Campaign Against Sanctions on Iraq
Newsletter - February 2001

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UN Watch

Correction to March 2000 UN oil experts report

CASI's May 2000 Newsletter mentioned the report of the UN oil experts commissioned by SCR 1284. Their March report on their January visit noted that "the group was advised, at the Ministerial level, that in the current political environment ... there would be no discussion on the matter of options for involving foreign oil companies in Iraq's oil sector" [p. 6]. When questioned by CASI at an oil conference in Versailles, Dr Faleh H. Al-Khayat, the Ministry of Oil's Director-General of Planning, explained that this was a mistranslation. He believed that he had told the oil experts that the provisions of 'oil for food' were such that no foreign company would do business in Iraq's oil sector, making this impossible to discuss. He claimed that he had challenged the experts to find a single oil company that would invest in Iraq and that, when he phoned the experts later, they had found none.

Phase VII 180 day report

On 1 June the Secretary-General submitted S/2000/520, his final report on Phase VII of 'oil for food'. There was a note of optimism about it: it noted efficiency improvements in the operation of 'oil for food'. At the same time, it reported that oil spare parts were accumulating in warehouses because complementary parts, without which they were useless, had yet to arrive, and because the absence of a cash component in 'oil for food' made it more difficult for the Ministry of Oil to pay to move the equipment from the warehouses. A number of the usual concerns were presented: the Iraqi government was slow in submitting contracts; the Sanctions Committee was placing too many holds, one of the consequences of which was to take land that had previously been irrigated out of irrigation. The Office of the Iraq Programme has organised in-depth assessments of the holds. The drought continued to wrack agriculture, cutting vegetable production in half and fruit production to 80% relative to 1998 [Iraqi government figures]. In Iraqi Kurdistan the situation generally continued to improve; this was slowed in its electrical sector as the Iraqi government denied visas for experts.

In conclusion, the report noted that the "nutritional and health status of the Iraqi people continues to be a major concern", but also that the Iraqi government "is in a position to reduce current malnutrition levels and to improve the health status of the Iraqi people". It recognised that public health required infrastructure, not just calories: "Clean water and a reliable electrical supply are of paramount importance to the welfare of the Iraqi people". Finally, the report was pessimistic about the implementation of the cash component and local purchase provisions foreseen by SCR 1284.

In introducing the report Benon Sevan, the Executive Director of the UN Office of the Iraq Programme, lamented the "growing tendency to politicize the [ 'oil for food'] programme". He described at greater length the results of the OIP's holds investigations: roughly 20% of the holds by value were being held with no reason given by the holding missions.

Security Council Resolution 1302

On 8 June SCR 1302 was passed, beginning Phase VIII of 'oil for food'. It also called for the "fast track" import procedures pioneered by SCR 1284 (previously referred to a "green lists" by CASI) to be extended to the water and sanitation sectors; as some feel that the previous "fast track" lists serve primarily to reduce photocopying expenses in the UN's Office of the Iraq Programme, the effect of these new lists is not yet clear. Somewhat alarmingly, paragraph three of the resolution referred to "dual usage" rather than to "1051 notifiable" items. See CASI's May 2000 newsletter for a more complete discussion of both these issues.

Most politically notable was 1302's call for the establishment of a team of "independent experts to prepare by 26 November 2000 a comprehensive report and analysis of the humanitarian situation". This is something that the former Humanitarian Co-ordinator, Hans von Sponeck, had advocated; the French delegation championed this, sacrificing a wish to see Iraq allowed to pay its UN dues out of 'oil for food' to achieve this.

The assessment has caused constant trouble: an OIP source claims that the Iraqi mission approached the French before the resolution's passage, asking for the assessment to be withdrawn. This angered the French who took the view that, as the Iraqi mission had asked for it earlier in the year, they were going to get it. On 11 September, Kofi Annan reported that the Iraqi government would not allow an assessment team in. One former consultant to a Security Council member speculated that this decision reflected fears by the Iraqi government that an independent assessment would reveal its failures to make use of all opportunities available it. The French have apparently argued that even an assessment from outside would have legitimacy, while the US rejects this.

