B. Cross-sectoral considerations in the three northern governorates

Programme coordination

118 As indicated in my previous report (S/2001/188, para. 145), the United Nations Office of the Humanitarian Coordinator for Iraq (north), pursuant to a decision taken at the inter-agency level, had initiated action to upgrade planning data and enhance information-sharing within the inter-agency programme in the three northern governorates. A joint humanitarian information centre was established in early January 2001 and has begun surveying the availability of data required to develop a common programme framework. It is also developing a lrncking system that will be compatible with the project approach of the inter-agency humanitarian programme, based on clear targets and performance indicators. The absence of entry visas for consultants in multi-sectoral planning, gender relations, agro!conomics, and needs assessments for vulnerable groups has delayed, to a considerable extent, the unit's programme of work.

119 The increased scope and scale of the inter-agency humanitarian programme is in many instances placing a heavy strain on local counterpart institutions in health, education, water and sanitation, electricity and agriculture. In some cases, they lack the skills and resources to operate and maintain the equipment or to staff the facilities being provided. In that regard, as title to all goods imported and installed under the programme vests for the time being in the United Nations, agencies and programmes are faced with not only the installation of new projects, infrastructure and equipment, but also with their operation and maintenance. As a result, United Nations agencies and programmes are obligated to bring in international staff not only to install project equipment, but also to ensure the running of this equipment once it is in place. As more of these projects are set to come on line, additional international staff, an! with them the issuance of more visas, will be required to install, maintain and train local staff without further depleting the already limited expertise in the local institutions, until local counterparts can be trained and attain the necessary experience.

Drought contingency

120 Additional rainfall, while leading to a partial recovery of rain-fed agriculture, has not been sufficient to restore irrigation or hydroelectric generation to normal levels. The inter-agency drought coordination committee is therefore continuing to conduct surveys and prepare contingency plans, with emphasis on human, animal and agricultural water supply and electricity. With respect to electricity, the total generating capacity will remain far short of requirements until water levels are restored in the Dokan and Derbandikhan reservoirs.

Delays in issuance of visas and clearance imports

121. The considerable number of delays and refusals in the issuance of visas to international staff, consultants and contractors, contrary to the relevant provisions of the Memorandum of Understanding signed between the United Nations Secretariat and the Government of Iraq (S/1996/356), and in particular its section VIII, paragraph 46, has been adversely affecting the implementation of the programme as a whole. While 528 visas had been granted since 1 November 2000, as at 14 May 2001. the total number of visas pending stood at 246, mostly for staff of UNDP (122) and UNOPS (89) in the three northern governorates. United Nations experts, in addition to carrying out the project activities required, have also been training national staff to take over, as soon as possible, the operations concerned. Until such time as there is a sufficient number of qualified national staff available, the programme will require outside expertise. The delays have been undermining the effective implementation of the activities in those sectors, and I appeal to the Government of Iraq to expedite the granting of the visas pursuant to paragraph 46 of the Memorandum of Understanding. The matter has been brought to the attention of the Committee. In a letter dated 7 May 2001 addressed to the Permanent Representative of Iraq to the United Nations, the Chairman of the Committee expressed the concern of the Committee with regard, to the situation concerning visas and urged "the Government of Iraq to fulfil its obligations under the Memorandum of Understanding, and to expeditiou&Iy address this issue".

122 In April 2001, the Government of Iraq made passage of goods between Zakho and Mosul contingent on prior provision of details on the consignments  concerned. This new measure resulted in a build -up, atone point, of several hundred trucks in the Dahuk Governorate. The immediate problem has eased

following intense consultations between the United Nations Humanitarian Coordinator for Iraq and the Government of Iraq. Iraqi customs authorities, however, have been instructed not to allow the import of any materials without the approval of the Government, effective 1 June 2001 Discussions are continuing with regard to long-term arrangements for the facilitation of import and export of goods under the programme through all entry points! The Security Council will be informed on the outcome of the discussions.

VI. Conclusions and recommendafions

123 The present report reflects both the positive achievements in meeting the humanitarian objectives of Security Council resolution 986 (1995) and the constraints and difficulties experienced in the effective implementation of the programme. Over the past four years, the humanitarian programme has contributed not only to arresting the decline in but also to improving the living conditions of the average Iraqi. I should like to reiterate, however, that the achievements of the programme should not lead us into a sense of complacency. The programme can and should be allowed to achieve its humanitarian objectives to the maximum. To this end, it is essential that it have the full cooperation of all parties concerned in order to meet the humanitarian and essential civilian needs of the Iraqi people.

