AAM: "It's going to change the nature of the whole environment for these security firms."

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Michael is in New York and talks to Kiran Chetry about the latest twists in the SOFA agreement -- according to Iraq's foreign minister, the immunity currently enjoyed by private security contractors will no longer be available to them.

KIRAN CHETRY: Welcome back to AMERICAN MORNING. New this morning, a security agreement between the U.S. and Iraqi forces is "almost finalized." That's according to Iraq's foreign minister. And as part of that deal, private security contractors in Iraq will no longer be immune to Iraqi prosecution. Immunity became a sticking point after a deadly shooting involving Blackwater contractors.

Joining me now with more on this, CNN Baghdad correspondent Michael Ware, who's actually here in New York for a change.


CHETRY: On a one-month reprieve, if you will.

About this agreement that they were struggling to hammer out, it looks like they're now nearing an agreement on this. What does it mean on the ground there?

WARE: What it's going to mean is that in the broader sense of this agreement the Iraqis are very much taking more and more control of the war. And come the end of the year, America's mandate from the U.N. to run this war ends.

Now, the role of private security firms is one of many issues involved in this agreement. And we heard from the Iraqi foreign minister that on this issue they may have made some headway. What it's going to mean is that any of these former American soldiers, Australian soldiers, British soldiers, who are now in these private security firms, when they're operating in Iraq as of next year they shall be liable to Iraqi law.

And there's very little that America can do about that in many ways. Legally, Iraq is a sovereign state. It does not want armed gunmen running around its country for whatever purpose and have no control over them.

So this is something that's going to be difficult for America to resist. But it's going to have significant implications for the firms who need to contract these security officers to protect what they're doing: infrastructure rebuilding, delivering aid, whatever it may be. It's going to change the nature of the whole environment for these security firms.

CHETRY: Well, I mean, you might be less likely to sign up if you fear that you...

WARE: Absolutely.

CHETRY: ... you could end up going the way of Saddam Hussein.

WARE: Absolutely. I mean, can you imagine your fate if you're thrust before an Iraqi court? What's the nature of the evidence? What's the onus of proof?

CHETRY: So what will we see? Will we see more Iraqis, perhaps, being contractors and security contractors? Will we see less American contractors there in these security roles?

WARE: Well, it's hard to say at this stage. I mean, certainly there's Iraqi security firms who would like to step up. But the question is, the western companies who are trying to go in there to do business, who are trying to get infrastructure contracts, who are trying to assist with government development, are they going to be happy with Iraqi security firms?

I mean, the police, the army, all the government institutions, they're infiltrated by the militias and the insurgents. So how is anyone going to trust a security firm?

CHETRY: Speaking of that, I want to ask you about, you talked about some of these firms getting in there and trying to help the Iraqis with their infrastructure. One big thing is these oil contracts.

WARE: Yes.

CHETRY: And there's been some controversy about the fact that many of these, at least short-term contracts are going to U.S. and European oil companies. What is the rub with that? What's going on?

WARE: Well, according to the Iraqi government line, these are just stop-gap measures. These are short-term contracts to just keep the oil infrastructure running. This is to repair and maintain. Now, the long-term contracts, which are much broader and would be the grand prize for these companies, are yet to happen.

The short-term contracts were awarded without bidding. Now, the full contracts are open to bids. There's 30-odd international companies -- Russian, Asian, all sorts -- who shall be entering that bidding process. However, you would have to imagine that anyone who gets one of these short-term contracts will at least have a foot in the door when it comes time to play for the main game. Which will be those big, long-term contracts.

CHETRY: All right. So, we'll have to wait and see. A couple of weeks away. They're supposed to be preparing their bids at this point. So, we'll see what happens with that. Great to see you, by the way, Michael.

WARE: It's great to be here, I can't tell you.

CHETRY: And I know you're here for a month and then you're headed back.

WARE: Yeah, well, it's always Iraq.

CHETRY: Thanks a lot, Michael.

WARE: Thank you, Kiran.

JOHN ROBERTS, CNN, ANCHOR: Welcome back, mate. Good to have you here.