the War has worked with US Representatives Sam Farr, Phil Hare and Jan Schakowsky to circulate a "Dear Colleague" letter urging the Obama administration to protect the unions. American labor leaders, like AFL-CIO president Richard Trumka, have urged the Iraqi government to change course and have lobbied Washington to do more. Prohibitions or not, though, Iraqi unions say they will not be driven underground again, as they were for decades under Saddam.