Visit to Iraq
(16 June to 6 July 1999)
TALKING POINTS and related TABLES
- Held intensive series of long working meetings with the Vice
President of Iraq as well as all the Ministers responsible for sectors
with which the Humanitarian Programme in Iraq is involved pursuant to
Council resolution 986 (1995) - (Foreign Affairs, Oil, Education,
Finance, Transport and Communications, Health, Trade, Agriculture,
Presidential Adviser on Electricity). Met in fact twice
with some of the ministers. Additional meetings were also held with
their respective senior officials.
- Visited the three governorates in the north (Dohuk, Erbil and
Suleimaniyah) where the United Nations implements the programme on
behalf of the Government pursuant to the MOU.
- Met with local authorities, including Messrs. Masood Barzani and
Talabani.
- Held numerous meetings with all UN agency and programme
representatives and visited many project sites.
- Held a meeting with NGOs in Baghdad.
- Met individually with many heads of diplomatic missions in Baghdad
and briefed the diplomatic corps prior to departure from Baghdad.
General remarks
Throughout the visit was received very warmly by the Vice President
and all the Ministers and their respective colleagues. Had a similar
warm reception by the local authorities in the north.
The meetings held were the most open and frank meetings I have had
during my three visits to Iraq since start of my assignment as Executive
Director of the Iraq Programme on 15 October 1997. The discussions were
held in a truly frank atmosphere, with a view to resolving difficulties
encountered and improving the implementation of the humanitarian
programme.
Reiterated that it was essential to depoliticize the humanitarian
programme in order to achieve its humanitarian objectives.
Throughout the visit, reiterated also that all United Nations
personnel, including myself, associated with the humanitarian programme
should refrain from getting involved in political issues - not even by
implications - and should concentrate all their efforts strictly on the
implementation of the humanitarian programme pursuant to the mandate
given to the Secretary-General by the Security Council in resolution 986
(1995), and in compliance with the provisions of the Memorandum of
Understanding signed between the Secretariat and the Government of
Iraq..
The North
There has been considerable progress made in the implementation of the
programme in the three northern governorates of Dohuk, Erbil and
Suleimaniyah.
Implementation rate in some sectors was slower than I would have liked
to see e.g., education and electricity in particular, as it affects all
sectors.
In electricity there is a lot to catch up with as the implementation
rate in that sector had a very slow start in the earlier phases.
As promised to you a year ago, I am pleased to inform that we have put
our house into order as far as the electricity projects in the north are
concerned and the implementation of the projects are in good hands..
Am determined to push for further improvements in the implementation
rates, particularly in the education sectors.
The United Nations can and must improve further its performance in the
North.
The key issue during my visit to the North was the question of
electricity supply. On this issue, during my meetings in Baghdad, the
authorities called for reconnecting the three governorates to the
national grid - as they put it, Baghdad has the expertise, and
emphasized the necessity of standardization. Besides, they told me they
could complete the electricity projects during a period of 3 to 5
months.
I pointed out that while on technical grounds one could not argue
against the reconnection to the national grid, the local authorities had
repeatedly insisted to have their own independent electricity system.
Since the Governorate of Dohuk was already connected to the national
grid, I added, the Government may wish to consider making Dohuk as a
model by providing additional electricity supply to Dohuk on a regular
basis, which was responded favourably by the authorities.
When I raised the question with the local authorities in the north,
the local authorities in the three governorates told me that while they
had no objection to reconnect to the national grid and, in fact, they
were ready to meet, as they put it, the expenses of reconnection "up
to their border", they would like to continue with the
implementation of the current electricity projects in their respective
governorates.
A series of further technical discussions between the authorities in
Baghdad and UNDP experts will resume during the first week in August.
The impact of our accelerated implementation in the northern
governorates is clear. There is new construction to be seen, greater
economic activity and fewer complaints from local authorities. Indeed,
their principal concern at all my meetings was how to ensure their
current share of financial support (13 per cent) beyond sanctions.
Centre/South
Our main responsibility in the fifteen governorates in the Centre/South is observation of the equitability, adequacy and
effectiveness of distribution of supplies provided under humanitarian
programme. We also monitor the utilization of oil spare parts and
equipment.
