Iraq's 'oil for food' programme: Covers expenses of Norwegian companies, government

By Morten Rønning
Norwatch

The United Nations Compensation Commission (UNCC) was formed in 1991 as a committee of the UN Security Council. The Commission's mandate is to receive and process financial claims due to losses and damages that arose as a direct result of Iraq's invasion of Kuwait in 1990, and to pay compensation. Parts of Iraq's earnings from the so-called "oil for food" programme are deducted to cover war indemnities. According to the Dag og Tid weekly, Iraq has paid USD 9.4 billion so far. Iraq may not repay its debt until the year 2070.

Norwegian companies
In the UNCC documents we find claims from three Norwegian companies: Bergen Bulk Carriers, Gearbulk Limited, and Stavanger Drilling. The Norwegian companies' claims were raised in co-operation with the Norwegian government.

The companies' claims are tied to insurance costs, loss of income, and unpaid bills. The two first-mentioned companies were awarded part of their claims, USD 83,150 and USD 390,160 respectively, whereas Stavanger Drilling was not awarded compensation. The UNCC thought that part or all of the loss for which Stavanger Drilling sought compensation, had been incurred outside of the geographical area covered by the compensation arrangements.

In addition, the Scandinavian airline company SAS was awarded an indemnity of USD 10,803 for extra insurance costs.

- We find it entirely natural that those who cause others increased expenses, also have to take the responsibility for covering those expenses, says Ymer Sletten of Bergen Bulk Carriers to NorWatch. The company applied for USD 241,165 in increased insurance costs for one ship that the shipping company had in the area, but was awarded only USD 83,150.

Silo
Through Araba Holdings Inc., Gearbulk Ltd. operated a floating grain silo at the port of Akaba in Jordan. The silo received grain by ship from the US and Canada, which was transported by lorries to Iraq. When the trade embargo against Iraq came into force in August 1990, the company immediately stopped all grain transportation. Things took a dramatic turn when Iraqi authorities forced the captain to unload the rest of the grain in the silo.

When Gearbulk left the area, they had unpaid accounts worth USD 390,160 with Iraqi authorities. The bills remained unpaid, and after the war, financial dealings with Iraq was banned.

Gearbulk's Kjell Hovden says to NorWatch that the sum is being repaid in instalments, and that a full settlement has not been made. The UNCC gives priority to individuals' claims for war indemnities. Hovden declines to comment on the fact that the compensation is being drawn from Iraq's earnings under the "oil for food" programme.

Gearbulk also asked to be compensated for the loss of income from a couple of ships with grain that were on their way to Akaba when the embargo was implemented, worth USD 735,611, but this was turned down by the UNCC.

Norwegian government
According to UNCC documents, Norwegian authorities have applied for a total compensation from Iraq of NOK 952,578 (USD 112,068). The sum divides into three categories: loss of property (NOK 110,868), evacuation costs (NOK 659,448), and increased public expenditure (NOK 182,262).

The property losses concern the theft of furniture from the Norwegian station in Kuwait.

Evacuation costs concern the evacuation of six embassy staff from Kuwait. In addition, the embassies in Riyadh, Damascus, and Islamabad were closed, and the staff and their families evacuated. A further 20 Norwegians were evacuated from the area at the government's expense. The sum covers travel, board and lodgings.

Increased government expenditure includes the transfer of embassy staff in Baghdad, plus reinforcement of the staff in Tel Aviv. It also includes travel and lodgings for Norwegian ministers, in connection with cabinet meetings, plus meetings with the families of Norwegians held hostage in Iraq. Coverage was further sought for tuition fees for the child of an employee at the Baghdad embassy, as the family left Iraq and did not make use of the school.

Only partial compensation
Out of the above claims, Norway got compensation for a total of USD 23,149 (barely NOK 200,000). The UNCC rejected some of the claims made by Norway, both with regard to evacuation and increased government expenses. Among other things, the UNCC points out that Iraq should not be charged with wage and travel costs that should be expected as part of the costs of diplomatic activities.

- The claims of the Norwegian government, brought at the UN, were based on a basic principle of international law, that damages inflicted by an illegal invasion are to be compensated for, says Torgeir Larsen, acting spokesperson of the Foreign Ministry, to NorWatch. The Foreign Ministry has taken note that the Commission did not see fit to award indemnities fully consistent with the claims.

Larsen further says that the percentage set aside to cover indemnities is to be assessed with regard to the needs of the Iraqi people, the servicing of foreign debt, and needs in the Iraqi economy. The percentage was lowered from 30% to 25% on December 5, 2000.

Enormous suffering
The UNCC's annual budget of USD 50 million is also drawn from Iraq's oil export earnings. According to Dag og Tid, Iraq is not allowed to appear at the UNCC to reply to the claims under consideration in the commission.

The same weekly says in a recent article that USD 9.4 billion has so far been paid in war indemnities, while purchases or contracts for the purchase of goods have been made for USD 14 billion. Iraq has not made full use of all funds paid in for the purchase of food, medicine, and other essential goods, but Iraq does not control these funds. The money is held in a UN account, and it has proven difficult to acquire needed equipment e.g. in the oil industry. Some of Iraq's wishes for goods have been rejected by the UN, and some suppliers, too, have opposed them.

As a result, the Iraqi civilian population, children in particular, are exposed to enormous suffering. Foreign minister Thorbjørn Jagland admits that sanctions are not working as intended, while international aid organisations such as the Red Cross and Unicef are describing the situation as a slow genocide. The international boycott of the country has above all affected the weakest, and has had little or no effect on Saddam Hussein and his dictatorial rule. A 1997 report from the UN stated that 570,000 children had died so far. According to Unicef, 5-6,000 children are dying every month as a direct consequence of the UN sanctions regime.

Norwegian former foreign minister,  Thorvald Stoltenberg, was named by the UN in October as head of an independent group to examine the humanitarian situation in Iraq.

With Norway's entry into the UN Security Council, we will have the entire issue of sanctions against Iraq thrown in our lap. France has proposed easing the sanctions, while the UK and US favour retaining them. The UK and US are keeping up their control of the so-called no-fly zones in the north and south of the country. They frequently bomb what they call "military targets", which the Iraqi side claims are civilian areas.

"We find it entirely natural that those who cause others increased expenses, also have to take the responsibility for covering those expenses."
- Ymer Sletten, Bergen Bulk Carriers, 4.12.2000

"In the resolution, the Security Council emphasises meeting the humanitarian needs of the Iraqi people."
- Torgeir Larsen, acting press spokesperson, Ministry of Foreign Affairs, 8.12.2000

Norwatch Newsletter 12/00