Contractors Using Exploited, Cheap Labor to Support our Troops

By Robert Bauman
Follow the Money Project
June 14, 2007

First it was stories of overcharging, fraud, waste and abuse of taxpayer money in Iraq by contractors. Then there were stories of poor performance, unreliability, corporate bottom-line decisions tragically affecting some contractor employees. But now, thanks to the reporting of David Phinney, a freelance journalist, human trafficking of cheap labor from third world countries, for KBR and other contractors in Iraq, has now been revealed. In 2005, Phinney reported in CorpWatch that KBR, a division of Halliburton at the time, was importing thousands of cheap labor from impoverished south Asian countries such as Pakistan, Philippines, Nepal, Sri Lanka and India using “subcontractor” labor providers. These labor providers, based in the Middle East, such as First Kuwaiti and Prime Projects International, would also subcontract to “recruiters” in those countries thus creating many layers making it difficult, if not impossible, for the Pentagon to track the labor and billings that would flow up to KBR and then to the Army.

While American workers received $80,000 to $100,000 a year working for KBR in Iraq, these Third Country Nationals, known as TCNs, were only earning between $200 and $1000 a month doing much of the same work. Along with that, reports by former KBR employees and some soldiers, have disclosed these TCNs were working under terrible conditions – frequently sleeping in crowded trailers, waiting outside in line in 100 degree heat to eat “slop” while their American counterparts were sleeping in more comfortable housing and dining at the military dining facility. Reports from former employees have also disclosed that KBR is increasingly relying on TCNs apparently with the goal of comprising at least 80% of their labor force.

But the problem of poor working conditions is not the only issue facing TCNs. According to Phinney, allegations of workers being “recruited” under false pretenses, charging them “recruiting fees” that indebted the poorly paid workers, that they were going to work in Kuwait, then diverted to Iraq after their passports were confiscated so they could not leave resulting in forced labor – involuntary servitude.

Despite the complaints by many TCNs about the awful working conditions, the seizure of their passports, and being forced to work in Iraq since 2003, the reporting of Phinney, and complaints by returning American KBR employees and soldiers, it wasn’t until April 2006 that the Pentagon acknowledged the problem as a widespread practice and issued a directive to contractors to cease and desist in the practice of human trafficking and abuse. But that doesn’t seem to have had much of an effect. Phinney reported this month in IraqSlogger, more than a year after the directive, that the U.S. Justice Department is investigating human trafficking by First Kuwaiti used for the building of the U.S. Embassy in the Green Zone of Iraq.

Because of a lack of oversight on the part of the Pentagon over the LOGCAP contract since the war started in March 2003, many abuses of the contract have taken place and now human trafficking has become a part of it. It has taken the Pentagon three years to even start looking into the problem. Yet, First Kuwaiti has billed KBR contracts, an estimated $2 billion that would be passed on to the U.S. Government. Besides the mess the invasion and occupation has created in Iraq, due in large part to poor decision making, the contracting has also been equally a mess, again due to poor decision making, inadequate oversight, and general neglect of the problems by Pentagon officials despite constant information and complaints by our soldiers and former contractor employees alerting them to many contracting abuses and overcharging. We have seen constant denials of any problems with contractors by both the Pentagon and contractor officials. In the face of growing evidence to the contrary, it is almost laughable to hear officials make such denials. We as a country are better than this.