After final Oil-for-Food report, Annan calls for States to act, pledges UN reforms

Paul A. Volcker

27 October 2005 – Receiving the final report of the Independent Inquiry Committee (IIC) into maladministration and corruption in the United Nations-run Iraqi Oil-for-Food Programme, Secretary-General Kofi Annan today called on Member States to take action against illegal practises by companies under their jurisdiction and to prevent recurrences.

At the same time he reiterated his commitment to "vital" reform of the UN management structure in response to criticism in earlier IIC reports that found failures in actions by the UN Secretariat in regard to the now defunct $64-billion Programme which allowed Saddam Hussein's sanctions-bound regime to sell oil to buy essential supplies.

Mr. Annan "notes that a vast network of kickbacks and surcharges has been exposed, involving companies registered in a wide range of member states, and certified by them as competent to conduct business under the Programme," a statement by his spokesman said, hours after he received the report from IIC Chairman Paul Volcker, a former United States Federal Reserve Chairman.

"He hopes that national authorities will take steps to prevent the recurrence of such practices in the future, and that they will take action, where appropriate, against companies falling within their jurisdiction," the statement added.

Mr. Annan recalled that, in his speech to the Security Council after the IIC's previous report, he had already accepted responsibility for management failures in the Secretariat.

He also noted that the latest report confirms the earlier finding that the respective roles and responsibilities of the Secretariat, the Security Council and the so-called 661 Committee, which approved all of the contracts, including the prices, were never clearly enough defined.

"Most importantly, the Secretary-General believes that thorough reform of the management structures and practices of the United Nations, especially those that relate to oversight, transparency and accountability, is vital," the statement said.

"He has already instituted extensive reforms – including broader and more rigorous financial disclosure requirements, a stronger policy to protect whistleblowers, and a review of all oversight and audit arrangements. He intends to pursue these and other reforms with even greater vigour in the weeks and months ahead, and looks to Member States for their support," it added.

In its previous reports the IIC said it had found evidence of both mis- or maladministration and corruption within the UN and by contractors.

But it said it had found that there was no evidence of any affirmative or improper influence by Mr. Annan in the bidding or selection process that selected a company for which his son, Kojo, had worked.

Mr. Annan has repeatedly said he has already initiated reforms following the earlier reports, which noted the significant role played by the Programme in assuring that ordinary Iraqis received food and medicine during the sanctions from 1996 until 2003.

Thanking the IIC members for their "extremely thorough investigation," Mr. Annan said in his statement today that such a probe was exactly what he had hoped for when he set up the inquiry 18 months ago.

"He notes, as Mr. Volcker himself has done, that few other organizations would voluntarily expose themselves and their activities to such detailed scrutiny," the statement concluded.

In a later briefing for members of the UN General Assembly, Mr. Volcker said the world body needed reform in its broader administrative practices and structures, with a chief operating officer appointed to oversee management discipline and professionalism. These tasks cannot be dependent on a Secretary-General alone, who is usually chosen for diplomatic and political skills and is busy with security issues.

"What is at stake is whether this organization will be able to act effectively, whether it will have the funds, the competence and the administrative leadership to respond. The world will be a poorer, more dangerous place without an effective United Nations," he added.

"There is an overwhelming common interest, a common interest in a strong, competent United Nations, an organization that can in practice respond to the various challenges sure to arise that no country or group or countries has the capacity or legitimacy to deal with effectively."

Talking to reporters after the briefing, Mr. Annan said there were "lessons for all of us to learn. And obviously, we are going to learn from the lessons, take measures to strengthen the Organization."

"And we already have proposals for reforms that will ensure that, in future, we are better equipped to handle this sort of programme," he added.

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