UN Concerned as Iraq Oil-for-Food Programme Nears End

Associated Press
October 30, 2003

With the UN's oil-for-food humanitarian programme set to end on Nov. 21, Security Council members have expressed concern about the fate of contracts and deliveries.

Benon Sevan, who runs the programme, told the council Tuesday that his office will continue "a smooth hand over" of remaining activities to the US-led coalition. But he said its wrap-up work has been hampered by a cutback in the UN's international staff after two bombings at the world body's headquarters in Baghdad. "Handing over a multibillion dollar programme of such complexity and magnitude during the six-month period" set by the council "would have been extremely difficult even under the best of circumstances," he said. "Doing so under current conditions of insecurity and reduced on-site staffing capacity will require a degree of realism, understanding and pragmatism, as well as flexibility from all parties involved."

The programme allowed the former Iraqi regime to sell unlimited quantities of oil, provided most of the money went to buy food, medicine and other humanitarian goods. It was adopted to help ordinary Iraqis cope with sanctions imposed after Iraq's 1990 invasion of Kuwait. Since the programme began in December 1996, Sevan said, about $65 billion worth of oil was exported, more than $46 billion was allocated to the oil-for-food operation, and more than $30 billion worth of goods were delivered to Iraq. Secretary General Kofi Annan suspended the programme in March on the eve of the US-led military campaign that toppled Saddam Hussein's regime and the Security Council voted on May 22 to lift sanctions and to eliminate the programme by Nov. 21.

Before the war, the programme was providing food for 90 per cent of Iraq's population and goods worth some $10 billion were in the delivery pipeline. As of this week, Sevan said, there was still more than $7.56 billion in the pipeline. Sevan said he didn't know how much money would be left in the oil-for-food escrow account when the program ends. The money is to be transferred to a development fund for Iraq's reconstruction controlled by the United States and Britain as occupying powers.

US Ambassador John Negroponte urged Annan to transfer at least $1 billion from the oil-for-food account to the reconstruction effort.

Sevan told the council that in Kurdish-controlled northern Iraq, where the United Nations ran the programme, he still planned to transfer over $3.5 billion worth of completed and ongoing projects to the coalition, including $1.5 billion worth of assets. In central and southern Iraq, the United Nations has determined that 3,154 approved and funded contracts worth $6.36 billion had been classified "to have relative utility" after the war, he said. So far, 1,653 contracts, just over 52 percent of the total, have been renegotiated to deal with postwar changes but UN agencies assured him the rest would be completed by a Nov. 3 deadline. He criticised the United States for not arranging to confirm the arrival of goods at the Iraqi port of Umm Qasr, despite agreeing on a method for doing so a month ago.

Germany's UN Ambassador Gunter Pleuger, who heads the Security Council committee monitoring sanctions against Iraq, called for Sevan's office to publish a list of contracts that won't be processed, and the criteria used to determine that they were not essential. France's UN Ambassador Jean-Marc de La Sabliere echoed the call for publication of a list and a reason for those contracts not deemed essential. Russia's UN Ambassador Sergey Lavrov requested detailed information on the reason why certain projects were not given priority status.

The council's resolution adopted in May setting the timetable for ending the programme said action on contracts determined to be "of questionable utility" would be delayed until Iraq has an internationally recognised government that can determine "whether such contracts shall be fulfilled."

More Articles on the Oil-for-Food Programme
More Information on Sanctions against Iraq
More Information on the Iraq Crisis

FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.