Since the start of the humanitarian programme, over $3.4 billion
dollars worth of food supplies and close to $700 million worth of health
supplies have arrived in Iraq. Food and medicine alone, however, can not
resolve the very serious difficulties experienced in improving the dire
humanitarian situation in Iraq. The improvement of the nutritional and
health status of trhe Iraqi people through multi-sectoral approach, as
recommended by the Secretary-General and endorsed by the Security
Council in resolution 1153 (1998) is being seriously affected as a
result of excessive number of holds placed on supplies and equipment for
water and sanitation and electricity.
With reference to humanitarian supplies which have reached Iraq, I was
determined during the visit, as I put it, "to demystify" the
question of excessive amounts of humanitarian supplies and equipment
provided under the humanitarian programme, being held in government
warehouses.
This particularly applied to medical supplies and equipment, although
it also applied to some other sectors.
I welcome the understandings reached with all the Ministers concerned
to review the inventory currently in government warehouses, regarding
supplies and equipment received under the programme, and prepare the
categories of items together with their respective dollar value, for
example, list of items received which were defective or did not meet
quality control standards, list of items which require complimentary
supplies, parts and equipment which are either on their way to Iraq or
had been placed on hold by the 661 Committee, as well as list of items
stored as buffer stocks, among others.
Assurances were received from the Vice President that the necessary
directives to the ministries concerned would be given.
WHO and UNICEF, together with UNOHCI, have already started working,
with the authorities concerned, on the inventory of supplies and
equipment in the health sector:
- Buffer stocks
- Supplies which have failed quality testing
- Defective equipment
- Unmatched arrival of complementary items, including essential
complementary items which have been placed on hold
- Allocations to semi-private centres kept at central warehouses
- Uninstalled equipment lacking spare parts or installation
services
Throughout the meetings there was an openness to share information,
including for the first time information provided by the Minister of
Trade regarding the supplies provided from Government stocks to meet the
shortfalls in the monthly food basket.
A major problem being faced by the Government is regarding supplies
and equipment which on arrival are found to be defective or do not meet
quality control standards.
I emphasized the necessity to enter in to contracts with reliable
suppliers and avoid excessive dependence on brokers.
The situation has worsened as many suppliers with whom Iraq has had
long standing commercial dealings have become reluctant to supply goods
under the 986 programme, given the lengthy delays in contracting and
approval. As a consequence, Iraq is obliged to procure through less
reliable brokers. This further reduces the likelihood of compensation
when sub-standard supplies and equipment are received.
It is essential to find ways and means to ensure that supplies and
equipment provided by contractors are in compliance with their
contractual commitments, e.g. performance bonds etc.
The 661 Committee recently reviewed procedures regarding the above
matters and decided to maintain current procedures.
The Secretariat stands ready to assist the 661 Committee in finding
appropriate measures in that regard. The Office of the Iraq Programme is
consolidating the relevant procedures and understandings reached by the
661 Committee, which should be helpful to both the Committee, the
Government of Iraq as well as to potential suppliers.
The Government needs to be more careful in the selection of
contractors.
Drought
- The drought is affecting not only Iraq but the whole region.
- The United Nations agencies, specifically FAO, are preparing a plan
to deal with the drought which will include sinking new water wells
for communities across the 18 governorates which are particularly
vulnerable to the effects of the drought.
- Between 1.2 million to 1.5 million sheep and over 50,000 heads of
cattle had already been moved to the three northern governorates. You
could see the stream of herds moving to the north for grazing, by foot
or by truckloads.
- The water levels at the two dams, the Derbandikan and Dokan, in the
North, were 23 metres below normal levels during my visit.
- In the distribution plan for phase VI there are a number of
activities related to drought.
- Requested the Government to indicate in the contracts when they are
related to anti drought activities in order to have priority approval
by the 661 Committee.
Foot and mouth disease
FMD is also affecting not only Iraq, but the whole region.
FAO has already ordered 1.8 million doses of FMD vaccine. It is
expensive, costing $1.00 per doze. Each animal requires booster shots
every two months. The kind of strain prevalent in Iraq requires a
special kind of vaccine which is produced, according to FAO, only by
three establishments, one in India, one in France and one in Ethiopia.
