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Hugh Robertson (Faversham and Mid-Kent) (Con): May I start by saying what a pleasure it is to follow the hon. Member for Lagan Valley (Mr. Donaldson)? His remarks about Trooper Williams were spot on: the hon. Gentleman was absolutely right. It was a pleasure, too, to hear his words about the Royal Irish Regiment. Like many soldiers who served in the Province, I was lucky enough to serve alongside their predecessors, the Ulster Defence Regiment, a very brave body of men. I fear that they have not always had the credit that they deserve for their loyal and brave service over the years.

I want to talk about a subject that has implications for foreign affairs and defence policy: the question of corruption at the United Nations during the oil-for-food programme. The conduct of the United Nations is clearly primarily a matter for the Foreign Office, but it
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is the impact that it is having on the insurgency in Iraq, and on members of the coalition and the Iraqis, that gives it its military dimension and thus its immediacy.

The oil-for-food scandal is, by anyone's judgment, a hugely complex and difficult subject. However, in the limited time available to me I want to concentrate on three aspects: what happened; why it is important; and what now needs to be done about it. Before I begin, I should add that until now I have been a great supporter of the United Nations; indeed, I served under its colours on two occasions and have been a member of the all-party group on the United Nations since I entered Westminster.

I have always felt that the UN is a good thing, provided that our expectations of what it can achieve are realistic. It is not, and never has been, a panacea for the world's problems, but it does enormous good in many spheres and provides a much-needed world forum. It is therefore particularly important that, when it goes wrong, as it has done badly over the oil-for-food programme, the world community takes quick and effective action.

So, first, what happened? In the aftermath of Iraq's defeat in the 1991 Gulf war, the UN passed a resolution authorising the export and sale of Iraqi oil to finance the purchase of humanitarian supplies for the people of Iraq. However, the Iraqi regime was unwilling to accept those provisions, so for four years no progress was made. In 1995, after intense diplomatic activity, the Security Council passed UN resolution 986, establishing the oil-for-food programme as we know it today. However, it contained a fatal flaw: two different sorts of contract were authorised. The first was contracts with end users—companies such as BP, which own their own refineries—but crucially it also established contracts with non-end users, or "brass plate companies", as they are known, which do not themselves own a refinery. The implications in respect of corruption are clear.

As a result, the money passed through UN-controlled escrow bank accounts, mainly at banks such as BNP, the French bank, via transfers authorised by the UN to purchase, seemingly, medicine, health supplies, foodstuffs and other supplies essential for civilian needs. However, at that point, 10 per cent. is regularly added to the suppliers' bills. Iraqi front companies profited by supplying goods. The very goods purchased were resold, overpriced or supplied at poor quality. A transport surcharge was often levied and bribes were paid. To that was added smuggled oil—produced at the same time as the legal oil produced under the UN resolution—as well as oil surcharges in respect of the legal oil.

The effect of all this was not to ameliorate the suffering of ordinary people in Iraq, as intended, but to enrich Saddam Hussein and his regime, as well as UN officials and Security Council members. Also, Saddam was enabled to buy influence with those with political influence in their own countries.

The figures involved are staggering. The all-up figure for money corrupted under the oil-for-food programme is $64 billion. Recent estimates suggest that $10 billion went to Saddam Hussein and his entourage. What is the evidence for this? It is quite considerable. It has been mentioned recently in the Iraq survey group report and the initial report of the Volker inquiry. That is largely an organisational and administrative document, but it highlights the scale of what is involved.
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This is not new news, however, as the signs were evident a long time ago. The UN Office of Internal Oversight, in annual reports to the General Assembly in October 2000 and October 2002, drew attention to the non-compliance of the Iraq oil-for-food programme with the UN's own best practice in financial and contracting matters. On 24 March 2002, our own ambassador to the UN, Sir Jeremy Greenstock, said:

Why is this important here in the United Kingdom? There are three reasons, I believe. First, the estimated $10 billion corrupted by Saddam Hussein and his entourage is being used to fund the insurgency facing British troops, civilians, the coalition and ordinary Iraqis in Iraq. That has been highlighted by the Iraq survey group and the Volker inquiry, and has been confirmed to the House by answers from the Foreign Office and the Ministry of Defence.

