Major Dan Taylor denied wrongdoing and said he gave the order to crack down because looters kept returning to the sprawling compound outside Basra even after being kicked out, and that warning shots had little effect.
"We seemed to have an increasing number of looters in there. Nothing made any difference," Taylor testified on Friday during the soldiers' court-martial by a panel of seven officers at a British base in Germany.
Three soldiers from the Royal Regiment of Fusiliers under Taylor's command are accused of abusing detainees after being ordered to get tough on looters.
Defence lawyers argue that the three were following Taylor's orders and had unclear legal guidance on how to treat common criminals as the army shifted from war to a policing role.
Taylor denied the charges.
Taylor said he came up with a plan he dubbed Operation Ali Baba to deter stealing, mainly of food.
"I was going to talk to them, they were then going to be given some work to do, we would talk to them again, and they were then going to leave the complex," Taylor said.
"In this case they were not normal civilians, they were looters"
Major Dan Taylor
Taylor said British troops had even been asked by Iraqis working at the former state warehouse to shoot looters and that the troops felt responsible for making sure humanitarian aid was not stolen. He said he cleared his crackdown order with a superior officer who approved the proposal.
He said later he walked by as captives were working cleaning up garbage and saw no abuse. He said he did not believe his order was illegal at the time and let the Iraqis go after about one and a half hours.
"In this case, they were not normal civilians, they were looters," he said. "I didn't believe it was breaking any laws or regulations."
Abuse was shown in photos taken by a soldier who was arrested in England after bringing the film to be developed.
Some of the photos show a bound Iraqi being dangled over a loading dock by a forklift, and another showing two Iraqis stripped and forced to feign sexual acts together.
The abuse photos have provoked
widespread dismay in Britain
The pictures have provoked widespread dismay in Britain and uncomfortable comparisons with the scandal over abuse of Iraqi prisoners by US soldiers at the Abu Ghraib prison in Baghdad.
Lance Corporal Darren Larkin, 30, has pleaded guilty to one count of battery after prosecutors alleged he was the man shown in a photo standing with both feet on a tied-up Iraqi lying on the ground.
Larkin and Lance Corporal Mark Cooley, 25, denied all other charges.
Cooley is charged with tethering the detainee to the forklift and driving it. He also is charged with simulating a kick and a punch against the other detainee, seen in two separate photos.
Corporal Daniel Kenyon, 33, the highest-ranking defendant, is charged with several counts of failing to report abuse to superiors. He has pleaded not guilty.
Under tough questioning from Kenyon's lawyer, Taylor acknowledged that there was no explicit authority in army rules of engagement to punish looters in Iraq.
"This was Operation Mishmash, Operation Mismanagement," said lawyer Stephen Giret.
A Danish intelligence officer and four military police sergeants will stand trial for abuse of Iraqi prisoners at a Danish camp in southern Iraq, the Danish army said on Friday.
Reserve Captain Annemette Hommel and four soldiers could face up to one year in prison if found guilty of breaking military law during interrogations last year, the army said.
"This was Operation Mishmash, Operation Mismanagement"
Stephen Giret, lawyer
The abuse inquiry first made headlines in the Scandinavian nation last August and prompted Defence Minister Soren Gade to recall Danish military commanders from Iraq.
Unlike in the British case and the Abu Ghraib case, no images of the Danish abuse have surfaced and many people still support the centre-right government's backing of the US-led war.