Notices for Companies and Delegations

Implementation of resolutions 1472 (2003) and 1476 (2003)

 8 May 2003

HIGHLIGHTS

·      Over 200,000 metric tons of food under the Oil-for-Food Programme reach alternative

       delivery locations outside Iraq

·      First quantities of food under the 59 per cent of the Oil-for-Food Programme dispatched to

       Iraq from an alternative delivery location in Kuwait

·      Goods worth $665 million in 236 contracts confirmed as shippable by 3 June 2003

·      Number of amendments to priority contracts submitted by the UN agencies and

       programmes increases from 37 to 103

·      Four un-funded contracts funded as priorities under paragraph 4 (g) of resolution 1472

       (2003)  

1.         Goods to be shipped by 3 June 2003. As at 8 May 2003, the United Nations agencies and programmes have identified goods worth $665.2 million under 236 contracts as shippable by 3 June 2003, based on the advice from the respective suppliers. This is a further increase from 206 contracts with goods valued at $548.6 million reported on 28 April 2003 and is, for most part, the result of the extended deadline for shipping of the priority goods as mandated under resolution 1476 (2003).  Most of the goods in the confirmed category are in the food ($313 million) and electricity ($173 million) sectors. The sectoral breakdown of confirmed priorities is provided in Table 1 below.

2.            Contracts under review as potential priorities. In addition to the goods in 236 confirmed priority contracts, a further 247 contracts with a deliverable balance of over $400 million are still being considered by the UN agencies and programmes for possible shipping by 3 June 2003. Most of the contracts still under review are in the agriculture, health and food sectors.  It should be noted that in some of these cases goods shippable by 3 June 2003, would most likely include only a portion of the outstanding quantities.  

Table 1:Contracts confirmed as shippable by 03/06/03 and contracts under review (as at 8 May 2003) 

  * Note: contains only values of goods confirmed as shippable by 3 June 2003, not necessarily the full outstanding      balance for each contract in this category 

3.         Transit goods vs. new shipments.  The balance between priority goods in transit and other goods selected as priorities by the UN agencies and programmes continued to shift towards the latter group. While initially almost 90 per cent of the priority goods confirmed as shippable by 12 May 2003 were goods in transit, the extension of the deadline to 3 June 2003 brought that percentage down to 55 per cent, as at 8 May 2003.  

Table 2:Priority goods that can be shipped by 3 June 2003 (as at 8 May 2003)

 4.         Four un-funded contracts funded under paragraph 4 (g) as priorities. The focus of prioritization activities has largely been on approved and already funded contracts, as they were the most likely group to be shipped within the time limitations mandated under resolutions 1472 (2003) and 1476 (2003). However, four approved and un-funded contracts valued at $38.9 million have recently been identified as priorities by UNDP, and were funded subsequently under paragraph 4 (g) of resolution 1472 (2003). The contracts concerned involve equipment for dredging and wreck removal, to be shipped by 3 June, which should assist in the reopening of the port of Umm Qasr. The tentative implementation schedule for these contracts is included in Table 3 below.  

5.         Non-priority goods in transit.  The total number of contracts considered as in-transit has increased from last week’s 355 to 399 registered cases this week. This is primarily due to the reporting of new cases previously unknown to OIP. The new cases are being investigated further to confirm they meet the transit criteria set by OIP.

Table 3: Summary of contracts in transit as at 8 May 2003 

* Please note that the values indicate total for goods yet to be delivered, and not the value of goods that may be     shipped by 3 June 2003. In many cases, only partial shipments of the balance of goods are possible by 03/06/03.

** The total of number of priority contracts in transit reported by UN agencies is 73 (see Table 2 above). However, there are 12 additional cases expected to be adopted by the UN agencies, pending confirmation of transit status. These contracts are registered as “Under Review” by the UN agencies rather than “Confirmed priority”.  

6.            Processing of amendments on priority goods in transit.   Renegotiation of contracts for priority goods identified as shippable by 3 June 2003 and submission of appropriate amendments to OIP represent the first steps towards the actual shipment of priority goods to alternative delivery locations outside Iraq established pursuant to paragraph 4 of resolution 1472 (2003). While the total number of contracts with priority goods shippable by 3 June 2003 stands at 236, the Office of Iraq Programme has received from the UN agencies and programmes a total of 103 amendments for such contracts so far.  This represents a substantial increase from the six amendments reported on 21 April 2003 or the 37 amendments reported on 28 April 2003. Table 5 shows submission of amendments per UN agency and programme as at 8 May 2003, and table 6 shows progress in submission of amendments for contract with priority goods confirmed as shippable by 3 June 2003.  

