Toxic Air, Silent Funds: Where’s the Environmental Support in Kurdistan go?

Rebin Fattah

On a rough road stretching from the Degala district to the villages southwest of Koya district (70 km east of Erbil), hundreds of vehicles, including oil trucks, pass daily. These trucks carry oil extracted from the Taq Taq field in eastern Kurdistan Region of Iraq. Along both sides of the road, there are a few scattered trees and some houses. The residents suffer from clouds of smoke emitted by the oil fields, which pollute the air, soil, and even the water.

The region encompassing the Taq Taq oil field—the first investment project contracted by the Kurdistan Regional Government with a foreign company in 2002—continues to suffer from a lack of essential services and is almost entirely devoid of vegetation that could mitigate the environmental pollution. In recent years, local farmers have staged several protests in response to worsening environmental degradation and the depletion of vital water resources.

According to farmers, the continuous drilling of oil wells has severely affected natural water sources, including springs and irrigation channels, causing them to dry up. The few remaining sources have become saline, primarily due to the excessive use of chemicals, including inorganic salts, during oil extraction operations.

Farmer Shakrallah Hamad Amin said: “Large areas of farmland have become barren. The air we breathe is polluted, and the soil is no longer fertile. If this continues, crop production will cease entirely, and agriculture in the region will vanish.”

The depletion of water sources in villages near Taq Taq oil field, coupled with the government’s neglect of potable water projects, has forced residents to seek alternative solutions on their own. As a result, many have resorted to digging shallow wells known locally as “Bael” or “Syrian wells”, despite a formal ban imposed by the Kurdistan Regional Government.

Geological expert Ribaz Anwar warns of the serious risks associated with using such wells: “The water they provide is not safe for drinking. These wells are too shallow to reach groundwater and instead tap into surface-level water, which is likely to be contaminated. Moreover, they can damage the geological structure of the soil, which is why their construction is prohibited.”

He further emphasized that: “Relying on these types of wells exposes residents to significant health risks, particularly given that nearby oil operations dispose of their waste in primitive ways, leading to contamination of water sources—especially those close to the surface.”

Environmental Fund

The Kurdistan Regional Government (KRG) signed its first investment oil contract on July 17, 2002, with the company Genel Energy, targeting the development of the Taq Taq oil field.

In 2006 and the subsequent years—especially following the enactment of the Ministry of Natural Resources Law No. 21 of 2007 and the Kurdistan Oil and Gas Law No. 22 of 2007—the KRG signed over fifty production sharing contracts (PSCs) with international oil companies.

These oil contracts signed between the KRG and the oil companies included a specific clause, Article 23, which allocated funding for the Environmental Fund in Kurdistan. This article obligated the companies to pay an annual fee to support environmental initiatives.

The essence of this clause is repeated in most contracts, requiring companies to deposit USD 150,000 for each contract year during the initial production phase (exploration period), and USD 300,000 for each contract year during the development phase, into the Environmental Fund.

Environmental Obligations in Oil Contracts

Contracts for 42 oil fields in the Kurdistan Region, which this investigation is based on, require companies to pay an annual fee to support environmental initiatives.

This applies to contracts for the Tawke oil field signed with DNO in 2008, the Miran field signed in 2007, the Aqra-Bijeelfield, the Sernak field (signed with GKN in 2007), and the Atrush field with Sterling Energy.

However, despite the inclusion of environmental protection clauses in these oil contracts, emissions from oil fields, improper disposal of oil waste, soil degradation, and loss of vegetation cover at and around oil field sites overall indicate a failure to implement the spirit of the laws and contracts in a way that ensures environmental protection in the Kurdistan Region.

It is noted that in several contracts, the specified amounts for environmental support were reduced to $100,000 per year during exploration and $200,000 per year during development—such as the contract for the Shaikan oil field signed with Gulf Keystone Petroleum and its partners in 2007, and the contract for the Sangaw field with Sterling Energy in 2007.

In other contracts—such as those for the Rovi and Sarta fields, first signed on January 22, 2006, between the KRG and Reliance Exploration and Production DMCC—the amount was further reduced to $75,000 annually during initial exploration and $150,000 annually during development.

