SECURITY COUNCIL ALTERS DURATION OF PERIODS AUTHORIZED IN JUNE UNDER IRAQ 'OIL-FOR-FOOD' ARRANGEMENT

12 September 1997

Press Release
SC/6418

SECURITY COUNCIL ALTERS DURATION OF PERIODS AUTHORIZED IN JUNE UNDER IRAQ 'OIL-FOR-FOOD' ARRANGEMENT

19970912 Resolution 1129 (1997), Adopted by 14-0-1 Vote, Retains Overall Period of 180 Days from 8 June for Sales To Meet Humanitarian Needs

Acting under Chapter VII of the Charter, the Security Council this afternoon extended from 90 to 120 days the initial period under which Iraq is permitted to sell up to $1 billion in Iraqi oil to meet the humanitarian needs of its people, as authorized under resolution 1111 (1997) of 4 June. At the same time, it reduced from 90 to 60 days the second period under which Iraq was permitted to sell up to an additional $1 billion under that resolution.

The Council took this action through its adoption today of resolution 1129 (1997), by a vote of 14 in favour to none against, with 1 abstention (Russian Federation).

Under resolution 1111, which renewed its earlier resolution 985 (1995), the Council had authorized the sale of Iraqi oil to pay for humanitarian goods and their distribution in the country for an additional 180 days, beginning at 0001 hours (EDT) on 8 June. Specifically, Iraq was authorized to produce a sum not exceeding a total of $1 billion during each 90-day period, as specified in the earlier resolution.

However, the Council today noted that Iraq would be unable to export products worth $2 billion within the 180-day period while still complying with the $1 billion limit set for each 90-day period. Determined to avoid any further deterioration of the current humanitarian situation in Iraq, it authorized the alteration of the authorized periods, while expressing its firm intention that under any future resolutions, the relevant time limits would be strictly enforced.

The Council further decided that its action today would apply only to the period covered by resolution 1111 (1997). Thus, it authorized sales of up to $1 billion for the 120-day period beginning on 8 June and another $1 billion for the 60-day period beginning on 4 October. It stressed that contracts for the purchase of humanitarian supplies submitted in accordance with resolution 1111 must be limited to items on the second distribution plan prepared by the Government of Iraq and approved by the Secretary-General. Appropriate amendments to the plan must be requested prior to purchasing items not on that list.

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Through other terms of the its text, the Council also expressed its full support for the Secretary-General's intention to follow up his observations concerning the needs of vulnerable groups in Iraq by monitoring the actions of the Iraqi Government in respect of those groups.

In taking today's action, the Council took note of the decision by the Iraqi Government not to export petroleum and petroleum products permitted under resolution 1111 during the period from 8 June to 13 August. It expressed deep concern about the resulting humanitarian consequences for the Iraqi people, since the shortfall in revenue would delay the provision of humanitarian relief and create hardship for the Iraqi people.

Speaking before the vote, the representative of the Russian Federation said that efforts to arrive at an agreed text reflecting all opinions had not met with sufficient understanding, and the text had been presented hastily. However, his country had decided not to oppose it, so as to avoid delaying the supply of humanitarian goods. Nevertheless, an unbiased look should be taken at the functioning of the Sanctions Committee, he said.

The representative of the United States said the Council had acted out of overriding humanitarian concern for the welfare of the Iraqi people, who would have paid the price for delays in the delivery of goods that would have resulted from Baghdad's refusal to sell oil until the first 90-day period under resolution 1111 had nearly expired. The co-sponsors had worked tirelessly to achieve a consensus text, but could not accept the introduction of language that sought to blame the United Nations for actions which were solely the fault of the Iraqi Government.

Statements were also made by the representatives of the United Kingdom, Egypt, China, and France.

The meeting, which was called to order at 3.25 p.m., was adjourned at 3.50 p.m.

Security Council Work Programme

The Security Council met this afternoon to consider the situation with respect to its sanctions regarding Iraq. It had before it a report of the Secretary-General on the matter submitted pursuant to resolution 1111 (1997). Also before the Council was a letter from the Chairman of the Committee established by Council resolution 661 (1990), known commonly as the Iraq Sanctions Committee.

Council resolution 1111 (1997) of 4 June extended for a further 180 days the provisions of resolution 986 (1995), known as the "oil-for-food" formula. Under that formula, Iraq is permitted to sell $1.07 billion worth of oil every 90 days to purchase humanitarian supplies.

Report of Secretary-General

In his report (document S/1997/685), the Secretary-General details the distribution of humanitarian supplies throughout Iraq, including implementation of the United Nations Inter-Agency Humanitarian Programme in the three northern governorates of Dahuk, Erbil and Sulaymaniyah. He says the sale of petroleum had resumed on 8 August, following the submission of pricing mechanisms by the Iraqi State Oil Marketing Organization for liftings of Iraqi crude oil in August, with the approval of the Iraq Sanctions Committee.

