UPDATE ON IMPLEMENTATION OF PARAGRA[PH 16 OF

SECURITY COUNCIL RESOLUTION 1483 (2003)

(Prepared by OIP/CPMD)

17 November 2003

HIGHLIGHTS

  • Processing or amendments near 95% of prioritized contracts
  • Additional 19 contracts prioritized last week
  • Some $215M authenticated under the new mechanism; authentication in Umm Qasr making progress
  • Final update on implementation of para 16 of SCR 1483 (2003) to be issued by OIP on Friday, 21 November 2003

1.Total of 2,784 amendments received by OIP as at 17 November (2 p.m.).With the third and final general deadline for submission of amendments expiring on 17 November 2003, the total number of amendments submitted stands at 2,784 or 94.8 per cent of the total number of contracts (2,937) determined to have relative utility under paragraph 16 of resolution 1483 (2003). This represents is a further increase of some 6 points from 88.7 per cent reported last week. This relative increase is the result of combination of new amendments received by OIP (around 120) and additional removals from the list of contracts that may be amended by the UN by 21 November 2003 during the past week. It should be noted that amendments for selected exceptional cases would still be accepted by OIP by 19 November 2003 which is the final deadline for submission of any amendments that would allow OIP to complete the process by 21 November 2003.

Table 1 shows amendment submission trends from 6 October to 17 November 2003, while Table 2 summarizes submission rates per agency/programme, as well as processing status for the amendments received by OIP.

Table 1: Overall amendment submission trend (from 6 October to 17 November 2003)

A: Date

/ 06/10/03 / 13/10/03 / 20/10/03 / 27/10/03 / 03/11/03 / 10/11/03 / 17/11/03
B: # of prioritized contracts / 3,180 / 3,145 / 3,170 / 3,154 / 3,186 / 3,002 / 2,937
C: # of amendments received / 797 / 976 / 1,270 / 1,653 / 2,373 / 2663 / 2,784
D: (C) as percentage of (D) / 25.06% / 31.03% / 40.06% / 52.41% / 74.48% / 88.71% / 94.79%

Table 2: Submission rates per UN agency/programme (as at 17 November 2003, 2 p.m. NYC time)

UN Agency / Confirmed priorities under 1483 / Amended priorities / Number and percentage of amendments / % / With UN Agencies
Approved / Under processing* / Approved / Under processing*
FAO / 186 / 147 / 24 / 171 / 91.94 / 79.03 / 12.90 / 15
ITU / 36 / 33 / 2 / 35 / 97.22 / 91.67 / 5.56 / 1
UN Habitat / 204 / 178 / 1 / 179 / 87.75 / 87.25 / 0.49 / 25
UNDP / 157 / 136 / 8 / 144 / 91.72 / 86.62 / 5.10 / 13
UNESCO / 86 / 74 / 2 / 76 / 88.37 / 86.05 / 2.33 / 10
UNICEF / 77 / 71 / 3 / 74 / 96.10 / 92.21 / 3.90 / 3
UNOPS / 1246 / 1166 / 32 / 1198 / 96.15 / 93.58 / 2.57 / 48
WFP / 701 / 657 / 13 / 670 / 95.58 / 93.72 / 1.85 / 31
WHO / 244 / 222 / 15 / 237 / 97.13 / 90.98 / 6.15 / 7
2937 / 2684 / 100 / 2784 / 94.79 / 91.39 / 3.40 / 153
*Under processing represents applications that are still under a two-day review by OIP or pending submission of further information from the respective UN agency.

2.Only 153 prioritized contracts remain with the UN agencies and programmes as of 17 November 2003. The last week’s figure of 339 contracts still with the UN agencies and programmes has been halved and now stands at 153 contracts, to include 19 new priorities received by OIP only this past week. With last submissions trickling in up to 19 November 2003, this number is likely to be reduced further, unless there are some last-minute priorities coming in from CPA or reactivations by the UN agencies and programmes.

The UN agencies and programmes reported that amendments have been completed in 5 out of 153 outstanding and sent to suppliers for signature but are still pending sugnature as at 17 November 2003. A new and final deadline for submission of these cases is 19 November 2003. In addition, the UN agencies and programmes reported that 30 contracts are ‘late priorities’ still being negotiated with suppliers (to include 17 contracts received only on 16/11/03) with a finals deadline for submission of amendments being 19 November 2003. Finally, additional 33 contracts are still with the UN agencies and programmes as responses either from CPA or suppliers are pending. The final deadline for amendment submission in the latter category is also 19 November. The balance of 83 contracts is a subject of reconciliation between OIP files and UN agencies and programmes files, to include non-submission of statistics that were due for this update. Table 3 below summarizes the outstanding cases.

