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News, 19-25/8/01 (2): OIL * U.S., Ally Part Ways on Iraqi Oil * Iraq could increase oil output to ten million barrels a day * Bula [Irish oil company] wait for ratification of Iraq contract * U.S. Devises Iraqi Oil Proposal * Opec leakage rises in July to 720,000 bpd * Britain lifts block on Iraqi oil price * Price turmoil 'may hit Iraq Aug. loadings' NEW WORLD ORDER * US leads race to arm developing world [and how. $7.7bn as opposed to scary China¹s $400m. Scary Russia isn¹t even in the running] * Bush tested as he seeks to balance policy on Israel and Iraq [a very dull article which I only include because of the dearth of general discussion pieces this week] NO FLY ZONES * Iraq: 1 Person Hurt in Allied Strike INSIDE IRAQ * Sanctions fire Iraqi World Cup bid * Bahrain 2, Iraq 0 in Soccer * WHO to Meet Iraqi Officials on Uranium Health Study * ICRC [Red Cross] in Iraq: Key facts and activities IRAQI/INTERNATIONAL RELATIONS * Brazil to Resume Relations with Iraq OIL http://www.washingtonpost.com/wp-dyn/articles/A43805-2001Aug21.html * U.S., ALLY PART WAYS ON IRAQI OIL by Colum Lynch The Washington Post, 22nd August UNITED NATIONS, Aug. 21 -- The United States declined this week to back a British proposal to tighten U.N. procedures for pricing Iraqi oil, citing concern that the proposal might disrupt global oil markets, according to U.N. diplomats and oil analysts. [.....] The British proposal seeks to stop the back-door payments by reducing Iraq's ability to sell oil below market value. It would require that Iraq and the United Nations jointly set prices every 10 days rather than every 30 days, hewing closely to world levels. It also would deprive the Iraqis of the right to request reductions whenever the market price drops. "We are trying to reduce the gap between the market price and the prices being set [at the United Nations] for Iraqi crude," said a British official. "The excess margin allows unscrupulous buyers to make excessive profits and pay a cash surcharge to the Iraqi government." U.S. officials are in favor of clamping down on Iraq's illicit revenue, which they suspect is used to purchase prohibited weapons and luxury goods for President Saddam Hussein's inner circle. But the United States, the largest consumer of Iraqi oil, is concerned that the British proposal could disrupt trade. "We are certainly sympathetic to the intent of [the British proposal], but we're just not sure yet whether it's the right thing to do," a senior U.S. official said. [.....] Some industry analysts warned that the British proposal might not provide enough lead time for oil traders to charter tankers and identify buyers. Most major producers price their oil every month, said Larry Goldstein, president of the Petroleum Industry Research Foundation. http://www.worldoil.com/news/newsstory.asp?ref=http://126.96.36.199/feeds/wo rldoil/new/article_e.asp?energy24=239766 * IRAQ COULD INCREASE OIL OUTPUT TO TEN MILLION BARRELS A DAY Worldoil.com, 21st August (from Agence France Presse) "Iraq could boost production capacity to 10 million bpd as soon as it starts to develop its new oilfields, which are on top of the 74 fields already in operation," Rashid told Al Rafidain weekly. Rashid said in early August that Iraq was looking to raise output to six million bpd, a plan it says has been scuppered by the ongoing international sanctions imposed on Baghdad for invading Kuwait in 1990 He added Iraq wants to increase reserves to 270 billion barrels and overtake Saudi Arabia as the world's top reservoir by transforming potential reserves into proven reserves. He said the Iran-Iraq conflict in the 1980s, the 1991 Gulf War over Kuwait and UN sanctions in force since Iraq's 1990 invasion of the emirate had all hampered Baghdad's efforts to develop oil reserves. Iraq has signed contracts with a number of foreign oil companies, notably from Russia and China, to develop oilfields, but the deals can not be implemented until sanctions are lifted. Under a UN exemption to the sanctions regime, Iraq exports crude to finance imports of essential goods. http://www.ireland.com/newspaper/finance/2001/0822/fin15.htm * BULA WAIT FOR RATIFICATION OF IRAQ CONTRACT by Ella Shanahan Irish Times, 22nd August The chief executive of Bula Resources, Mr Tom Kelly, has told shareholders the company is still waiting for ratification of an exploration and development contract in Iraq. In a statement issued yesterday to update shareholders Mr Kelly said he would visit Iraq in the coming weeks to meet key officials and discuss the application which was made in June. He will also meet the new Director General of Exploration at the Iraqi Oil Ministry in order "to get a hands-on understanding