Worse yet, Annan only named Thorvald Stoltenberg, a former Norwegian Foreign Minister, to lead the mission on 30 October, less than a month before the report was due. That deadline has now passed and the report is most likely never to be produced. One UN staff member thinks that the report became something of a game, with the prize being an updated version of the 1999 Security Council Humanitarian Panel report, but signed by Kofi Annan.

UN human rights body criticises sanctions

In August, controversy was sparked off by a UN body's outspoken criticism of the sanctions on Iraq. The United Nations Sub-Commission on the Promotion and Protection of Human Rights convened for their annual three-week meeting, and adopted a resolution on 18 August [E/CN.4/Sub.2/2000/L.32] entitled "Humanitarian situation of the Iraqi population". This was the fourth year in a row that the Sub-Committee, made up of 26 human rights experts named by their respective governments to serve in a personal capacity, had dealt with the issue of Iraqi sanctions. This year, however, its statements carried an altogether new tone. In strong language, the resolution made a direct link between sanctions and the Iraqi civilian population's suffering, and stated that it was: "considering any embargo that condemned an innocent people to hunger, disease, ignorance and even death to be a flagrant violation of the economic, social and cultural rights and the right to life of the people concerned and of international law".

It invoked the 1949 Geneva Conventions which it said "prohibit the starving of civilian populations and the destruction of what is indispensable to their survival", and with this in mind "decided, without a vote, to appeal again to the international community, and to the Security Council in particular, for the embargo provisions affecting the humanitarian situation of the population of Iraq to be lifted".

The background to this resolution was a working paper by the Belgian representative Marc Bossuyt (E/CN.4/Sub.2/2000/33), which the Sub-Committee had commissioned in 1999, and which was published on June 21 last year. His report, entitled "The adverse consequences of economic sanctions on the enjoyment of human rights" condemned sanctions on Iraq, calling them "unequivocally illegal", and saying they had caused a humanitarian disaster "comparable to the worst catastrophes of the past decades". In another resolution, also on 18 August, [E/CN.4/Sub.2/2000/L.33] the Sub-Committee decided to transmit the working paper to the Commission of Human Rights, a step CASI has been told is unprecedented. While the resolution itself made no country references, the endorsement of Bossuyt's paper made this initiative a very clear statement on sanctions on Iraq. It invited the Commission to "give due attention to the issues dealt with and to recommend appropriate measures to avoid averse consequences for the enjoyment of human rights in the imposition and maintenance of economic sanctions".

Language like this, particularly that of Bossuyt's working paper, has not previously appeared in the statements of UN bodies, and it inevitably provoked strong reactions. The day before the adoption of the resolution, the US Ambassador to the UN, George Moose, had made a statement to the Sub-Committee in which he called Bossuyt's writing on Iraq "incorrect, biased and inflammatory". Bossuyt had also made mention of Madeleine Albright's 1996 statement on "CBS 60 minutes", that the price of half a million Iraqi children having died was "worth it", the inclusion of which Moose called "particularly egregious". Moose concluded by stating that "this report reflects unfavourably on the Sub-Commission and on its author".

In spite such disputes, the Sub-Committee resolutions and endorsement of Bossuyt's working paper is yet another voice pointing at how the use of sanctions as a coercive instrument has led to very serious contradictions in Iraq. It attracted widespread media attention, being reported by all major news agencies, and found its way into the debate again in a letter from Hans von Sponeck in the Guardian on 3 January this year, where he recommended that "The FCO should carefully study the deposition of Professor Bossuyt to the Human Rights Commission".

FAO reports on food and nutrition in Iraq

In September, the Food and Agriculture Organisation (FAO) published an assessment of the food and nutrition situation in Iraq. The report was based on the findings of a mission to Iraq in May 2000, and as well as painting a picture of the current situation, it also makes a partial assessment of the general effectiveness of 'oil for food' in improving the nutrition and general health of the Iraqi population.

Contrary to UK government claims about diversion of resources from 'oil for food', the report characterises the Government of Iraq's food rationing system as "effective". It notes that the availability of "cereal imports since 1997/98 under the oil-for-food deal has led to significant improvements in the food supply situation" [p. 31]. The combination of local purchases and 'oil for food' rations make for a total per person energy availability per day of around 2,500 kcal [p. 10], just above the level advised UN nutritional experts, which stands at 2,463 kcal/person/day [p. 9]. Nevertheless, a major problem is that "food rations do not provide a nutritionally adequate and varied diet" [p. 33]. The potential solution to this, complementing the ration with locally produced goods, is made difficult by the fact that "two consecutive years of severe drought and inadequate supply of essential agricultural equipment and inputs, including spare parts, fertilizers, pesticides and herbicides, have gravely affected the Iraqi agriculture sector" [pp. 14, 31]. In addition, poverty compounds this problem: "with the decline in household income, a significant number of Iraqis are not in a position to adequately complement the ration" [p. 14].

