REPORT OF THE
SECRETARY-GENERAL
PURSUANT TO PARAGRAPH 5
OF SECURITY COUNCIL RESOLUTION 1302 (2000) OF
8 JUNE 2000
S/2000/857
Introductory statement by
Benon V. Sevan
Executive
Director of the Iraq Programme
at the informal
consultations of the Security Council
Thursday, 21
September 2000
I have the honour to introduce the report of the Secretary-General,
contained in document S/2000/857, submitted to the Council pursuant to paragraph
5 of resolution 1302 (2000). In
making this statement to the Council, I am taking into account also the very
extensive and frank discussions I held during my recent visit to Iraq from 1 to
16 August, with the Vice President of Iraq, H.E. Taha Yasin Ramadan, and all the
Ministers concerned as well as the local authorities in the three northern
governorates of Dahuk, Erbil and Suleimaniyah, including H.E. Mr. Barzani and
H.E. Mr.Talabani. I also had extensive meetings with all my United Nations
colleagues in Iraq, and met with the representatives of the non-governmental
organizations operating in Iraq. In addition, I met with the diplomatic corps in
Baghdad and also briefed them prior to my departure.
I co-chaired with the Minister of Trade an informal meeting of the Joint
Consultative Committee, composed of all representatives of the UN agencies and
programmes and the representatives of all the Ministries involved in the
implementation of the humanitarian programme.
Overall, I believe my visit was good and we reviewed a number of matters
and resolved some of the problems faced in the implementation of the
programme.
Revenue
As at 15 September 2000, the cumulative total proceeds received for the
programme were $32,339,217,120. The
proceeds have been distributed, pursuant to relevant resolutions of the Security
Council, as follows:
ESB (53 per cent account) for
central/southern Iraq
$16,718,071,803
ESC (13 per cent account) for the
three northern governorates
$4,046,127,331
ESD (2.2 per cent account) for
administrative and operational costs $689,397,850
ESE (UNSCOM/UNMOVIC)
$233,741,665
CWA (Compensation
Commission)
$9,653,446,127
RWA (Security Council resolution
778) Escrow Account
$119,500,828
(suspended during phases VII and VIII)
ESF (Transportation costs in
Turkey)
$878,931,516
As indicated in paragraph 10 of the report before you, on 28 July 2000,
the Security Council Committee was informed that $52 million in unencumbered
funds in the ESD (2.2 per cent) account was available for a decision by the
Security Council Committee established by resolution 661 (1990) as to its
possible use and allocation. An
early decision by the Committee would be of significant assistance.
Based on the current price of oil, it is estimated that the revenues
earned by oil exports during phase VIII will reach about $10 billion, which,
after deductions pursuant to paragraph 8 of resolution 986 (1995) and other
relevant resolutions of the Council, would make about $6.6 billion available for
the implementation and operation of the programme.
Under phase
VIII, the total value of applications received by the Office of the Iraq
Programme, under the 53 per cent account, was about $1 billion, as at 18
September 2000.
The figures carry a clear message. It is essential for the Government of
Iraq to proceed most expeditiously in contracting the supplies and equipment
required, as indicated in the distribution plan.
Oil spare parts and
equipment – paragraph 18 of resolution 1284 (1999)
I am pleased to inform the Council that the group of experts appointed
pursuant to paragraph 18 of resolution 1284 (1999), that is to say the oil
industry group, has been functioning well. As at 18 September 2000, the group
had approved 46 applications for phase VII projects, with a total value of $33.9
million. These come of course from the approved list of spare parts and
equipment, pursuant to paragraph 18 of resolution 1284 (1999). Applications including items not covered
under the approved list are submitted to the Security Council Committee for
approval, as was the case under previous procedures.
This modest success in a crucial sector is important. However, I very much regret to inform
the Council that the Security Council Committee is taking too long in its review
of the draft lists of items submitted for phase VIII by the Office of the Iraq
Programme. The list was submitted
to the Committee on 8 August and has still not been approved. We had a long delay also in the approval
of the list during phase VII.
This is puzzling – we now face a situation where procedures meant to
expedite approvals are now causing further delays in their approval. This has to be corrected and I appeal to
all concerned to redouble their efforts in responding to the draft proposals
submitted by the Secretariat to the Committee.
Despite the continued commendable efforts by the Iraqi authorities to increase
their production and export of oil, under very difficult conditions without the
supply of spare parts, I fear the current volume of production and export levels
are not sustainable, unless the necessary spare parts and equipment are
delivered. In previous reports, the
Secretary-General has noted that Iraq is producing and exporting oil at the
expense of the future, by destroying oil fields, some irreparably. So far, fortunately, there has been no
disastrous accident – but that is no basis for complacency.
