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Phase-VII "180-Day" Report Available

UN Secretary-General Kofi Annan's latest "180-Day Report" (S/2000/520) for
OFF Phase VII has been released
<>.  The Iraq Programme's
executive director, Benon Sevan, introduced the report to the Security
Council yesterday with the remarks below.


Introductory statement by Benon V. Sevan, Executive Director of the Iraq
Programme at the informal consultations of the Security Council Tuesday, 6
June 2000

I have the honour to introduce the report of the Secretary-General,
contained in document S/2000/520. At the outset, I should like to underline
the need to maintain the distinct identity of the humanitarian programme in
Iraq - as unique and different from all other United Nations activities
concerning Iraq. 

In any assessment of the programme and its implementation, we should examine
whether the programme is achieving its objectives, pursuant to the relevant
Security Council resolutions; how we can improve further the effective
implementation of the programme; and whether the United Nations Secretariat
and the agencies and programmes have been implementing the programme in full
compliance with the mandate given by the Security Council. As the
Secretary-General put it recently, we, as international civil servants, take
our "marching orders from the Security Council". 

I feel obliged to state this obvious fact, because lately there is a growing
tendency to politicize the programme, a development that may affect
adversely - and has already done so to some extent - the efficient
implementation of the programme. 


With the ceiling on revenues lifted under resolution 1284 (1999), Iraq has
been authorized to export unlimited amounts of oil and to import a wide
range of goods to meet the humanitarian needs of its population and to
rehabilitate its civilian infrastructure. 

It is estimated that the revenues earned by oil exports during phase VII
will reach $8.4 billion, which, after deductions pursuant to paragraph 8 of
resolution 986 (1995) and other relevant resolutions of the Council, would
make about $5.64 billion available for the implementation and operation of
the programme - as compared with the $1.32 billion made available for the
implementation of the programme at its start. As at 31 May 2000, the total
value of applications received by the Office of the Iraq Programme, under
phase VII, was $2,361,041,748.94. 

In addition to the funds available under phase VII, there are large sums
still available under previous phases, totaling over $2.3 billion. In this
connection, I should like to draw the attention of the Council to the
recommendation contained in paragraph 108 of the report of the
Secretary-General, to consider authorizing the Committee to review and
approve requests by the Office of the Iraq Programme for the use of funds in
excess of requirements in earlier phases to fund humanitarian supplies under
subsequent phases. For example, although phases I to III are closed, we
still have almost $25 million available for the purchase of humanitarian

Oil spare parts and equipment - paragraph 18 of resolution 1284 (1999)

For reasons elaborated in paragraph 104 of the report before you, the
Secretary-General recommends to the Council to consider a further addition
of $300 million to the allocation for oil spare parts and equipment for
phase VIII of the programme, bringing the total allocation for the phase to
$600 million. 

Now that the Security Council Committee has approved the procedures for the
implementation of paragraph 18 of resolution 1284(1999) and has also
endorsed the experts to serve on the group to approve applications for
contracts for oil spare parts and equipment, I should like to appeal to the
Committee members to review and approve expeditiously the lists of oil spare
parts and equipment, which was submitted by the Office of the Iraq Programme
on 1 June, in order to enable the group of experts to start their work no
later than 15 June.

Paragraph 17 of Council resolution 1284 (1999)        

I wish to thank the distinguished Chairman of the Security Council
Committee, His Excellency Peter van Walsum and the members of the Committee
for their expeditious and positive action also for the implementation of
paragraph 17 of resolution 1284 (1999). Since the endorsement of the
accelerated procedures for the approval of contracts for humanitarian
supplies, beginning late February, the Office of the Iraq Programme had
processed, as at 31 May, 433 contracts, with a total value of about $950
million, for items on the lists approved by the Committee, in the food,
health, education and agriculture sectors. In consultation with the United
Nations agencies and programmes and the Government of Iraq, the Office of
the Iraq Programme will soon submit to the Committee for its consideration
and approval, additional items to be included on the four lists already

In light of the positive results gained in the implementation of paragraph
17 of resolution 1284 (1999), the Council may wish to consider the
possibility to expand the application of the procedures under paragraph 17,
to additional sectors, to start with the water and sanitation sector. 