FAO doubts that the companies concerned could meet the magnitude of the
demand. Another problem being faced is, according to FAO, the fact that
by the time the vaccines arrive in Iraq, they lose over 30 per cent of
their potency, during the flight from Delhi to Amman and then by road
(1,000 kms) to Baghdad.
FAO will send an assessment mission to Iraq to review further the
situation. The Office of the Iraq Programme is working closely with FAO
in formulating the terms of reference of the assessment mission.
Oil spare parts and equipment
Under cover of his letter dated 2 July 1999 addressed to the President
of the Security Council, the Secretary-General submitted, pursuant to
paragraph 9 of resolution 1242 (1999, a detailed list of parts and
equipment necessary for the purpose described in paragraph 1 of
resolution 1175 (1998). In order to help prepare the list, the
Secretary-General dispatched a group of experts to Iraq, and the report
of the group appears as an annex to the letter of the Secretary-General
(S/1999/746).
According to the group of experts, while the estimated value ($600
million) of the list of spare parts and equipment submitted by the
Government of Iraq is twice the amount ($300 million) approved by the
Council in resolution 1242 (1999), the amount indicated by the
Government is considered to be commensurate with the production levels
achieved and predicted, particularly given the emphasis placed on major
projects and investment in safety, control of pollution and
environmental damage.
The stated crude oil production targets of the Government of Iraq are:
3 million barrels per day by December 1999; 3.2 million per day by March
2000; and 3.5 million per day by December 2000.
As pointed out by the Secretary-General in his letter addressed to the
Security Council, any additional amount requested for the purchase of
oil spare parts and equipment would require authorization by the
Council. The Secretary-General has been keeping under constant review
the revenues received during the current phase and would address the
matter within the context of his 90-day report to be submitted to the
Council by 23 August, pursuant to paragraph 6 of resolution 1242 (1999).
The letter of the Secretary-General is very clear on the urgent
requirements of oil spare parts and equipment for the oil industry, and
equal urgency of the approval of applications for such spare parts and
equipment.
The oil experts briefed the 661 Committee on Tuesday, 13 July.
As at 19 July 1999, a total of 1025 applications, with a value of over
$531 million, for oil spare parts and equipment had been received by the
Office of the Iraq Programme, of which 835, with a total value of $409.6
million, were circulated.
Of the total number of applications circulated, 588 with a total value
of $296.7 million, have been approved by the 661 Committee, and 233
applications, with a total value of $109.4 million, have been placed on
hold.
There remain 156 applications, with a total value of $121.9 million,
which have not yet been circulated, of which applications to a value of
$90.6 million require either distribution plan amendments or further
information from the applicants.
The current rise in the export volume of Iraqi crude oil of
approximately 300,000 barrels per day from phase IV to phase V (which
includes 100,000 barrels per day owing to reduced refining throughput),
should not create complacency regarding the urgent need for spare parts
and equipment for the oil industry. The higher production rates will
begin to decline unless much-needed chemicals for drilling and
perforating and other equipment and spare parts - some of which have
been placed on hold by the 661 Committee - are delivered to Iraq in a
timely manner. The absence of a single spare part or item of equipment,
as small as it may be, could be sufficient to prevent the completion of
an entire water injection project or well completion programme. For
phase VI, the current phase, it may be noted that an indication is
provided regarding the interrelationship of the spare parts and
equipment.
Oil production for export has a direct relationship to the revenue
available to fund humanitarian purchases. The approval and delivery to
Iraq of the spare parts allocated to the Oil sector would have a
positive impact on sustaining oil production and ensuring the continued
success of the humanitarian efforts.
Critical to these efforts are a number of necessary items:
- Contracts have been approved for pipes for the export pipelines to
carry the oil; however contracts for pigging these pipelines are "On
Hold". Communications equipment necessary for safe operation of
the export pipelines and the safe and efficient lifting at Mina Al
Bakr remains "On Hold".
- Contracts for equipment that relate to oil exploration, well
drilling, down hole well logging and surveying, including heavy
equipment vehicles needed to perform the field work are all examples
of goods and services that encourage "good oilfield husbandry".