of the logistics and staffing requirements which will need to be addressed when the agreement is signed and the pace of operations moves into a higher gear". The timing of the awards of contracts was now very much in the hands of government departments and the political process, he said. In the statement Mr Kelly also updated shareholders on the firm's activities in Libya. He said that Bula's manager in Libya had been deployed full-time in securing its applications to the Libyan government. Mr Kelly said the company was also trying to identify and secure a revenue stream by purchasing producing assets in order to support it during the period until the Iraqi and Libyan assets are "ratified and producing cash flow". He said Bula "has pursued 17 opportunities in nine countries over the past six months". He added: "We are actively working on enhancing the reputation of the company in order to be accepted as the partner of choice by host governments and joint venture partners in many of the areas we are targeting. "In this regard, Albert Reynolds (the chairman) has met with strategic industry leaders from the Middle East and West Africa as well as principals in the area of corporate finance." Mr Kelly said he believed it was the right strategy to continue to focus on Iraq and Libya. He added that the company's annual general meeting would be held on September 10th, when a more detailed update would be given to shareholders. http://www.baghdad.com/?action=display&article=8849328&template=baghdad/inde xsearch.txt&index=recent * U.S. DEVISES IRAQI OIL PROPOSAL The Associated Press, Wed 22 Aug 2001 WASHINGTON (AP) ‹ The State Department outlined a proposal Wednesday for preventing Iraq from continuing to make profits off oil sales by forcing buyers to pay surcharges outside the oil-for-food program. Spokesman Philip Reeker said such payments are a violation of U.N. Security Council resolutions and can be used by Iraq to develop its military capability. At present, Iraq is permitted to sell unlimited amounts of oil but the revenues must be used solely for humanitarian purchases. According to reports, Iraq earns money outside the system by setting artificially low prices for buyers, then demanding secret payments to make up the difference. Iraq and the United Nations set prices on Iraqi crude every 30 days, taking into account fluctuations in market prices. According to officials, Iraq has been able to sell some oil below market prices, and obtain back door payments from buyers in return. Reeker said the United States is proposing that the 30-day price adjustment period be reduced to 15 days. He said this would limit Iraq's ability to garner revenues outside the system and give oil traders the lead time needed for chartering tankers. http://www.gulf-news.com/Articles/news.asp?ArticleID=24991 * OPEC LEAKAGE RISES IN JULY TO 720,000 BPD London, Reuters, 23rd August Opec producers with output quotas leaked more oil to the market in July, Opec's Vienna secretariat said. The 10 Opec producers with quotas, excluding Iraq, pumped 24.94 million barrels per day, or 720,000 barrels per day in excess of official limits of 24.2 million, the secretariat said in a report based on selected secondary sources. In June leakage over the limits for the 10 was 610,000 barrels per day and in May 381,000 barrels per day, Opec had said previously. Opec implements a lower limit of 23.2 million bpd in September. Including Iraq, output was 26.99 million bpd in July compared to 25.81 million in June. Baghdad resumed UN-supervised sales in July after a month's break. Opec said it had revised down its projection for world oil demand growth this year by 100,000 bpd to 700,000 bpd and expected total demand of 76.4 million. It saw the call on Opec oil next year, assuming zero stock change, at 27.1 million bpd. http://www.worldoil.com/news/newsstory.asp?ref=http://188.8.131.52/feeds/wo rldoil/new/article_e.asp?energy24=240084 * BRITAIN LIFTS BLOCK ON IRAQI OIL PRICE Worldoil, 24th August (AFP): Britain has temporarily lifted an objection, which prevented the UN from setting an official price for Iraqi oil, allowing sales to resume under normal conditions until the end of August. But, a British diplomat said, it would agree to an official price for September only if the price-setting interval were cut from 30 days to 15 days. Iraq has been without an official price since Tuesday, after Britain called for more frequent price-setting so as to limit Iraq's ability to exploit fluctuations in the world market. UN officials said the lack of an official price had no immediate effect on Iraqi oil exports under UN supervision, but traders could be put off if uncertainty over the price persisted. Iraq, which has been subject