START-UP PROBLEMS HAMPER "OIL-FOR-FOOD" PROGRAM
(U.N., U.S. officials hoping to ease delays for Iraqi aid) (1300)
By Judy Aita USIA United Nations Correspondent
17 March 1997
United Nations -- U.N. officials and diplomats have expressed concern in recent weeks about the start-up problems and the pace of the complex operation with Iraq known as "oil-for-food," especially the time lag between the initial flow of oil from Iraq and the actual delivery of foodstuffs to needy Iraq civilians.
In a written report to the Security Council, Secretary General Kofi Annan pointed out that the proceeds from the first oil sale in December -- $68.8 million -- were received in the special U.N./Iraq account in mid-January and it was not until February that the first letters of credit for the purchase of humanitarian goods were issued.
Food shipments are not expected in Iraq until some time in March. In addition, there has not been enough money to meet the start-up costs of the U.N. agencies that will be providing assistance and overseeing some distribution.
"It appears unlikely that all of the humanitarian goods in the distribution plan will be delivered and distributed within the initial 180 days established" by the Security council in resolution 986, the secretary general reported.
Annan, as well as the 15 members of the Security Council, expressed concern about the first 90 days of the so-called "oil-for-food" resolution (Security Council resolution 986) under which Iraq is allowed to sell $2,000 million of crude oil over six months under close U.N. supervision on a renewable basis in order to buy food, medicine and other humanitarian supplies for Iraqi civilians suffering the effect of the six-year-old economic embargo.
U.S. Ambassador Bill Richardson told journalists after a private council meeting on the problem March 13 that "we want 986 to succeed; we think it is very important."
But the U.S. ambassador added that "not all the bureaucratic delays are here in New York. There are bureaucratic delays in Iraq and it's our view that this humanitarian initiative go forward."
"We want to make sure that if 986 is to succeed then Iraq has to move forward and remove some bureaucratic obstacles," Richardson said.
Security Council President Zbigniew Wlosowicz said that "the council recognizes that the implementation of the resolution 986 is a complex and complicated operation. Members of the council are fully committed to the purpose of resolution 986 and encourage continued effective implementation by all the parties concerned."
"While welcoming smooth operation of the sale of Iraqi oil," Wlosowicz said, council members are concerned about the humanitarian aspect of implementation and "have expressed hope that with further efforts to facilitate implementation of resolution 986, humanitarian aid will be delivered to Iraq and distributed on an equitable basis and to all segments of the Iraqi population throughout the country as soon as possible."
A U.S. official pointed out that the "oil-for-food" operation "is the most complicated thing the council has ever given the U.N. to do."
"We all knew there would be bureaucratic problems, but there have been more than we expected," said the official who spoke on the condition of anonymity.
"There are a lot of technical problems -- some in the (Security Council Sanctions) committee, some in Baghdad. They've all got to be solved and knocked down one at a time and that's what everybody is working for," the official said.
The problems must be dealt with in a businesslike way, not handled with one "dramatic meeting or council resolution," the U.S. official said.
"A decision we don't understand is that (U.N.) Department of Humanitarian Affairs (DHA) expenses would be capped at 2.3 percent no matter how much they actually need to spend," the U.S. official said.
"As a result, DHA has not been getting the money it needs to get this program started -- to get people to Baghdad, to buy them cars, to buy them computers. They don't have the money they need and that has slowed everything else down, including approval of contracts."
Iraq decided to have a 30-day pricing contract, which means money doesn't get to the account until 30 days after it leaves the port. "That's standard industry practice but it's not the only standard industry practice; they could have had a 10 or 15-day pricing mechanism," the U.S. official also said.
The U.S. official said that U.N. officials and members of the Sanctions Committee "are showing a very cooperative attitude. We're keeping an open mind on equitable distribution to see if the Iraqis are going to do what they agreed to."
"I'm not accusing Iraq of deliberately delaying, but every single bureaucratic decision no matter how sensible it seems in isolation, has a cumulative effect on things down the line," the official said.
The U.S. official also criticized Iraqi officials for saying that they can't distribute any supplies until they have "in a warehouse 30 days worth of wheat, 30 days worth of rice, 30 days worth of soap, 30 days worth of cooking oil. ... There is no logical reason for that."
Such a distribution plan is not required by resolution 986, the official said. The resolution "says equitable distribution, but it does not say that on one day everything you hand out must be non-986 and the next day everything you hand out must be purchased with 986 (money)."
"This is one of the things that will slow down distribution if (Iraqi officials) don't adopt a more reasonable position," the U.S. official said.
The official also worried that Iraq might not allow U.N. officials the free access throughout the country that was agreed to last year.
As of March 3, some 52.3 million barrels of oil worth an estimated $1,070 million have been approved for sale, the secretary general said in his report. U.N. overseers are confident that in the remaining 90 days, Iraq will be able to export sufficient oil to generate the $2,000 million allowed by the Security Council.
The money has been distributed as follows: $322.6 million for the purchase of humanitarian supplies by Iraq; $79.1 million for the purchase of humanitarian supplies in the three Kurdish northern provinces by the U.N.; $182.6 million to the U.N. Compensation Fund; $13.4 million to the U.N. for resolution 986 operational expenses; $4.9 million for operational expenses of the U.N. Special Commission overseeing the destruction of Iraqi weapons; and $23 million for other related accounts called for by the council.
Oil was first loaded at Mina al-Bakr on December 15, 1996, and the first proceeds were deposited in the U.N. escrow account in the Banque Nationale de Paris on January 15, 1997. Fourteen U.N. monitors observed the oil loadings and transfer and reviewed a total of 38 contracts, 35 of which have been approved, the secretary general reported.
Of the 151 U.N. observers to be deployed, as of early March only 84 had been deployed, he said. The main constraint has been the "shortage of funds...in the escrow account for operational and administrative expenses."
A total of 267 applications for the export of humanitarian supplies has been received by the council's Sanctions Committee and 11 have been approved, he said.
The U.N. has also reported that about 85,000 tons of wheat is expected in Iraq by the end of March and another 100,000 tons are on the way with arrival dates through April. About 13,000 tons of Thai rice is now being loaded and expected to arrive at the end of April.
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