Table 3: Summary of outstanding contracts as per OIP files

as at 17 November 2003

CATEGORY / # OF CASES
Amendments completed, sent out, suppliers’ signature pending / 5
Amendments for ‘late priorities’ still negotiated by the UN agencies and programmes / 30
Contracts with responses from CPA or suppliers pending / 33
Other cases pending according to OIP files
(subject to reconciliation)* / 85*

TOTAL OUTSTANDING CONTRACTS

/ 153

*includes contracts from UNOPS, Habitat and WFP (food) for which no

categorization was received at the time of this update

3.Nineteen new contracts prioritized over the past week.The total of 19 new contracts have been prioritized under paragraph 16 of resolution 1483 (2003) during the last week. The new priorities were in food handling/industry (15), oil industry (2) and water-sanitation (2) sectors. While the new contracts have been sent to the relevant UN agencies and programmes with extended deadline for submission of amendments (19 November), the agencies and programmes cautioned that it is unlikely all of these amendments will be processed in time. Such contracts will be transferred as “active” cases after 21 November. The list of 19 new priorities is attached to the update to the 661 Committee.

4.Further progress made in obtaining responses to “extra fee” disputes. As at 17 November 2003, OIP has registered total of 299 “extra fee” dispute cases. Of the total number, 267 cases have been resolved wither through CPA response or otherwise. The percentage of responses stands at 89 per cent compared to 88 per cent reported last week. Total of 32 cases – 1 less than last week -- are still pending response. It should be noted that many of these have only just been registered as “extra fee” disputes with OIP. OIP continues to urge CPA to provide responses in the outstanding 32 cases currently registered. OIP will also exceptionally accept amendments by 19 November 2003 in cases where the delay in submission was solely caused by late response to “extra fee” dispute. If no response is received, or late response prevents UN agency or programme to complete amendment, such contracts will be transferred to CPA for further processing.

5.Total of 694 contracts prioritized, then removed from the list of ‘amendable’ contracts. The UN agencies and programmes have continued closing files that clearly cannot be completed i.e. amended before 21 November. Some 100 such cases have been removed from the list last week. At the same time, a number of cases previously closed have been re-activated as suppliers have responded or have changed their previous position not to proceed. One of the main reasons for removal is the claim that the goods in previously prioritized contracts have been fully delivered. Other frequent reasons include inability to contact suppliers, suppliers unwilling to proceed with contracts or unwilling to accept terms and conditions of amendments. As of 17 November 2003, the total of 694 previously prioritized contracts have been removed from the “amendable by the UN” list, to include 171 contracts now considered as fully delivered. The breakdown of general categories is provided in Table 4 below. It should be noted that contracts in categories other than ‘fully delivered” and “does not exist” remain to be considered as having relative utility as per paragraph 16 of resolution 1483 (2003). They will be transferred as such to CPA after 21 November 2003 for further processing, as and if appropriate. The lists of 694 contracts in appropriate categories is attached to this update.

Table 4: Summary of contracts removed from the list of prioritized contracts that may

be amended by the UN before 21/11/03 as at 17 November 2003

Reason for removal from the list of ‘amendable’ contracts / # of contracts
Considered as fully delivered / 171
Supplier not interested/willing to proceed
(security concerns, not financially viable, no agreement possible on price/specifications change, not accepting confirmed “extra fee”, etc. / 341
Supplier does not exist/went bankrupt / 13
Could not contact the supplier/does not respond to queries / 111
Other / 58
TOTAL / 694

6.Number of priority contracts considered amendable by the UN stands at 2,937.Table 5 contains the summary of the priorities under resolution 1483 (2003) as at 17 November 2003. The totals number of contracts has gone down from 3,002 reported last week to 2,937. This is due to further removal by the UN agencies and programmes of contracts from the list of contracts that could not be amended by the UN before 21 November 2003.

