Presentation on theme: "United Nations Compensation Commission Learning from the United Nation’s experience in war economic reparation– The case of compensation for losses resulting."— Presentation transcript:
United Nations Compensation Commission Learning from the United Nation’s experience in war economic reparation– The case of compensation for losses resulting from Iraq’s invasion and occupation of Kuwait 7 February 2012 By: Dr Mojtaba Kazazi, Executive Head, UNCC
Summary Constitution Mandate Structure Finance Claims Processing Categories of Claims Status of Payment Activities
Constitution UNCC is a subsidiary organ of the Security Council UNCC operates within the framework of various Security Council resolutions SC resolutions 687 (1991), 692 (1991), 1483 (2003), 1546 (2004) and 1956 (2010), report of the SG (2 May 1991), established the Commission, its jurisdiction, its policy guidelines and its financing
Constitution (cont’d) Resolution 687 (3 April 1991) Most important and comprehensive resolution adopted by Security Council concerning crisis between Iraq and Kuwait Provided for –Demarcation of boundary (Boundary Commission) –Demilitarized zone (UNIKOM) –Destruction of weapons (UNSCOM) (UNMOVIC) –Return of Kuwaiti property seized by Iraq
Constitution (cont’d) Resolution 687 (3 April 1991) –Payment of compensation by Iraq (UNCC) –Exempting foodstuffs from trade embargo (Sanctions Committee) –Repatriation of Kuwaiti and other nationals –No acts or support of international terrorism –Formal cease ‑ fire upon acceptance of all of the above
Resolution 687: compensation “16. Reaffirms that Iraq, without prejudice to the debts and obligations of Iraq arising prior to 2 August 1990, which will be addressed through the normal mechanisms, is 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;...”
Resolution 687 :compensation (cont’d) “18. Decides to create a fund to pay compensation for claims that fall within paragraph 16 and to establish a commission that will administer the fund;...”
Resolution 687: compensation (cont’d) “19. Directs the Secretary-General to develop and present to the Council for decision,... recommendations for the fund to meet the requirement for payment of claims... and for a programme to implement the decisions in paragraphs 16 to 18...”
Report of the Secretary-General (S/22559) On 2 May 1991, the Secretary-General presented to the Security Council his report on the compensation provisions of resolution 687 Recommended that the proposed Compensation Commission take the form of a claims resolution facility that would verify and value the massive number of expected claims and administer the payment of compensation. The nature of the Commission would therefore be unique in the history of international efforts at post-war resolution. "the Commission is not a court or an arbitral tribunal before which the parties appear; it is a political organ that performs an essentially fact- finding function of examining claims, verifying their validity, evaluating losses, assessing payments and resolving disputed claims; it is only in this last respect that a quasi-judicial function may be involved."
Mandate Process claims, administer the UN Compensation Fund and ensure payment of successful claims 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 in accordance with Security Council resolution 687 (1991)
Structure of the Commission Governing Council Consists of 15 members of the Security Council (5 permanent and 10 non-permanent) from which a President and 2 Vice-Presidents are elected (2-year terms) Policy- making organ Established guidelines for claims processing Appointed Commissioners Approved compensation awards Established priority and mechanisms for payment of compensation awards 269 decisions to date, all by consensus, as well as many conclusions Approves budget of UNCC
Structure (cont’d) Commissioners During the claims processing period which concluded in 2007, Commissioners, proposed by the Executive Secretary and appointed by the Governing Council, worked in panels of 3 to verify and evaluate claims, comprised 59 experts in areas such as law, accounting, loss judgement, assessment of environmental damage and engineering Nineteen panels of commissioners reviewed and evaluated the submitted claims and reported their recommendations to the Governing Council Secretariat Services the work of the Commission at both policy making and functional levels
Finance Paragraph 3 of resolution 692 (1991) “Decides to establish the Fund and the Commission referred to in paragraph 18 of resolution 687 (1991) in accordance with section I of the Secretary ‑ General’s report....” Funds to pay compensation are drawn from the Compensation Fund, which receives a percentage of the proceeds generated by the export sales of Iraqi petroleum and petroleum products The percentage was originally set at 30 per cent by Security Council resolution 705 (1991) and was maintained until 2000 when it was changed to 25 per cent under Security Council resolution 1330 (2000) Security Council resolution 1483 (2003) reduced the level to 5 per cent and this percentage was reaffirmed most recently by resolution 1956 (2010)
Claims Processing The Commission accepted for filing claims of individuals, corporations and governments, submitted by approximately 100 governments, as well as 13 international organizations for individuals who were not in a position to have their claims filed by a government Approximately 2.7 million claims in six categories were filed Amount claimed: approximately $352.5 billion Total amount awarded: approximately $52.3 billion Paid to date: $35.4 billion
Categories of Claims Category A claims: Individual claims for departure from Iraq or Kuwait; Approximately 923,000 claims in six instalments; Approximately $3.4 billion claimed; $3.2 billion awarded. Category B claims: Individual claims for serious personal injury or death; Approximately 6,000 claims in three instalments; Approximately $20 million claimed; $13.5 million awarded. Category C claims: Claims for losses under $100,000, e.g. the loss of personal property; the loss of real property; the loss of income and business-related losses; Approximately 464,396 claims in seven instalments Approximately $10.8 billion claimed; $5 billion awarded. These individual claims were treated as “urgent” claims and were processed on an expedited basis using mass claims techniques, ahead of the larger individual claims, corporate claims and the claims of Governments and international organizations.
