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Us wants oil industry control { May 9 2003 } Original Source Link: (May no longer be active)
http://reuters.com/newsArticle.jhtml?type=topNews&storyID=2710079http://reuters.com/newsArticle.jhtml?type=topNews&storyID=2710079
U.S. Asks Approval to Control Iraq's Oil Industry
Fri May 9, 2003 01:42 AM ET
By Evelyn Leopold
UNITED NATIONS (Reuters) - The United States and Britain introduced a resolution on Friday that would end 12 years of U.N. sanctions against Iraq and give them control of the country's oil revenues for at least a year.
The tough resolution that in effect relegates the United Nations and other international institutions to an advisory role with little power, would phase out over four months the existing U.N. oil-for-food humanitarian program.
The United States and Britain, who sponsored the measure along with Spain, want a vote by June 3, when that program, which gives the United Nations control over the oil revenues, needs to be renewed.
Without adoption of the resolution, no Iraqi, U.S. or U.N. entity in Baghdad has the legal authority to export oil.
The Bush administration is counting on approval from Russia, France, China and Germany, who had the strongest anti-war position in the 15-member body, with officials saying there was little enthusiasm for another bruising fight.
Nevertheless, the text, which two senior council diplomats called 'hard' and 'in your face,' will probably face amendments from France and Russia, who have favored suspending the sanctions but leaving some control with the United Nations until an Iraqi government is established.
And nearly every council member, including Britain, had wanted to send U.N. weapons inspectors back to Iraq, as called for as in at least 16 resolutions as a condition for lifting the sanctions, imposed when Iraq invaded Kuwait in August 1990. But the draft resolution ignores any such requirement.
The U.S. proposal, endorsed by Britain and Spain, would deposit Iraqi oil revenues in an 'Iraqi Assistance Fund' for humanitarian and reconstruction purposes, to be held by the Iraqi Central Bank, currently managed by Peter McPherson, a former deputy U.S. Treasury secretary.
The new Assistance Fund would have an advisory board that would include officials appointed by U.N. Secretary-General Kofi Annan as well as the International Monetary Fund, the World Bank and others. This group would audit expenditures.
IRAQI ASSISTANCE FUND
But decisions on where to spend the money would be made mainly by the United States and Britain, with perhaps some input from other allies, like Australia, who sent some troops to the effort to oust President Saddam Hussein's government.
They would make those decisions in consultation with an Iraqi interim authority Washington is now setting up until a new Iraqi government is formed, which could take years.
The money in the Iraqi Assistance Fund, which would be used 'for the benefit of the Iraqi people' would remain there until 'such time as a new Iraqi government is properly constituted and capable of discharging its responsibilities.'
The resolution would be automatically renewed in a year unless the council made a decision to the contrary, a provision council members are bound to change.
The draft resolution also asks Annan to appoint a 'special coordinator' to supervise U.N. humanitarian assistance and 'reconstruction activities in Iraq.'
The coordinator's duties are vague in the resolution but he or she is to assist in establishing governing institutions, promoting human rights and legal and judicial reforms and in building an Iraqi police force.
The resolution would phase out the U.N. oil-for-food humanitarian program over four months but honor 'priority civilian goods' in contracts already approved. This would probably include the $1.6 billion in Russian contracts currently in the pipeline.
The program was designed to ease the impact of sanctions imposed in August 1990. It allowed Iraq to sell oil to purchase food, medicine and other civilian goods under U.N. supervision. Oil revenues are deposited into a U.N. escrow account to pay suppliers.
The oil-for-food fund now has some $13 billion in outstanding contracts for food, medicine and other civilian goods ordered by the ousted Iraqi government.
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