By an OGJ correspondent
NICOSIA, Apr. 9 -- The dispute over control of Iraq's postwar reconstruction—and by extension its oil wealth—has gotten nastier even as US-led coalition forces seek to wrap up the job of toppling Iraqi President Saddam Hussein's regime.
French President Jacques Chirac has insisted the United Nations must take charge of rebuilding postwar Iraq, ahead of a weekend meeting of France, Russia, and Germany that will push a plan of governments opposed to US and UK views.
Chirac dismissed the idea that the two main nations fighting the war in Iraq—the US and Britain—should lead the peace, saying, "We are no longer in an era where one or two countries can control the fate of another country."
While Chirac also said the reconstruction of Iraq is "a matter for the United Nations and it alone," there are questions even within the UN over the role it is apparently expected to carry out.
No UN plan
In early March, UN Sec. Gen. Kofi Annan said there is no UN plan for administering postconflict Iraq and stressed that the world body had been focusing instead on dealing with the humanitarian side of a potential conflict.
"There is no UN plan for managing or administering Iraq," Annan said at that time. "There is some preliminary thinking, but there is no plan and no document."
Today, 3 weeks after the outbreak of hostilities, there still are no such plans or documents.
Absent such a plan, the UN Security Council looks to be the next battleground for control of Iraq, with the UN's apparently innocuous oil-for-aid program at the epicenter of the looming battle.
The leaders of France, Russia, and Germany—the chief European opponents of the US-led war in Iraq—are due in St. Petersburg this week for meetings that are likely to focus on the continuing fighting and postwar reconstruction.
The central subject of foreign policy dialogue with Germany, according to a spokesman of Russia's foreign ministry, is "discussion of prospects for the settlement of the Iraqi crisis and its return to the aegis of the UN Security Council."
Russian Deputy Foreign Minister Viktor Kalyuzhnyy underlined that point, saying it is possible to settle Iraq's problems "only within the legal framework of the UN Security Council." Otherwise, he said, "those who started hostilities unilaterally ignoring the United Nations will start unilaterally dividing Iraqi resources tomorrow."
Oil-for-aid status
The UN's chief legal authority, Hans Corell, drew attention to the pending battle on Tuesday, saying that sales of Iraq's oil will remain under the control of the UN's oil-for-aid program, established by resolution 986 of the Security Council in 1995, until a new resolution is agreed.
Benon Sevan, the undersecretary general in charge of the UN oil-for-aid program, restating the issue on Tuesday, announced that Iraqi oil already under contract but not yet lifted and oil stored in the Turkish Mediterranean port of Ceyhan would stay there until a competent authority was available.
"There is no SOMO," Sevan told reporters, referring to Iraqi's State Oil Marketing Organization, which not only signs the contracts but must certify them before any lifting can resume, either in Ceyhan or elsewhere.
As Mark Malloch Brown, administrator of the UN Development Program, told reporters last week the dispute over Iraq's oil "drives you once more back to that little stuffy table in the Security Council and a resolution."
Before the outbreak of war, funds generated from Iraqi oil sales were placed in an escrow account, comanaged by the UN Office of the Iraq Program and the Iraqi government. Under terms of the resolution, Iraqi officials select vendors to import the goods or complete work, subject to approval by the UN.
That changed on Mar. 28, when the Security Council unanimously approved a temporary resolution giving Annan more authority to administer the operation for a 45-day period (OGJ Online, Mar. 28, 2003). Subject to renewal on May 12, the resolution authorizes Annan to carry out tasks to do with humanitarian aid, but it does not allow him to renegotiate oil contracts.
Absent any UN plan to administer Iraq, the US and UK are seeking a resolution that will enable organizations in the country to make submissions directly to Annan, saying it will speed up the aid disbursement process.
They are also seeking a resolution that would enable Annan to renegotiate oil contracts on behalf of the Iraqi state.
Opponents of the proposed resolution, mainly France and Russia, are concerned that the changes will allow coalition forces, and later a coalition-backed government, to submit most of the requests for the disbursal of aid. For the same reasons, they are no less worried that US and UK firms may scoop up lucrative oil deals.
Russia's biggest oil company, OAO Lukoil, expressed that concern on Tuesday, saying it would impound Iraqi oil tankers and initiate international arbitration against anyone who tries to abort a contract it signed with the government of Saddam Hussein.
"If anyone tries to squeeze us out of there, Lukoil will file an international arbitration suit in Geneva," Lukoil Vice-Pres. Leonid Fedoun told Russia's Kommersant newspaper.
Exports status shaky
As the diplomatic wrangles continue, however, the situation on the ground in Iraq suggests it will be some time before any of the country's oil fields will be in a position to begin producing crude oil again for export.
Three weeks into the US-led war, Saddam Hussein's government apparently still controls wells in the north around Kirkuk, even continuing to pump oil to the Turkish port of Ceyhan, while US officials estimate that repairs necessary to restore oil exports from southern fields could take months, making it unlikely that new oil-development deals will be signed any time soon.
