An undertaking has been given by the Iraqi government to pay up to £170 million owing to the Goodman group of companies following representations made by Mr Albert Reynolds in Baghdad last week.
Payment of the long-standing debt would also negate a claim of more than £80 million for compensation and damages lodged in the courts by a Goodman company, Anglo-Irish Beef Processors, against the Irish Government because of cancelled export credit facilities.
A commitment to pay the money in Geneva was made to an Irish delegation, led by the former Taoiseach, which had talks with the Deputy Prime Minister of Iraq, Mr Tariq Aziz.
Contacted in Mexico yesterday, Mr Reynolds confirmed that he had raised the issue with Mr Aziz and said that the Deputy Prime Minister had made a commitment to settle the debt. But Mr Reynolds was not sure when that would happen. It could be a year, or even longer, he said.
Mr Reynolds and Senator Mick Lanigan, who is treasurer of the Parliamentary Association for Euro/Arab Co-operation, travelled to Baghdad last week at the invitation of the speaker of the Iraqi parliament and held a series of meetings with senior ministers.
Later, Mr Reynolds flew from Baghdad to the UN headquarters in New York and lobbied there and at White House level in favour of an arrangement which would link the ending of economic sanctions against Iraq to the completion of UN weapons inspections.
A senior AIBP official said that he had no knowledge of any arrangement by the Iraqi government to pay its outstanding debts to the company. The UN embargo, imposed in 1990 after the invasion of Kuwait, had stopped all normal trade and Iraq now owed "zillions" to foreign firms.
As to the amount due, the official said that a total sum of £169 million was outstanding. Of this, the company had issued a revised claim for £80.7 million, excluding damages, against the Government in July, 1997, because of the cancellation of export credit facilities.
An official at the UN in New York confirmed that 30 per cent of the money raised through the sale of Iraqi oil over the past two years - about $7 billion - had gone towards payment of reparation to individuals and small companies for loss and damage resulting from the Gulf War.
Iraq was now beginning to deal with outstanding debts and claims from the corporate sector, he said, and this work was being conducted through the UN office in Geneva.
The original claim by AIBP against the Government was lodged in 1989 after the then minister for industry and commerce, Mr Des O'Malley, withdrew export credit facilities from the companies.
At a hearing of the Beef Tribunal in 1993 Mr O'Malley estimated the Goodman claim at £179 million, plus interest. Disagreement between Mr O'Malley and Mr Reynolds - who had originally granted the export credit facilities - over the size of the risk posed to the public finances led to the break-up of the first Fianna Fail/Progressive Democrat government.
Mr Lanigan, who accompanied Mr Reynolds at the meetings with Iraqi ministers, was less cautious about early payment of the Goodman debts. It could happen within a matter of weeks or months, he said.
"Mr Aziz explicitly mentioned Mr Goodman. He knew the name. We were discussing beef and the UN food-for-oil scheme and Mr Aziz said all outstanding debts to Goodman would be paid in the very near future. He said payment would be made in Geneva."
Mr Lanigan recalled that, when they discussed selling Irish goods into Iraq, Mr Aziz had mentioned the recall of the Irish ambassador as one of the issues which had posed problems. At a later meeting, however, the Iraqi Minister for Trade had said that it would put Ireland back on the "most favoured" list of countries.
Such a development, Mr Lanigan said, would open up the prospect of Irish companies being able to compete on an equal footing with France and tender for medicines and pharmaceuticals under the UN oil-for-food-and-medicines scheme.
Mr Reynolds said that the next tranche of Iraqi contracts under the UN scheme would be issued next January.