124. In my previous report I had expressed concern that the $5.556 billion required for the implementation of the approved distribution plan for phase IX might not become available, owing to the substantial drop in the oil exports from Iraq under the programme (S/2001/186, para. 157). 1 very much regret to confirm that, despite the increase in the daily average rate of oil exports under the programme to at least the levels of the previous phase during the last two months, it is now estimated that the total revenue of oil exports under the programme during the current phase (which will end on 3 June 2001) will reach only 6.5 billion euros, or about $5.7 billion, which will provide only about $3.5 billion for the implementation of the programme, after the deductions pursuant to the relevant resolutions of the Security Council.

125 The authorization for Iraq to export unlimited amounts of oil and to import a wider range of goods has transformed the programme's nature and range of activities from providing emergency humanitarian relief to encompassing many aspects of rehabilitation of essential civilian infrastructure. I should like to reiterate the recommendation made in my previous report (S/2001/186, para. 161) that the provisions of paragraph 17 of resolution 1284 (1999) be applied also to the remaining sectors of the distribution plan and that the lists of items already approved (the "green lists"), relating to different sectors, be expanded to include all items, with the exception of those covered under resolution 1051 (1996). Accordingly, I appeal to the Security Council and its Committee further to streamline their current cumbersome approval procedures and allow greater latitude so that a wider variety of medicine, health supplies, foodstuffs, as well as materials and supplies for essential civilian needs can be procured and supplied most expeditiously. Such an approach by the Council would also reduce the excessive nurnber of holds placed on applications.

126 Notwithstanding the range of opinions and discussions on a broader framework for the programme, I appeal to all parties concerned to preserve the distinct humanitarian identity of the programme established under resolution 986 (1995). I am encouraged by the work and achievements of the United Nations observation mechanism to date and am confident that the mechanism can provide the necessary assurances to the Security Council and its Committee that supplies and materials provided under the programme are indeed being utilized for approved purposes.

127 As indicated in the present report, a number of major difficulties continue to be encountered in the effective implementation of the programme, due to the absence of a viable arrangement for local procurement of goods and services and the provision of a cash component. An increasing range of equipment is being imported under the programme, with insufficient local resources available to undertake installation, training and maintenance. This makes such an arrangement more necessary than ever, as it is essential for the efficient use of imported commodities. The absence of arrangements for local procurement, for example, has led to a situation where locally produced agricultural items cannot be purchased under the programme for inclusion in the food basket. In turn, the importation of food items has become a disincentive to local agricultural production. I regret very much that there has been no progress on the arrangements for local procurement and cash component foreseen in paragraph 24 of resolution 1284 (1999). With this in mind, I appeal to the Government of Iraq to work with the United Nations in developing the necessary and viable working arrangements for local procurement and a cash component, which will ultimately serve to stimulate local production.

128 1 am pleased to inform the Security Council that a team of experts visited Iraq from 18 March to 1 April 2001, pursuant to paragraph 15 of resolution 1330 (2000), to discuss arrangements for the utilization of up to 600 million euros from the deposited funds in the escrow account established by resolution 986 (1995). Subject to the Council's approval of the proposed arrangements, these funds will be used for the cost of installation and maintenance, including training services, of the equipment and spare parts funded under the programme for the oil industry. The team of experts is about to finalize its report and, pursuant to paragraph 15 of resolution 1330 (2000), 1 will submit my recommendations thereon to the Council. I should like to express the hope that, once the arrangements proposed are approved by the Council, similar modalities could be extended to support activities in other sectors.

129. With the increased funding level and the growing magnitude and scope of the programme, the whole tedious and time-consuming process of the preparation and approval of the distribution plan and its annexes are no longer in step with current realities. It may be recalled that the distribution plan for the present phase was submitted by the Government of Iraq almost two months into the current phase. It should be borne in mind that soon after the approval of a distribution plan, thousands of amendments are submitted throughout the course of a given phase and thereafter. Accordingly, I have directed the Executive Director of the Iraq Programme to continue discussions with the Government of Iraq with a view to devising a more appropriate and flexible planning process that would meet the requirements of the expanded programme.

130 Current contract applications and processing procedures were put in place at a time when the overall focus and magnitude of the humanitarian programme were considerably smaller. Now that the programme has grown in size and complexity, many more contracts, in almost all sectors, involve large-scale technical equipment. For such contracts, current procedures involve the submission of additional technical information before processing and approval can occur. Omissions can delay the process by weeks. and at times by months. In addition, current procedures, from the time of authentication of goods to the payment to a supplier, can take from six to eight weeks. I have therefore requested the Executive Director of the Iraq Programme further to review and streamline all relevant procedures and make recommendations thereon to the Committee.