Other contracts, including those for the Mulla Omer and Shorish fields signed with OMV in 2007, mandate the same amounts: $75,000 annually for the exploration phase and $150,000 annually for the development phase.

In the case of the Binabawi field contract signed in 2007 between the KRG and AT Petroleum and Erbil Energy, and the Shaql oil field contract signed on February 25, 2007, with Pet Oil and TriLax, environmental support fees were initially set at $50,000 per year during exploration and $75,000 per year during development. However, after the contract was amended in 2008, these amounts were increased to $150,000 and $300,000 per year, respectively.

Despite all these allocations, the environmental situation in the oil field areas of the Kurdistan Region remains concerning and does not meet good environmental standards. Many of these locations have not seen effective environmental support projects.

Within the Birmam and Binabawi oil fields, located 35 kilometers from central Erbil, villagers have held several protests in recent years against the practices of oil companies and their neglect of environmental measures. But as Mohsen Kanabi, a local farmer, says: “Those protests were in vain.”

He adds: “It’s not only the absence of environmentally supportive projects by oil companies, but also that many orchards and farmlands have been damaged by company activities, and agricultural yields have declined as a direct result of the harm caused.”

Where Do the Environmental Allocations Go?

Returning to the Taq Taq oil field in southeastern Erbil, the villagers near the site currently rely on the Bail wells for agriculture and drinking water—despite the poor water quality. They hope the completion of the Gomaspan Dam, whose construction began years ago, will help resolve the water shortage in their area.

According to farmers, the dam represents the key solution to the problem of water scarcity and pollution. No one expects the operating oil company to implement projects that would save the region’s environment from further degradation or revive the damaged lands. This raises a natural question: “Where do the oil funds allocated for the environment go?”

When reviewing the Taq Taq oil contract, it becomes clear that in 2008—while the field was in the development phase—the company was directly obligated to pay $300,000 annually.

Reviewing various contracts reveals that the total amount is generally set at $150,000 per year during the exploration phase and $300,000 per year during development.

With more than 40 oil fields under investment, and assuming the minimum amount collected from each company is $150,000, the oil companies operating in the region were obligated to pay over $6 million annually to the Kurdistan Regional Government “to support the environment” since 2006. Yet, on the ground, residents have not seen effective environmental support projects, nor significant improvements in local infrastructure or services in those areas.

Environmental and Health Deterioration

Many environmental experts and specialists we contacted say that the growth of oil and gas industry-related activities in Kurdistan has led to a deterioration in the region’s environmental and health situation. They documented high levels of air, soil, and water pollution, which they attribute to oil activities, whether during the production phase or during the refining phase and other oil-related operations, including the production of derivatives such as generator fuel and gasoline.

Air pollution in Erbil, the capital of the Kurdistan Region, is one of the most pressing issues of public concern in recent years. The city’s sky is constantly covered in a layer of gray and brown, with the situation worsening in the neighborhoods located in the city center and its western side.

Officials, activists, and specialists attribute the cause to the operation of primitive refineries and oil facilities (some of which were unlicensed and were shut down in February and March 2025), along with numerous oil fields and projects west of the city, including the Khurmala and Erbil oil fields.

The critical environmental situation, announced periodically by environmental monitoring reports, coincides with a decline in the percentage of green spaces and vegetation cover in the city. This is despite officials from the Environmental Protection Agency and relevant government agencies stating that the percentage of green spaces in Erbil has reached 19.5%, while the global standard for green spaces in cities is 15%.

Environmental monitoring organizations deny the accuracy of the announced official percentage, as areas covered by grass and some flowers are included in this percentage, while the global standard includes only areas covered by trees. In this regard, according to data from the Hasar Foundation, which works in the environmental field, the green space in Erbil is only 2.07%.

The current environmental situation has serious implications for the health of citizens in the Kurdistan Region. One of its implications is the documented annual increase in cancer cases, which exceeds the natural population growth rate. This increase is alarming, according to specialists, despite the fact that the Ministry of Health in the region confirms in its data that the cancer incidence rate remains lower than the international average.

Specialist physician Khalis Qadir says that according to international standards, there are (190) cancer patients per 100,000 people annually, while in the Kurdistan Region, (151) cancer patients per 100,000 people are registered annually.

