Statement by the Minister for Foreign Affairs on the report of the United Nations Oil-for-Food Programme

I welcome the extensive and thorough report issued yesterday by the Volcker Committee on its inquiries into the allegations surrounding the United Nations Oil for Food Programme in Iraq. 

As the report states, this very large and complex Programme achieved many vital humanitarian goals in Iraq.  A full investigation was nonetheless necessary to ensure that the UN system addresses the management weaknesses that have been identified.  The Committee makes valuable recommendations for strengthening the management and accountability of the Organisation. 

It is also important that allegations that are without foundation are laid to rest.  I note that while the Committee ascribes deficiencies in management oversight to Secretary-General Annan, it has also found unambiguously that no evidence exists that he sought to influence the procurement process for the Programme.

The Committee also points out that responsibility for failures in oversight is widely shared, including by the members of the Security Council.   During its membership of the Security Council in 2001-2002, Ireland worked hard to ensure that the Programme was better adapted to alleviating the humanitarian situation of the Iraqi people. 

As Envoy of the Secretary-General, I have acted as advocate for a series of reforms, including management reforms, to be considered at next week's UN Summit.  The task before us now is to ensure that these reforms are adopted and urgently implemented.  As the Volcker Committee points out, at stake is ability of the United Nations to respond promptly and effectively to its responsibilities in a turbulent world. 
 
End of statement

Note for Editors
The Independent Inquiry Committee (IIC) was established by UN Secretary-General Kofi Annan in April 2004, under the chairmanship of the former Chairman of the US Federal Reserve, Paul Volcker, to conduct a thorough investigation of the management of the United Nations Oil for Food Programme, which commenced operation in early 1997 and came to an end following the invasion of Iraq in 2003. 

The decision to establish the IIC arose from allegations, in the wake of the fall of the regime of Saddam Hussein, that senior UN officials involved in the management of the Oil for Food Programme (OFFP) had received illicit payments, and that the regime itself had garnered extensive revenue from kickbacks and surcharges, in addition to revenue from oil smuggling in contravention of the sanctions.  The Committee, in an interim report, found that the Executive Director of the OFFP, Benon Sevan, a Cypriot national, had received such payments.  A procurement officer with the programme has recently been arrested in the US and charged with taking bribes. 

A major focus of the media coverage of the allegations was the fact that the Secretary-General son, Kojo Annan, had been employed by Cotechna, a Swiss firm that tendered for, and was awarded, a contract for supervising the import of goods into Iraq under the OFFP.  It was revealed that although he had ceased employment with the company before it was awarded the contract, he continued to receive payments up to early 2004 from the company, unknown to his father, under a no-compete agreement.

While this was a serious embarrassment for Kofi Annan, and while the Committee ascribes failures of management oversight to him, it unambiguously reconfirms its earlier finding that no evidence exists that the Secretary-General influenced, or attempted to influence, the procurement process in 1998 leading to the selection of Cotechna.  The Secretary-General has indicated his intention to remain for now at the helm of the Organisation.  His second five-year term of office expires at the end of 2006.

The Committee has determined that the revenue obtained from oil smuggling by the Saddam Hussein regime amounted to some USD 10.99 billion.  The UN Secretariat had no responsibility for preventing such smuggling, which was never a secret.  Illegal exports to, and imports from, Jordan and Turkey were tacitly tolerated by the Security Council, due to these countries' dependence on supplies from Iraq. 

The Committee has also determined that revenue to the regime from illicit surcharges and kickbacks associated with the Programme amounted to some USD 1.8 billion, and notes that it was not within the capacity of the Secretariat, under the Programme's design, to prevent such payments

While the Committee found that the management performance of the Secretary-General and the Deputy Secretary-General fell short of the standards that the UN should strive to maintain, it also recognised the difficult administrative demands imposed on the Secretariat and the Secretary-General in the management of such a complex operation that involved some USD 100 billion in transactions. 

Next week, the Taoiseach will lead Ireland's delegation at a UN Summit that will consider a range of reforms, including management reforms, that the Secretary-General himself has long advocated.  In April 2005, the Minister for Foreign Affairs, Dermot Ahern TD, was appointed by the Secretary-General as one of five Envoys with a mandate to encourage governments to take the necessary decisions.  Minister Ahern will be present in New York in advance of the Summit to help identify and overcome the remaining obstacles to agreement.

The text of the report of the Volcker Committee can be accessed at http://www.iic-offp.org/Mgmt_Report.htm

ENDS ++++
8th  September 2005
Press Section