No Nonsense Sevan Speaks Out

08/08/2001

We've done our best for Iraq

Responding to statements about the UN/Iraq program, its executive director Bebon Sevan, one of the most experienced and devoted civil servants, made a clear statement to the Security Council on Thursday, July 11. Sevan painted a lucid, detailed portrait of his team, caught as they are between various parties:

I should like to provide an update on a number of matters. Also, I feel duty bound, on behalf of my colleagues both at the Headquarters level and in the field, to provide clarifications with regard to a number of questions raised concerning the implementation of the programme as well as the assertions and allegations made recently in the Security Council. I feel obliged to make this statement because I do not wish our silence to be misinterpreted as a reflection of our agreement with what was stated recently. I owe it to all my colleagues , both at Headquarters and in particular to those in the field, who have been carrying out the tasks entrusted to them in implementing the mandates set forth by the Security Council, under very difficult conditions and often with personal sacrifice. Some of my colleagues have made the ultimate sacrifice in losing their lives while working with the humanitarian programme the objective of which is to serve the Iraqi people.

1. Resumption of oil exports

Iraq has started to pump oil to Ceyhan, Turkey and the first three vessels are currently under loading. The first full cargo of 2 million barrels will be leaving Iraq today. We already have received 10 oil contracts, five of which have already been approved by the United Nations Oil Overseers. The 10 contracts concerned under phase ten involve a total of 60 million barrels. Under approved contracts from phase nine of the programme, which ended on 3 July 30, 2001, there still remained 317 million barrels which have not yet been lifted, some 80 million barrels of which were designed as "transitional." At this time, about 90 million barrels from phase nine are transferred into phase ten.

2. Revenues

As at 4 July 30, 2001, the total of oil proceeds deposited in the United Nations Iraq Account since the start of the implementation of the Programme in December 1996, was $37,333,886,478.06 and 8,221,937,774 Euros. Since the inception of the humanitarian programme, the US Dollar account has accrued $1,000,641,781.66 and the Euro Account had accrued 19,646,364.78 Euros in interest income. Every cent and every centime deposited in the United Nations Iraq Account has been invested from the first day oil proceeds were collected. The earnings have been ploughed back into the Programme for the benefit of the people of Iraq and for additional humanitarian purchases to be made by the Government of Iraq.

Since the start of phase nine in December 2000, the Programme receives 72 percent of the total revenues of oil exports, 59 percent for the 15 governorates in the center/south of Iraq and 13 percent for the three northern governorates of Dahuk, Erbil and Sulaymaniyah. Prior to that, 66 percent of the total revenues received from oil exports , 53 percent were allocated for the 15 governorates in the center/south of Iraq.

As at 30 June 2001, a total of $30 billion was allocated for the Programme--$26.8 billion to the Government of Iraq for procurement of humanitarian supplies for the 15 governorates in the center/south, including the bulk purchase of food, medicine/vaccines for all the governorates or Iraq as well as for oil spare parts and equipment. The balance of $3.2 billion was made available to the United Nations agencies and programmes for the implementation of the Programme, on behalf of the Government of Iraq, in the three northern governorates.

As at 30 June 2001, of the total of $23.97 billion worth of approved applications for supplies and equipment contracted by the Government of Iraq, $13.325 billion worth of supplies and equipment, under already approved applications, with a total value of $10.645 billion, are in the delivery and/or production pipeline.

3. Banking arrangements--working relations with the Central Bank of Iraq (CBI)

With regard to banking arrangements and our working relation with the Central Bank of Iraq, I am afraid I will have to provide you with some details in view of the recent statement made in the Security Council that we have not been providing to the Government of Iraq "any information concerning the banking operations relating to Iraq's resources," and that the Central Bank of Iraq "has no inkling of what happens in United Nations banking operations, even though the Memorandum of Understanding stipulates the appointment of a liaison official from the Central Bank of Iraq to be apprised of this information and coordination." In fact, the United Nations Treasury has kept the Central Bank of Iraq fully informed on a regular basis. Reports are provided directly, in duplicate, to the Central Bank of Iraq. One copy is sent to the Central Bank by pouch through the Office of the United Nations Humanitarian Coordinator in Iraq (UNOHCI) and another copy is sent through the Permanent Mission of Iraq to the United Nations. These include: daily statements of transactions; weekly summary statements; monthly bank statement, and the Secretary-General's 90 and 180-day reports.

4. Audits

The United Nations Secretariat and the agencies and programmes of the United Nations system are subject to audit in accordance with their respective Financial Rules and Regulations. Also owing to the high value of oil revenues and the complexity of the Organization's responsibilities under the relevant Security Council resolutions, the Office of Internal Oversight Services (OIOS) expanded its audit coverage of the activities of the Office of the Iraq Programme, both at Headquarters and in the field. To meet this requirement, a new audit section for the Iraq Programme was established in the Audit and Management Consulting Division of OIOS.

5. Processing and approval of application for contracts

Working three shifts a day, the Contracts Processing Section of the Office of the Iraq Programme has been processing all applications as expeditiously as possible and we stand by and we are proud of our record. As of 3 July 2001, the total value of applications approved under the 59 percent account was $24.06 billion, including $5.396 billion worth of applications "notified" by the Secretariat. The total value of applications on hold was $3.331 billion. The total value of applications approved under the 13 percent account was $1.7 billion, including $68.6 million worth of applications "notified" by the Secretariat. The total value of applications on hold was $273,495. It should be understood by all concerned that it is the Government of Iraq which selects its suppliers and signs the contracts under the 59 percent account for the 15 governorates of Iraq, including also contracts under the bulk purchase arrangements for the whole country. The Secretariat has no role in that process and therefore cannot and should not be blamed for the performance of the contractors concerned. The Secretariat has no control over the suppliers as to when they submit their applications to the Office of the Iraq Programme, through their respective permanent or observer missions to the United Nations. Nor do we have any control as to when they respond to the repeated requests made by the Secretariat for additional information on the applications, including many which are submitted to us incomplete.