Mr. President,
I would like to draw the Council’s attention to something that appears difficult
to explain. The Council last year doubled the allocation for oil spare parts and
equipment. This was most welcome for the sector that is the lifeline of the
humanitarian programme. However,
that was the end of the good news – we continue to experience serious delays and
the number of holds placed on applications has become unacceptably high.
On the one hand, everyone is calling on
OPEC to increase the export of oil. On the other hand, the spare parts and equipment that are the minimum
requirements of Iraq’s oil industry, have been facing serious obstacles in the
Security Council Committee.
The Office of the Iraq Programme has provided the Committee on a regular
basis with all the information requested. We have arranged special briefings for the Committee by our oil
experts. I do hope that all
concerned will review further all the applications placed on hold and expedite
their release. We have in place a
very good monitoring mechanism that has been working well. If the Committee wishes to have specific
monitoring of specific items, we are prepared to monitor such items
accordingly. To do that, we first
need the supplies to be in Iraq.
Paragraph 17 of resolution
1284 (1999)
Since the endorsement of the accelerated procedures for the approval of
contracts for humanitarian supplies, beginning late February this year, the
Office of the Iraq Programme, has processed, as at 18 September, 762
applications, worth $1.792 billion, which represents 13.6 per cent of all
approved or notified humanitarian applications since the implementation of the
notification procedures. These were
for items on the list approved by the Committee, pursuant to paragraph 17 of
resolution 1284 (1999), in the agriculture, education, food and health sectors,
as well as in the water and sanitation sector under paragraph 8 0f resolution
1302 (2000).
In view of the positive results gained in the implementation of paragraph
17 of resolution 1284 (1999), the Secretary-General has strongly urged the
expansion and extension of the lists and procedures involved to all remaining
sectors in the distribution plan. I
should like to appeal to the Council to respond positively to the recommendation
of the Secretary-General, contained in paragraph 47 of his report.
Observation mechanism
regarding humanitarian supplies
In the previous report of the Secretary-General, contained in document
S/2000/520 of 1 June 2000, the Council was informed of the details of the
measures to improve the United Nations observation process. I am pleased to inform you that those
measures were put into effect, effective 20 July this year.
I am also pleased to inform you that during my recent visit to Iraq,
agreement was reached to increase the number of observers from 151 to 158,
excluding the number of monitors for oil spare parts and equipment. I should like to provide you with
some clarifications regarding the numbers of observers because some of you are
of the view that the numbers should be higher.
My colleagues and I, including the representatives of the agencies and
programmes concerned in the field, are satisfied that with 158 observers, we
will be able to carry out effective observation of the utilization of the
supplies and equipment arriving in Iraq under the humanitarian programme. We
have reorganized the observation mechanism and have improved the management of
that mechanism. We will ensure that there will always be 158 observers in Iraq,
irrespective of annual leave and occasional recuperation break
entitlements. We have also decided
that those who are counted as observers, do in fact act as observers. There is a special effort under way
right now to fill all the vacancies as soon as possible.
The new arrangements will be kept under constant review and adjustments
will be made whenever needed.
Holds placed on
applications
I am sure some of you will now tell me: “Benon, come on, not again, you
sound like a broken record!” Well, so be it. As the Executive Director of the
Iraq Programme, I feel duty bound to draw the attention of the Council to the
unacceptably high level of holds placed on applications. Just as playing a broken record hurts
the ear, every hold placed on an application for an essential supply affects the
implementation of the programme, or to put it another way, it hurts the Iraqi
people.
Mr. President,
The increasing number of holds has become a major concern for the
Secretary-General who has been following very closely the progress in our
efforts to reduce the number and value of holds. As stated in paragraph 46 of
the report before you, in many sectors, infrastructure remains heavily
incapacitated despite the ordering by the Government of Iraq of essential
inputs. Complementary items have
frequently been kept on hold long after the central items with which they were
intended to be used have been delivered. Thus many key supplies and equipment essential to all sectors remain
either on hold by the Committee or in effect on hold in an Iraqi warehouse,
waiting for the arrival of a complementary item.
Despite the commendable efforts made since the end of last April to bring
about a reduction in the number of contracts on hold, I regret to say that the
total value of holds, which had dropped to $1.6 billion, as at 31 May, has now
reached yet again, $1.982 billion, or just under $2 billion, as at 18 September,
involving 1,172 applications. Of
these, 503 applications, worth $266 million, were for oil spare parts and
equipment.