to sanctions since it invaded Kuwait in August 1990, is allowed to sell oil under United Nations supervision, and to use 72 percent of the revenue to import food and other necessities approved by the UN. At present, it sells about 2.0 million barrels a day, a volume large enough to cause severe disruption to the world market if supplies were halted. http://www.gulf-news.com/Articles/news.asp?ArticleID=25073 * PRICE TURMOIL 'MAY HIT IRAQ AUG. LOADINGS' London, Reuters, 24th August Up to four million barrels of Iraqi Kirkuk crude scheduled to load in the last week of August may not be lifted amid uncertainties over the official selling price (OSP), market sources said yesterday. If the crude oil is not lifted, it would be the first confirmed case of a missed loading since the United Kingdom began insisting that the United Nations price Iraqi exports every 10 days instead of every month, as is industry practice. "We're hearing of some August liftings being cancelled because of a lack of price for the third decade," said one trader of Iraqi crude. "The uncertainty is killing the market." Both lifters and refiners say the uncertainty ‹ coupled with much tighter prices ‹ has decimated the Kirkuk market. As of Wednesday afternoon Iraq's State Oil Marketing Organisation (Somo) had not proposed any new August 21-31 prices for their crude oil exports as they voiced silent objection to the UK's move for 10-day pricing periods, sources said. The very large crude carrier (VLCC) Astro Castor, originally scheduled to lift two million barrels of Kirkuk from Ceyhan, Turkey, on August 27, was refixed several weeks ago for a West African lifting, shipping sources said. And the VLCC Olympic Breeze, originally slated to lift Iraqi barrels on August 31, now appears unlikely to ship the cargo, they added. Iraqi contract holders could still nominate other vessels to lift the crude, but traders said this was unlikely due to refiners' reluctance to buy the barrels with so much uncertainty over price. "Refiners are not willing to step up and buy if they know the price will be changed three times before they lift," said one trader. As of Wednesday afternoon no new vessels had been named to replace the VLCCs, shipping sources said. Spot trading in Kirkuk has slowed to a near halt as buyers and sellers are reluctant to step in without knowing whether or not the decade-by-decade pricing mechanism will be maintained throughout next month. NEW WORLD ORDER http://www.guardian.co.uk/international/story/0,3604,539912,00.html * US LEADS RACE TO ARM DEVELOPING WORLD by Richard Norton-Taylor The Guardian, 21st August World arms sales to developing countries rose by 8% last year with the US dominating the market, according to an American congressional report. Total weapons sales to developing countries amounted to nearly $36.9bn (£25.5bn) last year, with US companies accounting for about half ($18.6bn) of the contracts, the study says. Russia accounted for more than a fifth of the trade, with $7.7bn in sales (nearly double its 1999 figure of $4bn). The conventional arms transfers to developing nations study, published by the Congressional Research Service at the Library of Congress, says France sold $4.1bn worth, Germany$1.1bn, Britain $600m, China $400m, and Italy $100m. The author, Richard Grimmett, says that although the developing world constitutes the largest market for arms, it still represents a growing sector. "Despite global changes since the cold war's end, the developing world continues to be the primary focus of foreign arms sales activity by conventional weapons suppliers." Human rights and arms control groups will seize on the report as further evidence that, despite Washington's criticism of weapons sales by other countries, not least Russia, US corporations are more to blame for arming the world than their rivals are. The study, reported in the New York Times, points to a relatively small but significant trade in Russian arms to Iran. It says that between 1997 and 2000, Russia agreed to sell Iran $300m worth of weapons. During that period Moscow actually delivered $800m worth. "In late 2000, Russia served public notice that it again intended to pursue major arms sales with Iran, despite objections from the United States," says the report. Russo-Iranian ties have been strengthened by the presence of common foes, notably the Taliban regime in Afghanistan. But the Bush administration is likely to exploit the findings because it is determined to press on with its planned missile defence shield against perceived threats from so-called rogue states, including Iran and Iraq. "Iraq was once a major purchaser of advanced weaponry from Russia," the report says. Baghdad bought significant quantities of western