Categories of Claims (cont’d) Egyptian Workers’ claim: Consolidation of 1.2 million small individual claims for deposits made to Iraqi banks; Approximately $500 million claimed; $84 million awarded to 223,817 successful claimants. Category D claims: Similar losses as category C Claims but for losses over $100,000; Approximately 13,900 claims; Approximately $16.5 billion claimed; $3.4 billion awarded. Category E claims: Claims from corporations; Approximately 6,571 claims in four instalments; Approximately $78.7 billion claimed; $26.3 billion awarded.
Categories of Claims (cont’d) Category F claims: Claims by Governments and international organisations; 393 claims; Four separate Panels of Commissioners appointed; Approximately $236 billion claimed; $14 billion awarded. Category F, Fourth Instalment claims (“F4”): Environmental claims; Approximately 168 claims in five instalments; Approximately $84.9 billion claimed; $5.3 billion awarded.
Categories of Claims (cont’d) LATE FILED CLAIMS Palestinian late-filed claims: Approximately 46,231 claims; - 43,855 were filed in category C; 7800 were deemed eligible for inclusion in programme and 7300 were awarded approx. $123M - 2,374 were filed in category D; 404 were deemed eligible for inclusion in programme and 296 were awarded approx. $26M Bedoun claims: Approximately 32,000 claims recommended for payment; - Fixed awardable amount of $2,500 per claim; approx. $79M awarded
Current Activities The Commission's current principal areas of activity relate to: Arrangements for ensuring payments are made to the Compensation Fund Level of Iraq’s contribution to the Fund Payment of claims and payment mechanism Negotiations between Iraq and Kuwait under the auspices of the UNCC on the outstanding balance that remains owing to Kuwait Follow-up Programme for Environmental Awards
Considerations Prior to development of mandate Ensure a clear understanding of: –demographics of prospective claimant population (e.g. size, location, any special circumstances) Types of harm or loss suffered in order to clearly identify types of claims eligible for compensation Legal bases Source of funds for compensation Entity/entities responsible for distribution Lump-sum settlement versus open-ended Mass claims processing versus individual review Fixed award or evaluation of loss(es) Timeframe for submitting claims (should avoid lengthy timeframes)
Considerations Mandate clear mandate purpose of compensation source of funds who is to be compensated what harms or losses are to be compensated how harm is to be quantified how much compensation is to be awarded how compensation is to be distributed
Considerations (cont’d) Pre-implementation Ensure provision of adequate administrative resources Consider whether there is a need for a notice plan Devote adequate time to planning and policy development, will save time and reduce costs later on Engage technical experts in early planning stages (e.g. legal, financial, actuaries and information technology specialists) Computer applications designed to facilitate claims intake, processing and payment should ideally be developed well in advance of the time that they are required.
Considerations (cont’d) Implementation Claim forms should be clear and unambiguous - important to use plain language, translation Supporting documentation, if required, should be requested with claim form to avoid need for multiple exchanges Consideration should be given to testing claim form on a sample claimant population prior to mass distribution A duplication identification strategy should be developed before claims processing begins
Considerations (cont’d) Claims processing Outreach is crucial – will assist in managing claimants’ expectations and ensuring they have a clear understanding of process and potential entitlements Elaboration of specific review methodologies facilitates the verification and valuation of claims. Grouping similar claimants and loss types will optimize the consistency of results both within and between claims categories.
Considerations (cont’d) Payment Mechanism &Transparancy Mechanism for paying compensation should be established well before the first payments are made Responsibilities, including reporting requirements, of entities distributing payments should be elaborated as early and as clearly as possible Audit & Oversight Audit is a very important part of a claims programme Agreement on the scope of audit should be reached at the beginning of a claims programme and should be documented
Final Observations Source of compensation- Lump-sum settlement versus open-ended Legal base and issues Approach: Mass claims processing versus individual review- Fixed amount or evaluation of losses Verification methodology and standards Approval of compensation-by who? Payment Mechanism and transparancy of payment Audit, oversight, accountability Detailed information on the UNCC can be found on its website -