Global Policy Forum

Kofi Annan

Dear Mr. President,

In the Note by the President of the Security Council of 18 March 2003 (S/2003/337), it is stated that the members of the Council, taking note of my decision to suspend, for security reasons, the work of the United Nations humanitarian personnel in Iraq, stand ready to consider as soon as possible proposals by me on how to meet humanitarian needs of the people of Iraq, taking into account the urgency of the humanitarian situation in Iraq.

The most recent extension of the mandate of the Oil-for-Food Programme, originally established by Security Council resolution 986 (1995), expires on 3 June 2003. As I informed the Security Council on Monday, 17 March 2003, the developments in Iraq have affected the implementation of the programme. Should the Security Council agree that there is an urgent need to provide humanitarian assistance to the Iraqi people during and following possible hostilities in Iraq, which might render the current arrangements inoperable, certain adjustments to the mandate of the programme will be needed. The paragraphs below discuss the minimum changes that are necessary in order for the programme to be able to provide such assistance. The annex to the present document contains proposed elements for a possible new Security Council resolution. It is assumed that such a resolution would be under Chapter VII of the Charter.

In the event of hostilities in Iraq, the primary responsibility for ensuring that the Iraqi population is provided with adequate medicine, health supplies, foodstuffs and material and supplies for essential civilian needs will rest with the authority exercising effective control in the country. In order for the Organization to play its role in meeting the immediate humanitarian needs of the people of Iraq under the Oil-food-Food Programme, it would be necessary for the United Nations, on an interim basis, to be authorized to provide emergency humanitarian assistance to the Iraqi population not only in the three Governorates in the north of Iraq but throughout the country. Accordingly, it is recommended that, on an interim and exceptional basis, the functions performed by the United Nations under Security Council resolution 986 (1995) with regard to the three northern Governorates of Iraq be extended as necessary and feasible for the purposes of implementation of paragraph 1 of resolution 1447 (2002), throughout Iraq, and that the Secretary-General be authorized to use, for meeting the humanitarian needs of the Iraqi population throughout the country, the funds available for that purpose under Security Council resolution 986 (1995).

In addition, it is recommended that the new resolution give the Secretary-General the necessary flexibility to play his role in meeting the immediate humanitarian needs of the Iraqi population. Thus, it is recommended that the new resolution authorize the Secretary-General to take all the measures required to ensure the implementation of the new resolution, and to enter into any necessary arrangements with such authorities as may be established in Iraq during or after hostilities.

In this regard, it is noted that, under the current mandate of the Oil-for-Food Programme, humanitarian supplies are imported into Iraq pursuant to Distribution Plans, prepared by the Iraqi Government and approved by the Secretary-General, for the various "Phases" of the programme, these "Phases" corresponding to the successive extensions of resolution authorize the Secretary-General as he deems necessary to meet the immediate humanitarian needs of the people of Iraq, to use and redeploy resources already imported into Iraq under the programme, notwithstanding the Distribution Plans and Phases of the programme to which such resources have been allocated, and to use available unencumbered funds in the United Nations Iraq Account, regardless of the Phase or sector for which such funds have been designated, and notwithstanding the subdivisions envisaged in Security Council resolution 986 (1995), paragraph 8 (a), (b) and (d), on a reimbursable basis.

Under Security Council resolution 986 (1995), paragraph 8 (a) and (b), the proceeds of sales of Iraqi oil and petroleum products are to be used to finance the import of humanitarian supplies into Iraq. In order to enable the United Nations to meet the immediate humanitarian needs of Iraqi refugees who leave Iraq as a result of hostilities, it is recommended that the new resolution authorize the Secretary-General to provide agencies, programmes and funds financial resources to deliver humanitarian assistance not only to the population within Iraq but also to Iraqi refugees in the neighbouring countries. There are currently approved and funded contracts for purchases of humanitarian supplies totalling approximately $8.9 billion "in the pipeline", i.e., contracted supplies that have not yet been delivered. Other contracts, totalling over $5 billion, have been processed but letters of approval of such contracts have not been issued due to the lack of funds. The priorities of the need for some of these supplies might change in the light of the necessity to meet the immediate humanitarian needs of the Iraqi population affected by hostilities. The purchaser in the contracts for such supplies and equipment for areas other than the Northern Governorates is the Government of Iraq. Hostilities might interfere with the Government's performance of its role as the party to these contracts, such as negotiating and agreeing to amendments to the contracts necessitated by the hostilities, and resolving commercial disputes with suppliers under the contracts.

