US embassy cable - 03HANOI829

UNCLAS SECTION 01 OF 02 HANOI 000829 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR PRM, USAID/FFP/EB, IO, AND EAP/BCLTV 
 
USDA/FAS FOR C&MP AND EC 
 
E.O. 12958:  N/A 
TAGS: PREL, ETTC, EAID, EAGR, ETRD, IZ, VM, UNSC 
SUBJECT:  VIETNAM ON OIL-FOR-FOOD PROGRAM 
 
REF:  STATE 82506 
 
1.  (U) This is an action request -- see para 10. 
 
2.  (U)  SUMMARY:  Vietnam is interested in continuing its 
exports of rice until the Oil for Food (OFF) Program, 
especially in quickly fulfilling outstanding rice contracts, 
but has concerns about insurance costs and port access.  The 
MFA stressed that Vietnam's participation would not/not be 
affected by the expressed opposition of Iraq to UNSCR 1472. 
End Summary. 
 
3.  (U)  VINAFOOD 1:  Agatt and AgSpec on April 1 discussed 
the OFF Program with Luong The Phiet, Deputy General 
Director of  Vietnam Northern Food Corporation (Vinafood 1 - 
- the GVN's parastatal agricultural exporting agency) and 
Dinh Cong Chinh of its Foreign Economic Department.  They 
welcomed the clear USG statements supporting the OFF 
program, and said they were eagerly awaiting shipping 
information from the UN's OFF Office. 
 
4.  (U)  OUTSTANDING:  Phiet confirmed that Vinafood had 
been a major supplier of rice to Iraq over the last 10 
years, exporting more than 840,000 metric tons of rice to 
Iraq in 2002 alone.  He added Vinafood was eager to fulfill 
the outstanding (not yet shipped) rice contracts, amounting 
to another 450,000 metric tons.  Vinafood is ready to ship 
that rice after resolving issues of insurance and port 
facilities. 
 
5.  (U)  INSURANCE:  Phiet expressed concern over whether 
insurance could be purchased to cover both the commodity 
(rice) and the vessels going to Iraq.  He welcomed the 
information that the U.S. Maritime Administration has war 
risk insurance, but asked if that insurance would cover the 
value of the commodity as well as the vessel.  Furthermore, 
he asked how high the premiums might be. 
 
6.  (U)  PORT FACILITIES:  Vietnam has routinely shipped 
rice to the Iraqi port of Umm Qasr and has been in touch 
with port contacts, who had expressed worries about 
submerged mines damaging or destroying any large vessels 
trying to berth.  He was aware that one or two small vessels 
had docked, but noted that larger vessels might still 
confront a dangerous situation. 
 
7.  (U)  OTHER ISSUES:  Phiet also noted there was a host of 
smaller concerns that would probably have to be addressed by 
the UN's Office of the Iraq Program.  Among those concerns: 
--  adjustments to the outstanding contracts and letters of 
credit necessitated by delays in shipping (note:  some of 
which stem from Vietnam's inability to ship in late 2002 due 
to lack of stocks, and others due to insurance and port 
access issues); 
--  concerns regarding which company would be the new UN 
Independent Inspection Agent (replacing, if necessary, 
Cotecna); 
--  who would be the buyer.  In the past, the Grain Board of 
Iraq had been the buyer of record. 
 
8.  (U)  FUTURE:  Phiet emphasized that, in addition to 
fulfilling outstanding contracts, Vietnam would welcome new 
oil-for-food business as well.  He noted that the rice 
supplies were now available (the Winter-Spring rice harvest 
is underway).  If vessels were willing, Vietnam could export 
rice to Iraqi ports in three weeks. 
 
9.  (U)  MFA:  In a separate meeting on April 3, Pol/C 
conveyed reftel points to MFA West Asia and Africa 
Department Deputy Director General Doan Ngoc Boi.  Boi 
expressed appreciation for the US support for OFF, but 
wondered whether this interest in humanitarian programs for 
Iraq was not rather new.  Pol/C reviewed briefly US support 
for solutions to Iraq's humanitarian problems over the past 
decade and commitment to ensuring better lives for the Iraqi 
people.  Boi noted that the Iraqi Government had expressed 
its opposition to UNSCR 1472; when questioned, he assured 
Pol/C that the GVN would not/not side with the GOI on this 
and would welcome the opportunity both to complete past OFF 
contracts and to compete for new ones under the new UN 
arrangements.  He noted over USD400 million in OFF contracts 
with Vietnam in the works for 2003. 
10.  (U)  ACTION REQUESTED:  Please clarify issues regarding 
insurance and port access, and provide any other additional 
information of relevance. 
BURGHARDT