He adds, “But the problem is that cancer incidence rates in the Kurdistan Region are increasing rapidly.” He gives an example of this: “According to statistics for 2016 and 2017, the annual rate of cancer patient registrations in the region per 100,000 people was less than (100) people. However, in the last two years (2024 and 2025), the rate has risen to (151) cases per 100,000 people.”

He therefore expects that cancer incidence rates in Kurdistan will exceed the current global rate of (190) cancer patients per 100,000 people annually in the coming years.

Missing Funds!

The Kurdistan Region Environmental Protection and Improvement Board (KREB) is a government organization tasked with granting approvals for various projects, monitoring the compliance of implementing companies with environmental protection requirements, assessing the environmental impacts of various projects, and subsequently rejecting licenses for violating projects and imposing penalties on companies that do not comply with environmental regulations.

Razzaq Khilani, who served as the board’s technical director for many years before retiring in early 2025, commented on the funds allocated to environmental support within oil projects: “We know that there are funds allocated for environmental support that were received from oil companies, but we have no information about the amount of the funds or how they were spent.”

Khilani added that the board investigated the funds received from oil companies under the name of environmental support and concluded that these funds were deposited in a special bank account, “but we do not know how they were spent, and we have not received a single cent of these funds.”

The Environmental Protection and Improvement Authority itself has an environmental fund, whose revenues come from government allocations, subsidies, grants, fees, and fines imposed on companies and projects that violate the environment. This is in addition to the environmental fund established during oil operations in accordance with oil laws and contracts.

However, Khilani says, “The government has not allocated any financial allocations to the environmental fund. The revenues come from leasing, fees, and fines imposed on companies that violate environmental laws.”

He reveals that the Kurdistan Region’s Environment Authority “not only has not received the environmental support funds allocated by the oil companies, but it also lacks the authority to use and spend the funds in its own environmental fund. It also has no information about how the government is spending these funds.”

Khilani estimates the funds in the authority’s fund at more than one billion dinars, emphasizing, “We have not withdrawn a single dinar from it. We have no authority to use or spend these funds.”

Accordingly, the Environment Authority does not know the fate of the environmental support funds from oil contracts, nor does it know whether the government has spent the Environment Fund’s funds or not. Since the Authority’s establishment in 2008, it has been unable to withdraw any funds from its bank account.

The media director explains that there is a legal issue with the authority to spend the funds, related to the Environment Authority Law: “We drafted the amendment bill in 2015, but due to political disputes that led to the Speaker of Parliament being prevented from entering the parliament building, work was suspended and the project remained as is.” The law Khilani referred to is the Environmental Protection and Improvement Law, which was enacted in 2008. More than 18 years later, it has failed to address the issue of how environmental revenues are used or managed. There appears to be no serious effort to resolve the issue, especially since the Kurdistan Parliament has been inactive for more than two years and has not held its sessions since the last parliamentary elections in October 2024. The former spokesperson for the Environmental Protection and Improvement Authority also denies any knowledge of any environmental project being implemented by the Ministry of Natural Resources: “They did not inform us of any project, and they did not consult with the Environment Authority at all.”

No environmental projects have been implemented

Although oil companies are required to pay an annual sum of money under the name of environmental support, since the establishment of the Ministry of Natural Resources in the Kurdistan Regional Government in 2006, no environmental projects have been implemented using Environmental Fund funds.

Those contacted denied any knowledge of any environmental support projects implemented using Environmental Fund funds. Since its establishment in 2006, the Ministry of Natural Resources in the Kurdistan Regional Government has not provided any clarification regarding these funds or how they are spent.

For its part, the Ronpin Organization for Transparency in Oil Operations, which publishes monitoring and evaluation reports on oil and gas operations in the Kurdistan Region, confirms the “lack of transparency regarding Environmental Fund funds.”

Dr. Yadgar Siddiq, an oil expert and head of the organization, says, “There is only information indicating that companies are obligated under the Oil Law and oil contracts to pay for environmental support costs and compensation for environmental damage caused by oil operations.” He adds, “There is no information proving that the funds collected were spent on environmental protection.”

