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Press Release

19 November 2003

 Oil-for-Food Programme Set to Close 21 November 

The United Nations will terminate its administration of the multi-billion dollar Oil-for-Food Programme (OFFP) in Iraq at midnight 21 November.  

Operational responsibility for the seven-year-old programme, including all humanitarian projects funded by oil revenues, assets ranging from schools to power stations and all OFFP contracts with suppliers will be transferred to the Coalition Provisional Authority (CPA). 

The balance of unencumbered funds held in the UN Iraq Account will be transferred to the Development Fund for Iraq, which is under the direction of the CPA. 

The UN has already transferred $3 billion to the Development Fund from the UN Iraq Account, where some $1.6 billion remains.  

A ceremony is to take place Friday in Erbil (northern Iraq), marking the termination of the UN OFFP and its transfer to the CPA.  

As stipulated by Security Council resolution 1483 (22 May 2003), there will be no further role of the UN in operating the humanitarian programmes funded through the OFFP. However, a pipeline of some $8.2 billion in humanitarian supplies and equipment continues to be delivered,  and the CPA has indicated it will maintain most of the ongoing projects and operations, eventually turning them over to Iraqi authorities. 

Before the war, some 893 international staff and 3,600 Iraqis worked for the Programme in Iraq: most international staff left the country in the wake of the Baghdad bombing of 19 August, while national staff continued operations. As of 19 November 2003, there were 3,394 UN national staff, of whom 2,544 were in the north and 850 in the centre/south. The CPA has indicated that most of the Iraqi staff associated with project implementation in the three northern governorates will be retained. 

In financial terms, the OFFP has been the largest programme the UN has ever administered. Between 1996 and the onset of war in March, the OFFP  achieved progressive improvements in health, education and public infrastructure. (See accompanying fact sheet). Malnutrition rates among children were reduced by 50 percent in six years, and more houses were constructed in 2002 than in 1990. 

The OFFP has also been one of the most efficient of UN programmes, operating through nine agencies with a 2.2 percent overhead. 

The UN Security Council established the OFFP in 1995 in response to a humanitarian crisis that followed the comprehensive sanctions imposed on Iraq following its 1990 invasion of Kuwait.  Under the programme, 3.4 billion barrels of oil were exported, with 72 percent of the revenue going toward humanitarian needs. The balance was allocated to Gulf War reparations (25 percent); UN administrative costs (2.2 percent) and the weapons inspection programmes of IAEA and UNMOVIC (0.8 percent).  

The UN’s Oil-for-Food Programme has benefited tens of millions of Iraqis, by using Iraqi oil revenues to purchase and manage some $46 billion worth of humanitarian assistance, supplies and projects. Proceeds from oil exports bought food and medicines;  built schools, clinics and housing;  maintained and rehabilitated electrical supply and oil infrastructure;  improved water treatment and distribution. Virtually all Iraqis received food through its country-wide network; 60 percent were totally dependent upon food rations. Food imports totaled more than 500,000 metric tons a month, and deliveries have been continuing despite the current conflict and insecurity. 

In the northern Iraqi governorates of Erbil, Dahuk and Sulaymaniyah,  nine United Nations agencies implemented the OFFP.* 

In the 15 governorates of southern and central Iraq, the OFFP was implemented by the former Government of Iraq, with the UN monitoring for effective and equitable distribution. Food distribution has been handled by some 44,000 Iraqi food agents. UN agents also monitored oil shipments at export points and authenticated OFFP supplies at entry points. 

An orderly handover of  the Programme’s assets and operations by  the 21 November deadline set by  the Security Council has been accomplished on time and in the face of chronic insecurity, including the 19 August bombing of the UN headquarters in Baghdad which led to the temporarily withdrawal of most UN international staff. Still, the UN has sustained essential humanitarian assistance through the dedication of  Iraqi national staff.  

UN agencies are handing over all documents and dossiers for OFFP-funded projects they managed. They have also completed the renegotiation of contracts with suppliers as stipulated by the Security Council.   

After 21 November, UN agencies will continue their mandated activities in humanitarian assistance to Iraq with revenues received from donor countries from humanitarian appeals in March and June 2003. Iraqi authorities may request further technical assistance from them. 


For additional information please contact: Ian Steele Tel. 212 963 1646  email: steelei@un.org


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