Observation mechanism                 

Whereas the core objectives of the United Nations observation mechanism as
set out in the relevant paragraphs of the MOU remain unchanged, the methods
and priorities of the observation mechanism have been kept under constant
review in order to meet the evolving information needs of the Security
Council Committee. On 25 April this year, I briefed the Committee and
submitted a paper on the developments and improvement of the observation
mechanism in Iraq, prepared by the Office of the Iraq Programme, in full
consultation with our colleagues in UNOHCI, and the United Nations agencies
and programmes participating in the implementation of the programme.

The constant review of the mechanism and its working methods is essential,
in light of the growing size and complexity of the programme. It should be
borne in mind that, since the second phase, the implementation of the
programme has involved concurrent implementation of activities approved
under multiple phases. In other words, the funding level for a given phase
does not necessarily reflect the magnitude and the scope of actual programme
implementation during that phase.

As a result of the increased scale and complexity of the programme, the
focus of observation has been shifting away from the distribution of food
and basic medicines - the so-called relief consumables - to observing inputs
related to infrastructure rehabilitation. As the quantity and complexity of
such infrastructure-related inputs increase, the United Nations will need to
field observers with the required skills and expertise, to meet the
Committee's information requirements, as well as to confirm that materials
and supplies are delivered to the predefined destination in accordance with
the distribution plans. The observers must ensure that the materials and
supplies are used for their intended purposes, and determine whether these
materials and supplies are adequate or necessary to meet the essential needs
of the Iraqi population. Paragraph 41 of the MOU makes provision for such

There is an ongoing debate among members of the Council and its Committee
whether the number of observers should be increased in light of the growth
and complexity of the programme. There are currently 151 observer posts in
Iraq. These include 63 geographical observers within the Geographical
Observation Unit (GOU), 13 multi-disciplinary observers with the
Multi-disciplinary Observation Unit (MDOU) and 75 agency and programme
sectoral observers. The number of observers was established in the Interim
Report of the Secretary-General (S/1996/978. para. 30), in accordance with
paragraph 42 of the MOU, which stipulates that "the exact number of such
personnel will be determined by the United Nations, taking into account the
practical requirements. The Government of Iraq will be consulted in this

Unfortunately, at present we have a significant number of posts for
observers vacant. While recognizing that there may be a need to increase the
numbers in the future, as necessary, for the time being our main objective
is to fill all the vacancies. We have been having difficulties in attracting
candidates for these posts, which are temporary in nature. I should like to
assure you, however, that we are fully committed to taking all steps
necessary to improve the efficiency of the United Nations observation
mechanism as set out in resolution 986 (1995) and the MOU, and to make all
the necessary improvements in order to address the concerns expressed by
members of the Security Council and the Committee. We are also fully
committed to improving and strengthening our good working relationship with
the Government of Iraq, in order to enhance the effective implementation of
the programme. To this end, we are discussing with the Government of Iraq
how the access of our observers to end-users and end-use facilities can be
improved. This includes the timely provision of escorts by the Government.
This is a concern, which has been referred to by the Secretary-General in
paragraph 113 of his report.

Holds placed on applications            

It is our sincere hope that the ongoing efforts to adapt the structure, and
to strengthen and focus the observation mechanism, will contribute to a
dramatic reduction in the number of applications placed on hold.

Further to the report of the Secretary-General contained in document
S/2000/208, the Office of the Iraq Programme has launched an intensive
campaign to have all holds placed on applications reviewed further by the
Security Council Committee. We have provided the Committee with detailed
information for each application placed on hold, the date when the hold was
placed, and the reason given by the holding mission or missions, as well as
action taken thus far. We also provided the Committee with the list of holds
on applications that should be addressed on a priority basis. In brief, the
Office of the Iraq Programme has provided the Committee with the most
comprehensive and detailed information on holds.

I should like to express my thanks to the Chairman and the members of the
Committee for agreeing to convene separate meetings on holds, on a sector by
sector basis. We have made a good and honest start in addressing the
question of holds, which has already allowed for a significant number of
contracts previously on hold to be approved. 

As at 31 January 2000, the total value of holds was approximately $1.5
billion, reaching just under $2 billion as at 30 April. I am pleased to note
that during the month of May, thanks to the recent positive trend and the
concerted efforts made by all concerned, the total value of holds, as at 31
May, was reduced to $1.6 billion, a reduction of $317 million. 