As of 31 August 1997, 24 contracts involving purchases from 14 countries had been approved for export, covering some 107.9 million barrels of oil for the 180 days, the report states. In the first 90 days, 24 liftings -- totalling 28.7 million barrels, with an estimated value of $456.2 million -- have been completed. Owing to a delay in the resumption of petroleum sales, total revenue for the first 90-day period will be about $500 million below the objective of $1.07 billion (including the pipeline fee), if current prices remain unchanged.

According to the report, 786 applications for exports of humanitarian supplies to Iraq under resolution 986 (1995) were submitted to the Committee, of which 672 were approved, 83 were on hold, 20 were blocked, and 11 were pending or awaiting clarification. The Committee has adopted measures to facilitate a smoother contract approval process. Some $1,066.9 million has been allotted for the purchase of humanitarian supplies by the Iraqi Government, as well as $261.5 million for the purchase of humanitarian goods for the three northern governorates by the United Nations Inter-Agency Humanitarian Programme.

Resources authorized under resolution 986 (1995) are intended to prevent a further deterioration in Iraq's humanitarian situation and to meet essential needs, the report states. To assess the adequacy of such resources, the United Nations must undertake surveys within the framework of the resolution

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and its memorandum of understanding with Iraq. In the food sector, the Iraqi Government has given permission for the United Nations Children's Fund (UNICEF) to conduct a nutritional survey. It has not yet allowed the World Food Programme (WFP) to undertake a household survey to measure the adequacy of the ration. Moreover, the Government has yet to release data gathered from over 6,000 households in central and southern Iraq during August 1996. Survey data for some 2,000 households in the three northern governorates has enabled the United Nations to identify more clearly the areas of greatest humanitarian need.

A Food and Agriculture Organization (FAO)/WFP nutrition survey conducted during June and July has confirmed previous UNICEF assessments that, despite improved food supply, child malnutrition remains serious and widespread, particularly in children under five years of age, the report states. Only during August was the full ration basket distributed throughout Iraq. It is vital that the full ration be distributed and that those most dependent on regular supply are not disadvantaged by repeated disruptions in distribution. According to the WFP, prices of some basic food commodities had dropped significantly when goods first arrived under resolution 986 (1995). The prices of other goods in the food basket have also dropped, although not significantly, and increased unpredictability in distributions has led to local price fluctuations.

Despite increased medical supplies, it is too early to assess whether they have met essential needs, the report states. United Nations observers have been informed by Iraqi medical staff that, to date, supplies have been insufficient to meet essential needs. Uncertainties in arrival times make it difficult to plan and implement the rational and equitable use of resources.

According to the report, supplies for the water and sanitation, agricultural, education and electricity sectors had not arrived in the central and southern governorates. Improvement in water quality was expected from the distribution of water treatment chemicals. In addition, seeds, insecticides, fungicides, herbicides and irrigation pipes should arrive in time for the winter planting season. Nevertheless, agricultural equipment, such as tractors, combine harvesters and irrigation pumps to be purchased under the first phase, will only meet 25 per cent of urgent needs.

The Secretary-General says the availability of additional revenues from the authorized sale of oil will help address continuing humanitarian needs in Iraq. However, the Government's decision to suspend the sale of oil pending the approval of the new distribution plan will cause a significant shortfall of funds, since the target of $1 billion worth of oil sales cannot be met within the first 90 days. In view of the adverse consequences of that for the humanitarian programme and on the United Nations capacity to carry out its observation and implementation responsibilities, the Council might consider an appropriate mechanism to meet the shortfall. If the programme was renewed,

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the Government and all concerned parties should ensure that no similar delays will occur.

Regular reports by the United Nations Humanitarian Coordinator, United Nations agencies, oil overseers and United Nations independent inspection agents confirm the continuing cooperation of the Iraqi Government and local authorities in implementing the oil-for-food programme. The Secretary-General considers it essential that such collaboration continue and that United Nations personnel should be able to carry out their functions with the full support of all parties.

In approving the new distribution plan, the Secretary-General says he informed the Government that the United Nations accepts assurances given by Iraq as a commitment that the necessary additional resources will be available for vulnerable groups in central and southern Iraq. He also informed the Government that the United Nations will continue to observe the situation of such groups to determine and report on the adequacy of resources to meet the humanitarian needs of the Iraqi population.

Report of Iraq Sanctions Committee

The report of the Iraq Sanctions Committee (document S/1997/692) details activities relating to the implementation of resolution 986 (1995) during the first 90 days after the entry into force of paragraph 1 of resolution 1111 (1997). It states that oil overseers continued to advise the Committee on prices, volumes, liftings, destinations, management of the 90-day revenue objective of $1.07 billion (including the pipeline fee), and other questions relating to imports and to the monitoring of petroleum exports originating in Iraq.