Goods started to arrive under the 'oil for food' programme in the first half of 1997, but it appear that this has little impact on the high malnutrition level of children. In South/Central Iraq malnutrition "remains unacceptably high ... since the six-monthly surveys began in 1997 it appears that there has been little further improvement except for chronic malnutrition ... still, at least about 800,000 children under the age of five are chronically malnourished"[p. 17]. These findings "corroborate ... the findings of the 1999 Mortality Survey supported by UNICEF that found more than a two-fold increase in infant and child mortality since the end of the 1980s"[p. 21].

While all age groups suffer from insufficient supply of micronutrients, caloric malnutrition problems are largely confined to children under 15. By contrast, for adults a growing concern is instead that of obesity as "more than half the adult population has some degree of overweight". The interpretation of the Foreign and Commonwealth Office (FCO) interpretation of this is that "the situation on the ground ... is improving ... Indeed a recent FAO/WFP mission reported that more than half the adult population in Iraq is overweight" [FCO letter 26/09/00]. Such optimism does not seem substantiated by the report, which makes clear that obesity is a health problem: "the major reported causes of death in adults are heart disease, hypertension and diabetes, all conditioned by obesity". In addition, the report hints that social disruption is causing these problems, as "it is likely that the long-term abnormal situation of Iraqi families contributes to this condition". More specifically, "inappropriate diet, lack of physical activity, ... unemployment and the adoption of sedentary lifestyles" were named causes [p. 23].

The FCO reading of the report is strangely selective in other instances as well. Peter Hain wrote on 13 November that "there are no reliable figures on child malnutrition in the centre and south of Iraq" [House of Commons written answers]. The FCO has not indicated why it chooses to accept FAO nutrition figures for adults, but rejects those for children even when given in the same report. A more complete consideration of the report seems to suggest that four years into 'oil for food', caloric intake is just about the only nutritional requirement that has been adequately met.

The explanation for this continuing problem is that "malnutrition, especially child malnutrition, is often caused by factors other than those related to food", notably "disease and unsafe water" [p. 34]. The report also implicates overcrowding, poverty, and the lack of education. The conclusion is that "significant improvement in the health and nutrition status of the vulnerable population, and of children and mothers from these households in particular, cannot be achieved without improving these contributing factors" [p. 35].

On the bright side, in contrast to the bleak picture painted in portraying the Centre/South of Iraq, the report notes that "the implementation of the SCR 986 (oil-for-food) programme in the north, phases I-VI since 1997 has been accompanied by significant improvements in health, mortality and nutritional status" [p. 27]. Notably, wasting, resulting from acute malnutrition, has almost been eliminated in the north. The FCO again has its own explanation. In what was called a 'keynote' speech at the Royal Institute of International Affairs on 7 November, Peter Hain admitted to concern about the humanitarian situation in the South/Centre of Iraq, and invites us to "Contrast the situation with northern Iraq, where the same sanctions apply but Saddam's writ does not run. That is because in northern Iraq the UN is implementing the 'oil for food' programme, not the Iraqi authorities".

There might be some truth in the claim that the UN administration is more efficient than the corresponding Iraqi authorities; for example, UN staff get paid while Iraqi officials do not receive salaries from 'oil for food' money. Nevertheless, Peter Hain has yet to present the evidence that has led him to this conclusion, which is not supported by the FAO findings. On the contrary, the report notes that "in contrast to the situation in the centre/south, improvements in the nutritional situation in the north had started in 1994, prior to SCR 986". In other words, the start of the discrepant development preceded the arrival of goods under the 'oil for food' programme by almost three years. According to the FAO, the difference between the north and the South/Centre is "due to greater resources in the north, the north has 9% of the land area of Iraq but nearly 50% of the productive arable land, and receives higher levels of assistance per person. The north also benefits from the greater flexibility the use of cash gives" [p. 28].