The Minister for Trade and Investment, who is in his place, said in an answer to me recently that the Government believe

The Secretary of State for Defence went further in the House by saying:

the funds corrupted under the programme—

It is a pretty staggering tale. Given that link to British troops and civilians, not to mention other coalition members and Iraqis, it is vital that the Foreign Office pursues this matter in the strongest possible way.

The second reason why it is of course important is the impact that it had on British foreign policy. The two western countries most clearly implicated are France and Russia. A number of people in both countries, close to the highest offices in government, were named in the list published recently in the Iraqi newspaper Al-Mada. A number of senior UN diplomats, and family members of senior UN diplomats up to and including the Secretary-General, are also named. It is important to add the caveat that none of this is yet proved. But, clearly, there is a considerable case to answer. The implications for decisions made at the UN up to and including the outbreak of war are clear, and may have had an impact on the actions of the UN itself, and, of course, France and Russia.

The final reason why it is important is that it surely highlights, if that were necessary, the need for reform at the United Nations. The tragedy of the post-11 September period, when the threat has been greater than at any time since the second world war, is that many of our international institutions are weak. The UN, NATO and the EU are all, to some extent, in need
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of reform, particularly the United Nations. The very fact that $64 billion was corrupted while the Security Council was earning $3 billion for administering the programme, and ignoring repeated warnings about what was happening, highlights the urgent need for far-reaching reforms, particularly in the fields of transparency and accountability. There are also serious consequences for those who argue that all would have been well had we simply left this issue to the United Nations. Widespread and large-scale corruption is not, by anyone's measure, an attractive legacy.

We know what happened and why it is important. I should add that the Volker inquiry, under the chairmanship of the former head of the US Federal Reserve, Paul Volker, was set up to examine the programme on 19 March 2004. The crucial question now is: what needs to be done?

First, the need for reform at the United Nations, particularly in the fields of transparency and accountability, is highlighted. That must be a top priority for the Foreign Office and the Government, and I hope that the Minister will confirm that in his wind-up. It gives me no pleasure to say it, but this must also raise serious questions about the Secretary-General's position. It happened on his watch, while the Security Council was generating $3 billion of fees for administering the programme, and it has washed up to the door of his own family. One must ask the question: is he the man to push through this much-needed reform?

Questions must also be asked about the Volker inquiry itself. It has a staff of only 50, split between New York, Paris and Baghdad. That small group of people must look through 10,000 boxes of documents and millions of pages of paperwork. In southern Iraq alone, there are 1,000 contracts for oil supply and 3,500 contracts for humanitarian aid, which it must examine. Volker himself said at his press conference on 9 August:

There are also real concerns about the lack of subpoena power and the UN's refusal to make public the internal reports covering the programme. A number of questions arise from that. Is the inquiry correctly staffed? Are its powers extensive enough? And why do the UN's internal reports remain secret—after all, it is supposed to encourage a culture of openness, and we all pay for it? Furthermore, given that the Volker inquiry was established in March this year, why did it take the Secretary-General another three and a half months—until 1 July—to send out an instruction compelling UN personnel to co-operate with it? By anybody's judgment, that is a lamentable record.

Did the Government recognise the danger inherent in this programme early enough and take effective action? Sir Jeremy Greenstock's concerns are on the record in March 2002. They must have been apparent before that. Could we have taken action earlier? Finally, are we sure, given the list that has been published in Al-Mada, that no British nationals, or people resident in Britain, are tied up in this inquiry? I hope that the Minister will be able to confirm that in his wind-up, or if not, write to me about it.

I have no doubt that the corruption of the programme is one of the most serious incidents in the UN's history. A former senior UN diplomat described it to me the
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other day as cataclysmic. Surely, for the sake of the UN and all those caught up in Iraq, the UK Government must establish exactly what happened and bring those responsible to justice. Surely all those in the UN and in Iraq deserve no less.

6.30 pm

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