The figures just quoted represent 13.44 per cent of the value of all
circulated applications, as compared to 10.6 per cent, as at 30 June. In brief,
there has been a net increase in the volume and value of the holds both in
relative and absolute terms. As you
will note from the additional information on holds, provided in the annexes
attached to the text of my statement, there are many reasons for placing
applications on hold. Increasingly,
we have been facing a new situation whereby even when experts from UNMOVIC do
not consider that items are on the 1051 list, some members insist that the items
concerned are covered or should have been covered under resolution 1051
(1996).
Mr. President,
We should not be complacent by citing that the total value of
applications placed on hold represents only about 10 to 14 per cent of the value
of all applications circulated. It
is neither the size nor the value of the items placed on hold that determine
their relative value for the implementation of a project. What is the use, for example, if
approval is given for the purchase of a very expensive truck and the application
for the purchase of its ignition key is placed on hold?
The level of holds remains unacceptably high in the transport and
telecommunications sector, and the electricity and education sectors, which now
stand, respectively, at 46, 36 and 20 per cent of all applications circulated in
those sectors.
I should like to appeal to all concerned, to redouble their efforts in
expediting the approval of applications and to further review all holds placed
on applications. We are prepared to
carry out all the observation/monitoring you require.
The Office of the Iraq Programme will shortly launch a new effort to bring down
the level of holds, by giving more specific and detailed information on each
hold, in each of the sectors concerned.
I should like to state in no uncertain terms that holds, as large a
detriment as they are, they are not the only problem we face in the effective
implementation of the programme. As
indicated from the relevant table annexed to the text of my statement, the
Office of the Iraq Programme has about $1.163 billion worth of applications
still waiting for additional information prior to circulation. I therefore appeal to the Government of
Iraq and the permanent and observer missions of the suppliers concerned, to
respond promptly to all requests for additional information and to refrain from
submitting incomplete applications.
As I stated earlier, while we have passed the mid-point of the current
phase, the total value of applications received thus far is only about $1
billion. It is essential that the
Government of Iraq ensures the timely contracting of all the supplies and
equipment required, in sufficient quantities, in order to have such supplies
arrive in Iraq as urgently as possible. In light of the serious difficulties experienced with some of its
contractors, it is also essential for the Government of Iraq to be more
selective in choosing its suppliers in order to avoid the arrival of defective
supplies. Far too many defective
supplies are arriving in Iraq. The
choice of the contractor, however, remains with the Government of Iraq. The UN
has no role in their selection.
Letters of Credit
In April of this year, the Office of the Iraq Programme was alerted to
the emergence of a large backlog in the issuance of Letters of Credit (LCs) by
the bank holding the United Nations Iraq escrow account. Thanks to the measures taken by the UN
Treasurer and the bank, the backlog has now been significantly reduced. As at 14 September 2000, there were only
74 approved applications for which the bank was awaiting clarifications from the
Central Bank of Iraq (CBI) to issue the LCs. There were an additional 389
applications awaiting issuance of LCs, pending receipt of instructions by the
bank from CBI. It should be noted,
however, that most of these applications have been approved very recently. At present, there are only 20 approved
applications from phases IV and V, for which no LCs have been issued, due to the
absence of instruction from the CBI. We have asked the Iraqi authorities whether they still wish to act on the
related contracts.
I am pleased to inform you that following my discussions held in Iraq on
the need to reduce the lead-time for issuance of instructions by CBI, the UN
Treasurer has now noted a significant improvement in that regard. The Government has also decided to send
a high official from the CBI to New York for a period of six months, to work
together with us in resolving all matters concerning banking.
Commercial protection for
the Government of Iraq
I should like to refer to previous exchanges with the Security Council
Committee, regarding the payment mechanism under the ESB (53 per cent) account,
and, in particular, to the paper submitted by the Office of the Iraq Programme
to the Committee, on 7 July 1999, contained in document S/AC.25/1999/CN/31. Furthermore, it may be recalled that the
Secretary-General, in paragraph 208 (e) of his report of 10 March 2000
(S/2000/208), and in paragraph 111 of his report of 1 June 2000 (S/2000/520),
drew the attention of the Council to the importance attached to meeting the
legitimate need to provide commercial protection for purchases made from the ESB
(53 per cent) account.