131 I should like to express the hope that the revised and updated lists of items and technology to which the import/export mechanism approved by resolution 1051 (1996) apply. to be submitted pursuant to paragraph 19 of resolution 1330 (2000) by the Executive Chairman of UNMOVIC and the Director-General of IAEA, will lead to a reduction in the number of disagreements between the Secretariat experts and members of the Security Council Committee on the status of applications submitted under the humanitarian programme. A better-defined list of items to be submitted under the mechanism approved by resolution 1051 (1996) would also reduce the number of holds placed on applications. Even for "dual use" items or items on the resolution 1051(1996) list, I should like to appeal to the Security Council Committee to have confidence in the United Nations observation mechanism and to approve and/or release applications on hold, if necessary on the condition of "end-use" observations and reports thereon to the Committee. The United Nations observation system is now capable of tracking the "end-use" of items throughout the country and providing the Committee with regular reports and information on such items, as required. I also would like to appeal to the Government of Iraq to fully cooperate in this undertaking.

132 It is essential for the Government of Iraq to prioritize its contracting, giving particular attention to the food, health and nutrition sectors. Furthermore, with the size of revenues available to the programme, shortfalls in distribution of food basket items and essential medicines can no longer be justified. I am therefore instructing the Executive Director, in full consultation with the United Nations Humanitarian Coordinator for Iraq, the United Nations agencies and the programmes concerned, to provide me with an assessment in time for my next report to the Security Council, including a list of essential medicines in short supply and measures required to resolve this problem without further delay.

133 It is also essential to address urgently the problems arising from inordinate delays in submissions of applications and from the submission of non- compliant applications. It is unfortunate that while the Secretariat has notified the Government of Iraq of its concern over delays in the submission of contracts, feedback from the Government showed that in many cases contracts have been signed but suppliers have yet to submit them. With only about three weeks left to the end of the present phase, on 3 June 2001, the total value of applications received, as at 14 May 2001, was $1.8 billion, including $1.2 billion for items for the food basket. Not a single application under the health, water and sanitation, education and oil sectors has been received. I therefore appeal to the Government of Iraq to insist that its suppliers submit applications in a timely fashion. I should also like to reiterate my appeal to the Government of Iraq to provide information to the Office of the Iraq Programme and the United Nations Office of the Humanitarian Coordinator for Iraq on contracts signed, even before the applications concerned are submitted by the suppliets to the Office of the Iraq Programme. Such advance information would definitely expedite processing of the applications received. In this context, I should also like to recommend to the Government of Iraq that the Central Bank of Iraq take all necessary measures to expedite the processing of the outstanding $ 1.151 billion worth of unopened letters of credit for already approved applications.

134 I wish to express my deep concern over the current visa situation and the negative impact that the interruption in essential activities is having on the humanitarian situation in the three northern governorates. In this regard, I reiterate my call upon the Government of Iraq to issue the required visas to United Nations officials, experts and other personnel performing contractual services for the United Nations in Iraq, in conformity with the letter and spirit of the relevant provisions of the memorandum of understanding, paragraph 46 of which stipulates that these staff shall have the right of unimpeded entry into and exit from Iraq and shall be issued visas by the Iraqi authorities promptly and free of charge. In this regard, it should be noted that, as title for all FSC (13 per cent) account properties remain, for the time being, with the United Nations. the Organization finds itself responsible not only for the building and installing of infrastructure and equipment, but also for its operation and maintenance and for the training of national staff. With the expansion of the programme activities, in order to fulfil the responsibilities entrusted to it by the Security Council, the United Nations will require an increasing number of international staff.

135 I have repeatedly expressed my deepest concern over the safety and security of United Nations personnel working around the world, an increasing number of whom have lately made the ultimate sacrifice in the line of duty while carrying out humanitarian and peacekeeping missions. I have been following very closely the criminal court proceedings in Baghdad concerning the tragic event that took place in June 2000 within the premises of the FAO office in Baghdad, in which two staff members were killed and eight persons were injured, including four United Nations staff members. I wish to infortn the Security Council that, on 14 May 2001, the criminal court pastponed, yet again, for the seventh time, its proceedings in the trial of the accused, to 28 May. I will keep the Council informed of the proceedings of the court, which, I do hope, will be concluded expeditiously.

136 In conclusion, I should like to stress that it is incumbent on all parties concerned to take concerted measures to ensure the effective implementation of the humanitarian programme in order to alleviate the plight of the Iraqi people, and to refrain from any actions that could exacerbate the already fragile living conditions of the average Iraqi.