Security Council permits limited oil sales by Iraq, sets compensation payment rate: also demands Iraqi compliance with disarmament measures.

The Security Council on 15 August partially lifted a ban on the sale of Iraqi oil and set compensation payments for damage inflicted on Kuwait during the war at 30 per cent of Iraq's annual oil exports. It also demanded Iraq's compliance with diarmament measures imposed following the Gulf war. It did so in adopting three more resolutions related to the situation between Iraq and Kuwait.

In unanimously adopting resolution 705 (1991), the Council decided that Iraq's compensation payments for losses and damage resulting from the 2 August 1990 invation of Kuwait and the subsequent seven-month occupation should not exceed 30 per cen of the annual value of Iraq's exports of petroleum and petroleum products. That percentage would be reviewed from time to time, the Council stated.

The resolution was prepared during consultations on the basis of the Secretary-General's suggestion.

Resolution 706 (1991), also adopted on 15 August, among other things, stipulated the terms for the limited sale of Iraqi oil and oil products, so that essential civilian needs could be met under strict conditions and with close UN monitoring. The sum to be produced by Iraq's limited oil exports could not exceed $1.6 billion, the Council stipulated.

A recent humanitarian mission to Iraq by the Secretary-General's Executive Delegate, Sadruddin Aga Khan, determined that the present food, health and nutrition situation there was "critical". There were widespread shortages of essential medicines and medical supplies.

On 4 September, the Secretary-General recommended (S/23006) the basic structure and measures for the sale of Iraqi oil, aimed at meeting that country's humanitarian requirements. Noting that there would be a shortfall of approximately $800 million in the amount estimated by the Executive Delegate as necessary to meet the humanitarian and essential civilian requirements, the Secretary-General reported that he would, at the appropriate time, recommend an increase in the maximum figure of $1.6 billion.

Iraq must report monthly on its gold and foreign currency reserves. It will be permitted to sell its petroleum products for a six-month period, with full payment by purchasers deposited into a UN-established and -controlled escrow account. Funds from that account would then be used to purchase essential foodstuffs and supplies for civilian needs, cover the costs to the UN of its roles in this respect and meet Iraq's financial obligations under previous Council resolutions.

Those obligations include Iraq's payments to the UN Compensation Fund to pay claims by victims of Kuwait's invation and occupation; the full costs of destroying, removing or rendering harmless Iraqi weapons of mass destruction, and monitoring Iraq's compliance with its diarmament requirements; UN expenses incurred in facilatating the return of all Kuwaiti property seized by Iraq; and half the expenses of the Iraq-Kuwait Boundary Demarcation Commission, established on 17 May.

The Secretary-General was to report on activities to facilitate the repatriation or return of all Kuwaiti and third-country nationals or their remains present in Iraq on or after 2 August 1990.

Resolution 706--sponsored by Belgium, France, the USSR, the United Kingdom and the United States--was adopted by a vote of 13 to 1 (Cuba), with 1 abstention (Yemen).

On 19 September, the Council adopted resolution 712 (1991) to implement resolution 706 on the sale of Iraqi oil.

Confirming the ceiling of $1.6 billion, the Council authorized the immediate release by the Secretary-General of the first one third of that amount from the escrow account, subject to the availability of funds, to meet Iraq's essential civilian needs.

The Council urged that any provision to Iraq of foodstuffs, medicines and supplies to meet those needs should be undertaken through arrangement which assured their equitable distribution.

The Council also decided that the oil should be immune from legal proceedings and that all States should take steps to ensure that protection.

It reaffirmed that the escrow account, as well as inspectors and experts engaged in the implementation of the resolution, enjoyed UN privileges and immunities.

Resolution 712 was adopted by a vote of 13 to 1 (Cuba), with 1 abstention (Yemen), and was sponsored by Belgium, France, Romania, the USSR, the United Kingdom and the United States. This brought to 21 the total number of Council texts adopted under the item "The situation between Iraq and Kuwait", since the crisis began in August 1990.

What was termed "serious violations" by Iraq of its diarmament obligations were condemned in resolution 707 (1991). Also sponsored by Belgium, France, the USSR, the United Kingdom and the United States, the text was adopted unanimously on p.4).

Debate

In debates on the resolutions, Kuwait said the Iraqi regime had exposed international peace and security in the Gulf and throughout the world to danger. The region would not recover its stability until that regime was "placed under effective international control and its vindictive spirit reined in". Sanctions against Iraq must not be lifted until that occurred.

Iraq said the "alliance" wanted to destroy Iraq as an effective Arab force, influential in determining the region's fate. The continued economic embargo and other Council actions were aimed at "putting Iraq forever under the trusteeship of the United States and its allies". The "pretexts" invoked to impose sanctions against Iraq had ceased to exist.

Iraq wanted a grace period of five years before deductions were made from oil revenue income. It also asked for a decrease in the deduction ceiling from 30 to 10 per cent. Resolution 706 would result in catastrophic consequences, as Iraq would be given a minimum of aid so that its people would not starve to death, but without providing the opportunity to reconstruct its economy.

The Council's "arbitrary" resolutions, Iraq charged (S/22957), were part of "an iniquitous and hostile policy directed against Iraq by means of which the neocolonialist States are seeking to make of Iraq a deterrent example to other third world countries and a field of experiment for their schemes to intervene in the affairs of the other countries", to prevent them from achieving economic development and to impose political hegemony over them.

The United States said the primary purpose of resolution 707 was to strengthen the roles of the International Atomic Energy Agency and the Special Commission in eliminating Iraq's weapons of mass destruction capability and in assuring that such weapons were not reacquired. Resolution 706 was intended primarily to get humanitarian assistance to those who needed it the most in Iraq.

