The Report of the Iraq Inquiry

37. In early summer 2003, there was a chance for the Government to revisit its

reconstruction effort to put it on a more sustainable basis.

38. On 12 May, Baroness Amos succeeded Ms Short as International Development

Secretary. Baroness Amos’s arrival coincided with reports from Basra that ORHA’s

inability to deliver reconstruction might undermine the level of consent enjoyed by

UK forces in the South, and hence affect plans for their withdrawal.

39. Baroness Amos immediately signalled DFID’s willingness to do more on

reconstruction.

40. On 22 May, the UN Security Council adopted resolution 1483. The resolution

formally designated the US and UK as joint Occupying Powers in Iraq. It confirmed that

the UN would not – as the Government had at an earlier stage assumed – have lead

responsibility for the administration and reconstruction of Iraq. Sir Suma Chakrabarti,

DFID Permanent Secretary from 2002 to 2007, told the Inquiry that Ms Short’s

resignation and the adoption of the resolution led to a significant shift in DFID’s

attitude: “From that point on, we had to try and make ORHA work better whether

we liked it or not.”10

41. Resolution 1483 also created the Development Fund for Iraq (DFI) to hold

95 percent of Iraq’s oil revenues and other Iraqi assets, and imposed joint US/UK

responsibility (as Occupying Powers) over disbursements from it. The CPA would use

those revenues to fund Iraq’s reconstruction; of the US$19.4bn spent by the US/CPA on

the relief and reconstruction of Iraq during the Occupation, US$14bn came from the DFI

and a further US$2.4bn from vested and seized Iraqi assets.

42. Section 9.8 concludes that resolution 1483 set the conditions for the CPA’s

dominance over post‑invasion strategy and policy by handing it control of funding for

reconstruction and influence on political development.

Resolution 1483, which was adopted on 22 May 2003, provided that disbursements from

the Development Fund for Iraq (DFI) would be “at the direction of the Authority [the US

and UK as Occupying Powers], in consultation with the interim Iraqi administration”. By

that time, the US was committed to a protracted Occupation and it was not clear when an

interim Iraqi administration would be established.

On 10 June 2003, the CPA issued a regulation that gave Ambassador Paul Bremer,

as “Administrator of the CPA”, authority to oversee and control the establishment,

administration and use of the DFI and to direct disbursements from the DFI.

10 Public hearing, 8 December 2009, page 34.

534