arms too, including from Britain, before the 1991 Gulf war. The congressional report adds pointedly: "Russia would clearly pursue new major weapons deals with Iraq if current UN sanctions on Iraq that ban Iraqi arms purchases are lifted." The report also warns of China's role in the world arms market, saying that Beijing could hurt efforts to stem sales of advanced missile systems in unstable regions. Chinese arms sales peaked in 1999 at $2.7bn, but dropped to $400m last year, the congressional report states, with Pakistan a major buyer. The big jump in US arms exports was partly due to the $6.4bn sale of 80 F16 fighters to the United Arab Emirates, a third of its export total. The UAE, which also bought a significant number of arms from Britain, led the developing world last year in signing arms deals worth $7.4bn, the report states. India, which is cultivating close weapons links with Russia, was the second-largest arms buyer in the developing world with $4.8bn. The US congress report is confined to arms sales to developing nations. According to the latest data from the International Institute for Strategic Studies, total arms exports amounted to more than $58bn in 1999, with the US accounting for nearly half. Britain sold 20%, while France sold 12.4% of weapons. Whitehall figures put UK arms exports last year at £1.7bn. Australia bought the most, followed by Saudi Arabia. http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT33E8C0OQC&liv e=true&tagid=ZZZOMSJK30C&subheading=US * BUSH TESTED AS HE SEEKS TO BALANCE POLICY ON ISRAEL AND IRAQ by Roula Khalaf and Richard Wolffe Financial Times, 21st August Since the United Nations security council failed to agree a resolution on US proposals for "smart sanctions" against Iraq last month, Saddam Hussein has sought to challenge the US on another front. The Iraqi leader has stepped up efforts to shoot down US and British warplanes patrolling the no-fly zones in the north and south of the country - an act of defiance that has left the Bush administration, which has yet to complete its review of Iraq policy, in an uncomfortable position. The new stand-off comes after Iraq rebuilt the air defence and communications infrastructure the US destroyed in a large February offensive. Baghdad argues that the no-fly zones are illegal because they are not stipulated by UN resolutions. The US has responded with air strikes on Iraq's radar, military communications and missile sites, but not on the scale seen in February. "The administration is trying to hit Iraq but until now, they've done it without going all out - but also without appearing not to be doing anything," says a senior Arab diplomat. For the Bush administration, Iraq is becoming a defining test of its diplomatic powers. But designing a policy that deals more effectively with Mr Saddam is a complex business, made even more difficult by the escalating violence between Israelis and Palestinians. The White House insists it is still pursuing three options: reform of the more than decade-old UN sanctions to tighten restrictions on the regime and facilitate the flow of civilian goods; defending the no-fly zones in Iraq; and ultimately the pursuit of a change of regime in Baghdad. For now, say officials, the focus remains on amending the sanctions and defending the no-fly zones. Colin Powell, the secretary of state, is now pressing again for Russian backing for "smart" sanctions before a self-imposed deadline of the end of November. But the setback suffered by the US at the security council represents an embarrassment at a time when the White House is determined to craft a closer relationship with Moscow over other strategic issues such as missile defence and trade. It has also left President George W. Bush vulnerable to attack from domestic political opponents who accuse his administration of a broader failure of foreign policy. The impasse with the Russians has led to a sharp degree of frustration inside the State Department. "It's important that Russia works to restore security council unity and not succumb to Baghdad's attempts to manipulate the security council," said one State Department official. But even before the Russian threat of veto, smart sanctions were undermined by the reluctance of Iraq's neighbours to go along with a policy that would require stricter monitoring of their borders to stop the smuggling that keeps the Iraqi regime afloat. Their hesitance became apparent after Baghdad threatened to cut off trade. Meanwhile, the US setback at the UN security council has given hopes to hawks inside the Pentagon that more aggressive policies, including regime change, might gain higher priority. It remains unclear, however, how this could be pursued on the ground. Such a