U.S. plans to keep control of Iraq oil

 By Evelyn Leopold

UNITED NATIONS (Reuters) - In hopes of getting strong U.N. support, the
United States has made concessions in its quest to lift 13-year-old
trade sanctions against Iraq, opening the door for the return of U.N.
arms inspectors.

But the resolution, expected to be adopted by Friday, still gives the
United States and Britain wide-ranging powers to run Iraq and control
its oil industry until a permanent government is established, which
could take years.

The text, the third version distributed on Monday, seeks to accommodate
some of the criticism by France, Russia, China and other U.N. Security
Council members, particularly what they see as an attempt to sideline
the United Nations but obtain privileges the world body has under
international law.

While few expect any country to veto the text, the United States wants a
large majority in the 15-nation council.

Without U.N. action to lift the sanctions, imposed when Iraqi troops
invaded Kuwait in 1990, Washington would be in a legal no man`s land,
with many firms unwilling to engage in trade with Iraq, and oil exports
open to lawsuits.

Russia`s U.N. Ambassador Sergei Lavrov said he "welcomed the mood of the
co-sponsors to really try their best to respond to as many question as
they can." But he said council members wanted "more clarity" at the lack
of any time limit or renewal of the resolution.

In deference to Russia, which was favoured in contracts by the ousted
government of President Saddam Hussein, the resolution phases out the
existing U.N.-run oil and civilian supply network over six months
instead of four months.

It does not guarantee that all contracts in the so-called oil-for-food
pipeline will be honoured, such as the $4 billion owed Russian firms,
but leaves time to sort them out.


On the political role of the United Nations, the draft calls for a
high-level special representative with "independent responsibilities."
The envoy would "work intensively" with the United States and Britain
"to facilitate a process leading to an internationally recognised,
representative government of Iraq" but his or her duties are still

U.S. Ambassador John Negroponte said Washington could offer further
changes but it was unlikely. "Never say never," he said. "But ... we
have gone just about as far as we can in meeting the concerns expressed
by other delegations."

The resolution, he said, foresaw no role for U.N. arms inspectors. But
the new text mentions their mandate in U.N. resolutions since 1991, and
opens the door for their return to verify Iraq had no weapons of mass

Most controversial is shielding Iraq`s oil revenues and a special
Development Fund set up to administer them until 2008 from any lawsuits,
attachments or claims. This is usual for a fund administered by the
United Nations but not one over which the world body has no power.

However, the new text says buyers of Iraqi oil are not necessarily
immune from suits, such as cases of oil spills.

Money from the fund can be spent by the United States and Britain for
the benefit of the Iraqi people. An international board, including the
United Nations, will monitor the fund.

Troubling to international law experts is the rewriting of the 1949
Geneva Conventions on the duties of occupying powers, such as the United
States and Britain. They are not supposed to create a new permanent
government or commit Iraq to long-term contracts, such as oil
exploration, under the Geneva treaties.

"The United States is asking the Security Council to authorise it to do
a series of things that would otherwise violate international law under
the guise of ending sanctions," said Morton Halperin, a former State
Department official and director of the Open Society Institute in

"The purpose of this resolution is to relieve the United States of both
its obligations and the limits of what it can do as an occupying power
under international law by having the Security Council supersede the
requirements of the Geneva Convention," he said in an interview.