Unfortunately, these are also examples of contracts currently "On
Hold".
- A number of contracts that include control instrumentation that are
for the efficient and safe operation of control rooms in pumping
stations, degassing plants and crude oil treatment facilities are
currently on hold "pending further technical evaluation".
These goods are crucial to ensuring that other major equipment, much
of it expensive, is operated within the manufacturers’
recommended parameters to avoid damage through misuse and, in
addition, to provide a safe working environment for operators. A
contract for hydrostatic testing units which is essential to ensure
the integrity and safety of pipelines in storage tank farms and
pumping stations is also "On Hold", "due to dual use
concerns".
- The Secretary General has, in previous reports, expressed concern
regarding the state of the Iraqi environment. Contracts for goods that
would address these types of concerns, include waste water treatment
equipment, automatic control instrumentation, gauges, oil slop sewage
draining units, pumps etc. These contracts, however, are all "On
Hold" either "pending further evaluation" or "for
dual use concerns" regarding their material composition or
because of their computer related components.
- A recent review of circulated contracts in both Phases IV and V
reveal a number of examples where some goods have been approved while
other complementary goods necessary to complete "Projects"
are "On Hold". The simplest example of this is approved and
delivered pipes that are awaiting fittings, welding units and heavy
equipment (and tires) for site preparation that are currently on hold.
The consequence is that these projects cannot be completed in the
absence of integral parts and the contracts are often abandoned or
cancelled by the purchaser.
The Secretary-General has already brought to the Council’s
attention that the operations in Mina al-Bakr are not carried out in an
operationally safe manner. Owing to the lack of intermediary storage
capacity, a large percentage of crude oil is transferred almost directly
from the producing fields to Mina al-Bakr. The operation involves a
length of 180 kms of the pipeline, without efficient communications and
operations control. The application for the necessary communication has
been on hold since October 1998.
A particular concern is the control of any situation that might be
caused by an emergency shut-down of a loading procedure at Mina al-Bakr,
which could result in a major and disastrous oil spillage.
The increase in production and export of oil is being achieved,
however, at very a very high cost, damaging oil wells, some permanently,
and very serious environmental consequences which will not be tolerated
by any standard.
I should like to reiterate what the Secretary-General has asked for
repeatedly - it would be most helpful if the Security Council could
request the 661 Committee to proceed as expeditiously as possible in its
consideration and approval of applications for oil spare parts and
equipment and to review further all applications placed on hold. The
same applies of course for all applications submitted for other sectors
covered under the approved distribution plan. There are excessive
numbers of holds being placed on essential supplies related particularly
to water and sanitation and electricity which affects all other sectors.
On telecommunciations, we are discussing with the ITU and UNOPS
regarding arrangements for the implementation of the telecomunications
projects in the north as well as the observation mechanism for the
centre/south.
There is an urgent need to address telecommuncations requirements.
The Office of the Iraq Programme will spare no effort in assisting the
661 Committee in providing any additional information, as well as
technical advice, that may be required.
Let us all remember and remember very well: the success or
failure of the programme hinges squarely on the amount of oil produced
and exported.
Revenue
It may be recalled that in his supplementary report (S/1998/90)
submitted to the Security Council in February 1998, the
Secretary-General had recommended a revenue target of $3.4 billion for
the implementation of the humanitarian programme, after the deductions
pursuant to paragraph 8 of resolution 986 (1995). In resolution 1153
(1998), the Council endorsed the recommendations of the
Secretary-General and authorized a revenue target of up to $5.256
billion during a given period of 180-day, which after deductions would
indeed provide the $3.4 billion required for the implementation of the
humanitarian programme. The revenue target proposed by the
Secretary-General did not include the $300 million authorized by the
Council in resolution 1175 (1998) for oil spare parts and equipment.
That revenue target was never achieved during the fourth and fifth
phases due to the substantial fall in oil prices. Accordingly, the
recommendations of the Secretary-General regarding the enhanced
humanitarian programme as endorsed by the Council could not be fully
implemented in light of substantial short-falls in the funding levels.