Accordingly, it is recommended that the Security Council, in its new resolution, request the Secretary-General to review, as a matter of urgency, the situation with the contracts that have been concluded by the Government of Iraq and that have been approved and funded but not yet, completely performed, as well as contracts that remain unfunded, to determine the relative priorities of the need for humanitarian supplies represented in these contracts and to proceed with such contracts in accordance with such priorities and, in the case of unfunded contracts, as funds become available. In addition, it is recommended that the Security Council, in the new resolution, decide that the Secretary-General may authorize United Nations agencies, programmes and funds not only to enter into new contracts for humanitarian supplies, but also, as they may consider appropriate, to negotiate with the respective suppliers under contracts already concluded by Iraq any justifiable changes in the terms or conditions of such contracts, including where appropriate compensation for any increased costs incurred by suppliers as a result of such changes, and, where necessary, the cancellation of such contracts, and to assume responsibility for these contracts. The assumption by an agency, programme or fund of responsibility for a contract would also enable it to exercise rights under the contract to suspend or terminate the contract, and to resolve any disputes arising under the contract.

It is also recommended in this regard that the current procedures with respect to the approval of contracts and changes to contracts remain in effect. It is recommended that the new resolution further expressly provide that any obligations or liabilities arising under any new contracts entered into by the United Nations agencies, programmes and funds, and any existing contracts for which they assume responsibility, should be satisfied and paid exclusively from the proceeds of sales of Iraqi oil and petroleum products and not from the budgets of the United Nations or such agencies, programmes or funds.

It is recommended that the new resolution specify that the Iraqi State Oil Marketing Organization is to retain, for the purposes of the implementation of paragraph I of resolution 1447 (2002), the authority to conclude oil contracts with national purchasers authorized by the 661 Committee, which will continue to perform its functions in accordance with the relevant Security Council resolutions, and require that applications for the proposed purchase of Iraqi petroleum and petroleum products be submitted for approval in accordance with current procedures of the 661 Committee. It is understood that the proceeds of such sales of petroleum and petroleum products will be deposited into the United Nations Iraq Account, in accordance with Security Council resolution 986 (1995).

As I have reported to the Security Council, it has been necessary for me to order the withdrawal from Iraq of independent inspectors who inspect exports of Iraqi oil and petroleum products and imports of humanitarian supplies. The withdrawal of these inspectors prevents the fulfillment of contracts for sales of Iraqi oil and petroleum products, and deliveries of humanitarian supplies into Iraq. With respect to humanitarian supplies, Security Council resolution 986 (1995), in paragraph 8 (a) (iii), requires confirmation that the goods have arrived in Iraq. Such confirmation is also required for the payment of letters of credit issued for the purchase of humanitarian supplies under contracts that have been concluded by the Government of Iraq. In order to enable such inspections to take place, it is recommended that the new resolution authorize the Secretary-General to use oil export routes in addition to those authorized under Security Council resolution 986 (1995), under appropriate monitoring by the oil inspection agents, and to establish alternative locations for the delivery and inspection of humanitarian supplies and equipment under the programme, both inside and outside Iraq.

In order to expedite the shipment of urgent humanitarian supplies, it is recommended that a new resolution request all States to make any necessary adjustments to their export procedures in order to mitigate any delay in the export of humanitarian supplies and equipment to Iraq. In addition, it is recommended that the provisions of the revised Goods Review List (GRL) procedures adopted by resolution 1454 (2002) concerning pre-approved non-GRL items be applied for the expeditious processing and approval of contract applications submitted outside the scope of the Oil-for-Food Programme by the United Nations agencies, programmes and funds implementing humanitarian activities in Iraq.

In addition to the changes to the mandate of the Oil-for-Food Programme, it should also be noted that humanitarian agencies are planning to conduct emergency relief operations outside that mandate, and, it will be necessary for the international community to support the humanitarian needs of the Iraqi people to the extent they are not met under the Oil-for-Food Programme. In this context, it is hoped that all concerned will guarantee the freedom of movement of all humanitarian staff, as well as their safety and security.

I would appreciate it if the foregoing considerations could be brought to the attention of the Members of the Council so that they may take them into consideration in deciding upon emergency measures to be taken to alleviate the humanitarian situation in Iraq.

Please accept, Mr. President, the assurances of my highest consideration.

