Al-Ahram Weekly On-line   Al-Ahram Weekly On-line
5 - 11 October 2000
Issue No. 502
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Abdel-Aziz El-Shafei
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Iraq must pay

Sanctions on Iraq are only the public face of a larger and more sinister campaign by the United Nations to set humanitarian concerns aside in its thirst for revenge. In the first instalment of a two-part article, Alain Gresh* investigates a low-profile commission that levies a heavy tax

Geneva is not given to raised voices, preferring protective silence, discreet discussions and no publicity. On 15 June, however, the affable atmosphere of the United Nations Compensation Commission (UNCC) governing council's routine meetings suddenly became tense: for the first time, the consensus was shattered.

The amount at stake was certainly impressive -- $15.9 billion, or twice Jordan's gross domestic product. But the subject was not a bank merger, laundered money or a takeover bid. Those taking part were not bankers, but high-ranking diplomats from the 15 United Nations Security Council member countries. They were there to take a decision on a claim submitted notably by the Kuwait Petroleum Corporation for compensation by Iraq. The French and Russian diplomats explained their reservations; they could not allow such a massive amount to be taken from a country that is growing ever more impoverished and given to an opulent emirate.

The session was adjourned to 30 June, when an additional meeting was held to no avail. It was adjourned again to 28 September, when the UNCC unanimously voted the $15.9 billion through. In return, France and Russia won some changes in the way the commission is run and in the percentage of Iraqi exports to be used as compensation. Regardless, this does not change the scandalous basis on which the UNCC functions.

The UNCC, which started work 10 years ago, was set up to process claims and pay compensation for losses resulting from Iraq's invasion and occupation of Kuwait. With its offices scattered around Geneva's international quarter, it has attracted little public attention, but this discreet body is nonetheless one of the main players in a strategy designed to annihilate Iraq.

There is often mention of sanctions, children dying for lack of medical treatment, hospitals without equipment and the slow disintegration of one of the world's oldest civilisations -- but rarely talk of the UNCC. A few lines from an agency dispatch, rarely printed, occasionally remind us of the daily bombings mounted by US and British air forces on Iraq. But not a single journalist is to be seen in the corridors of the UNCC. There has never been any public debate about its questionable legality or its dubious acts. Yet since December 1996, this institution has collected one third of Iraq's export income -- a sum totalling $11 billion.

In April 1991, following the allied victory in the Gulf War, the Security Council confirmed that Iraq was "liable under international law for any direct loss, damage [...] or injury to foreign governments, nationals and corporations, as a result of Iraq's unlawful invasion and occupation of Kuwait." The UNCC was set up by Security Council Resolution 692 on 20 May 1991 to handle claims for compensation. The UNCC governing council is made up of representatives of the 15 countries on the Security Council and determines the amount of compensation to be paid to each claimant on the basis of a report by a panel of three commissioners. The panel is made up of experts appointed by the secretariat, a theoretically administrative body, but in practice the real seat of power.

From the outset, United States representatives took control of the secretariat and directed -- or, more exactly, misdirected -- all the UNCC's decisions. There is no precedent for the procedure adopted by the Security Council, at least since the Treaty of Versailles, which brought an end to the First World War and paved the way for the second. Article 231 of the treaty laid full responsibility for the war on Germany and forced it to pay seemingly endless reparations. The "Germany must pay" slogan ultimately led to Adolf Hitler taking power. Nowadays the slogan in the US (which refused to ratify the Versailles treaty) is "Iraq must pay." But what will be the result?

Michael E Schneider, a former professor of international public law and a lawyer at Lalive and Partners (1), pointed out the main flaw in the procedure: Iraq is not recognised as "a defendant party and no attempt has been made to obtain its agreement. Iraq, and only Iraq, must pay for every penny of the procedure, the fees of the commissioners and their experts, whereas the country cannot even consult the experts' findings." Iraq must be held accountable for the damage caused by its invasion of Kuwait, yet even a criminal is entitled to defence and lawyers, and is not required to pay for judges, trial and investigation. Every year $50 million are deducted from Iraqi exports to fund the UNCC, the (business class) travel expenses of its experts, its commissioners' hefty fees and so on. For the first time in the history of international law since the Second World War, a state has no right of appeal against a procedure involving it.