As of 5 September, the overseers had approved 24 contracts involving purchases from 13 countries, involving a total of some 107.9 million barrels of oil for the 180-day period. All contracts submitted had employed the pricing mechanisms approved by the Committee. During the past 90 days, the Committee adopted points of understanding to further expedite the implementation of resolution 986 (1995). On 20 August, it approved a revision of the form of notification or request to ship goods to Iraq and the guidance note on its completion. To facilitate the delivery of humanitarian supplies, the Committee also agreed to extend the validity period of its approval letters from 120 days to 180 days, with a possible further extension of another 90 days on request. Those measures have been implemented by the Secretariat since 1 September.

According to the report, the export of petroleum from Iraq has proceeded in full compliance with the provisions of resolutions 986 (1995) and 1111 (1997), as well as with the memorandum of understanding and procedures adopted by the Committee. At the same time, the Committee has made repeated efforts

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to expedite the processing of humanitarian supplies to Iraq, and consignments of supplies approved during the initial 180-day period were arriving steadily. With the approval of the new distribution plan and computerization of the categorized list of goods, the Committee will be in a better position to address the humanitarian needs of the Iraqi people by expediting further the processing of contracts.

Owing to the delay in the export of petroleum in the first two months following the adoption of resolution 1111 (1997), the total revenue generated by Iraqi oil exports did not reach the objective of $107 billion (including the pipeline fee) for the first 90-day period ending 5 September 1997. The likely implications of that shortfall in oil revenue have been brought to the Council's attention.

Draft Resolution

The Council had before it the following draft resolution, which is sponsored by the United Kingdom and the United States:

"The Security Council,

"Recalling its previous resolutions and, in particular, its resolutions 986 (1995) of 14 April 1995 and 1111 (1997) of 4 June 1997,

"Reaffirming that the implementation period of resolution 1111 (1997) began at 00.01 Eastern Daylight Time, on 8 June 1997, and that the export of petroleum and petroleum products by Iraq pursuant to resolution 1111 (1997) did not require the approval by the Secretary-General of the distribution plan mentioned in paragraph 8 (a) (ii) of resolution 986 (1995),

"Taking note of the decision by the Government of Iraq not to export petroleum and petroleum products permitted pursuant to resolution 1111 (1997) during the period 8 June to 13 August 1997,

"Deeply concerned about the resulting humanitarian consequences for the Iraqi people, since the shortfall in the revenue from the sale of petroleum and petroleum products will delay the provision of humanitarian relief and create hardship for the Iraqi people,

"Noting that, as set out in the report of the Committee established by resolution 661 (1990) (S/1997/692), Iraq will not be able to export petroleum and petroleum products worth 2 billion United States dollars by the end of the period set by resolution 1111 (1997) while complying with the requirement not to produce a sum exceeding 1 billion United States dollars every 90 days set out in paragraph 1 of resolution 986 (1995) and renewed in resolution 1111 (1997),

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"Acknowledging the situation with regard to the delivery of humanitarian goods to Iraq as described in the report of the Secretary-General (S/1997/685) and encouraging the continuing efforts to improve this situation.

"Stressing the importance of an equitable distribution of humanitarian goods as called for by paragraph 8 (a) (ii) of resolution 986 (1995),

"Determined to avoid any further deterioration of the current humanitarian situation,

"Reaffirming the commitment of all Member States to the sovereignty and territorial integrity of Iraq,

"Acting under Chapter VII of the Charter of the United Nations,

"1. Decides that the provisions of resolution 1111 (1997) shall remain in force, except that States are authorized to permit the import of petroleum and petroleum products originating in Iraq, including financial and other essential transactions directly relating thereto, sufficient to produce a sum not exceeding a total of 1 billion United States dollars within a period of 120 days from 00.01, Eastern Daylight Time, on 8 June 1997 and, thereafter, a sum not exceeding a total of one billion United States dollars within a period of 60 days from 00.01, Eastern Daylight Time, on 4 October 1997;

"2. Decides further that the provisions of paragraph 1 above shall apply only to the period of implementation of resolution 1111 (1997), and expresses its firm intention that under any future resolutions authorizing States to permit the import of petroleum and petroleum products originating in Iraq, the time limits within which imports may be permitted established in such resolutions shall be strictly enforced;

"3. Expresses its full support for the intention of the Secretary- General, stated in his report to the Security Council (S/1997/685), to follow up his observations concerning the needs of vulnerable groups in Iraq by monitoring the actions of the Government of Iraq in respect of these groups;

"4. Stresses that contracts for the purchase of humanitarian supplies submitted in accordance with resolution 111 (1997) must be limited to items which appear on the list of supplies annexed to the second distribution plan prepared by the Government of Iraq and approved by the Secretary-General pursuant to paragraph 8 (a) (ii) of resolution 986 (1995), or appropriate amendments to the plan must be requested prior to purchasing items not on the annexed list;

"5. Decides to remain seized of the matter."