6. Payment to the Contractors

While the Secretariat has made substantial efforts to streamline the process at every step and reduce delays, the established procedures must be followed nonetheless. With regard to complaints of delayed payments to the contractors for supplies which have arrived in Iraq, the Treasury has stressed on several occasions that payments for letters of credit are based on normal commercial practice. There have been many instances whereby contractors have failed to present documents in compliance with the terms of the letter of credit. Discrepancies in documents result in delays in payment.

7. Keeping the Government of Iraq informed on our operations in the three northern governorates

The United Nations Implements the programme in the three northern governorates on behalf of the Government of Iraq. We have kept the relevant authorities in Baghdad fully informed, within United Nations rules and regulations, through regular meetings with and provision of information, in writing, to the relevant officials in the Ministry of Foreign Affairs and the technical ministries concerned. It should also be understood by the authorities concerned that there are certain documents such as contracts and invoices, which we simply cannot provide. We also have our own legal obligations and constraints. Contrary to what has been stated in the Council recently, our requests for visas for United Nations personnel to carry out implementation of projects in the three northern governorates have not been "for irrational purposes." We have provided to the Government of Iraq all the information required, or requested by the Government of Iraq, regarding the responsibilities to the undertaken by those for whom visas have been requested. As title for all 13 percent account properties in the three northern governorates remain, for the time being, with the United Nations, the Organization finds itself responsible not only for the building and installing of infrastructure and equipment, but also for its operation and maintenance and for the training of national staff. With the expansion of programme activities, in order to fulfill the responsibilities entrusted to it by the Security Council, the United Nations will require an increasing number of international staff. The number of outstanding visas was 280, including 140 for UNDP electricity projects and 111 for UNOPS demining programme. As so many critical remarks and allegations were made regarding the implementation of the programme with respect to the electricity sector and demining activities in the north. I will not respond to them one by one at this meeting, particularly to those for which no details were provided. Otherwise, I can keep you here until midnight. However, I should like to give a few examples on certain assertions made in the Security Council recently. The cost per mine/unexploded ordnance removed in the three northern governorates is approximately $1,500, contrary to the statement made in the Security Council that it was $21,000. In fact, our actual costs could be lower if the Government of Iraq would consider our repeated requests to provide maps/records of the minefields laid that do not jeopardize national security. This would reduce the need to search large tracts of land and thus increase efficiency in the utilization of our resources. It would also be helpful if the visas pending approval for months were granted expeditiously, and if the large number of demining equipment, including mechanical mini-flails, waiting at the border, were released, thus enabling the programme to operate at full efficiency. Furthermore, contrary to what was stated regarding cost of demining dogs, during the period July 1999 to June 2000, 140 dogs were deployed under the programme, each of which was fed 0.8 kg of imported dog food. The imported food was enhanced by local food such as chicken and fat. The average cost of feeding one dog during this period was $34 per month, or just under one dollar a day, or $408 per year, and not $1,248 per year, as was stated in the Council recently. I very much regret to go into such details. I have been given no alternative in view of the remarks made. I will refuse also to respond to other remarks made about our handling the dogs, which were incredible. A total of 22,000 mines and UXOs have been destroyed. In addition, under the Mines Victims support programme, UNOPS has provided 1,702 prosthesis/orthoses, as well as services to over 39,000 outpatients during the course of one year alone. Undoubtedly, we had, and continue to have, a number of difficulties in implementing the programme. Similar to the difficulties encountered in importing essential demining equipment, we have been experiencing, in a rather new development, very serious difficulties in bringing into Iraq essential equipment for the electricity projects in the three northern governorates. I was informed by UNDP yesterday that some 250 trucks loaded with about 4,800 tons of equipment are in Turkey, awaiting clearance by the Iraqi authorities, with substantial financial implications. Despite the difficulties encountered, however, much has been accomplished in the electricity sector and the Government of Iraq has been fully kept informed of those accomplishments.

8. Briefly, on the one hand we are denied the essential means and the tools to implement the programme effectively and on the other we are accused of failure to implement the programme effectively. Only 2.2 percent of the revenues received from oil exports are set aside for the administrative and operational costs of the United Nations. Even there we have done our best to cut costs in order to make additional funds available to the humanitarian programme. That resulted in the additional transfer of $52 million to that programme.

9. Given the difficulties we have been encountering in recruiting staff to go to work in Iraq, I find it very odd hearing the claim that "a mission to Iraq is one of the most cherished and sought0after assignments by the United Nations Secretariat staff." There are many factors that make Iraq a difficult duty station. These include security concerns, the fact that it is a non-family duty station, that staff must live in hotels, and that getting in and out of the country is arduous, leading to a sense of isolation. For these reasons, it has always been difficult to find staff to come and work in the country. In this regard, it should also be noted that the financial incentives and entitlements to work in Iraq are very much equal, and in many cases, considerably less than those provided for in other duty stations. I very much regret to have taken so much time. I had no alternative in light of what has been stated recently regarding our performance. My colleagues and I have been implementing a mandate established by the Security Council and inevitably caught between various parties. We are prepared to be judged by our performance in carrying out the tasks entrusted to us. As directed by the Secretary General, we have spared no effort in ensuring that those of us involved in the implementation of the programme observe fully the parameters governing the humanitarian programme, in full compliance with the relevant resolutions of the Security Council and the Memorandum of Understanding.