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1 April 2003

Weekly Update – 1 April 2003

Oil-for-Food Programme Asks Global Suppliers to

Speed Humanitarian Deliveries for Iraq

An initial assessment of contracts in the United Nations humanitarian pipeline for Iraq has identified over $1 billion worth of goods and supplies as potential priorities for delivery over a 45 day period to 12 May.

The adoption of Security Council Resolution 1472 (2003) on 28 March, gave authority to the Secretary-General for 45 days to facilitate the delivery and receipt of goods contracted by the Government of Iraq through the Oil-for-Food Programme which has $10.1 billion worth of goods and supplies in its pipeline. These include food items worth $2.4 billion, water supply and sanitation equipment ($506 million) and health supplies ($374 million). There are $5.8 billion in processed contracts that are unfunded. The Programme has $2.9 billion in uncommitted funds in escrow.

The Council has indicated that some of the escrow could be used to cover additional costs involved in renegotiating supply contracts and redirecting shipments to the most useful locations. The announcement of temporary new delivery locations is expected as soon as agencies have completed their assessments of the priority needs of civilians inside and outside the country.

The initial assessment by the Office of the Iraq Programme and UN agencies and organizations has identified more than 450 contracts across the spectrum of medicines, health supplies, foodstuffs, water and sanitation and other materials identified by the Security Council as priorities for shipment. The contracts are held by suppliers from some 40 countries representing almost every region of the world.

The ongoing review of contracts in the Oil-for-Food pipeline includes humanitarian items within two main categories:

-          priority goods already in transit by land and sea; and

-          priority items already approved but not yet shipped, that stand the greatest chance of being accelerated in the pipeline to reach their destination within the 45-day window provided by the resolution.

The programme has asked individual UN agencies to ‘adopt’ the most urgently needed supplies already in transit, according to their needs, and go directly to suppliers to re-negotiate the most favourable terms for rapid delivery.

A review of the approved but unshipped contracts will then follow, with agencies again asking the suppliers to urgently identify the status of these orders and modalities for rapid delivery to Iraq.

Agencies actively involved in the review of the pipeline are: FAO, UNDP, UNHCR, UNICEF, WHO, WFP.

Oil exports

Meanwhile, there have been no oil exports under the Programme since March 20. Revenues generated from oil sales from the beginning of phase XIII of the Programme (5 December 2002 - 3 June 2003) are estimated at about $4.5 Billion at current prices and rate of exchange.

Oil-for-Food Programme

The Oil-for-Food programme was established by the Security Council on 14 April 1995. Some 3.4 billion barrels of Iraqi oil valued at about $64 billion have been exported under the programme since December 1996. Of this amount, 72 per cent of the total has been allocated towards humanitarian needs nationwide since December 2000. The balance goes to: Gulf War reparations through a Compensation Fund (25 per cent since December 2000); UN administrative and operational costs for the programme (2.2 per cent) and costs for the weapons inspection programme (0.8 per cent).

Since December 1996 more than $45 billion worth of humanitarian supplies, including $3.8 billion worth of oil spare parts, have been approved by the 661 Sanctions Committee and the Office of the Iraq Programme. Of this amount, almost $27 billion worth of humanitarian supplies and equipment have been delivered to Iraq under the Oil-for-Food Programme, including $1.6 billion worth of oil industry spare parts and equipment.

Additional information is available from the website of the Office of the Iraq Programme. For further information please contact Ian Steele email: steelei@un.org