Table 5: Summary of ‘amendable’ contracts with confirmed relative utility

as at 17 November 2003

Sector / Count / Total Value / Pending Shipment
Agriculture / 202 / $748,368,919.28 / $620,527,291.80
Non UNOPS / 191 / $678,685,141.34 / $573,576,704.78
UNOPS / 11 / $69,683,777.94 / $46,950,587.02
Education / 89 / $203,660,139.42 / $195,251,931.32
Non UNOPS / 77 / $186,404,822.63 / $181,560,504.78
UNOPS / 12 / $17,255,316.79 / $13,691,426.54
Electricity / 154 / $1,635,306,095.00 / $841,713,771.64
Non UNOPS / 153 / $1,635,119,710.02 / $841,508,748.17
UNOPS / 1 / $186,384.98 / $205,023.47
Food Handling / 250 / $653,038,367.72 / $530,795,231.62
Non UNOPS / 232 / $518,588,859.04 / $423,428,223.80
UNOPS / 18 / $134,449,508.68 / $107,367,007.82
Foodbasket / 438 / $1,565,533,197.87 / $1,425,538,594.63
Non UNOPS / 428 / $1,515,937,538.20 / $1,389,644,813.98
UNOPS / 10 / $49,595,659.67 / $35,893,780.64
Housing / 227 / $613,097,523.15 / $441,812,599.13
Non UNOPS / 196 / $484,075,490.94 / $376,281,287.55
UNOPS / 31 / $129,022,032.21 / $65,531,311.58
Industry / 7 / $10,660,474.87 / $10,681,786.88
Non UNOPS / 6 / $8,189,267.97 / $8,210,579.98
UNOPS / 1 / $2,471,206.90 / $2,471,206.90
Medicine/Health / 244 / $415,711,632.65 / $269,051,592.91
Non UNOPS / 238 / $397,558,084.30 / $259,024,279.93
UNOPS / 6 / $18,153,548.35 / $10,027,312.98
Special Allocation / 22 / $119,374,678.35 / $101,267,595.76
Non UNOPS / 20 / $113,766,670.38 / $95,101,012.67
UNOPS / 2 / $5,608,007.97 / $6,166,583.09
Special Allocation - Labour and Social Affairs / 7 / $9,533,960.66 / $9,966,400.75
Non UNOPS / 7 / $9,533,960.66 / $9,966,400.75
Special Allocation - Youth and Sports / 9 / $19,364,366.72 / $18,531,514.42
Non UNOPS / 9 / $19,364,366.72 / $18,531,514.42
Telecommunications / 137 / $472,108,473.59 / $361,124,561.10
Non UNOPS / 122 / $380,846,577.57 / $306,882,029.77
UNOPS / 15 / $91,261,896.02 / $54,242,531.33
Water And Sanitation / 80 / $448,602,370.90 / $390,873,120.30
Non UNOPS / 70 / $396,382,314.67 / $341,567,398.24
UNOPS / 10 / $52,220,056.23 / $49,305,722.07
Oil for Food / 1866 / $6,914,360,200.18 / $5,217,135,992.25
Oil Spares - UNOPS / 1136 / $1,212,145,331.35 / $982,310,407.97
TOTAL / 3002 / $8,126,505,531.53 / $6,199,446,400.22

7.Update on inspection and authentication activities.Since 10 October 2003, when the revised authentication mechanism was implemented, Cotecna has authenticated the arrival of goods valued at $214.9 million under a total of 159 Comm. numbers.

The inspection and authentication of goods at the land entry points continue to operate smoothly. The number of trucks presented for inspection in At Tanf has risen substantially to 71 in the past week. The sites at Al Karama and Silopi remain extremely busy. An average of 153 trucks per day are being processed by Cotecna staff in Silopi alone. Added to the increase in traffic at all sites, Cotecna inspectors continue to inspect goods adoped under Security Council resolution 1472 at agency warehouses and free trade zones within the region which may not be delivered directly to Iraq due to the limited absorbtion capacity of Iraqi Ministries in the Health, Electricity and Agriculture sectors.

CPA officials have, in the past week, developed improved communications links with Cotecna and 16 consignments inspected by Cotecna in the United Arab Emirates, or under the off shore procedure, destined for Umm Qasr have now been authenticated.

A confirmation report has been received by from CPA in connection with one of the 17 outstanding deliveries to be authenticated under the "ad hoc" system which was implemented in the period immediately prior to the implementation of the revised authentication mechanism. Electronic copies of all paperwork associated with these claims have been forwarded to CPA officials in Baghdad for further action after Friday 21 November 2003.

No further reports have been received from CPA in connection with services which suppliers claim to have provided prior to the withdrawal of Cotecna on 17 March 2003. There therefore remain 29 claims which Cotecna has been unable to authenticate. OIP will also transfer electronic copies of all paperwork associated with these claims to CPA officials for further action after 21 November 2003.

A further four contracts judged as in transit to Iraq as at 28 March 2003 have been prioritized. UNOPS is ascertaining the costs associated with the 35 remaining transit contracts which have not been prioritized. Arrangements will be made to compensate suppliers and they will be advised to dispose of the goods to alternative markets.

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