WFP takes on Oil-for-Food for 3 months

A key US $900 million piece of Iraq’s former Oil-for-Food Programme is being handed back to the UN World Food Programme (WFP) after weeks of negotiations, a US administrator recently announced. UN officials handed over all Oil-for-Food Programme contracts to the US-led administration on 21 November along with more than US $2 billion from surplus funds. The programme, estimated at about US $10 billion per year, brought in food and humanitarian goods to an estimated 27 million people - virtually everyone in the country. The programme was created in 1996 to allow former president Saddam Hussein to sell oil to buy aid for Iraqis following years of crippling international sanctions. A new three-month deal was signed, according to Lt. Col. Paul Wright, a US advisor to the Iraq trade ministry. But some details still needed to be approved, Mia Turner, a WFP spokeswoman, said from Cairo. Despite this, Iraq’s ministry of trade is expected to take over food buying and distribution at the end of March. “There is an agreement being worked out, but there are still details that have to be decided,” Turner told IRIN. US officials said all along that they needed help from UN agencies to continue the programme, Wright said. A new Oil-for-Food coordination centre staffed by close to 30 Americans is now monitoring imports of various humanitarian items at four main border crossings. “They’re (WFP) going to start procurement within days,” Wright said. “Hopefully we can turn it over and have transparency.” US officials said one of the main reasons to turn over food buying and distribution to the WFP over the next few months is to give US administrators time to train Iraqi staff in international procurement procedures. Consultants will be brought in to discuss how to create procedures for public bidding of contracts, to make sure there is fair and open bidding from private companies and that an auditing trail exists, he explained. Under the former Saddam Hussein regime, it appeared that copious records were kept, but procedures on how to do things were often just kept in workers’ heads, the US advisor said. Workers also would learn more about budgeting procedures. “Right now, we have no audit capability,” Wright added. “With the current generation of people (working in the ministry of trade) we’re not convinced they’re able to procure things in a current standard method.” Under the former regime, virtually all Oil-for-Food contracts had 10 percent kickback fees tied to them that went directly to the government, workers in various ministries said. However, the UN has said it did not know of the after-service fees. US investigators have also found numerous front companies with contracts that had to be weeded out of the mix. Rules requiring direct trade between a company and the Iraqi government were often ignored, according to Wright. The US advisor said an inspector general’s office was being created to watch for possible corruption issues in the future, comparing the ministry of trade’s previous problems with accounting scandals at energy giant Enron Corp in the United States. “Where do we get auditing people? First you have to get people who speak and read Arabic,” Wright said. “It will be a monumental task.” In addition, US-based security company Dyncorp will be paid up to US $6 million over a six-month period to protect up to 30 trucks per day bringing food and other goods into the country. Of a $13 billion budget for Iraq next year, an estimated $5 billion is expected to go toward food, according to a Iraqi trade ministry official. The WFP delivered some 2 million mt of food in months following the US-led invasion in April. Some of the country’s food stores were looted however and need to be replenished. “We lost that reservoir, that backlog of food, so we now need just-in-time delivery,” Wright explained. The monthly food ration includes rice, flour, sugar, chickpeas, tea and milk. It’s distributed through an estimated 40,000 stores around the country. About 60 percent of the population depends completely on the Oil-for-Food Programme for basic food necessities, according to Coalition Provisional Authority (CPA) estimates in May. Another 30 percent has food ration cards, but also has other sources of income, according to estimates.