The United Kindom said the time had not yet come to lift sanctions against Iraq, which had failed to live up to many of its obligations. In view of Iraq's past record, an effective UN system for monitoring oil sales and for equitably distributing humanitarian supplies was needed.

The USSR said the three resolutions were meant to secure the implementation of resolution 687 (1991). It would be in Iraq's own interest to strictly fulfil its obligations under all relevant Council resolutions. Only in that way could it turn a tragic page in its history and take a worthy place in the international community. The complete implementation of Council decisions would also bolster the UN's ability to act as a guarantor of peace and security, based on the rule of law, and would help prevent such crises both in that region and other regions of the world.

Iraq told the Council that resolution 712 perpetuated the economic siege against Iraq. Under resolutions 706 and 712, Iraq had two choices, one more bitter than the other. The first choice involved the maintenance of the state of full siege with all the concomitant suffering and starvation of the Iraqi people. The second involved a limited exception to the siege, for which Iraq would in return concede its sovereignty over its oil resources and acceptance of the hegemony of some Council members, through UN bodies, over Iraq's oil resources and prevention of Iraq from developing and manufacturing those resources.

The United States said that the resolution was a key step towards bringing the Gulf crisis to a close and towards having Iraq meet its responsibilities. The resolution would implement the international community's concern for providing humanitarian assistance to Iraqi civilians. The way was open for Iraqi authorities to allow that process to begin.

Compensation Fund

The Security Council on 20 May formally created the Compensation Fund from which compensation for claims against Iraq arising from its invasion and occupation of Kuwait would be paid. The Council had also decided to establish a Commission to administer the UN Compensation Fund. Under resolution 687, the Council had made the creation of the Fund one of the conditions upon which the lifting of the prohibition against the import of commodities and products originating in Iraq was contigent.

The Fund's Governing Council met for the first time in Geneva from 23 July to August. Composed of representatives of the 15 members of the Security Council, the Governing Council is the principal organ of the Commission, responsible for administering the Fund and establishing guideliness for presenting and evaluating claims arising out of "direct losses, damage, including environmental damage and the depletion of natural resources, or injury to foreign Governments, nationals and corporations as a result of Iraq's unlawful invasion and occupation of Kuwait".

UN Legal Counsel Carl-August Fleischhauer reported that losses and damage were still occurring and the continued burning of scarce natural resources was causing "immeasurable risk" to the environment.

Hundreds of thousands of ordinary people had been severely victimized, he went on, including enormous numbers of foreign workers who lost their jobs, lodgings and often all their belongings as a consequence of the occupation. Those workers, who had been compelled to leave the Gulf area, became a social and economic burden to their countries of origin, which had lost the remittances of those nationals. The Governing Council should bear in mind that aspect of its task when establishing priorities.

On 25 July, the Governing Council approved guidelines for the conduct of its work. On 2 August, it adopted the criteria to expedite processing of urgent claims. It also approved United States' proposals on arrangements for ensuring payments to the Compensation Fund. Philippe Berg of Belgium is Governing Council President; Carlos Alzamora of Peru is Commission Executive Secretary.

Boundary Commission

The Iraq-Kuwait Boundary Demarcation Commission, consisting of three independent experts, met in Geneva from 1 to 12 July and from 12 to 16 August. It authorized an independent survey and mapping of the entire border. the results were expected to be available in February 1992.

It also decided on methodology to be applied in demarcating the western portion of the border, considered material available for demarcating the eastern portion of the boundary, and decided on the approximate location of the boundary in the vicinity of Safwan in the northern section. Surveying of a wide zone around the boundary, to be undertaken jointly by national survey departments of New Zealand and Sweden, was to begin soon.

UNIKOM 

The Secretary-General on 6 August reported (S/22916) to the Security Council on the UN Iraq-Kuwait Observation Mission (UNIKOM), established by the Council on 9 April to monitor the Iraq-Kuwait border. The situation within the area of operations remained calm, he stated, with the number of border incidents and violations decreasing. The mission continued to receive the cooperation of all concerned in the area.

On 23 August, the Secretary-General reported (S/22977) that activity on the Iraq-Kuwait border had increasedd, with shots being firec on 14 August in the deminilitarized zone. UNIKOM's Chief Military Observer, Major-General Gunther Greindl, protested the incident to Iraqi authorities.

Other developments

On 23 August, Iraq charged (S/22974) that "the massive destruction wrought by the United States and its allies on Iraq's civilian facilities and infrastructure in the course of their military operations" clearly demonstrated the United States' "unlawful use" of the "cover of international legitimacy and Security Council resolutions in order to destroy an entire people".

On 2 August, Kuwait said (A/45/1047-S/22890) Iraq had not abandoned its expansionist and hostile policies towards Kuwait and the region. The Council should maintain its determination and resolve to oblige Iraq fully and scrupulously to abide by international decisions.

On 28 August, Kuwait alleged (S/22990) that Iraqi forces, in a premediated and planned action, had that day attacked the Kuwaiti island of Bubiyan with heavy weapons. The island is three kilometres outside the demilitarized zone (DMZ). It stated that 43 attackers were taken prisoner and seven Iraqi boats were destroyed.

On 29 August, Iraq said (S/22993) that Kuwait's claim of infiltraion was "a fabrication without any foundation", intended to "perpetuate the blockade of Iraq, to secure a stranglehold on its people and to create confusion" as to Iraq's full compliance with Council resolutions.

On 3 September, the Secretary-General reported (S/23000) that UNIKOM, after investigating the Bubiyan incident, neither found evidence of firing at the location nor was shown evidence that there had been weapons on the Iraqi boats.

On 16 September, Iraq called (S/23042) for the establishment of a fact-finding commission to investigate reports that Iraqi soldiers had been buried alive by United States forces during the military operations carried out in accordance with Council resolution 678 (1991).