Secret November Deal for Iraq’s Oil (CounterPunch)

UNITED NATIONS (–Iraq returns to the agenda of the UN Security Council at Final Call press time. The focus will be on the politically and legally delicate issue of who shall administer Iraq’s oil wealth.

The United States plans to propose a Security Council resolution lifting all international sanctions against Iraq with the guarantee that proceeds from future Iraqi oil sales would be held in trust for an interim Iraqi authority, according to news reports.


Speculation at the UN is that the Bush administration will propose that the end of sanctions coincide with the June 3 end of the Iraqi oil-for-food program that allows profits from the sale of oil to be used to purchase humanitarian supplies for 60 percent of Iraq’s 27 million people.

The Security Council unanimously adopted a resolution on April 23 that extended the current oil-for-food program, which was due to expire on May 12. The new mandate, adopted in March 2003, gave Secretary-General Kofi Annan authority over the program. The U.S. ambassador to the UN, John Negroponte, said Washington supported the resolution because it makes sense to make a technical adjustment so that Kofi Annan can “better plan to provide humanitarian aid to the Iraqis.”

But the Washington Post reported April 25 that advisers to Pres. Bush adopted the Pentagon proposal for immediate elimination of all UN controls over Iraq. Observers say that France caught the U.S. off-guard when it unofficially called for the immediate lifting of sanctions that affect civilians and the phasing out of the oil-for-food program. Russia called for putting the entire Iraqi aid program under Kofi Annan, who now controls only emergency procurements.

Russia produced a document, “Elements for UNSC: Draft Resolution on the Oil-For-Food Program,” that said the Security Council must “stress the necessity to make every effort to sustain the operation of Iraq’s national network for distribution of humanitarian goods.” Russian Pres. Vladimir Putin told British Prime Minister Tony Blair on April 29 that he feared lifting the sanctions would sideline the UN further. Pres. Putin said he wanted UN inspectors to verify that Iraq is free of weapons of mass destruction.

The draft document also authorized the secretary-general to manage, on a temporary basis, the rehabilitation of the Iraqi oil industry. Mr. Blair had traveled to Russia to persuade Mr. Putin that UN sanctions should be “promptly” lifted.

Analysts say the upcoming debate over the ending of sanctions could be a replay of the resolution 1441 political confrontation that pitted the U.S. and Britain against other Security Council members. But Jim Paul, executive director of the New York-based Global Policy Forum, said he believed the Council to be too fragmented to offer any real resistance against the United States and U.K.

He quoted a UN diplomat who described Security Council members as “blind men” groping around in a room full of furniture. “They are bumping into a lot of things and they don’t know where they are going,” Mr. Paul said.

Under the UN charter, sanctions can only be imposed and lifted by a Security Council resolution, which requires the approval of nine of the 15 members and the absence of a veto by any of the five permanent members: the U.S., U.K., France, Russia and China. In April 1991 the Security Council spelled out conditions for lifting sanctions on Iraq. These included the verification by UN inspectors that Iraq has destroyed its banned weapons of mass destruction.

The Bush administration says the UN will play a “vital role” in Iraq, but won’t say to what degree. Arab leaders and the European Union say that the UN must be tapped for its nation-building expertise, and Mr. Annan said that only by enlisting the UN could the rebuilding of Iraq be considered “legitimate.”

“While some protested for years about the economic sanctions because of the hundreds of thousands of Iraqi deaths they caused, the U.S. government continuously responded that it was Saddam Hussein’s regime and not the sanctions that was to blame for the suffering,” Sam Husseini, communications director of the Institute of Public Accuracy, told The Final Call.

“Now that it is convenient for them, the Bush administration is moving to lift the sanctions immediately. Given the belated admission by the U.S. of the effects of the sanctions, we must come to grips with the realization that the U.S. government has conducted a nearly 13-year war of military and economic warfare against Iraq,” Mr. Husseini said.

Mr. Paul speculated that Security Council deliberations over lifting the sanctions are likely to be lengthy because members want leverage in dealing with the United States. Diplomats say sanctions are the only channel through which France and Russia, opponents of the U.S.-led war, could persuade the U.S. to accept a strong political role for the UN in post-war Iraq. Observers also say that nations may seek to use their leverage in the Council to protect their commercial interests in Iraq from being taken over by U.S. competitors.

Insiders say that Russian companies did business with Iraq to the tune of $7.3 billion since 1996, when the oil-for-food program began; Egypt $4.3 billion; France $3.7 billion; with Jordan, the United Arab Emirates and China doing $3 billion each in contracts.

Diplomats milling in the hallways outside of the Security Council tell reporters in confidence that “handing over the oil to the U.S. is too much to ask, too much.”

There is, according to the oil-for-food program staff, $10. 3 billion in an escrow account earmarked for health-related equipment, electrical equipment, water and sanitation equipment and spare parts for oil production equipment. The UN receives two and a half percent of the oil profit money for administrative costs.