Follow-up Programme for Environmental Awards

More than 700 oil wells were set on fire as the Iraqi forces retreated from Kuwait at the end of the 1990 Gulf conflict, with an estimated 6 million barrels of oil per day burning for nearly ten months. Additionally, the construction of oil trenches; the piping of oil into the waters of the Persian Gulf; the laying of ordnance; the military mobilization of the Allied Forces; the movement of refugees; and even the extinguishing of the oil fires itself caused environmental damage throughout the region.

Recognizing the unprecedented damage to the environment, paragraph 16 of Security Council resolution 687 (1991) affirmed that Iraq was liable under international law "for any direct loss, damage, including environmental damage and the depletion of natural resources, or injury to foreign Governments, nationals and corporations, as a result of Iraq’s unlawful invasion and occupation of Kuwait.”

Approximately US$4.3 billion was awarded by the UNCC to the Governments of the Islamic Republic of Iran, the Hashemite Kingdom of Jordan, the State of Kuwait and the Kingdom of Saudi Arabia in relation to environmental remediation and restoration claims.

These remediation and restoration awards were based on of the reports of the panel of commissioners that not only recommended the award amounts but also the technical elements for projects to be undertaken with the award funds. These technical elements included details such as specific geographical areas for remediation or restoration, technological approaches, and restoration objectives.

Given the unique nature of these environmental awards, the Follow-up Programme for Environmental Awards (the Programme) was established by the UNCC Governing Council under decision 258 (2005) to monitor both the financial and technical implementation of environmental projects being undertaken by the participating Governments with the award funds to ensure financial transparency and technical compliance with the F4 Panel recommendations.

The Programme was set up at the request of the Government of Iraq, with the full support of the participating Governments (ie. Iran, Jordan, Kuwait and Saudi Arabia), and was in fact funded by the four Governments from a prorated portion of their respective F4 awards allowed for administration. Thirteen environment remediation and restoration claims, as well as some monitoring and assessment claims, were covered under the Programme.

Attached to decision 258 are detailed guidelines for the Programme. Each participating Government was required to:

• establish a National Focal Point (NFP) to co-ordinate the projects;
• retain Independent Reviewers (IRs), approved by the UNCC;
• submit biannual reports to the UNCC on work progress, financial and environmental performance of the projects;
• for projects in excess of US$50 million, submit technical and financial phasing plans for the approval of the Governing Council before commencement of the project;
• seek approval for modifications to the remediation/restoration approaches as recommended by the F4 Panel of Commissioners.

Under decision 258, 15 per cent of the total value of each claimant Government’s projects under the Programme was withheld by the UNCC for release upon successful completion of the project.

Under decision 266, adopted by the Governing Council in 2009, an additional 10 per cent of the value of each phased project was also withheld by the UNCC, to be released as needed under phasing plans. In addition, decision 266 required that the participating Governments establish special accounts in their Central Banks or similar Government institutions, to administer the balance of the Phased Project funds. These accounts were subject to an agreement that funds would be released only with the approval of the Governing Council in accordance with approved phasing plans.

In the Programme’s early stages, the UNCC Secretariat provided support to the NFPs as they set up the necessary internal infrastructure to manage their respective programmes and their respective independent reviewer teams.

In Jordan, the Minister of Environment was appointed to act as Jordan’s NFP to manage US$160 million awarded to Jordan to restore the Badia Rangeland. A program management unit within the Ministry was subsequently established to carry out the planning and implementation of Jordan’s project under the Programme. A ministerial steering committee chaired by the Minister of Environment plays an oversight role.

In Kuwait, a separate government entity was established to manage approximately US$3 billion awarded for its six projects subject to the Programme. The Kuwait NFP Secretariat is responsible for the overall technical and financial oversight of Kuwait’s projects. This Secretariat is headed by a Secretary-General and reports to a Board headed by the Kuwait Minister of Oil, and accountable to the Council of Ministers.

In Saudi Arabia, the Presidency of Meteorology and Environment (PME) was designated as Saudi Arabia’s NFP to manage approximately US$1.1 billion awarded for its four projects subject to the Programme. Various other government ministries and PME committees support the NFP, and in addition, a program management support contractor was engaged to provide technical and administrative support to the NFP.

The Islamic Republic of Iran had only two small projects under the Programme, and as such, the Secretariat’s interaction with Iran was limited.

The Independent Reviewers (IRs) played a critical role, and were charged with evaluating the technical and financial aspects of the participating Governments’ projects and providing those evaluations to the UNCC. They were technical and financial experts nominated by the participating Governments and approved by the Governing Council to provide technical support to the UNCC in carrying out its monitoring functions. They submitted biannual reports to the UNCC which were critical reviews of the required biannual reports from the NFPs.

Between 2006 and 2013, with the support of the IRs and the Secretariat, the NFPs continued to further develop their project and phasing plans for review by the Governing Council and in some cases, began implementation of their respective projects with award funds authorized for release by the Council as deemed appropriate.

In 2011, the Governing Council adopted decision 269 concerning the fulfilment of the Follow-up Programme for Environmental Awards in the near-term. In adopting this decision, the Council recalled that decision 258 provided that prior to the eventual disestablishment of the UNCC Governing Council, the Council would consider further arrangements with regard to its review functions under the Programme and recognized that many of the projects under the Programme were of long duration and would not be completed for a number of years. The Council decided that the mandate of the Programme would be fulfilled upon the participating Governments’: (i) establishment of five enumerated structural systems and controls,(ii) the provision of adequate assurances for their maintenance and for the exclusive use of the award funds for the successful completion of the projects and (iii) a determination to that effect by the Governing Council.

Following that decision, the Secretariat and the IRs increased their capacity-building efforts with the NFPs with a view to ensuring the establishment of those systems and controls.

At is seventy-fifth session in May 2013, the Governing Council determined that the Islamic Republic of Iran's projects under the Programme had been fully completed and that the Kingdom of Saudi Arabia had established the requisite systems and controls under decision 269. As a result, the Council adopted decision 270 (2013) declaring the mandate under the Follow-up Programme for Environmental Awards fulfilled in respect of these two countries. On 13 June 2013, the UNCC received the signed assurances required under decision 269, with full oversight for remaining implementation of the projects transferred to the Saudi Arabia NFP.

At its seventy-sixth session in November 2013, the Governing Council determined that both the Hashemite Kingdom of Jordan and the State of Kuwait had established the requisite systems and controls under decision 269 and adopted decision 271 (2013) declaring the mandate under the Follow-up Programme for Environmental Awards fulfilled in respect of these two countries. On 2 December 2013 and on 20 January 2014, the UNCC received the signed assurances from Kuwait and Jordan respectively, with full oversight for the remaining implementation transferred to the NFPs within each country.

Information on the projects being undertaken by each country is set out in the country-specific sections.