In sum, the FAO mission provides important information about the situation in Iraq. The lasting impression is that despite hopes to the contrary, the present exceptions to sanctions ( 'oil for food') have been inadequate to address very fundamental issues. Perhaps most distressing is the continued suffering of children. While the FAO does not make any political recommendations, one cannot help but note that the report's numerous recommendations would amount to an effective overhaul of the present workings of 'oil for food'.

Security Council Resolution 1284 update

Thirteen months after the adoption of Security Council Resolution 1284 (17 Dec 1999), there has been no movement forward in the endeavours to have it accepted by Iraq. Talks between Iraqi ministers and Kofi Annan are scheduled for late February, but there are no signs that UNMOVIC inspectors will be let into the country. Oil Minister Amir Muhammad Rasheed underlined this again on January 17, the 10th anniversary of the Gulf War, saying that SCR 1284 "is a complete failure and we will never deal with it and it is totally impractical". The FCO, however, still calls SCR 1284 "the way forward", and continues its high public commitment to its implementation as the only venue for dealing with Iraq. As ever, short of regard for appealing to the Iraqi government's regard for the suffering civilian population, it is hard to detect any mechanism whereby it would be pressured to accept the resolution; the situation continues to appear deadlocked.

Meanwhile, aspects of 1284 have continued to be incorporated into 'oil for food'. The "fast-track" procedure of contract approval which was called for by SCR 1284 has been developed further. Under this system, contracts do not have to be individually approved by the Sanctions Committee, as long as they appear on pre-approved lists. Lists for food, educational, and health supplies had developed already when we last touched upon this in our May 2000 newsletter. Water and sanitation supplies were added on 11 August, while the health lists were expanded on 1 September. However, lists for oil spare parts approved, as called for by §18 of SCR 1284, ran into difficulties. Although first prepared in July, they were held up by one of the members of the sanctions committee, widely presumed to be the US, until they could finally be approved on 1 December.

Several other clauses of SCR 1284 have yet to be implemented. Most prominently, the implementation of a cash component [§24] is not yet near any solution, in spite of numerous statements by UN agencies about its critical importance for the running of the 'oil for food' programme. Another outstanding issue, is the formation of a committee for faster approval of oil spare parts, separate from the Sanctions Committee.

Humanitarian Co-ordinator comments on 'oil for food'

Tun Myat, the UN Humanitarian Coordinator in Iraq, returned to New York on 19 October, for the first time since his appointment to Baghdad in April. In a press conference on the situation in Iraq, he said that the food distribution system in Iraq under the 'oil for food' programme was "second to none", but that "in order to affect the overall livelihood and nutrition state of the people, of the children, you need more than food, of course". Unless the basics -- housing, electricity, water, and sanitation -- were restored, the overall well-being of the people would not improve [UN Department of Public Information (DPI) Press Briefing by UN Coordinator in Iraq 19/10/00]. In addition to the collapse of such infrastructure, he said, the major problem was poverty:

"The food distribution system ... now ensures that under the new Distribution Plan over 2,470 kcal of energy of food is being made available to every man, woman and child in the country. And normally that should be sufficient to sustain life and make people's livelihoods a little bit more palatable but the fact is, of course, people have become so poor, in some cases, that they are - they can't even afford to eat the food that they've been given free because for many of them, the food ration represents the major part of their income... So in order to sustain their livelihoods, they sell part of the food that they get. And that is the sorry part of it: they have to sell it in order to buy clothes and shoes or hats or whatever other things that they would require. So the sort of upturn in nutrition that we would all want to be seeing is not happening".

180-day report on Phase VIII of 'oil for food'

On 29 November, the 180-day report on phase VIII of the 'oil for food' programme was made available [S/2000/1132]. The report is longer than its predecessors, and contains a wealth of information on the workings of the programme. While the report on phase VII [S/2000/520] had been carefully optimistic, the tone has once again swung back to stressing intrinsic inadequacies of the present arrangements. Many distribution systems work well, especially that for foodstuffs, and a shortfall of revenue no longer is the largest hindrance to the programme. Nevertheless, other fundamental structural factors are still limiting its implementation.