Kofi Annan

Whereas the primary responsibility for ensuring that the Iraqi population is provided with adequate medicine, health supplies, foodstuffs, and materials and supplies for essential civilian needs rests with the authority exercising effective control in Iraq;

Convinced of the urgent need to continue to provide humanitarian assistance to the Iraqi people which should be based on the equitable distribution of humanitarian relief to all segments of the Iraqi population throughout the country and of the need to extend such humanitarian assistance to the Iraqi people who leave the country as a result of hostilities,

Recalling in this regard the arrangement established by Security Council resolution 986 (1995) and other relevant resolutions approved, by the Council in its furtherance as a temporary measure to provide emergency humanitarian assistance to the Iraqi people,

Reaffirming that humanitarian needs of the Iraqi people on an interim basis through the United Nations oil-for-food programme, subject to the provisions of the present resolution,

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,

Decides that in view of the exceptional circumstances prevailing currently in Iraq, on an interim and exceptional basis, the functions performed by the United Nations pursuant to sub-paragraph 8 (b) of resolution 986 (1995) in the three northern Governorates of Iraq, shall be extended as necessary and feasible, for the purposes of implementation of paragraph I of resolution 1447 (2002), throughout Iraq and that the Secretary-General shall be authorized to use, for meeting the humanitarian needs of the Iraqi population throughout the country, the funds available for that purpose under resolution 986 (1995)

Decides further that every effort should be made to sustain the operation of the present of distribution of national food basket and essential public services;

Requests the Secretary-General to review, as a matter of urgency, the situation with the contracts concluded by the Government of Iraq which are funded but not yet completely performed as well as the contracts that remain unfunded, to determine the relative priorities of the need for humanitarian supplies represented in these contracts and to proceed with such contracts in accordance with such priorities as financial resources become available;

Decides that, with regard to contracts for essential humanitarian supplies concluded by the Government of Iraq that are approved and funded, the Secretary- General may authorize the United Nations agencies programmes and funds to negotiate with the respective suppliers any justifiable changes in the terms or conditions of such contracts, including where necessary, the cancellation of such contracts, and to assume responsibility for these revised contracts on the understanding that any obligations or liabilities arising under new contracts concluded by agencies, programmes and funds or any existing contracts for which they assume responsibility pursuant to this resolution "shall be satisfied and paid exclusively from the proceeds of sales of Iraqi oil and petroleum produces under the oil-for-food programme and not from the budgets of the United Nations or such agencies, programmes and funds;

Authorizes the Secretary-General to establish alternative locations for delivery and inspection of humanitarian supplies and equipment under the oil-for-food programme both inside and outside -Iraq;

Authorizes the Secretary-General for the purpose of meeting the immediate humanitarian needs of the Iraqi population to re-deploy resources in Iraq obtained under the oil-for-food programme, notwithstanding the Distribution Plans for the relevant Phases of the programme, and to use available unencumbered funds in the United Nations Iraq Account on a reimbursable basis, regardless of the Phase or sector for which such funds have been designated and notwithstanding the subdivisions envisaged in subparagraphs 8 (a), (b) and (d) of resolution 986 (1995);

Authorizes the Secretary-General to use financial resources made available under the present resolution to provide humanitarian assistance also to the Iraqi refugees who will leave Iraq as a result of hostilities;

Decides that the Iraqi State Oil Marketing Organization should be allowed to continue to remain, for the purposes of the implementation of paragraph 1 of resolution 1447 (2002), the authority to conclude oil contracts with national purchasers authorized by the 661 Committee, which will continue to perform its functions in accordance with the relevant Security Council resolutions. National purchasers shall be required to submit applications concerning the proposed purchase of Iraqi petroleum and petroleum products for approval in. accordance with the current procedures of the 661 Committee. The proceeds of sales of Iraqi petroleum and petroleum products shall continue to be deposited in the United Nations Iraq Account in accordance with resolution 986 (1995);

Authorizes the use of additional oil export routes, under appropriate monitoring by the oil inspection agents appointed by the Secretary-General pursuant to Security Council resolution 986 (1995);

Decides that the provisions of the revised Goods Review List (GRL) procedures adopted by resolution 1454 (2002) concerning pre-approved l1on-GRL items may be applied for the expeditious processing and approval of contract applications submitted outside the scope of the oil-for-food programme by the United Nations agencies, programmes and funds;

Requires all States to make any necessary adjustments to their export procedures in order to mitigate any delay in the export of humanitarian goods and equipments to Iraq;

Requests the Secretary-General as a matter of urgency to take all the measures required to ensure the implementation of the present resolution and authorizes him to enter into any necessary arrangements with such authorities as may be established in Iraq during or after hostilities.

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