Nations Myth #3:
The abusive corruption and crippling
mismanagement of the U.N. doesn't significantly undermine
Oil-for-food report condemns 'corrupt' UN
under fire as inquiry calls for broad reform
MacAskill, diplomatic editor
Wednesday September 7, 2005
The UN is
guilty of "corrosive corruption", according to a
long-awaited investigation published today into the
handling of the multimillion-pound Iraq oil-for-food
The 1,000-page report by Paul Volcker, former head of
the US Federal Reserve, found "serious instances of
illicit, unethical and corrupt behaviour within the
The report blames Kofi Annan, the UN secretary
general, for mismanagement. It adds: "The inescapable
conclusion from the committee's work is that the UN
organisation needs thoroughgoing reform - and needs it
The investigation, which produced a stream of damaging
interim reports this year, has badly undermined Mr Annan
and the UN.
Mr Volcker, who was appointed by Mr Annan to carry
out the investigation, released a five-page preface to
his report last night after it was leaked to a news
agency. The full report will be published this
According to a UN source, Mr Annan will express
regret over the mismanagement but is not considering
The UN source said the report would clear Mr Annan of
any wrongdoing in relation to the business dealings of
his son, Kojo, who worked for Cotecna, the Swiss-based
company which won one of the oil-for-food programme
contracts in 1998.
One of Mr Volcker's interim reports in March found no
evidence of improper influence by the secretary general
in awarding the contract. But Mr Volcker reopened the
investigation after emails disclosed in the press
suggested the secretary general knew more than he had
said about his son's involvement.
According to the UN source, the final report has
found no evidence to support those claims.
Mr Annan is expected to express regret over the role
of his son.
The secretary general was criticised for his overall
handling of the programme. "The UN charter designates
the secretary general as chief administrative officer.
Whatever the founders had in mind, the secretary general
- any secretary general - has not been chosen for his
managerial or administrative skills, nor has he been
provided with a structure and instruments conducive to
strong executive oversight and control."
The oil-for-food programme was set up in 1996 to
alleviate the worst effects of UN sanctions on the Iraqi
population. But it quickly came to be abused by UN
staff, by Saddam Hussein and by western and Middle East
companies, who made millions from illegal kickbacks.
The report's preface says the difficulties
encountered - "the politicisation of the decision
making, the managerial weakness, the ethical lapses" -
were "symptomatic of systematic problems in the UN
"Neither the security council nor the secretariat
leadership was clearly in command. That turned out to be
a recipe for the dilution of secretariat authority and
evasion of personal responsibility at all levels.
"When things went awry - and they surely did - when
troublesome conflicts arose between political objective
and administrative effectiveness, decisions were
delayed, bungled, or simply shunned."
The report adds: "Most notable among the UN's
structural faults is a grievous absence of effective
auditing and management controls."
Partly as a result, there were instances of
corruption among senior staff as well as in the field.
Mr Annan can take some comfort from the fact that the
report says the blame has also to be shared around the
security council and member states. "However
well-conceived the programme was in principle, the
security council failed to define clearly the practical
parameters, policies and administrative
responsibilities," the report says.
Reform should be tackled at the UN summit next week,
the report recommends, adding: "To settle for less, to
permit delay and dilution, will invite failure, further
erode public support, and dishonour the ideals upon
which the UN is built."
Although this is the final report on the UN, Mr
Volcker is planning to issue a further report in October
listing companies which, according to the preface,
engaged in "wholesale corruption".
Unlimited © Guardian Newspapers Limited 2005
UN Management Reforms: 2005
STATUS OF UN MANAGEMENT REFORMS AS AT :
5 September 2005
Management Reform Measures to Strengthen Accountability,
Ethical Conduct and Management Performance
The importance of
effective multilateralism and the unique role of the United
Nations in development, security and human rights are
reaffirmed in the Secretary-General's "In Larger Freedom"
report submitted to the General Assembly in March. That
report includes broad proposals to accelerate management
reform of the Secretariat to make it more flexible,
transparent, accountable and equipped to deal with the needs
and challenges of the 21st Century. These measures are part
of a longer-term series of reforms launched in 1997 and
reinforced in particular with three packages of change
initiatives since then: namely, the Brahimi report on UN
peace operations, the 2002 Agenda for Further Change and
last year's overhaul of the staff security system.
The current phase of reform comes at a particularly crucial
time for the UN. The Secretariat has faced an unprecedented
series of organizational challenges which have exposed flaws
in the way it conducts its business. As a result, the UN
must take real action now where it is in the
Secretary-General’s authority to do so directly,
particularly in the critical areas of management, oversight
and accountability. The reform initiatives summarized below
are already underway and most will be fully implemented
within the next few months, with the exception of those that
require Member States approval. While the preparation for
many of the steps predates the problems revealed over the
past year, the initiatives also explicitly seek to address
both the serious concerns expressed by UN staff in last
year’s Integrity Perception Survey, and the recommendations
of the Independent Inquiry Committee led by Paul Volcker
into the Oil-for-Food Programme.
I. Improving the Performance of Senior Management
A series of steps are
being taken to streamline and improve the decision-making
processes of the Secretariat, open up the recruitment
process and enhance training and development of senior
- Introduction of executive-level decision-making
The existing Senior Management Group, established in
1997, and comprising all Heads of Secretariat
Departments and UN Offices, Funds and Programmes, has
improved coordination and coherence within the UN
family. In practice, however, while having real utility
as an information-sharing body, it has proved too large
for effective and timely decision-making. As a result,
two new, senior committees chaired by the
Secretary-General - one dealing with Policy issues and
the other on Management - have been created to enhance
the quality and speed of top-level decision-making. The
modus operandi of these committees will ensure clear,
action-oriented outcomes with better definition of
responsibility areas and timelines for implementation.
