Liz McManus (Wicklow, Labour)
Link to this: Individually | In context

Question 14: To ask the Minister for Foreign Affairs his views on the abuse of the oil for food programme by the United Kingdom and the United States in their choosing to ignore selectively oil exports to neighbouring countries to Iraq from whom they anticipated and sought assistance for the later invasion of Iraq; and if he will make a statement on the matter. [13541/05]

Dermot Ahern (Louth, Fianna Fail)
Link to this: Individually | In context

The Independent Inquiry Commission, established by the United Nations and chaired by Mr. Paul Volcker, is charged with investigating alleged irregularities in the administration of the oil for food programme. The commission is also expected, in its final report, to provide authoritative estimates of the revenues earned by the former Iraqi regime from sales of oil in contravention of Security Council resolution 661, which in 1990 imposed comprehensive economic sanctions on Iraq.

Some estimates of such earnings have, however, already been made. The Iraq survey group, for example, which reported to the US administration in September 2004 on Iraq's weapons of mass destruction programmes, estimated that sales of oil and oil products to Jordan, Turkey and Syria in contravention of resolution 661 amounted, respectively, to $4.45 billion, $0.7 billion and $2.8 billion. The group also estimated that revenue from oil smuggling to other destinations was worth a further $1.2 billion to the Iraqi regime.

After the first Gulf War in 1991, Jordan approached the Security Council to request an exemption that would allow it to import oil legally from Iraq. While not granting an exemption, the council took note of the request. However, it was widely reported that Iraqi oil was being exported on a regular basis to Jordan. There were also extensive reports, while the sanctions were in force, that oil products, chiefly diesel, were exported by road tanker from Iraqi refineries via northern Iraq into south-east Turkey.

In addition, following a rapprochement between the formerly opposed Baath regimes in Baghdad and Damascus, a disused pipeline between Iraq and Syria was alleged to have been reactivated. Syria faced accusations in 2001 in the Iraq sanctions committee of the Security Council, the "661 committee", that it was using this pipeline to import large quantities of Iraqi oil. While not denying that the pipeline had been reactivated, Syria maintained that it was merely being tested with a view to future legal trade.

These earnings from oil exports in contravention of the sanctions were unrelated to the humanitarian programme for Iraq, "oil for food programme", established by resolution 986 in 1996, which permitted the sale of Iraqi oil against the supply of civilian goods and which commenced effective operation in early 1997. There have been allegations that the Iraqi regime was in receipt of illegal earnings from bribes and surcharges from suppliers and purchasers under the programme and the Iraq survey group has estimated such earnings at $1.73 billion. It might be noted, however, that a US Congress sub-committee arrived at much higher estimates.

It is regrettable that public comment has frequently failed to distinguish between the earnings of the Iraqi regime in contravention of resolution 661 and the separate issue of alleged maladministration in the UN's office for the Iraq programme, which was responsible for the administration of the oil for food programme. This confusion has been to the detriment of the image and credibility of the United Nations and its secretariat.

The Volcker commission has already issued two interim reports. In the first, issued in February 2003, it found that the executive director of the office for the Iraq programme had placed himself in a clear conflict of interest in soliciting oil allocations under the oil for food programme from the Iraqi authorities on behalf of an oil contractor. The UN has instituted disciplinary proceedings against him and another official. The interim report also found that the selection process by which three firms were appointed as contractors in the administration of the programme did not meet with the UN's established financial and competitive bidding rules. Nonetheless, it found that, despite some weaknesses in the auditing area, the administration of funds by the office for the Iraq programme was conducted in a disciplined manner.

The second interim report of the Volcker commission focused on the possibility that the previous employment of Secretary General Annan's son by a firm that bid successfully for a contract in the administration of the programme might have influenced the firm's selection. The commission found no foundation for such a link, despite discovering that, unknown to the Secretary General, his son continued to receive payments from the firm in question under a "no-compete" clause for over five years after he had left its employ.

The Volcker commission is expected to complete its work this summer. I look forward to the publication of its final report, which I expect to provide a full and authoritative assessment of the application and supervision of the sanctions regime by the Security Council, as well as of the operation and administration of the oil for food programme.