What's In Blue

Posted Mon 21 Feb 2022

Iraq: Briefing and Vote on Draft Resolution on the UN Compensation Commission (UNCC)*

Tomorrow (22 February), the Security Council will convene for a briefing on the UN Compensation Commission (UNCC). Ambassador Michael Gaffey (Ireland), the president of the UNCC Governing Council and Ireland’s Permanent Representative to the UN and other International Organisations at Geneva, is expected to brief on the Governing Council’s final report on the UNCC and the conclusion of its work. Iraq and Kuwait will participate in the briefing under rule 37 of the Security Council’s provisional rules of procedure. Iraq’s Minister of Foreign Affairs, Fuad Hussein, is expected to attend the meeting.

Council members have been negotiating a draft resolution on the UNCC, which will be voted on during the meeting.

Background

In resolution 687 of 3 April 1991, the Council reaffirmed that Iraq was liable under international law for any direct loss, damage, or injury to foreign governments, nationals, and corporations “as a result of its unlawful invasion and occupation of Kuwait”, including environmental damage and the depletion of natural resources. In the same resolution, the Council also decided to create a fund to pay compensation for claims made by those who suffered loss, damage, or injury and to establish a commission to administer the fund. The resolution further directed the Secretary-General to present recommendations to the Security Council regarding the fund, including in relation to Iraq’s contributions. These contributions were to be “based on a percentage of the value of its exports of petroleum and petroleum products”, with the final amount “not to exceed a figure to be suggested by the Secretary-General”.

On 20 May 1991, the Security Council adopted resolution 692, which decided to establish the UNCC as a subsidiary organ of the Security Council and to set up the United Nations Compensation Fund (UNCF) in accordance with recommendations made in a 2 May 1991 report of the Secretary-General. Among other matters, this report recommended that the Governing Council have the same membership as the Security Council and said that the Governing Council should act as the policy-making organ of the UNCC.

Resolution 705 of 19 August 1991 subsequently endorsed the Secretary-General’s suggestion that the compensation to be paid by Iraq should not exceed 30 percent of the annual value of its exports of petroleum and petroleum products, and also decided that this figure should occasionally be reviewed “in light of data and assumptions contained in the Secretary-General’s letter of 30 May 1991 and other relevant developments”. Iraq’s contribution to the UNCF was initially reduced to 25 percent of the revenue generated by its exports of petroleum and petroleum products by resolution 1330 of 5 December 2000, before being further reduced to five percent by resolution 1483 of 22 May 2003. In resolution 1956 of 15 December 2010, the Security Council decided that five percent of the value of any non-monetary payments of petroleum, petroleum products, and natural gas made to service providers should also be deposited into the UNCF by Iraq.

In December 2014, Iraq requested that its contributions to the UNCF be suspended for one year because of the challenges it was facing in its conflict with the Islamic State in Iraq and the Levant (ISIL/Da’esh). This request, which was supported by Kuwait, was approved by the Governing Council. Additional requests from Iraq for suspension of its payments to the UNCF were also approved by the Governing Council in 2015 and 2016. In November 2017, the Governing Council decided that Iraq should pay 0.5 percent of both its proceeds from export sales of oil and gas and the value of any non-monetary payments of oil and gas made to service providers to the UNCF in 2018, increasing to 1.5 percent in 2019 and three percent in 2020. In the same decision, the Governing Council determined that Iraq’s contributions should remain at this level until the outstanding compensation was paid in full.

The UNCC considered approximately 2.7 million claims worth $352 billion during its lifespan and finished reviewing these claims in 2005. On 13 January, the UNCC announced that it had paid $629,324,488 to Kuwait and said that “all claimants awarded compensation by the UNCC have now received the full amount of their awards”. In total, the UNCC paid approximately $52.4 billion to more than 1.5 million claimants. On 9 February, the Governing Council held a special session to mark the fulfilment of the UNCC’s mandate, where it decided that Iraq is no longer required to make contributions to the UNCF and invited the Security Council to take the necessary action to note that the UNCC’s mandate has been fulfilled and that the UNCC will be winding down its activities this year.

Draft Resolution

The draft resolution that will be voted on tomorrow is a response to this invitation. The UK, which is the penholder on Iraqi-Kuwaiti issues, circulated a first draft on 11 February. A negotiation was held on 15 February and a further draft was distributed the next day. Following another round of written comments, a revised draft was put under silence until 5 pm on 18 February. This silence period was subsequently extended until 9 am on 21 February. Silence was broken by India, which led to a further revised draft being placed under silence until 2 pm on 21 February. Silence was not broken, and this draft is now in blue.

The draft in blue decides that the UNCC has fulfilled its mandate and reaffirms that Iraq has fulfilled its international obligations to compensate all claimants awarded compensation by the UNCC. It also confirms that Iraq is no longer required to make contributions to the UNCF and that the UNCC’s claims process is complete and final. The draft further decides to terminate the mandate of the UNCC and directs it to conclude the outstanding matters necessary for its closure and the dissolution of the UNCF by the end of 2022 and return any remaining amounts to Iraq. It also decides that the UNCC will be closed and the UNCF dissolved once these steps have been taken.

Negotiations on the draft resolution were relatively smooth overall, reflecting consensus among Council members in relation to the underlying aims of the text. It appears that Council members wanted a resolution that was acceptable to Iraq and Kuwait and sought input from both states during the negotiations. It seems that Iraq, for example, was particularly interested in precluding further claims being made against it and ensuring that the text clearly reflected that the UNCC had completed its work and would no longer be on the Council’s agenda. As a result, the draft text in blue states that the Council has concluded its consideration of the UNCC and that no further claims shall be made to the UNCC. Similarly, language requesting that the UN Secretariat provide Iraq with access to the claims records of the UNCC was included at Iraq’s request. The draft text also includes paragraphs welcoming improved relations between Iraq and Kuwait and acknowledging the involvement by other member states and international organisations in the UNCC’s work, which was requested by Kuwait.

It appears that India broke silence over concerns that the draft text focused too closely on the UNCC without sufficient emphasis on Iraq’s liability under international law for its invasion and occupation of Kuwait. It seems that text noting that the UNCC was established for payment of compensation in relation to this liability was included in the draft in blue to address this concern, as was language clarifying that the Council’s consideration of the UNCC related to compensation for Iraq’s liability.

The US apparently suggested that the draft resolution should refer to Kuwait’s willingness to support Iraq’s requests for suspension of its contributions during 2014, 2015 and 2016. It seems that this proposal was supported by France and other Council members, and relevant language was added to a paragraph that expresses appreciation for Kuwait’s cooperation. Russia seemingly pushed for an earlier deadline for the closure of the UNCC and the dissolution of the UNCF, but this could not be accommodated because the process cannot begin until September due to administrative reasons.

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*Post-script: On 22 February, the Council unanimously adopted resolution 2621 which, among other things, terminated the mandate of the UNCC and directed it to conclude the outstanding matters necessary for its closure by the end of 2022.

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