UNITED NATIONS 12 march 2011- The U.N. Security Council may consider a proposal to set up an escrow account for Ivory Coast cocoa revenues to keep them out of incumbent leader Laurent Gbagbo's hands, U.N. diplomats told Reuters.
Amid fears of a new civil war in Ivory Coast, Gbagbo rejected an African Union proposal at a summit on Thursday offering him a safe exit in return for ceding power to rival Alassane Ouattara, winner of a disputed November election according to U.N.-certified results.
"An escrow account for cocoa revenues is one of the options we're considering for Cote d'Ivoire," a Western diplomat said on condition of anonymity. "In theory it could work and it's something the council can take a look at."
Another council diplomat confirmed that the idea of a U.N.-administered escrow account was under discussion for the world's biggest producer of cocoa, a commodity that is Gbagbo's main source of funds as his international isolation increases.
"Obviously this is what we're all looking at now -- how to get the cocoa money away from Gbagbo so that Ouattara's government can use it," a diplomat said. "The one big problem with the idea is that the cocoa suppliers aren't necessarily supporting Ouattara."
The diplomats said the idea would be that anyone purchasing Ivorian cocoa would put the money into the escrow account for eventual use by Ouattara. They said details would have to be worked out, and it would not be easy to convince veto powers Russia and China, as well as South Africa, to support it.
"It's definitely something we're looking at at the finance ministry and treasury level," a diplomat said. "But it will take time. If we do it, we want to make sure it's done right."
The planning for a cocoa escrow account, one of the diplomats said, has been stepped up since Gbagbo announced that the state would handle all cocoa exports.
COCOA FUTURES SOAR
At the moment, the idea would have the support of European council members and the United States, diplomats said, though it would need nine of the 15 members to vote in favor of it and no vetoes in order to be approved by the council.
"One of the other big challenges would be the smuggling of cocoa and complicity of neighboring countries that are helping Gbagbo's people raise money by circumventing normal channels ... using intermediaries to sell cocoa to firms that don't want to do business with Gbagbo," a diplomat said.
The conflict has sent cocoa futures near to 32-year highs although they were down on Friday as commodities fell across the board on news of the huge Japanese earthquake.
Gbagbo's camp has said a repeat of a 2002-2003 civil war was possible, while rebels who control the north declared that force was the only way to remove Gbagbo from power.
Britain and France have also been considering an escrow account for Libyan oil revenues to ratchet up the pressure on Libyan leader Muammar Gaddafi, whose forces are fighting rebels attempting to end his 41-year rule of the North African state.
The idea of a U.N.-administered escrow account was first used in the case of Iraq in the 1990s.
The United Nations' "oil-for-food" program in Iraq -- which allowed Baghdad to sell oil in order to buy humanitarian goods -- was hit with allegations of widespread corruption. U.N. officials have said privately that there is little appetite to get back in the business of administering oil revenues.
China's U.N. Ambassador Li Baodong, president of the Security Council this month, told reporters on Friday that council members unanimously backed the AU proposal for Ouattara to lead a unity government while allowing Gbagbo a safe exit.
Without going into details, he said council members were prepared "to impose measures, including targeted sanctions, against all parties who obstruct the attempts of a speedy and peaceful resolution of the crisis."******