Unfortunately, however, up until now the Committee has not taken action on any
such arrangement, and applications containing these payment mechanisms have been
approved only after these payments mechanisms have been removed.
I very much doubt that any member of this Council or any Council,
Commission, Committee or an Organization, let alone any business establishment
or an individual, would enter into a contract with a supplier without there
being clear commercial protection against the shipment of supplies and equipment
which may be found to be defective, malfunctioning or not in compliance with the
terms of the contract.
The contracts signed by the Government of Iraq, however, contain no such
provisions. In the present contracts there are no provisions for performance
bonds, despite the size, technical complexity and the value of contracts. In
brief, commercial protection for Iraq is seriously lacking. As a result, much is arriving in Iraq,
defective or non-compliant with the terms of contracts. At present, there is no penalty against
a supplier who does not meet the terms of a contract. He is paid once it is
certified that the supplies have crossed the border into Iraq.
These are all legitimate concerns and I should like to make an urgent
appeal through the Council to the Committee members to reconsider this very
important matter. The Office of the Iraq Programme is ready to assist the
Committee in that regard.
Reimbursement from the ESC
(13 per cent) account to the ESB (53 per cent) account
Another proposal submitted by the Office of the Iraq Programme to the
Security Council in February 1999, concerning reimbursement from the 13 per cent
account to the 53 per cent account, has yet to be acted upon by the
Committee. As at 18 September, $145
million allocated for food and $110 million allocated for medicine, have not
been reimbursed from the 13 per cent to the 53 per cent account, pending
delivery of the supplies to the three governorates in the north.
Given that the Committee has had OIP’s proposal before it for almost 18
months, it is time for the Committee to consider and act on the proposal we have
submitted.
Implementation of the
humanitarian programme
Mr. President,
There is nothing theoretical about the United Nations’ concerns on the issue of
holds. This is particularly true
when we look at those sectors that affect all other sectors – namely,
electricity, transport and communications, as well as water and sanitation.
Electricity in particular is a major
concern – not only is the supply of electricity insufficient, it is precarious,
as seen with the recent fire in the transmission lines at the Mussaiyab Power
Station, which resulted in the loss of 600 MW. This increased power outages in Baghdad
to eight hours a day and up to 20 hours in other affected governorates. The entire electricity grid is in a
precarious state and is in imminent danger of collapsing altogether should
another incident of this type occur.
In Baghdad last month I had a meeting
with the Commissioner for Electricity. After five minutes, the lights went
off. When he tried to telephone to
find out what had happened, the phone was not working. So we had an hour’s meeting in the
dark. I assure you it was not
staged. There was no need, because I have experienced the outages and the
frustrations of trying to telephone in Baghdad. Besides, I have met with him several
times while the lights were on. The
system simply does not function. There is an urgent and genuine need to act on the requests for supplies
and equipment for these sectors.
With such a high volume of supplies and
equipment arriving in Iraq under the programme, it is essential to provide the
necessary logistic facilities to move and store the supplies and equipment, as
well as to provide the necessary laboratory equipment for quality testing. I am very much concerned that, with
additional funding available, a heavy volume of supplies and equipment will
arrive in Iraq and there will be no means to transport them, let alone unload
them at the port – which itself is in dismal condition.
We will soon submit to the Security
Council Committee copies of WFP’s Mission Report on the Transport and Food
Handling Sector, a report on Water and Sanitation in the Northern Iraq as well
as a report on the electricity sector, prepared by experts sent by OIP. We will also arrange for the experts
concerned to brief the Security Council Committee. As soon as we hear from FAO, the
technical report prepared for the Government of Iraq by FAO, on the assessment
of the food and nutrition situation in Iraq will also be made available to the
Committee. I will also arrange for
FAO to brief the Committee.
I do hope
that the reports and briefings will provide a better understanding and
appreciation of the difficulties encountered and will expedite the approval of
applications as well as the flow of humanitarian supplies into Iraq. I also hope that the Government of Iraq
will take into full account the recommendations contained in the reports in
formulating their proposals as well as deciding on the supplies and equipment
required.
In the three governorates of Dahuk,
Erbil and Sulaymaniyah, where the United Nations implements the humanitarian
programme on behalf of the Government of Iraq, there has been positive impact on
the daily lives of the people. All
my interlocutors confirmed this assessment. I should like to quote what one of
the leading figures in the north has recently stated: “The United Nations ‘oil-for-food’
programme has had a positive impact on the quality of life in the region, and
through our close cooperation with the UN agencies, the programme has yielded
significant success.”
