18 November 1999
U.S. Will Continue to Carefully Check Oil-For-Food Contracts, Envoy Says
(UN reports on condition of humanitarian aid program) (1280) By Judy Aita Washington File United Nations Correspondent United Nations -- The United States will continue putting holds on Iraq's oil-for-food contracts until it is assured that the material is going to Iraqi civilians and money isn't going into the pockets of Iraqi officials, U.S. Ambassador Peter Burleigh said November 17. After a private Security Council briefing by the executive director of the UN's Iraq Program, Burleigh acknowledged that the United States was responsible for many of the Sanctions Committee "holds" placed on contracts in the oil-for-food program. Nevertheless, the ambassador, who is the deputy head of the U.S. delegation to the United Nations, pointed out that the UN has reported that the program has had an overall positive effect on the lives of the Iraqi civilians it is intended to help and U.S. questioning of some contracts is not the main reason for the majority of the administrative holdups. Talking with journalists after the meeting, Burleigh said the United States has put "several hundred contracts on hold ... for three basic reasons." First, the ambassador said, "more than 50 percent of holds are because the contracts lack full technical information from the government of Iraq and from the suppliers or contractors -- the applications themselves don't have enough information so we can make a reasoned decision." Second, the United States has "deep concerns about dual use items and the end use of certain equipment on the ground in Iraq once it arrives." When UN weapons inspectors were on the ground prior to December 1998, they were able to check that the equipment went for humanitarian purposes and not to the military or for weapons production, Burleigh pointed out. With the departure of the weapons experts, the problem "looms larger because we have no way of monitoring on the ground except for the occasional UN monitors from the humanitarian program," he said. The U.S. is discussing with the United Nations increasing the number of oil-for-food monitors in Iraq "as a stopgap measure" until the council agrees on a comprehensive resolution that would include reestablishing a serious disarmament agency on the ground in Iraq as the successor to UNSCOM, the ambassador said. One of the duties of the new disarmament agency "would be the same monitoring (as UNSCOM), thus relieving us of the responsibility and meeting our concerns that the dual use equipment is being used for the purposes stated," Burleigh said. Third, the United States has "problems with some companies which engage in what we consider to be illegal activities vis-a-vis illegal trading activities with the government of Iraq -- percentages paid to government and Iraqi officials," Burleigh said. When the United States has information on such activity it goes to the government of the country in which the company operates and explains why contracts from those companies are not going to be approved, the ambassador noted. "We are not going to approve contracts from those companies which are involved in corrupt practices that benefit Saddam Hussein and his immediate circle," Burleigh said. As the secretary general reported, Burleigh also pointed out, the oil-for food program "is doing very well" with "overall positive effects." "There are problems in some sectors," the ambassador said, "but for the reasons I mentioned earlier we are going to continue our holds policy until we are satisfied that nothing that has to do with weapons of mass destruction finds its way into Iraq." The United States has submitted a draft resolution that would continue the current oil-for-food program, allowing Iraq to sell $5,200 million in oil over the next six months to buy food, medicine and other humanitarian goods along with some agriculture, electrical, water, sanitation equipment and supplies as spelled out in a UN-approved plan. The resolution would also include the provision that if oil prices stay high and the cap will be breached by the end of the six-month period, the council would allow additional sales up to about $2,000 million to make up for past Iraqi shortages in earlier phases of the program. Included in the resolution would be a request for the UN to undertake a study and report back to the council by January 15, 2000, on Iraq's needs for electrical and oil industry equipment and spare parts above what is currently authorized in the oil-for-food regime. Burleigh said that the United States hoped that the resolution would be quickly adopted as a "technical and straightforward" one that would continue the humanitarian program that currently expires November 20. In the meantime, the council is continuing to labor over a comprehensive resolution that deals with sanctions, the elimination of Iraq's weapons of mass destruction and the organization that would replace the UN Special Commission overseeing the destruction of Iraq's weapons (UNSCOM). In his briefing to the Security Council November 17, the executive director of the Iraq program, Benon Sevan, said the program continues to have a positive impact. "The humanitarian situation in Iraq has improved considerably in those three years" and the range and quality of commodities en route as well as those awaiting distribution and utilization means that the potential impact of the program is greater still," Sevan said. But Sevan pointed to several problems that are keeping the program from achieving maximum impact on the well-being of Iraqi civilians. Those problems range from the holds placed on some contracts by the Security Council's Sanctions Committee to Baghdad's inability to deliver goods or submit applications for needed items. Not all the difficulties encountered in the effective implementation of the program can be attributed to holds placed on applications by the sanctions committee members, Sevan said. Iraq, the suppliers and their respective governments are also involved. Late submission of applications and on-going distribution and installation difficulties are serious. The UN is concerned that there are relatively few applications to import health supplies, oil industry spare parts, water and sanitation equipment, educational supplies and other items needed to rebuild Iraq's infrastructure, Sevan said. And as of November 10 health supply applications were only about 35 percent of what was planned for. Sevan also told the council that the UN needs more staff and resources to handle the paperwork and other processes as the program has grown. In phase III, for example, the UN processed about 1,000 applications for about 19,000 items, compared to about 2,100 applications for about 51,000 items in phase V. He said the UN expects that the current phase VI will involve about 3,000 applications for about 90,000 different items. While there are about $1,042 million of items on hold, assessing the impact of holds is complicated by the fact that the UN does not have a full picture of the resources available to Iraq outside the program, the executive director pointed out. There are $73 million in agriculture contracts on hold which the UN's Food and Agriculture Organization (FAO) estimated has caused significant reductions in the use of land for grain crops. In electrical power, of the $746.8 million of applications submitted, $377.7 million or 51 percent are on hold. According to UNDP, if the contracts were released the government in theory would be able to add 1,900 megawatts of power generating capacity. On the other hand, less than 30 percent of the health equipment that has arrived in Iraq has been distributed. While there is a slight improvement in the distribution of medicines, "serious management deficiencies remain," Sevan said. (The Washington File is a product of the Office of International Information Programs, U.S. Department of State.)
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