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OIL FOR FOOD: UN RESOLUTION 986.
/* Written 30 Jul 6:00am 1996 by drunoo@xxxxxxxxxxxx in igc:reg.burma */
/* -------------" Oil for Food: Alternative to Sanction "------------ */
OIL FOR FOOD: AN ALTERNATIVE TO SANCTION
Some of our friends who advocate toughter measures from U.S.
Government may feel dissatified with recent Burma Bill HR.3540.
>From my view, it may be more effective to control the money flow
from companies rather than calling for complete withdraws. This is
particularly true for the operation of oil companies.
The SLORC must surely be looking forward to the time of completion of
its Yadana gas pipeline and the revenue that followed from the sale of
natural gas. It will be much more practical in letting such oil companies
building necessary infrastructure and the operation for the time being
(human rights concerns must be respected, of course). Important issue is
the way to find in limiting the flow of revenue - which will be substantial
in amount when the pipeline is completed - to the military government. For
the oil companies, it will still take some time to complete the pipeline -
reported to be after 1998. If things continue to be difficult like now
and the political reconciliations in Burma are still not achieved by that
time, the measures must be made to divert the flow of revenue to the direct
use of the people of Burma and elected government. To generate some
thought, I have posted the UN Resolution 986 on Iraq (& We do have time to
do political ground-work.)
The money flows from other businesses to SLORC are not substantial. The
largest foreign exchange income for SLORC in FY-1995 came from tourism,
which is only US$30 million. Though, it may still accumulate to few hundred
millions in small revenues, that would be no cause for serious concerns.
Such amount would still be a 'petty-cash' in terms of Governments' revenue.
Annoyance to most people was caused by the claim of SLORC's highly inflated
figures of investments - such as US$3. billion. The other problem is SLORC
flaunting about the support of international business community to the
people of Burma. -- With best regards, U Ne Oo.
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MID: IRAQ, IN SURPRISE MOVE, EDGES TOWARD UN OIL TALKS
IRAQ OIL DAYLEAD
By Evelyn Leopold of Reuters
UNITED NATIONS, Jan 16(1996) Reuter - The United Nations received a
letter from Iraq late today apparently signalling Baghdad's
willingness to start talks on a controversial limited oil sales
deal.
Chief UN spokeswoman Sylvana Foa said that Secretary-General
Boutros Boutros-Ghali expected such a letter on selling small
quantities of oil to buy badly needed food and medicine, as called
for by Security Council resolution 986. She later announced a
letter had been received from the Iraqi authorities, but declined
to give its contents.
Resolution 986 permits the sale of $US2 billion ($A2.7 billion)
worth of oil over six months in order to buy food, medicine and
other goods for the Iraqi population, suffering under stiff
sanctions imposed when Iraq invaded Kuwait in August 1990.
Despite pressure from Boutros-Ghali, Iraq had previously turned
down Security Council Resolution 986, preferring instead to seek
the lifting of sanctions entirely.
Diplomats at the United Nations said Iraq's UN ambassador, Nizar
Hamdoon, told envoys to expect such a letter on beginning the
talks. He first briefed ambassadors from non-aligned countries on
the council and then spoke to others. Hamdoon declined all public
comments.
Unclear is whether Iraq wants to talk about implementing the
resolution or renegotiating some of its terms, which would be
unacceptable to the council. Boutros-Ghali's staff is not permitted
to change the resolution but to discuss ways of implementing it.
In Washington, the Defence Department said the move by Iraq
could be "good news". Pentagon spokesman Ken Bacon emphasised the
sale should not be viewed as a concession to Iraq because sanctions
were still intact, particularly on Baghdad's obligation to scrap
its weapons of mass destruction.
If Iraqi President Saddam Hussein "is ready to allow the
resolution to take effect for the benefit of his people that is
good news", said Bacon. "I think it would be an important step
forward."
Negotiations were held several years ago on a similar limited
oil sales deal fell through after months of talks. Iraq has said
that the resolution, which requires heavy UN monitoring of oil
sales, violates its sovereignty.
Specifically, diplomats said Baghdad had objected to the amount
of humanitarian supplies bought with the oil revenues that would go
to the Kurds in the north and a demand that most of the oil move
through its pipeline to Turkey rather than its seaport at Mina
al-Bakr.
Iraq's action coincides with Security Council discussions on
sending a mission to Baghdad on the country's humanitarian needs
and evaluating how the limited oil sales resolution could alleviate
the suffering caused by the sanctions.
The mission, which has been rejected in the Iraqi state-owned
press, could come up with a report backing the view that the
economic havoc is largely Iraq's own fault for refusing to take
advantage Resolution 986.
Some council members, including the United States, stress Iraq's
responsibility for the suffering of its own people. Others,
probably including Russia and France, could use the plight of
ordinary Iraqis as ammunition for their long-standing efforts to
ease the sanctions.
REUTER gr
UNITED
NATIONS
S
Security Council
Distr.