Mohamed Al-Douri, Iraq's ambassador to the UN in Geneva and a former professor of international law, works "under an embargo." Iraq has lost the right to vote at the UN because it has not paid its dues (2), whereas the US -- the organisation's largest debtor, with more than $1 billion in arrears -- has never been penalised as such. Communication between the Iraqi ambassador and his government is laborious, as an envoy takes at least four days to make the round trip from Geneva to Baghdad and back. Al-Douri lacks even office equipment. Xerox, for instance, has refused to sell him photocopiers -- afraid, no doubt, that he will turn them into chemical weapons.

Al-Douri went to great lengths to explain his country's position. The claims referred to above (nos. 4003197 and 4004439), being made notably by the Kuwait Petroleum Company for a total of $21.6 billion, were typical. They concern the suspension of production and sale of Kuwaiti oil during the Iraqi occupation, as well as losses caused by fires. The claims, tens of thousands of pages long, were filed on 20 May and 24 June 1994 and passed on to the three commissioners responsible for the case. The secretariat only provided the Iraqi government with a summary of their contents on 2 February 1999 -- five years later. It had only until 19 September to present its comments.

As the Iraqi delegation explained to the UNCC governing council on 13 June, the claims "address too many legal, scientific, technical, engineering, and accounting merits. How much time is required to prepare a comprehensive, scientific and appropriate response to those claims? You distinguished members should work out the time required for communicating the voluminous documents, verifying, studying, translating them from a foreign language to Arabic and back again to English, and then prepare the response."

The UNCC has not allowed the Iraqi government to use its own export revenue to obtain the services of a law firm. Al-Douri added: "We did, nevertheless, submit our comments, to which Kuwait replied, but we have no idea what it said in response. After a great deal of procrastination, we were at last allowed to state our case to the commissioners -- in no more than one hour -- last year on 14 December." The commission awarded $15.9 billion to the claimants, which prompted the French and Russian representatives on the governing council to express their misgivings for the first time. Al-Douri concluded: "Iraq is responsible, but there is no justification for violating international law."

"How can a case be judged unless contradictory opinions are expressed and both parties are given an opportunity to state their point of view?" asks Michael Schneider. "How can you react to cut and dry cases? Kuwait organised an international call for tenders to prepare and plead its case. To get to the bottom of it would require painstaking work for which the commission does not have time. Not only has Iraq been refused money to defend itself, but all the major law firms have already been hired by the claimants or by the UNCC itself." The UNCC hired Price Waterhouse after it had worked for Kuwait, which creates a conflict of interest.

In 1991 the UN secretary-general recommended that Iraq should be "informed of all the claims and will have the right to present its comments to the commissioners." But in the end the Security Council decided otherwise and simply accepted that Iraq had "a right to receive the summary reports of the executive secretary and comment thereon." This procedure is more in keeping with the Inquisition than modern legal practice -- a point recognised by Norbert Wuhler, head of the legal department at the UNCC, when he wrote of an "inquisitorial procedure" (3). As UNCC Executive First Secretary Carlos Alzamora put it, all the inconvenient legal safeguards "which generally encumber judicial proceedings" have been eliminated.

The UNCC justifies its behaviour by the pressing need to refund the hundreds of thousands of ordinary people who suffered during the invasion of Kuwait. Out of a total of 2.6 million claims for compensation, the vast majority were made by private individuals. But their claims add up to only $20 billion of the total $320 billion in compensation demanded from Iraq. In other words, the $15.9 billion awarded notably to the Kuwait Petroleum Company is almost equivalent to the total compensation due to be paid to the 2.6 million private claimants. It is also double the amount really received by the central government in Baghdad between December 1996 and July this year to feed and care for 15 million people.

By instituting quick procedures for dealing with individual claims (the commission used statistical models, as it would be impossible to examine each claim separately), the commission undoubtedly facilitated compensation -- but at the cost of taking numerous shortcuts, many of which were politically motivated.

(1) The firm has filed a request to defend Iraq, paid for out of UNCC funds. The request was rejected. The firm has only been able to represent Iraq in one case, the Well Blowout Control Claim. See also Michael E Schneider, "How Fair and Efficient is the United Nations Compensation Commission System," Journal of International Arbitration, vol. 15, no. 1, March 1998.

(2) Iraq's proposal that the UN deduct what it owes from oil exports was rejected.

(3) See Norbert Wuhler, "The United Nations Compensation Commission: A new contribution to the process of international claims resolution," Journal of International Economic Law, Oxford University Press, Oxford, 1999.

Translated by Harry Forster

* The writer is the editor-in-chief of Le Monde Diplomatique. This article, reprinted with the permission of the author, appears in this month's issue of Le Monde Diplomatique. The second instalment will appear in the coming issue of the Weekly.

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