From 2014 to 2023, before its work was completely suspended, the Kurdistan Parliament experienced exceptional circumstances amid the war with ISIS and the sharp political disagreements between the main forces represented within it. No budget law has been passed since 2013, creating further uncertainty regarding overall revenues and expenditures, including oil revenues.

Social Responsibility Projects

Some companies operating in the oil and gas sector in the Kurdistan Region have undertaken environmental projects within the scope of their licenses or within the boundaries of their activities, under what is known as “corporate social responsibility allocations.” These are unrelated to the Environment Fund and environmental support allocations.

Statements from the Ministry of Natural Resources also confirm that oil companies are required to donate funds to support the environment. Other obligations stipulated in contracts include prohibiting environmental damage during pipeline construction and canceling or handing over the contract area in accordance with international standards.

However, the parties we contacted were unable to confirm the companies’ compliance with the Ministry of Natural Resources’ international requirements and standards for preventing pollution, protecting the environment, and preventing environmental degradation.

On the ground, the issue appears different. In the framework of a project to monitor the commitment of oil companies in the Kurdistan Region to the principles of social responsibility, including the principle of environmental protection, two organizations, one local and the other international, (the Iraqi Al-Masala and the Norwegian NPI) in 2013, concluded that the oil companies in the Shaqlawa-Harir oil block, during the exploration and search phase for oil, destroyed no less than (7,000) trees and damaged about (14,000) other trees.

After uncovering this environmental damage, the American company Hessy began establishing the “Kasnazan Forest Area” east of Erbil, as a contribution to environmental support or to compensate for the environmental damage it caused. However, any spending in this area is not linked to the environmental support funds required of oil companies, as their contracts require them to pay the funds to the government.

he Ministry of Natural Resources cites on its website only two environmental activities carried out by oil companies: Talisman Energy, which has collected nearly one million plastic drinking bottles at its operations since July 2012, and Marathon Oil, which helped provide drinking water to villagers by drilling a water well in the village of Pistana and formed teams to collect waste from neighboring villages in the company’s operating area in Harir District (70 km northeast of Erbil).

The ministry noted that Marathon Oil is improving the city’s environment through a tree planting program.

The ministry also notes that the operator of the Taq Taq oil field (TT OPCO) collects waste from villages in the area.

However, these activities are very limited compared to the environmental impacts of the oil industry and are not related to the funds allocated for environmental support, which is another responsibility of oil companies according to the contracts they have signed.

Environmental Monitoring of Oil Fields

Located 30 km southwest of Erbil, Khormala is one of the largest oil-producing fields in the Kurdistan Region. This area is considered the most environmentally affected in the region. It is almost devoid of vegetation, and has become a barren landscape, home to dozens of unlicensed and polluting oil refineries and facilities.

In mid-April 2025, local officials in Erbil announced the closure of 59 polluting refineries in Erbil, following a government decision to close unlicensed oil facilities and those that violate environmental standards. They emphasized that the remaining refineries must adhere to the environmental guidelines issued in 2020 or they will also be closed.

However, activists monitoring the operation of these refineries fear that the closure will be temporary and limited, and that most of these refineries will resume operations after a period of time, as has happened several times over the past ten years. On the ground, after several years of oil projects and their cumulative negative impacts, the Ministry of Natural Resources issued, for the first time, Directive No. 1 of 2015 regarding the assessment of the environmental impacts of oil operations in Kurdistan. The directive required oil companies to submit reports on environmental impact assessments of oil activities, but the contents of those reports have not yet been disclosed.

For its part, the Environment Authority issued a number of instructions regarding monitoring environmental elements and preventing and combating environmental violations. These instructions include Directive No. 2 for the Protection and Maintenance of Air of 2021 and Directive No. 2 for the Tracking and Prevention of Environmental Violations of 2023.

However, none of the instructions mention monitoring oil exploration and production operations, instead focusing on oil refineries, generators, agricultural projects, and municipalities.

Various sources we contacted, including environmental and journalistic sources, also confirmed that the lands surrounding the oil fields are cordoned off by government security forces and private security company personnel. Access to these fields is inaccessible to the media, and journalists and media outlets are prohibited from approaching their borders.