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[casi] Security Council Adopts Adjustments to UN's Oil-for-Food Programme

UN gives the nod to revamp its oil-for-food programme
By Mark Turner at the United Nations
Published: March 28 2003 19:48 | Last Updated: March 28 2003 19:48

The United Nations Security Council on Friday voted unanimously in favour of temporary measures to 
revamp Iraq's oil-for-food programme, as UN aid agencies appealed for $2.2bn (1.4bn) in emergency 
funds over the next six months.

The oil-for-food resolution allows the UN secretary-general to rejig approximately $10bn worth of 
agreed contracts, and a further $5bn, approved but not paid for, to address the immediate 
humanitarian needs of Iraqis. It also introduces more flexibility into a tightly-defined system of 
entry points and bank accounts.

It comes amid UN warnings that the plight of Iraqis "is likely to become desperate as distribution 
systems are disrupted", and that "prolonged hostilities may result in a serious humanitarian 

The resolution, agreed unanimously, marked something of a diplomatic coup for Germany. The country 
proposed the resolution and steered it through acute tensions between the US, Russia and others 
over the balance it struck between the responsibilities of the occupying powers, the continuing 
sovereignty of the Iraqi government, and a pragmatic need for the UN to step in and help. The UN's 
sanctions committee, of national experts, will retain monitoring powers over its implementation.

There had also been concerns over a proposal to allow the UN to borrow funds from a Kuwait 
compensation fund for humanitarian needs. The resolution now expresses an open-ended "readiness" by 
the UN to use those funds (due to be disbursed in April) "on an exceptional and reimbursable basis".

Mohammad Abulhasan, Kuwait's ambassador to the UN, said he supported the idea, as long as the 
plight of 44,000 people affected by Iraq's previous occupation of Kuwait was not ignored.

The final version was co-sponsored by fourteen countries, and while negotiations were tense, they 
revealed a new ability by the European members of the Security Council in particular to put aside 
ideological differences to achieve pragmatic ends.

But it remained clear that deep disagreements remain over any future UN role for the administration 
or rebuilding of Iraq, and that further resolutions will be far more difficult. The resolution does 
not address the future of Iraq's oil industry.

Kofi Annan, UN secretary-general, on Friday warned there were "certain red lines" in the council, 
many of whose members "did not want to see any situation where the UN is subjugated to the 
authority of a country or several countries".

He added: "Some are concerned they should not be placed in a situation where they take action that 
appears to legitimise the military action ex post facto. We are going to have to determine the 
relationships between the UN, occupied Iraq and the occupying power; lots of issues will have to be 

The UN now faces a big task in managing the oil-for-food contracts, and also in handling separate 
funds accrued under its emergency appeal. The UN said its $2.2bn appeal, particularly the $1.3bn 
covering food items, could be cut following the resolution - but was uncertain to what extent.

Of the $10.1bn goods in the oil-for-food pipeline, a quarter covers food needs, but of that only 
$270m are active contracts ready for immediate application. Many of the contracts in the pipeline 
do not account for the additional emergency needs due to the outbreak of hostilities.

UN aid chiefs said any programme will be dependent on the security situation on the ground, and 
will also rely on the substantial Iraqi-government-run network in the centre and the south. While 
that network appears to be struggling on, it is unclear in what state the UN will find it once it 

 Copyright The Financial Times Ltd 2003. "FT" and "Financial Times" are trademarks of the 
Financial Times.

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