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Statements

Sir JOHN WESTON (United Kingdom) said he regretted that the decision of the Iraqi Government not to export oil under resolution 1111 (1997) until 13 August had resulted in it being unable to export the full quota of oil provided for in the first 90-day period. Unless the Council were prepared to amend the provisions of the resolution, that would mean less revenue for the purchase of humanitarian supplies for the Iraqi people. Through no fault of their own, the Iraqi people would be denied the full allowance of humanitarian supplies.

The United Kingdom was determined to ensure that the Iraqi people received the maximum benefit from resolution 1111, he said. Therefore, it had taken the initiative and was co-sponsoring the current draft resolution, so as to enable Iraq to make up the shortfall in oil sales and thus ensure that the full amount of revenue was available for the purchase of humanitarian supplies. It was hoped that the Iraqi Government would fulfil its full responsibilities under resolutions 986 (1995) and 1111 (1997), as well as all other relevant Council resolutions.

NABIL A. ELARABY (Egypt) said the shortfall in Iraqi exports was a technical issue that should be dealt with by a technical resolution. It would have been preferable if consultations had continued until agreement was reached on a more satisfactory text. However, he welcomed the paragraph that had been added to the draft this morning encouraging continued efforts to improve the delivery of humanitarian supplies.

The Sanctions Committee should redouble its efforts with respect to humanitarian supplies, he said. The Secretary-General had called upon all parties to renew their efforts to ensure the supply of humanitarian goods. Egypt supported the general thrust of the draft resolution, particularly with regard to humanitarian needs, and would vote in favour of it.

QIN HUASUN (China) said the quota for the sale of oil in the 90-day implementation period for resolution 1111 (1997) had been reached. That was a technical issue and should not be politicized. The fundamental reason for resolution 1111 had been to alleviate the humanitarian situation in Iraq; delays in supplying humanitarian goods were not in keeping with its provisions. The Secretary-General had pointed out that such delays had a negative impact. His country was deeply concerned about the issue and called on all concerned to speed up the delivery of those goods by accelerating the processing of the application of contracts. China would vote in favour of the draft resolution.

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ALAIN DEJAMMET (France) said the mechanism proposed in the draft resolution was in the right direction. France had therefore supported efforts to adopt that humanitarian and technical text and hoped the Council would show solidarity and act jointly. France was conscious of the need for all to be reminded of their obligations. It was hoped the appeal contained in the text would improve the situation.

SERGEY V. LAVROV (Russian Federation) said that efforts to arrive at an agreed text reflecting all opinions had not been met with sufficient understanding. Evaluation of the situation should not be one-sided, and it was disappointing that the text had been presented hastily. However, his country had decided not to oppose it, so as to avoid delaying the supply of humanitarian goods. Nevertheless, an unbiased look should be taken at the functioning of the Sanctions Committee.

The text was adopted by 14 votes in favour to none against with one abstention (Russian Federation) as resolution 1129 (1997).

BILL RICHARDSON (United States) said the current action represented a one-time exception, intended solely to prevent unnecessary suffering among the people of Iraq. There would be strict adherence to the time-limits for sale of Iraqi petroleum under any successor resolutions. The Council had acted today out of overriding humanitarian concern for the welfare of the Iraqi people, who would have paid the price for the inexcusable delays in delivery of humanitarian goods that would have resulted from Baghdad's refusal to sell oil until the first 90-day period under resolution 1111 had nearly expired.

The Iraqi regime's decision to delay oil sales had defied the clear conditions of a United Nations resolution, he said. That Government had made "a callous decision to put at risk the well-being of its people in order to seek to score propaganda points".

The United States regretted that some had been unable to support the resolution, he said. The co-sponsors had worked tirelessly to achieve a consensus text, but they simply could not accept the introduction of language that sought to blame the United Nations for actions which were solely the fault of the Iraqi Government. It was Iraq which had submitted hundreds of flawed, incomplete and inaccurate contract applications to the Sanctions Committee, thus bogging it down in a deluge of dubious documents.

The Government of Iraq bore sole culpability for the situation that had necessitated the resolution and the Council had recognized that, he said. By refusing to sell oil, that Government was using its people as a pawn to pursue political ends at odds with those of the international community. In implementing the resolution, the Security Council intended to remain vigilant in safeguarding the humanitarian needs of the Iraqi people. That was why the United States had co-sponsored the resolution and had voted for it.

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