GENERAL
S/RES/986
(1995)
14 April
1995
RESOLUTION 986 (1995)
Adopted by the Security Council at its 3519th meeting,
on 14 April 1995
The Security Council,
Recalling its previous relevant resolutions,
Concerned by the serious nutritional and health situation
of the Iraqi population, and by the risk of a further
deterioration in this situation,
Convinced of the need as a temporary measure to provide
for the humanitarian needs of the Iraqi people until the
fulfilment by Iraq of the relevant Security Council
resolutions, including notably resolution 687 (1991) of
3 April 1991, allows the Council to take further action with
regard to the prohibitions referred to in resolution
661 (1990) of 6 August 1990, in accordance with the provisions
of those resolutions,
Convinced also of the need for equitable distribution of
humanitarian relief to all segments of the Iraqi population
throughout the country,
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,
1. Authorizes States, notwithstanding the provisions of
paragraphs 3 (a), 3 (b) and 4 of resolution 661 (1990) and
subsequent relevant resolutions, to permit the import of
petroleum and petroleum products originating in Iraq,
including financial and other essential transactions directly
relating thereto, sufficient to produce a sum not exceeding a
total of one billion United States dollars every 90 days for
the purposes set out in this resolution and subject to the
following conditions:
(a) Approval by the Committee established by
resolution 661 (1990), in order to ensure the transparency of
each transaction and its conformity with the other provisions
of this resolution, after submission of an application by the
95-10988 (E) /...
*9510988*
State concerned, endorsed by the Government of Iraq, for each
proposed purchase of Iraqi petroleum and petroleum products,
including details of the purchase
price at fair market value, the export route, the opening of a
letter of credit payable to the escrow account to be
established by the Secretary-General for the purposes of this
resolution, and of any other directly related financial or
other essential transaction;
(b) Payment of the full amount of each purchase of
Iraqi petroleum and petroleum products directly by the
purchaser in the State concerned into the escrow account to be
established by the Secretary-General for the purposes of this
resolution;
2. Authorizes Turkey, notwithstanding the provisions of
paragraphs 3 (a), 3 (b) and 4 of resolution 661 (1990) and the
provisions of paragraph 1 above, to permit the import of
petroleum and petroleum products originating in Iraq
sufficient, after the deduction of the percentage referred to
in paragraph 8 (c) below for the Compensation Fund, to meet
the pipeline tariff charges, verified as reasonable by the
independent inspection agents referred to in paragraph 6
below, for the transport of Iraqi petroleum and petroleum
products through the Kirkuk-Yumurtalik pipeline in Turkey
authorized by paragraph 1 above;
3. Decides that paragraphs 1 and 2 of this resolution
shall come into force at 00.01 Eastern Standard Time on the
day after the President of the Council has informed the
members of the Council that he has received the report from
the Secretary-General requested in paragraph 13 below, and
shall remain in force for an initial period of 180 days unless
the Council takes other relevant action with regard to the
provisions of resolution 661 (1990);
4. Further decides to conduct a thorough review of all
aspects of the implementation of this resolution 90 days after
the entry into force of paragraph 1 above and again prior to
the end of the initial 180 day period, on receipt of the
reports referred to in paragraphs 11 and 12 below, and
expresses its intention, prior to the end of the 180 day
period, to consider favourably renewal of the provisions of
this resolution, provided that the reports referred to in
paragraphs 11 and 12 below indicate that those provisions are
being satisfactorily implemented;
5. Further decides that the remaining paragraphs of this
resolution shall come into force forthwith;
6. Directs the Committee established by resolution
661 (1990) to monitor the sale of petroleum and petroleum
products to be exported by Iraq via the Kirkuk-Yumurtalik
pipeline from Iraq to Turkey and from the Mina al-Bakr oil
terminal, with the assistance of independent inspection agents
appointed by the Secretary-General, who will keep the
Committee informed of the amount of petroleum and petroleum
products exported from Iraq after the date of entry into force
of paragraph 1 of this resolution, and will verify that the
purchase price of the petroleum and petroleum products is
reasonable in the light of prevailing market conditions, and
that, for the purposes of the arrangements set out in this
resolution, the larger share of the petroleum and petroleum
products is shipped via the Kirkuk-Yumurtalik pipeline and the
remainder is exported from the Mina al-Bakr oil terminal;
7. Requests the Secretary-General to establish an escrow
account for the purposes of this resolution, to appoint
independent and certified public accountants to audit it, and
to keep the Government of Iraq fully informed;
8. Decides that the funds in the escrow account shall be
used to meet the humanitarian needs of the Iraqi population
and for the following other purposes, and requests the
Secretary-General to use the funds deposited in the escrow
account:
(a) To finance the export to Iraq, in accordance with
the procedures of the Committee established by resolution
661 (1990), of medicine, health supplies, foodstuffs, and
materials and supplies for essential civilian needs, as
referred to in paragraph 20 of resolution 687 (1991) provided
that:
(i) Each export of goods is at the request of the
Government of Iraq;
(ii) Iraq effectively guarantees their equitable
distribution, on the basis of a plan submitted to
and approved by the Secretary-General, including a
description of the goods to be purchased;
(iii) The Secretary-General receives authenticated
confirmation that the exported goods concerned
have arrived in Iraq;
