Annan reports on Iraq

UN Secretary General Kofi Annan presented a report on the situation in Iraq to the UN Security Council, placing emphasis on streamlining the processes used in the oil-for-food agreement beyond simply increasing the amount of funds available within the program.

The report earlier this month found on the oil industry that a group of experts assembled by Annan to report on the state of the Iraqi oil industry found that, "The decline in the condition of all sectors of the industry continues, and is accelerating in some cases." It said, "The ability of the Iraqi oil industry to sustain the current reduced production levels will be seriously compromised unless effective action is taken immediately to reverse the situation."

The report added that current methods being used to obtain the oil could result in limiting the proportion of Iraq's total oil that can actually be obtained.

"The inadequacy of the monetary value of the oil spare parts and equipment programme to sustain production operations is now self-evident," the report added, saying that when the level of the program was set, the assumption was that spare parts would be available more rapidly than has actually been the case.

It also noted a lack of back-up equipment in refineries to replace any of the equipment in use.

"Since sanctions were imposed against Iraq in 1990, the oil industry of Iraq has suffered seriously as a result of the absence of the required spare parts and equipment. Taking into account the production required for local consumption needs from 1991 to 1996 and production since late 1996 under the humanitarian programme, the Iraqi oil industry has produced some 5,000 million barrels of oil with virtually no investment in infrastructure repairs or maintenance. The result has been a massive decline in the condition, effectiveness and efficiency of that infrastructure, coupled with appalling safety conditions and significant environmental damage," the report said.

The report also noted problems in the distribution of food and spare parts, saying, "Degraded discharge facilities and generally poor port conditions continue to contribute to the slow and inefficient offloading of necessary food basket items, particularly bulk foodstuffs and badly needed infrastructure spare parts and equipment." It proposed several ways of helping streamline the application, approval and distribution processes.

In the area of health care in southern Iraq, Annan said there had been improvements, but he said he is still, "seriously concerned at key aspects in the provision of health care; improvements in neither the distribution of health care nor in the health infrastructure envisaged in my supplementary report have materialized. Erratic, the uncoordinated arrival of drugs to treat chronic disease has prevented the monthly requirements of all patients from being met, which may have contributed to the increase in deaths attributable to cardiac, diabetic, renal and liver disease reported by the Ministry of Health for the period from January to August 1999."

He said the efforts to help the education sector had achieved "inadequate results."

He recommended that attention be given to the quantities of items on hold, saying, "The effectiveness of the programme has suffered considerably, not only because of shortfalls in the funding level but also because of the very large number of applications placed on hold, in particular those concerning electricity, water and sanitation, transport and telecommunications, which impact all sectors. The total value of applications placed on hold as at 31 January was over $1.5 billion. A determined effort must be made by all parties concerned to collaborate effectively with a view to making further improvements in the implementation of the programme."

The report called on the Security Council to improve its procedures to help expedite the approval of applications, better identify reasons for placing contracts on hold, and streamline the process for lifting the holds.