policy, moreover, faces stern resistance from Washington's Arab allies. "There are a number of key issues on which the administration hasn't reached a consensus - the most clear-cut case is Iraq," says a US policy analyst. "At some point, it's pretty clear that there will be another air strike and hype about supporting opposition groups. But even hardliners understand you cannot do this alone, that you have to have some Saudi and Turkish support." A further complication comes from the reluctance of Arab rulers to back the US administration on Iraq when its hesitant engagement in the Palestinian-Israeli conflict is seen as blanket support for Israel. Saudi sensitivity was underlined last week when Prince Sultan, the defence minister, spoke against US air strikes in an interview with the newspaper Alsharq al-Awsat a day before the US hit targets in Iraq's southern no-fly zone. Analysts, however, do not expect the administration to adopt a more active policy on the Palestinian-Israeli front, at least not in the near future. The White House has attempted to cultivate a handful of Arab friends such as Saudi Arabia but is determined to avoid a clash with Israel that could complicate relations with Congress, where the Jewish state has wide support. The assumption appears to be that the effects of such a stand can be contained. As the US tries to convince Russia of the merits of smart sanctions and the Pentagon examines other options, Mr Saddam's behaviour is likely to prove a decisive factor in the direction of US policy. "If Saddam oversteps the mark, the hawks will have a much stronger voice," says a US analyst. NO FLY ZONES http://www.baghdad.com/?action=display&article=8908691&template=baghdad/inde xsearch.txt&index=recent * IRAQ: 1 PERSON HURT IN ALLIED STRIKE The Associated Press, Sat 25 Aug 2001 BAGHDAD, Iraq: A U.S.-British airstrike on a radar station in southern Iraq on Saturday has wounded one person, the official Iraqi News agency reported. U.S. and British officials confirmed the attack in Wasit province, 116 miles south of Baghdad, but made no mention of injuries. ``The U.S. British warplanes targeted our civil and service installations ... resulting in the injury of one civilian,'' an unidentified Iraqi military spokesman told the agency. Iraqi surface-to-air missiles and ``courageous ground resistance'' returned fire on the planes, forcing them to turn back ``in shame,'' the spokesman said. The U.S. Central Command released a statement saying that allied aircraft launched the missile attack at 4:30 a.m. EDT ``in response to recent Iraqi hostile threats against coalition aircraft monitoring the southern no-fly zone.'' Damage assessment was ongoing, the U.S. statement said. ``Coalition aircraft never target civilian populations or infrastructure and go to painstaking lengths to avoid injuries to civilians and damage to civilian facilities,'' it added. Since December 1998, there have been more than 1,010 incidents of Iraqi surface-to-air missile and anti-aircraft fire against coalition aircraft. A British Ministry of Defense official said on condition of anonymity that ``this was a successful mission and there were no collateral implications. All personnel returned safely.'' [.....] INSIDE IRAQ http://europe.cnn.com/2001/WORLD/meast/08/23/iraq.worldcup/index.html * SANCTIONS FIRE IRAQI WORLD CUP BID CNN, August 23 BAGHDAD, Iraq: Iraq is gearing up for a World Cup qualifier against one of its former enemies on the battlefield. It will be the first time Iraq has played Iran in Baghdad since the eight-year war between the two countries which ended in 1988. But Iraqi players say the sanctions imposed on Baghdad since the Gulf War in the early 1990s is hardening their will to win against the odds. For years, sanctions have prevented Iraqis from air travel forcing the team to drive 10 hours just to board a plane. Coach Adnan Hamad told CNN Iraq has plenty of young talent, but cannot develop it due to lack of resources, as local teams have no money to buy the right equipment or keep playing fields in good condition. Iraq's top side, the Al-Zawra club, sometimes share the practice pitch with three other teams, he said. But the situation in Iraq has not always been quite so desperate. In 1986 the national team qualified for the World Cup in Mexico. Players used to be showered with luxuries such as cars for winning international matches but now they are only paid $35 a month. Leith Hussein has evaded Iraqi sanctions by playing for a Lebanese club. But he says he still suffers from widespread prejudice due to his nationality. At one Arab country's airport he was held for 24 hours while his Lebanese team-mates went through customs without delay. http://www.baghdad.com/?action=display&article=8873105&template=baghdad/inde