(b) To complement, in view of the exceptional
circumstances prevailing in the three Governorates mentioned
below, the distribution by the Government of Iraq of goods
imported under this resolution, in order to ensure an
equitable distribution of humanitarian relief to all segments
of the Iraqi population throughout the country, by providing
between 130 million and 150 million United States dollars
every 90 days to the United Nations Inter-Agency Humanitarian
Programme operating within the sovereign territory of Iraq in
the three northern Governorates of Dihouk, Arbil and
Suleimaniyeh, except that if less than one billion United
States dollars worth of petroleum or petroleum products is
sold during any 90 day period, the Secretary-General may
provide a proportionately smaller amount for this purpose;
(c) To transfer to the Compensation Fund the same
percentage of the funds deposited in the escrow account as
that decided by the Council in paragraph 2 of resolution
705 (1991) of 15 August 1991;
(d) To meet the costs to the United Nations of the
independent inspection agents and the certified public
accountants and the activities associated with implementation
of this resolution;
(e) To meet the current operating costs of the Special
Commission, pending subsequent payment in full of the costs of
carrying out the tasks authorized by section C of resolution
687 (1991);
(f) To meet any reasonable expenses, other than
expenses payable in Iraq, which are determined by the
Committee established by resolution 661 (1990) to be directly
related to the export by Iraq of petroleum and petroleum
products permitted under paragraph 1 above or to the export to
Iraq, and activities directly necessary therefor, of the parts
and equipment permitted under paragraph 9 below;
(g) To make available up to 10 million United States
dollars every 90 days from the funds deposited in the escrow
account for the payments envisaged under paragraph 6 of
resolution 778 (1992) of 2 October 1992;
9. Authorizes States to permit, notwithstanding the
provisions of paragraph 3 (c) of resolution 661 (1990):
(a) The export to Iraq of the parts and equipment
which are essential for the safe operation of the
Kirkuk-Yumurtalik pipeline system in Iraq, subject to the
prior approval by the Committee established by resolution
661 (1990) of each export contract;
(b) Activities directly necessary for the exports
authorized under subparagraph (a) above, including financial
transactions related thereto;
10. Decides that, since the costs of the exports and
activities authorized under paragraph 9 above are precluded by
paragraph 4 of resolution 661 (1990) and by paragraph 11 of
resolution 778 (1991) from being met from funds frozen in
accordance with those provisions, the cost of such exports and
activities may, until funds begin to be paid into the escrow
account established for the purposes of this resolution, and
following approval in each case by the Committee established
by resolution 661 (1990), exceptionally be financed by letters
of credit, drawn against future oil sales the proceeds of
which are to be deposited in the escrow account;
11. Requests the Secretary-General to report to the
Council 90 days after the date of entry into force of
paragraph 1 above, and again prior to the end of the initial
180 day period, on the basis of observation by United Nations
personnel in Iraq, and on the basis of consultations with the
Government of Iraq, on whether Iraq has ensured the equitable
distribution of medicine, health supplies, foodstuffs, and
materials and supplies for essential civilian needs, financed
in accordance with paragraph 8 (a) above, including in his
reports any observations he may have on the adequacy of the
revenues to meet Iraq's humanitarian needs, and on Iraq's
capacity to export sufficient quantities of petroleum and
petroleum products to produce the sum referred to in
paragraph 1 above;
12. Requests the Committee established by resolution
661 (1990), in close coordination with the Secretary-General,
to develop expedited procedures as necessary to implement the
arrangements in paragraphs 1, 2, 6, 8, 9 and 10 of this
resolution and to report to the Council 90 days after the date
of entry into force of paragraph 1 above and again prior to
the end of the initial 180 day period on the implementation of
those arrangements;
13. Requests the Secretary-General to take the actions
necessary to ensure the effective implementation of this
resolution, authorizes him to enter into any necessary
arrangements or agreements, and requests him to report to the
Council when he has done so;
14. Decides that petroleum and petroleum products
subject to this resolution shall while under Iraqi title be
immune from legal proceedings and not be subject to any form
of attachment, garnishment or execution, and that all States
shall take any steps that may be necessary under their
respective domestic legal systems to assure this protection,
and to ensure that the proceeds of the sale are not diverted
from the purposes laid down in this resolution;
15. Affirms that the escrow account established for
the purposes of this resolution enjoys the privileges and
immunities of the United Nations;
16. Affirms that all persons appointed by the
Secretary-General for the purpose of implementing this
resolution enjoy privileges and immunities as experts on
mission for the United Nations in accordance with the
Convention on the Privileges and Immunities of the United
Nations, and requires the Government of Iraq to allow them
full freedom of movement and all necessary facilities for the
discharge of their duties in the implementation of this
resolution;
17. Affirms that nothing in this resolution affects
Iraq's duty scrupulously to adhere to all of its obligations
concerning servicing and repayment of its foreign debt, in
accordance with the appropriate international mechanisms;
18. Also affirms that nothing in this resolution
should be construed as infringing the sovereignty or
territorial integrity of Iraq;
19. Decides to remain seized of the matter.
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