During my
recent visit to the region, together with the UN Humanitarian Coordinator in
Iraq, Mr. Tun Myat, and the representatives of the agencies and programmes, I
reviewed thoroughly the programme activities and we have taken the necessary
decisions to enhance further the rate of our implementation of the
programme. We will follow up our
review at the forthcoming interagency meeting to be held at Headquarters, under
the Chairmanship of the Deputy Secretary-General, with the participation of the
agency and programme representatives in Iraq, as well as the participation of
representatives from their respective headquarters.
It was also decided that to the maximum possible, we should utilize
national expertise in implementing the activities under the programme. We have also decided to emphasize and
strengthen training of national personnel within the context of the programme in
order to develop and further strengthen local capacity.
This would
also apply to our activities in the 15 governorates in the center/south of Iraq.
I regret to say that there has been too much emphasis in bringing expertise from
outside even when such expertise – at times even better - exists within the
country.
In brief, the humanitarian programme pursuant to resolution 986 (1995),
irrespective of the difficulties encountered and the criticisms from various
quarters, has provided substantial assistance towards meeting the pressing
humanitarian needs of the Iraqi people throughout Iraq.
Internally displaced
persons
A matter of great concern is of course the increasing numbers of
internally displaced persons, both due to the conflict among the various
factions in the north as well as those coming from the south. The existence of the large numbers of
internally displaced persons has been placing additional burden on the programme
and measures should be taken to resolve the matter urgently. I have impressed on the local
authorities in the north that they have to resolve their differences and allow
the internally displaced to return to their respective areas of residence. I also took up the matter with the
Government of Iraq. I was told that
those moving to the north were in fact non-residents. I have no way to check out whether that
is true or not. What I was told by
the internally displaced people who had recently arrived from Kirkuk and
Khanaghin, was that they were forced to leave their homes and move to the
north.
On my way back to Baghdad from Sulaymaniyah, I was confronted by hundreds
of displaced persons who were residing in the most abominable conditions at the
Kani Shaitan Camp. Accordingly, I
took the decision, in consultation with the local authorities and my agency
colleagues, to make available 150 houses - presently under construction at
Chamchamal town and to be completed by mid-October – to 220 families, the
internally displaced and presently residing at the Kani Shaitan Camp. The remaining houses at Chamchamal
housing project, involving a total of 240 houses, will also be made available to
the IDPs from the Kani Shaitan Camp which will then be closed. This, however, is not a solution as
there are so many more people who are internally displaced. It may be recalled that the number of
internally displaced at the outset of the programme was estimated to be about
500,000. Several thousands of
returnees from Iran are also living in very difficult conditions.
I therefore requested Mr. Tun Myat to establish an interagency working group the
review the situation and to come up with proposals to address their immediate
requirements, taking into account also the survey on this matter that is being
conducted by HABITAT, which should be completed soon. We will keep the Council and its
Committee informed on further measures taken.
NGOs
The non-governmental organizations working in Iraq, which have been
providing very valuable services to the Iraqi people, are facing an increasingly
difficult situation, in particular in funding their activities. With so high a level of revenues being
made available to the humanitarian programme under resolution 986 (1995), donors
are becoming reluctant to contribute funds to the work of the NGOs. Some NGOs feel that unless their funding
situation is improved, they may have no alternative but to curtail further their
activities. Some, in fact, told me, that they may have to stop their programmes
altogether.
I therefore appeal to all donors to continue to support the work of the
NGOs that are involved in areas not covered under the programme.
Closing remarks
Mr. President,
Recent developments concerning Iraq are a matter of serious concern. The growing tendency to politicize the
programme has indeed been affecting adversely the implementation of the
humanitarian programme. The programme has a distinct identity and should not be
confused with other United Nations activities related to Iraq. Accordingly, I would plead with all
concerned to avoid politicizing the humanitarian programme in order to allow us
to implement the programme efficiently for the benefit of the Iraqi people, an
objective set out in Security Council resolution 986 (1995).
On behalf of the Secretary-General, I should like to appeal to all Council
members as well as to the Government of Iraq, to take concerted action in
improving the implementation of this programme. Lifting the ceiling on oil
revenues and establishing procedures to expedite approval of applications were
important and welcome decisions. They will not make a difference, however, without also removing the
roadblocks that delay or prevent the purchase of key supplies and
equipment.
In taking whatever measures with respect
to this programme, it is of paramount importance not to lose sight of the human
dimension and fully bear in mind the humanitarian needs of the Iraqi people at
this very difficult period.
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