The total value of the contracts was reduced by $51 million as a result of these amendments, mainly due to the change in transport and insurance costs to the suppliers but also through reduction of quantities to be delivered in some cases. The net cost to the Iraq escrow account, however, will ultimately have to include the storage cost at the alternative locations, as well as the cost of transporting these goods to Iraq.  

Table 4:Submission and status of amendments on contracts containing priority goods (as at 8 May 2003)

Table 5:Progress in submission of amendments from

21 April 2003 to 8 May 2003

 7.            Deliveries to alternative locations. The UN independent inspection agents (Cotecna Inspection, S.A.) have established presence in the ports in Turkey, Syria, Jordan and Kuwait, and have started authentication of goods received by the UN agencies and programmes, both under 13 per cent and 59 per cent accounts, based on advice from the UN agencies and programmes on the arrival of goods. The authentication is often not done immediately after the arrival of goods, as the consignments are not always discharged/stored where Cotecna has an established presence. OIP has requested UN agencies and programmes that they must first notify OIP of the arrivals of the consignments, so that Cotecna can be tasked to make arrangements for inspection and authentication of goods at appropriate locations.  Lack of advance notice to OIP in this regard often has created a time lag between actual arrival of goods in various ports and storages and their subsequent inspection and authentication. Based on the information available to OIP as at 7 May 2003, various consignments of food under 59 per cent account totaling 224,000 metric tons of food appeared to have arrived at alternative delivery locations, as detailed in Table 7 below, while authentication has been completed only in 3 out of 9 the reported cases.  

Table 6: 59% account goods – deliveries to alternative locations outside Iraq under para 4 (g) of SCR 1472 (2003)

 8.            Delivery of goods to Iraq.    The very first delivery to Iraq of 59 per cent account goods from alternative locations outside Iraq took place on 29 April 2003, when 880 metric tons of wheat was transported from Kuwait to Nasiriyah by WFP. This was followed by additional two deliveries of wheat flour to Basrah totaling 1,391.5 metric tons. The wheat flour originates from the consignment of 50,000 tons of wheat authenticated as arrived to Kuwait on 21 April 2003 under Comm. number 1300016. 

9.            Deliveries of goods under 13 per cent account.  Deliveries of goods to Iraq under 13 per cent account continued with WFP having delivered almost 16,000 metric tons of food by 6 May 2003, not only to the three northern governorates that were the original recipients, but also to locations in Baghdad, Basrah, Nasiriyah, Mosul and Kirkuk.  The delivered goods included high-energy biscuits (HEB), pulses, rice and sugar, purchased from 13 per cent account funds.

             In addition, UNICEF received at the warehouse in Mersin (Turkey) various goods under 13 per cent account, including vitamins, medical supplies, generators, various spare parts, educational supplies, water and fuel tankers, wheel loaders, chlorine gas, pumps, tyres and jerry cans. Some of these goods have already been delivered to the three northern governorates with details still pending.    

10.            Expected future deliveries. The information available on expected future deliveries is rather scarce as the relevant UN agencies and programmes staff are currently preoccupied with negotiations and preparations of amendments for priority contracts to ensure sufficient time for shipment of goods by 3 June 2003. Apart from the information on possible dispatch and arrivals for dredging and wreck-removal equipment (see Table 3 above), UNDP provided a list of contracts with priority goods likely to be dispatched by mid-May as the suppliers have recently been issued authorization to ship goods even though the amendments have not been fully processed.

11.            Applications for emergency supplies outside the Programme. Paragraph 7 of resolution 1472 (2003) provides for fast-track approval of contracts for emergency supplies outside the Programme, which remain subject to sanctions provision. The number of such applications has increased by 21 compared to the previous update, having reached 169 as at 8 May 2003. Most of these applications (115) have been submitted by the UN agencies and programmes and other international organizations, including UNICEF (60), WFP (43), ICRC/IFRC (12) and WHO (9). The remaining 54 have been submitted by various permanent missions on behalf of NGOs, including USA (13), France (10), UK (9) and Belgium (6).

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