xsearch.txt&index=recent * BAHRAIN 2, IRAQ 0 IN SOCCER The Associated Press, Thu 23 Aug 2001 MANAMA, Bahrain (AP) ‹ Bahrain beat Iraq 2-0 in a World Cup qualifier on Thursday night on second-half goals by Talal Yosuf and Ghazi Al-Kawari. Bahrain (1-0-1) moved into the Group A lead with four points, followed by Iraq (1-1), Saudi Arabia (0-0-1), Iran (0-0) and Thailand (0-1). Saudi Arabia is at Iran on Friday. The top team qualifies for next year's World Cup, and the second-place team advances to playoffs for another berth. http://dailynews.yahoo.com/h/nm/20010823/hl/uranium_1.html * WHO TO MEET IRAQI OFFICIALS ON URANIUM HEALTH STUDY by Stephanie Nebehay Yahoo, 23rd August GENEVA (Reuters) - The World Health Organisation said on Thursday it would meet Iraqi experts next week to firm up planned research into cancers that Baghdad blames on Allied use of depleted uranium in the 1991 Gulf War. The talks, being held in Baghdad from August 27-31, follow a formal invitation received from the Iraqi government, the United Nations health agency said in a statement. WHO and Iraqi officials met last April at the agency's headquarters in Geneva, where they hammered out a basic framework for intensified technical and scientific cooperation. The mission will kick off WHO's first comprehensive attempt to assess the state of public health a full decade after a US-led alliance bombed Iraq after the nation invaded Kuwait. ``The purpose of the mission is to complete work on detailed proposals for studies on non communicable diseases and congenital malformations and draw up a schedule for implementation of the research,'' WHO said. Diseases to be tracked were mainly cancers and kidney disease. ``The studies' aim will be to investigate claimed increases in these diseases in Iraq and look into their potential link to environmental and other risk factors,'' it added. Baghdad has insisted for years that there was a link between depleted uranium (DU)--a toxic, radioactive element on tips of armour-piercing weapons used by US and British forces during the conflict--and a growing incidence of leukaemia and other cancers in Iraq. Baghdad's Health Ministry says cancer cases increased from 6,555 in 1989 to 10,931 in 1997, especially in areas bombed by US-led forces during the war. But WHO and NATO say there is no evidence that DU munitions cause cancer, despite media reports suggesting a number of NATO peacekeepers in the Balkans had fallen ill or died after exposure. WHO and the UN Environment Programme (UNEP) said last March, after collecting extensive soil and water samples in Kosovo, that DU used by NATO posed ``no significant risks.'' FOCUS NOT JUST DU ``We will not just focus on depleted uranium, it is one of many environmental risk factors,'' Dr Michael Repacholi, WHO's occupational and environmental health coordinator, told Reuters. ``Iraq had industrial plants burn, which spreads chemicals and heavy metal dust which can get into the water supply and also be breathed in. We have to assess the exposure to these things too.'' A primary WHO goal will be to provide Iraqi officials with equipment, fellowships and training so that they can set up cancer registries and carry out analysis, Repacholi said. WHO's eight-member team will be led by Dr Abdelaziz Saleh, the deputy head of its regional office in Cairo. http://www.arabicnews.com/ansub/Daily/Day/010824/2001082418.html * ICRC IN IRAQ: KEY FACTS AND ACTIVITIES Arabic News, 24th August The ICRC has been continuously present in Iraq since 1981. Its operation was initially mainly concerned with the protection of Prisoners of War from the Iran- Iraq conflict ( 1981 to 1988) and from 1991 Gulf War. Almost 100,000 prisoners of War from the Iran, Iraq conflict and 70,000 from the 1991 Gulf War returned to their families under the auspices of the ICRC. Today, the ICRC still continues to follow the numerous cases of persons unaccounted for as a result of the two international armed conflict. In the aftermath of the 1991 Gulf War, the ICRC started emergency assistance programs for the civilian population in Iraq, mainly consisting of the distribution of clean drinking water in large urban centers and major repair works on water treatment facilities. As the humanitarian situation of the civilian population in Iraq continued to deteriorate due to the economic sanctions imposed by the UN Security Council, the ICRC has continuously stepped up its humanitarian assistance programs. After the introduction of the oil-forÐfood program in 1996, which allows Iraqi government to use its oil revenues to purchase humanitarian supplies abroad under UN supervision, the ICRC gradually withdrew from material assistance programs and concentrated its