U.S. Supports Provision of Iraqi Oil Parts, Envoy Says
Oil-for-food program review says oil industry needs spare
parts
By Judy Aita
Washington File United Nations Correspondent
United Nations -- The United States supports the rapid provision of
spare parts to Iraq's oil industry under the oil-for-food program and
has endorsed steps taken by the UN Security Council to enhance
Baghdad's ability to obtain those parts, U.S. Ambassador James
Cunningham said September 21.
Nevertheless, Benon Sevan, executive director of the United Nations
Iraq Program, warned the Security Council that Iraq's current volume
of oil production and export levels are not sustainable unless the
necessary spare parts and equipment are delivered. He said that the
U.N. program under which Iraq can import those parts continues to
experience serious delays and the number of holds placed on
applications by the U.N. sanctions committee is unacceptably high.
The Security Council lifted the ceiling on the amount of oil Iraq can
sell under U.N. supervision in the so-called oil-for-food program to
buy humanitarian supplies for Iraqi civilians and certain replacement
parts for the oil industry. It also doubled the allocation allowed for
oil spare parts and equipment.
Sevan said that without the spare parts "the oil industry may have a
major accident. They cannot sustain the current production levels.
They are producing now at the expense of the future because they are
harming their oil wells and, in fact, they are destroying some of them
irreparably."
Talking with journalists after his private meeting with the council,
Sevan also credited the sanctions committee members for having
"managed to reduce the level of holds on $1,500 million" worth of
supplies. But in the meantime, he said, there are holds on new
applications totaling almost $2,000 million, of which $266 million was
for oil spare parts and equipment.
But the problems are not the fault of the sanctions committee alone
and in his remarks to the council, which were released by the U.N.,
Sevan faulted Iraq for its choice of contractors and for not acting
quickly enough in ordering necessities.
Based on the current price of oil, the U.N. estimates that the
revenues earned by oil exports during the six-month phase from June to
December 2000 will reach about $10,000 million, which, after
deductions for other expenses such as replenishment of a compensation
fund, will make about $6,600 million available for the oil-for-food
program. As of September the U.N. has received applications from Iraq
for goods totaling $1,000 million or about 53 percent of the account.
"The figures carry a clear message," Sevan said. "It is essential for
the government of Iraq to proceed most expeditiously in contracting
the supplies and equipment required as indicated in the distribution
plan."
Sevan also said that Iraq has to be "more selective in choosing its
suppliers in order to avoid the arrival of defective supplies."
"Far too many defective supplies are arriving in Iraq," he said.
Sevan also said that many of the holds are the result of a lack of
details from suppliers about the nature of the product. "In my own
office I have more than [$1,000 million] worth of applications pending
circulation [to the Sanctions Committee] due to the fact that
suppliers have not submitted the information needed," he said.
Cunningham, the deputy U.S. representative to the United Nations, said
that the problems with Iraq's oil industry are "a justifiable
concern."
"We know there are problems in the oil industry and we have created
the wherewithal to address those problems," the ambassador said. "The
number of holds in the oil spare parts sector has gone down
significantly in the last couple of months."
Cunningham said that "on the question of the oil spare parts, we
support the rapid provision of oil spare parts. We've endorsed steps
in the resolution to enhance Iraq's ability to obtain oil spare
parts."
"The facts of the matter are there are $200 million worth of unused
authority under the last phase of oil-for-food" for oil industry
parts, the ambassador told journalists after the meeting. And Iraq has
"placed no new orders under the current eighth phase of oil-for-food."
The reason the United States places "holds" on various categories
equipment, such as electric and telecommunication equipment, "stems
from our concerns about the dual-use capability of items under
question," Cunningham said. "In other sectors, it is often to ask for
better information about what the equipment will be used for."
"Things that go into telecommunications are obviously problematic
because telecommunications also feeds military capability," he said,
"so we have a high standard there and requirement about where
particular items are going and what their intended use is."
"There are elements that improve our confidence about the end use of
these items," the ambassador said. "One of which is information about
what exactly it is -- because we don't see the actual item we have to
rely on information from the shippers. And in some cases, observations
of actually where it actually goes" to ensure that the part "actually
ends up in a truck and not in a tank."
Cunningham pointed out that with improved and streamlined procedures
that were put in place in December after the passage of Security
Council resolution 1284, the sanctions committee has released
contracts worth $1,500 million. "Many more contracts are going forward
now much more rapidly. The ones that are being held we hope we can
resolve relatively quickly as the information flow proceeds," he said.
"Ninety percent of the contracts that have been submitted have gone
through," Cunningham said. "What is in dispute or under discussion is
10 percent -- that's not very high in a program of this complexity."
Asked about reports that France is planning a humanitarian flight to
Baghdad later this week, Cunningham said that the flight would require
approval of the sanctions committee as is the case in all fights to
Baghdad.
He pointed out that a similar flight from Russia earlier this month
had gotten approval from the committee.
(The Washington File is a product of the Office of International
Information Programs, U.S. Department of State. Web site:
http://usinfo.state.gov)