There are calls for better Iraqi performance in several areas. Notably, the Secretary-General urges that higher priority is given to education, and that more resources are devoted to targeted relief for vulnerable groups. Another growing problem is a slow rate of contracting . At the conclusion of Phase VIII in early December, only 28% of its distribution plan budget had been spent. As at 15 January this figure stood at 53%, reflecting the bunching of contract submission towards the end of each Phase, although the health sector contract applications amounted to a mere 13% of those allocated in the budget [UN Department of Public Information, 18/01/01]. Benon Sevan, when introducing the report on 4 December, made clear that this problem was partly attributable to the sheer volume of contracts and the daunting task of handling the ensuing bureaucracy and negotiations, but also asked the Iraqi government to contract more expediently. Tun Myat recently gave further information on this issue, stating that

"The real reason is nothing sinister ... it all boils down to a new Iraqi law from last October which eliminates the role of middlemen in supplying contracts ... Many ministries here took time to readjust their purchasing procedures, sources of supplies and identification of suppliers, ... and this is probably the main reason why some of the ministries have fallen very badly behind" [Reuters, 'Iraqi oil-for-food no substitute for sanctions end', 30/01/01].

The report also indicates that the need for a cash component is becoming increasingly pressing:

"The absence of an appropriate cash component has increasingly hampered the implementation of the programme. A cash component is essential for all sectors of the programme. With the increased funding level and volume of supplies and equipment being delivered to Iraq, the effective implementation of the programme cannot be achieved unless there is an early positive resolution to the present impasse" [§133].

For example, in trying to administer a programme of targeted nutrition it is not only hampered by the absence of the goods needed, but also by "the lack of a cash component for the transportation of supplies, staff training, the supervision and monitoring of malnourished children and nutrition education" [§82]. Crucial areas such as water and sanitation [§92], and education [§102] were also singled out as areas in which improvement cannot be brought about merely by providing access to goods and material, but depends on the ability to pay for the human resources needed to make use of them. Security Council Resolution 1330 (4 Dec 2000) reiterated the Council's approval in principle of such a mechanism, and on 25 January the Iraqi government agreed to a UN mission which will examine ways of bringing this about in the oil sector. This offers some hope that action will be taken in other areas, in which there has been little progress on resolving this issue. In its absence, the resulting adverse effects seem set to grow proportionally larger as the programme grows in complexity.

The report also reiterates what for more than a year has been a main feature of the Secretary-General's reports, that the large number of holds placed on applications remains "one of the major factors that are impeding programme delivery in the centre and south". This is further discussed in a separate article of this newsletter.

In conclusion, the report constitutes a move away from the optimistic expectations generated by rising oil prices and consequent availability of funds. Poverty, the lack of a cash-component, "excessive" holds on contracts, the failure to submit applications timely, and the increasing bureaucracy of the programme all contribute to frustrate a sustainable improvement of the humanitarian situation in the South/Centre of Iraq.

Security Council Resolution 1330

On 4 December SCR 1330 was passed, beginning Phase IX of 'oil for food'. Most of its measures are discussed elsewhere in this newsletter, but a short summary follows here.

As in the previous three Phases, $600m are allocated for the purchase of oil-industry spares [§7]. The resolution also "expresses readiness to consider" paying Iraq's UN membership dues out of 'oil for food' revenue, has Iraq has lost its vote in the General Assembly from failure to pay [§8]. In addition, SCR 1330 calls for an expansion of the "fast track" procedure of contract approval, with electricity and housing lists to be added, while existing lists are to be enlarged [§§10-11]. In an attempt to benefit vulnerable groups in Iraq, the deduction of revenue to the Compensation Fund is decreased from 30% to 25% [§12]. A cash component in the 'oil for food' programme is mentioned in terms similar to the year-old SCR 1284, but with a new willingness to prioritise the oil sector, for which 600m euros are allocated to this purpose [§15]. Paragraph 18 asks the Secretary-General to prepare proposals for the use of additional export routes for oil.

Holds on contracts grow drastically

The last few months have seen a drastic increase in the number of "holds" placed on imports to Iraq under the 'oil for food' programme. These originate in the gatekeeper role of the Sanctions Committee, whose 15 members all have to approve contract applications made by Iraq under the programme. The purpose of this mechanism was set up to ensure that no 'dual use' items enter the country without adequate monitoring systems in place, and that no goods which do not qualify as "supplies for essential civilian needs" are purchased under the programme. Increasingly, however, applications are not accepted or rejected outright but instead have holds put on them. Almost all holds have been placed by the US and UK, reflecting the hard-line position of the two countries towards Iraq, but perhaps also the possession of the resources required to properly scrutinise contracts, which many smaller countries might not have.