activities in area which are not covered by the oil-forÐfood program. The main problem identified was the gradual break down of public infrastructure, such as hospital buildings, water and sewage treatment plants, etc, due to a lack of investment and maintenance. Over recent years the ICRC has carried out hundreds of emergency repair and rehabilitation projects in hospitals, health care centers, water treatment plans and sewage evacuation systems in order to keep these structures functional. Due to the lack of maintenance and the absence of new investments, the state of Iraq's drinking water supply systems and sewage evacuation network has constantly deteriorated since 1991. In many parts of the country they have broken down completely. Since 1996 it has been possible for the Iraqi government to import spare parts for the water and sanitation sector under the oil-forÐfood program. The program, however, does not provide funds for maintenance and rehabilitation works on existing installations or for the construction of new structures. Currently, the major part of the ICRC's operation in the water and sanitation sectors consists in emergency projects all over the country in cooperation with the local authorities, ICRC engineers are involved in the design and the planning of the projects. The works on the sites are carried out by local Iraqi contractors under the supervision of the ICRC and the local authorities. Imported spare parts are provided by the Iraqi government under the oil forÐfood program. Moreover, the ICRC became involved in the prosthetics service for amputees in Iraq in 1994 at a request from the Iraqi Red Crescent Society and the Ministry of Health. As Iraq was unable to import orthopedic components because of the economic embargo imposed on the country in 1991, the ICRC set up a local component production, mainly for feet and knee joints and provided necessary raw material. Expatriate prosthetic specialists provided training and expert advice to the staff of the Iraqi orthopedic centers, The ICRC activities led to a gradual increase in the production of prostheses, which had previously almost come to a standstill. Since the beginning of the ICRC's physical rehabilitation program in Iraq, more than 13,000 amputees have been fitted with prostheses in the six orthopedic centers, which are assisted by the program. The ICRC continues to provide technical and material support as well as training for the Iraq staff working in the centers. Over the past year, where necessary, the buildings and equipment of the orthopedic centers have been maintained. Also indoor and outdoor walking training areas have been constructed. Currently, the ICRC is involved with its local partners in the development of national treatment guidelines for amputees and in the establishment of a quality control system for lower limb prostheses. Upgrading the level of training of staff in the fields of prosthetics/ orthotics and physiotherapy remains a high priority for the ICRC and seminars, meetings on various subjects are organized on a regular basis by ICRC experts with the co-operation of the ministers of Health and Higher Education in Iraq. IRAQI/INTERNATIONAL RELATIONS http://www.voanews.com/article.cfm?objectID=0F3A0AC8-9916-11D5 843000508BF9712A&Title=Brazil%20to%20Resume%20Relations%20with%20Iraq * BRAZIL TO RESUME RELATIONS WITH IRAQ by Bill Rodgers VOA News, 25th August Rio de Janeiro: Brazil is resuming relations with Iraq, which were downgraded during the Gulf War. The Brazilian government wants to promote closer commercial ties with Baghdad. In a Foreign Ministry communiqué issued late Friday, the Brazilian government announced it is re-activating its embassy in Baghdad. Brazil first established diplomatic relations with Iraq in 1967, but then downgraded them during the 1991 Gulf War, when Brazil supported the U.N. Security Council sanctions imposed against Iraq. In Friday's communique, the Foreign Ministry said with the resumption of limited Iraqi oil sales, trade between Brazil and Iraq has resumed. The statement said more Brazilian companies are now expressing interest in selling goods to Iraq, which has led Brazilian President Fernando Henrique Cardoso to decide to establish limited diplomatic ties with Baghdad. However, the statement said Brazil will continue to adhere to the Security Council resolutions on Iraq, and awaits the normalization of relations between Baghdad and the international community. -- ----------------------------------------------------------------------- This is a discussion list run by the Campaign Against Sanctions on Iraq For removal from list, email email@example.com Full details of CASI's various lists can be found on the CASI website: http://www.casi.org.uk