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Compensation Claims/Totals (1 Aug 00)

Copyright 2000 Guardian Newspapers Limited   
The Guardian (London) 
August 1, 2000 

SECTION: Guardian Foreign Pages, Pg. 11 
LENGTH: 947 words 
HEADLINE: The Gulf war 10 years on: Damage claims spiral into the realm of the futile 
BYLINE: Brian Whitaker 

For nine years now 200 people in Switzerland have been totting up what promises to be the world's 
biggest bill: the compensation Iraq must pay for invading Kuwait. The final tally will not be known 
for three more years, but it is likely to be hundreds of billions of dollars. 

With a filing system that would cover half a football pitch, and running costs of Dollars 40m 
(pounds 27m) a year, the task of assessing the damage is huge. But if the history of war 
reparations is anything to go by, it is almost certainly futile. 

Like sanctions, Gulf war compensation is a well-intentioned idea gone wrong. The sums involved are 
so big that either Iraq will be burdened with the cost long after Saddam Hussein has gone or, more 
likely, it will stop paying and victims will see no more than a fraction of the money. 

Either way, deciding who should be compensated, and by how much, has turned into a bureaucratic and 
legal minefield for the UN compensation commission, the body set up to process claims. 

Nobody disputes that hundreds of thousands of innocent people suffered injuries or lost money as a 
result of the invasion, among them poor families in Egypt, India and elsewhere who depended on 
remittances from relatives working in Iraq or Kuwait. 

Thousands of businesses were hit, and governments suffered too. Jordan, for instance, which did not 
take part in the war, provided emergency medical facilities at its taxpayers' expense. 

When the war ended in 1991, Iraq agreed to pay compensation. Claims poured in to the commission's 
headquarters in Geneva from as far afield as Bolivia, Iceland, Nepal, Panama, Thailand, Uruguay and 
Vietnam - 2.6m in all. They totalled Dollars 322bn. 

Among the more creative claims were several for backs allegedly injured by people packing their 
belongings to flee Kuwait, and one for candle burns sustained during a power cut. 

The commission rejected those, but did decide that heart attacks suffered outside Kuwait or Iraq 
could be compensated if they occurred up to six months after a war-related "traumatic event". 

The Pakistani government claimed Dollars 179m in lost tax revenue because it had allowed evacuees 
to bring their cars home without paying the normal import duty. 

That, too, was rejected, but when Israeli farmers claimed for flowers and fruit which could not be 
picked because of curfews and border closures, they were awarded Dollars 8m. 

The Canadian government claimed Dollars 47m, including Dollars 50,000 allegedly given to the Red 
Cross to set up an information bureau in Canada. Despite a request from the commission, it failed 
to provide evidence that the Red Cross had actually received the money. 

Similarly, British government claims totalling Dollars 6m were reduced to Dollars 499,000, mainly 
for lack of supporting evidence. 

The problem is not simply one of greedy claimants sniffing a honey pot; there are also losses 
clearly attributable to the war which fall outside the rules of compensation. 

Hotels and travel companies in several countries lost money during the conflict, through disrupted 
flights and cancelled bookings. The commission ruled that those in Cyprus, Egypt, Tunisia, Morocco 
and Turkey could not be compensated, but awarded Dollars 14.7m to hotels and travel firms in 

The reasoning behind this was that there had been "an actual and credible threat" to Israel (in the 
form of 40 Scud missiles and statements by the Iraqi deputy prime minister Tariq Aziz) which was 
"intimately connected" to the invasion of Kuwait, whereas the other countries - regardless of their 
losses - had not faced a similar threat. 

The huge volume of claims, and in some cases the lack of documentation because of the war, means 
that verification can be difficult. Sources say that smaller claims are subjected to only random 
checks, while larger claims are examined by professional loss adjusters. 

In 1994 the commission reported that some duplicate claims for personal injuries had been found, 
though it did not say how many. It admitted that the ability of its computer system to detect these 
was limited, and urged governments (responsible for distributing the compensation to their cit 
izens) to take their own precautions to avoid double payments. 

Iraqi officials believe there have been duplicate claims relating to businesses in Kuwait, where 
foreign investors are obliged to have a Kuwaiti partner. They say that if both partners claimed 
from different countries for the same loss, it would be particularly difficult for the system to 

So far the commission has dealt with 2,588,014 claims and awarded Dollars 15.5bn compensation. The 
remaining 13,000 are mainly large government claims, including Dollars 111bn sought by the 
government of Kuwait and Dollars 48bn for environmental damage. If approved in full, they would 
bring Iraq's total bill to almost Dollars 284bn, but interest charges could easily double that. 

Iraq is currently paying the compensation, together with all the commission's running costs, by 
means of a 30% deduction from its revenue under the oil-for-food programme. The amount paid in this 
way varies with oil prices, but is around Dollars 400m a month. Once sanctions are lifted, however, 
there will be no sure way to collect the money. 

The Iraqis are already complaining about the way the claims have been dealt with. Some others say 
that the huge sums involved look punitive, even if they are not meant to be. They ask why future 
generations of Iraqis should bear the cost of President Saddam Hussein's desert folly. 

Special report on Iraq on the Guardian website Iraq 

LOAD-DATE: August 1, 2000

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