New Petroleum Contracts Producing more than Oil

Rajabi noted that the Cabinet made an executive decision that simply defines the general terms of a future contract to be signed between Iran and a foreign party. Rajabi said, “At this point, the general terms of the [Iran Petroleum Contract] are only an executive decision, and not an international agreement. Only the Court of Administrative Justice can stop it [the general terms of the Iran Petroleum Contract] from developing into a contract.”

Sahar Seyedipour, another lawyer based in Tehran, agrees with Rajabi. She told Al-Monitor that all government organizations must comply with Cabinet decisions. Of note, based on Articles 77 and 125 of the Iranian Constitution, international agreements require parliament’s approval. However, contracts in which one side is a government entity or company and the other side is a privately owned foreign company are not considered international contracts and are therefore not subject to Article 77.

Seyedipour told Al-Monitor, “Even if parliament’s Committee for the Evaluation of Government Acts’ Compliance with the Law rejects the general terms of the [Iran Petroleum Contract], this has informative rather than legal value.” But does this stop parliament from criticizing the Cabinet’s decision?

Ever since being passed by the Cabinet, the general terms of Iran Petroleum Contract have been under attack by the conservative-dominated parliament. Critics, who mostly belong to right-wing factions, argue that the general contract terms violate Articles 44 and 45 of the Iranian Constitution. Article 44 says that the state should be in charge of major industries and large mines, while Article 45 states that anfal — the collective property of the Muslim community, which includes mines — must be managed under the exclusive control of the Islamic leadership for the benefit of the public.

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