I remain convinced that the timely provision of information in advance of
the submission of applications - details which by now are well known to all
concerned, such as technical specifications, and end-use and end-user
information - will expedite approval of applications in most cases. An
analysis of the reasons given for the total number of 1,088 holds with a
value of $1.6 billion, as at 31 May 2000, indicates that while the large
number of holds concern items on the 1051 list for dual usage, (369
applications with a total value of $617.4 million, 37.9 per cent of the
total value of applications on hold), 225 applications with a value of
$396.1 million (or 24.3 per cent) are awaiting additional information either
from the Government of Iraq or the permanent missions concerned. While we
have provided information requested on 272 applications, with a total value
of $320.5 million (or 19.7 per cent of the total value of holds), they
continue to remain on hold, without any additional information requested by
the holding mission(s). There are 161 application, with a total value of
$277.5 million (or 17 per cent of the total value of holds) for which the
holding mission(s) stated that the applications concerned required further
evaluation. There are also 61 applications concerning oil spare parts and
equipment, with a value of $18.8 million (or 1.1 per cent of the total value
of holds), the reason given being that they are not directly related to the
repair of oil infrastructure for the purpose of increasing oil exports.

While we have repeatedly brought to the attention of the Council the
negative impact of the holds on applications on the effective implementation
of the programme, it should be borne in mind that the total value of the
holds represents 12.2 per cent of the total value of applications circulated
or notified ($13.4 billion). 

In addition to the need to address the question of holds, there is an urgent
need to improve the pace of contracting by the Government of Iraq for
supplies in sufficient quantities to meet the requirements, the timely
submission of applications by suppliers through the respective permanent
missions and the timely delivery of supplies to and distribution of supplies
within Iraq. There is also the need to expedite the opening of letters of
credit. In addition, there is the need for a determined effort by all
members of the Committee to approve expeditiously applications for contracts
relating, in particular, to food handling, health, water and sanitation,
electricity, transport and telecommunication, all of which impact directly
on other sectors. 

Implementation of the programme in the center and south of Iraq             

Details on the progress on programme implementation were provided in the
Secretary-General's previous report to the Council (S/2000/208) in early
March this year, and are supplemented by information provided in the present
report. The report of the Secretary-General contains a number of
recommendations, which we hope the Council will act upon positively. 

With regard to the timely and equitable distribution of all humanitarian
goods, in particular, medical supplies, and the removal and avoidance of
delays at warehouses, I am pleased to inform the Council that there has been
steady progress in the removal of distribution bottlenecks in all the
sectors of the programme, especially from central warehouses to the
governorates. In the agricultural sector, in order to improve the
distribution of spare parts in the agricultural machinery sub-sector, the
Government of Iraq has introduced a new system, using private agents.
Difficulties persist, however, in the onward movement of goods from
governorate warehouses to end-user facilities, owing to the absence of an
adequate transportation fleet in most of the sectors.

Although the food distribution network has operated adequately to date, the
situation can be expected to deteriorate given the extreme state of
dilapidation of the port of Umm Qasr, the railway system, the transportation
fleet, mills and silos. The requirements of the food-handling sub-sector
need to be addressed on a most urgent basis. 

Implementation of the programme in Dahuk, Erbil and Sulaymaniyah

In view of the increasing volume of funds available to the programme,
UNOHCI, together with United Nations agencies and programmes concerned, is
in the process of reviewing the implementation capacity of the United
Nations system to improve its effectiveness.

In a separate paper, I am providing the Council with information regarding
recent United Nations activities and initiatives in the three northern

Concluding remarks             

I should like to thank the members of the Security Council for their support
and cooperation. 

I should also like to take this occasion to pay tribute to all my
colleagues, both in the Secretariat as well as the agencies and programmes
concerned, at headquarters and in the field, for their dedicated efforts,
often under very difficult conditions, in the implementation of this

Finally, I should like to reiterate the statement of the Secretary-General
that "despite all constraints, difficulties and shortcomings referred to in
the present report, as in previous reports, the programme has succeeded in
providing substantial assistance to Iraq's pressing humanitarian needs in
all sectors, through large-scale importation of civilian goods."

Review of 53% Account Applications on Hold: All Phases             
As of 31 May 2000 <see full table on web-site>

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