During phases IV and V, the revenues available for the implementation
of the humanitarian programme, after deductions of funds for the oil
spare parts and equipment as well as for pipeline fees, were,
respectively, $1.651 and $2.198 billion. Therefore, there was a
shortfall of $3.1 billion in the revenues authorized for humanitarian
supplies under phases IV and V.
Thanks to the rise in oil prices, we may be able to achieve for the
first time the revenue target set by resolution 1153 (1998) and, in
fact, go beyond the $5.2 billion. As at 21 July 1999, approved phase VI
contracts for oil exports involved 344.6 million barrels, with an
overall estimated value of $5.7 billion. More contracts are expected to
be submitted to the 661 Committee for approval, which would generate
additional revenue.
Would like, however, to caution that the oil market continues to be
volatile. While since 1 June 1999 oil prices have risen by about $5 per
barrel, from one day to another the prices have at times gone up and
down by about $1. The average price of Iraqi crude oil slipped by 80
cents per barrel between 20 and 21 July. Each change in price by 10
cents per barrel, amounts to about $25 million in revenue generated or
lost.
The Security Council may wish to review, pursuant to paragraph 14 of
its resolution 1242 (1999), the revenue target set forth in paragraph 2
of its resolution 1153 (1998).
x x x
Security and safety of staff
The security and safety of staff working in Iraq remains paramount.
It may be recalled that on 5 June, the Iraq News Agency (INA) reported
that unnamed officials in the Ministry of Agriculture had accused the
United Nations agency responsible for demining activities of "sabotage"
through alleged actions of a British employee who, it was claimed, had
buried locust eggs at a location in northern Iraq in April this year.
After investigating the report by INA, in a statement to the press on
10 June I expressed my serious concern about the allegations made and
stated that the report was incorrect in every detail and completely
false in its claim that a United Nations employee or the United Nations
Office for Project Services, which implements the demining programme in
the three nortern governorates, had behaved in a way which could damage
agriculture in Iraq.
I was expecting that during my recent 20 day visit to Iraq the matter
will be raised by the Government. It was not.
In fact, I wished to raise the matter myself and did so during my
meeting with the Minister of Agriculture, on 22 June. I asked to visit
the site where we allegedly had buried the locust eggs. As I put it,
they must be hatching by now. The response was quick, and consisted of
laughter. I thought the matter was closed.
I very much regret that while I was on the road on my way to Amman on
6 July, the Government handed to the United Nations Humanitarian
Coordinator a note verbale, reiterating allegations first reported by
INA on 5 June, stating that the Government of Iraq considered Mr. Ian
Broughton, a New Zealand national, working with UNOPS, as "undesirable
person", and requested his departure within 72 hours of the receipt
of the note verbale. Mr. Broughton who was completing his assignment in
abour a week’s time, left the country on 8 July.
We did again carry out an investigation and could not confirm the
allegations made by the Government.
Again, I should like to express my regret that the Government did not
see fit to inform me while I was in Iraq about this matter. In fact, the
letter from the Acting Minister for Foreign Affairs addressed to the
Secretary-General is dated 5 July, when I was still in Iraq. The text of
that letter is reproduced in document S/1999/757.
I believe the onus to provide the proof remains with the Government of
Iraq.
Also as United Nations Security Coordinator, I am very much concerned
with the increasing trend by officials at the highest levels in making
allegations against United Nations personnel in Iraq, who already have
been working in a difficult environment. I am seriously concerned also
because only about two months ago we lost a colleague who was shot in
cold blood in the north. We are still awaiting the results of the
investigation by the local authorities. The allegations made by the
Government against a United Nations colleague is very serious and could
provoke violent action by those who are disgruntled against UN
personnel.
I therefore appeal to the Government to refrain from making such
allegations and provide information to the Secretary-General in advance,
if indeed there are activities being carried out by UN personnel outside
the mandate given to the Secretary-General. This was an understanding I
had reached with the authorities during my previous visit to Iraq in
June 1998.
x x x
Finally, Mr. President,
Let us all join hands in improving the implementation of the
humanitarian programme in order to achieve the humanitarian objectives
of Security Council resolution 986 (1995) and the successive resolutions
concerning the programme. Let us depoliticize the programme in order to
achieve its humanitarian objectives.