For more than a year now, holds have been identified by UN staff as a major obstacle to the implementation of the 'oil for food' programme. The December 'oil for food' report of the UN Secretary-General [S/2000/1132], concluding phase VIII of the programme, provides the most recent statement on its persisting adverse effect:

"the volume of holds has risen drastically to $2.31 billion as at 31 October 2000. This is certainly one of the major factors that are impeding programme delivery in the centre and south. Current holds on such sectors as electricity, water and sanitation and agriculture impact adversely on the poor state of nutrition in Iraq. Similarly, holds on trucks badly needed for transportation of food supplies may soon affect distribution of food rations, which is also compounded by collapsing telecommunications facilities. I therefore appeal to all parties concerned to fully cooperate and address the excessive number of holds placed on applications" [§128].

The Secretary-General goes on to mention the specific examples of railways, water and sanitation, electricity, telecommunications, and drought intervention as critical areas where inadequate provision is particularly attributable to holds [§§ 74, 90, 101, 108, 120]. Benon Sevan, the Director of the UN Office of the Iraq Programme, provided figures for the most critical sectors when introducing the report: "in telecommunications, electricity, agriculture, education, oil, and water and sanitation, ... respectively, 45, 34, 23, 22, 21, and 20 per cent of the total value of applications remains on hold". Sevan had previously stated that "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" [Introductory statement to S/2000/857, 21/09/00]. Statistics are matched by first-hand impressions: Tun Myat, the UN Humanitarian Co-ordinator in Iraq, concurs that holds were placed on "very critical items", and that this was "becoming a major problem". [UN Department of Public Information, "UN aid coordinator in Iraq urges lifting of holds on humanitarian contracts", 19/10/00].

Such clear statements notwithstanding, the amount of holds has continued to increase dramatically, both in numerical value and in proportion to the total value of contracts circulated, as is shown in the graphs below.

(data source for both graphs: UN Office of the Iraq Programme)

Why is this trend continuing, in spite of its proven adverse effect on the humanitarian situation of Iraqi civilian population? Part of the answer is that the nature of 'oil for food' programme has changed. While initially conceived as a programme for short-term emergency relief, ten years of sanctions has made improvement of the humanitarian situation contingent on the rehabilitation of Iraq's infrastructure. As a result, the volume of contracts is much higher than previously, and the goods needed have a higher potential for 'dual use', howsoever defined. This requires a new approach, and as Benon Sevan explains: "We cannot go on applying similar procedures which were valid at the time when it was only food and medicine" [UN Department of Public Information (DPI), 'UN official urges Security Council to readjust work of Iraq sanctions committee' 4/12/00]. One initiative in this vein is the introduction of a new and more extensive monitoring mechanism on the ground in Iraq, introduced in the last 'oil for food' report. It is hoped that will speed up the approval of contracts that require monitoring within Iraq [S/2000/1132, §§ 43, 64, 65].

There are, however, reasons to doubt that more efficient information provision will have the desired effect, as other factors appear to influence the number of holds. In the same report, the Secretary-General's report states that he "must note that in many cases in which the requested clarifications and/or information appeared to have been provided, the applications concerned remained on hold, without any indication of the reasons provided for the continuation of the holds concerned" [§ 40]. Benon Sevan elaborates that "the absence of timely feedback, long after the necessary clarifications are provided, may give -- and in fact has given -- rise to speculation as to the real motive behind the hold placed on an application" [Introductory statement to S/2000/1132 by Benon Sevan, 4/12/00].

Similarly, Benon Sevan "appealed to Council members to avoid politicizing the relief effort in Iraq, asking that it allow it to 'maintain its distinct humanitarian identity.'" [UN DPI, 4/10/00]. These remarks by people at the heart of 'oil for food' seem to suggest a feeling that political factors obstruct the provision of essential humanitarian supplies. Ten years into the sanctions regime, this fundamental contradiction has yet to be addressed.

