/ 6 September 2005

Oil-for-food analysis points at UN failures

A sweeping year-long probe of the Iraq oil-for-food programme has concluded that the United Nations allowed ”illicit, unethical, and corrupt behaviour” to overwhelm the $64-billion operation, and must adopt sweeping reforms to reclaim its credibility before taking on such tasks again.

Yet the independent inquiry committee’s final report, to be released on Wednesday, will say the programme succeeded in providing minimal standards of nutrition and health care for millions of Iraqis trying to cope with tough UN sanctions imposed after Saddam Hussein’s 1990 invasion of Kuwait.

It also helped the international effort to deprive Saddam of weapons of mass destruction, it said.

”Those were real accomplishments. They were achieved despite uncertain, wavering direction from the [UN] Security Council, pressures from competing political forces in Iraq, and endemic corruption on the ground,” said a draft forward to the report, obtained by The Associated Press. ”Sadly, those successes fell under an increasingly dark shadow.”

While the forward doesn’t go into detail about Annan, an official familiar with the committee’s final conclusions said it will criticise him, his predecessor Boutros Boutros-Ghali and the UN Security Council, especially Russia and France.

Annan’s failure to manage the $64-billion programme properly will be strongly criticised, but there is no new ”smoking gun” linking him to an oil-for-food contract awarded to the Swiss company Cotecna that employed his son, the official said on Monday, speaking on condition of anonymity because the report has not been released.

Even though the secretary general denies any knowledge of Cotecna’s bid, a cloud will likely remain over his actions because of unanswered questions about e-mail suggesting he knew more than he said about his son’s involvement, the official said. The author of the e-mail, Michael Wilson, a Cotecna executive who is a friend of Kofi and Kojo Annan, denies ever talking to the secretary general about the firm’s attempt to win a UN contract.

The new report will criticise Kojo Annan for trading on his father’s name in the purchase of a Mercedes, for which he borrowed money from Wilson, the official said.

Inner workings of programme

The final report is expected to detail the inner workings of oil-for-food over more than 700 pages. The 1 800-word draft forward written by inquiry chief Paul Volcker, former chairman of the United States Federal Reserve, speaks more broadly, focusing on the administrative failures of oil-for-food and the specific reforms the agency must adopt.

It assigns blame to nearly every branch of the UN, from Annan and the UN agencies that did work in Iraq to its member states and the 15-nation Security Council.

”As the years passed, reports spread of waste, inefficiency and corruption even within the UN itself,” Volcker wrote. ”Some was rumour and exaggeration, but much — too much — of it has turned out to be true.”

The reforms that Volcker recommends — chiefly in auditing and accountability — will not be surprising to Annan and the UN. They are similar to the management reforms he hopes world leaders will adopt at a UN summit that begins on September 14.

It says the UN is the only organisation in the world with the expertise and authority to handle work such as oil-for-food.

”At stake is the UN’s ability to respond promptly and effectively to the responsibilities thrust upon it by the realities of a turbulent and often violent world,” Volcker wrote.

In a BBC interview on Monday, Annan said he wished the UN had never been given the oil-for-food programme, ”and I wish the UN will never be asked to undertake that kind of a program again”.

Saddam’s manipulation

Volcker’s work began after it came to light that Saddam had heavily manipulated the programme, luring companies, favoured politicians, journalists and others with lucrative deals for oil in exchange for kickbacks that helped prop up his regime.

Volcker’s team has documented how the programme’s former chief, Benon Sevan, allegedly took $160 000 in kickbacks, while a Russian official solicited a bribe.

While the forward is critical of UN management, and by extension Annan, its overall tone toward him is not entirely critical. Volcker wrote UN secretary generals are not chosen for management skills and they don’t have the tools for strong executive oversight.

Instead, the secretary general becomes the world’s diplomat-in-chief who must navigate the demands and desires of 191 member states.

”The present secretary general is widely respected for precisely those qualities,” Volcker wrote. ”In these turbulent times those responsibilities tend to be all-consuming. The record amply reflects consequent administrative failings.”

At the same time, Volcker strongly criticised the UN Security Council, which set the oil-for-food programme and monitored its work.

The 15-nation council, the most powerful decision-making body of the UN, allowed Iraq too much room in establishing and implementing the programme, he said.

The council also never clearly defined the policies and responsibilities around the programme. A chief failing was that the council exercised control over the programme through a committee set up to monitor sanctions, which was given responsibility for overseeing its contracts.

”Neither the Security Council not the secretariat leadership was clearly in command,” Volcker wrote. ”When things went awry — and they surely did — when troublesome conflicts between political objectives and administrative effectiveness arose, decisions were delayed, bungled or simply shunned.” — Sapa-AP