Compensation conflicts

After the Gulf War, it was laid down that Iraq was liable for any economic loss and damage resulting from its invasion of Kuwait. Consequently, the UN Compensation Commission (UNCC) was set up in to oversee compensation claims, and with SCR 705 (15 August 1991) it was decided that 30% of Iraq's oil revenue should be paid into a Compensation Fund to this purpose. Ten years on, both the amount paid in compensation and the procedure whereby claims are processed have become increasingly questioned, and compensation has become a bone of contention within the Security Council.

The controversy started in June 2000 when the UNCC ruled that Iraq must pay $15.9bn in damages to the Kuwaiti Petroleum Corporation. France and Russia, backed by China, Tunisia and Ukraine, refused to ratify the decision, in the first interference with the compensation process since its inception in 1991. Eventually, a compromise was reached in September 2000, whereby the claim was awarded, while in exchange a reduction of the percentage allocated for compensation from 30% to 25%, as formalised in SCR 1330 (4 December 2000). This reduction is not a new idea, although France and Russia have never before exerted pressure to get it through. As early as March 1999, the Humanitarian Panel report recommended that "the Security Council could authorize -- possibly as a temporary measure -- reducing by an agreed percentage the revenue allocated to the United Nations Compensation Commission" [Annex II of S/1999/356, §54, vi]. More significantly, this was in fact included in §24 of an Anglo-Dutch draft resolution which preceded SCR 1284 (17 December 1999), and which proposed a reduction to 20% on a loanable basis.

The extra revenue generated by the recent reduction to 25%an estimated $0.5bn in phase IX of 'oil for food'is "to be used for strictly humanitarian projects to address the needs of the most vulnerable groups in Iraq" [SCR 1330, §12]. It is noteworthy that this is an implicit admission that reparations and humanitarian needs compete for scarce resources. This conflict was in fact foreseen already by SCR 687 (3 April 1991), which stated that the level of payment by Iraq should take "into account the requirements of the people of Iraq, Iraq's payment capacity ... and the needs of the Iraqi economy" [§19]. This seems to echo widely held tenets of international law. The International Law Commission, set up by the UN General Assembly as an authoritative body with responsibility for the development and codification of law, last reported on the issue in 1996, recommending that "in no case shall reparation result in depriving the population of a State of its own means of subsistence" [Ch. 3, article 42., §3]. Ten years into the reparations regime, there is good reason to question whether this principle has been upheld; by December 2000, $9.5bn of revenue generated under 'oil for food' had been paid in compensation payments, while humanitarian goods to a value of $9.3bn had arrived in Iraq under 'oil for food' [Office of the Iraq programme, 'Basic figures']. In numerical terms, the programme could just as well be called "oil for compensation".

Such issues are bound to become even more contentious in the future, as the nature of claims being processed is starting to change, and the compensation debt grows. By June 2000, the UNCC had finished processing almost 2.6 million relatively small claims, filed mainly by individuals, to a total sum of $13.5bn. The award of the Kuwaiti Petroleum Company's claim in a stroke doubled Iraq's compensation debt, and was the first of a series of very large claims, mainly by corporations, which now are in the pipeline. 'Le Monde' concludes that, assuming that one third of the outstanding claims of c. $300 billion are awarded, and that the present rate of payment continues, Iraq would not have paid off its debt (including interest) even by 2070 [Le Monde, 'A debt of dishonour', Oct 2000]. While calculations differ, most observers agree with the words of Khaldun al-Naqeeb, a political sciences professor at Kuwait University, that the present arrangements ensure that "Iraq's economic future has been mortgaged for most of the coming century because of the hundreds of billions of dollars in claims for war reparations" [AFP, 'Ten years lost and more bleak decades to come for Iraq', 25/07/00].

Moreover, as reparations look set to continue long after sanctions' lifting, a mechanism will have to be devised for securing their payment. Presently, "oil for reparations" and UN control over Iraqi revenue ensure this, but it is not clear how the process would proceed in a post-sanctions setting. SCR 692 lays down that if Iraq were to fail in its compensation obligations, "the Security Council intends to retain or to take action to reimpose the prohibition against the import of petroleum and petroleum products originating in Iraq and financial transactions related thereto" [§9]. Until an alternative settlement is reached, the compensation of victims of the Gulf War will continue to take place on the backs of other victims, i.e. the Iraqi population, adding to the sanctions' failure to separate humanitarian needs and political aims.