Status: The Policy Committee has met
frequently since its creation in early May 2005. It has
presented the Secretary-General with policy options on a
wide range of issues. The Management Committee has held
two meetings to endorse several reform proposals and
will meet approximately monthly throughout 2005 to take
up issues as they arise.
- Selection system for senior officials
Historically, the selection process for senior UN
officials has been opaque and not sufficiently focused
on the growing needs for management as well as political
expertise in candidates. To address this, a transparent
new selection system has been introduced to ensure a
much wider search for qualified candidates and a
rigorous, open selection process against pre-determined
criteria for all new heads of UN Funds and Programmes.
This will help build a new generation of UN senior
leaders, recruited on the basis of merit and a proven
combination of substantive, political, managerial and
leadership skills. The Department of Peacekeeping
Operations (DPKO) is also developing new criteria for
the appointments of its senior-level field managers.
Status: Several high-level appointments have
been made using the new system, including those of the
UNDP Administrator Programme, Kemal Dervis, the
Under-Secretary-General for Internal Oversight Services,
Inga-Britt Ahlenius and the new UN High Commissioner for
Refugees, António Gutierrez.
- Induction of senior officials
Given the findings of the Volcker Inquiry and other
instances of alleged misconduct, it is clear that a more
robust approach is needed to ensure that once senior
officials are appointed, they are properly briefed on
the broader system of UN rules, regulations, codes of
conduct and managerial systems.
Status: DPKO piloted its first Senior
Leadership Induction Programme from 20-25 June for a
group of newly appointed leaders in a number of field
missions. The Programme included sessions on conduct and
requirements for management performance. It is intended
that this will take place twice a year.
At the same time, OHRM is developing a broader induction
programme for officials in the Secretariat, where USG
and ASG will participate in an "Orientation and
Induction Programme"; D1s and D2s in a "Leadership
Development Programme"; and P4s and P5s in a modified
"People Management Training Programme". The first
"Leadership Development Programme sessions will be held
from 9-14 October and 4-9 December 2005.
Enhancing Oversight and Accountability
Perhaps the most
obvious shortcomings identified by the Volcker Inquiry and
other crises are in the area of oversight and
accountability. The current "control" systems for monitoring
management performance and preventing fraud and corruption
are insufficient and must be significantly enhanced.
- The Management Performance Board
In order to ensure a rigorous monitoring of individual
offices and managers, a Management Performance Board
(MPB) has been created. It will systematically assess
the performance of senior managers, bring to the
Secretary-General's attention instances which require
his attention, and advise him on suggested corrective
action, where necessary.
Status: The Deputy Secretary-General chaired
the first organizational meeting of the MPB on July 6th.
A review of existing sources of managerial performance
data was conducted and gaps were identified. The
Department of Management will review strategic reporting
models used in other comparable organizations, with a
view to establishing a set of qualitative and
quantitative benchmarks for the Board's periodic review.
A new system of reporting will be considered at the next
meeting of the Board in the fall of 2005.
- The Oversight Committee for the UN Secretariat
To address shortcomings identified by both the General
Assembly and the Volcker Inquiry and to increase the
effectiveness of the oversight function, a new Oversight
Committee is also being established. The Committee,
which will have three internal and one external member,
will ensure that appropriate management action is taken
to implement the recommendations of the Office of
Internal Oversight Services, the Board of Audit and the
Joint Inspection Unit. A new tracking system is being
piloted for better follow-up of the 500-plus important
audit recommendations issued each year.
Status: The Terms of Reference for the
Committee have been finalized and are ready for
issuance. The three internal participants have been
identified. Selection of an external participant is
being finalized. The Committee will convene its first
meeting shortly and meet quarterly thereafter.
- Comprehensive review of OIOS
In November 2004, the Secretary-General recommended to
the General Assembly that the Office of Internal
Oversight Services (OIOS) undergo a comprehensive
external review to strengthen its independence and
authority while ensuring it is fully equipped in terms
of resources, expertise and capacity to carry out all
aspects of its work. That recommendation was reiterated
in the Secretary-General's "In Larger Freedom" report.
In addition, the General Assembly has asked the
Secretary-General to report on how to guarantee the full
operational independence of OIOS in the upcoming session
Status: The Secretary-General's
recommendation is currently before the General Assembly.
It is also anticipated that the outcome document for the
September Summit will contain measures to strengthen the
independence of OIOS. In addition, the new
Under-Secretary-General for Oversight Services took up
her duties on 15 July 2005. She has a one-term,
non-renewable term of five years.
- Enhanced Anti-Fraud and Corruption Policy
The UN already has in place various rules and policies
designed to prevent fraud and corruption. However,
following a recommendation of the UN's external
auditors, it is now consolidating them into a
stand-alone, comprehensive anti-fraud and corruption
policy. The policy will draw on existing best practices,
including the model recently developed by the World
Status: The High-Level Committee on
Management (HLCM) Working Group on Fraud Prevention,
under the leadership of the UN Controller, is finalizing
a policy with input from the UN Funds and Programmes. A
final policy is scheduled for endorsement by the
Management Committee in October.
Ensuring Ethical Conduct
In direct response to
the concerns about fairness and integrity raised in last
year's Integrity Survey among UN staff, and to prevent the
reoccurrence of such damaging incidents as the exploitation
reported in certain peacekeeping missions, misconduct of
senior officials and harassment in the workplace, the UN is
implementing concrete steps.
- Whistleblower protection
The results of the Integrity Survey indicated that staff
had little confidence in the Organization's ability to
provide sufficient protection for whistleblowers. A
review of best practice was conducted, using the
expertise of a consultant recommended by Transparency
International. The Secretary-General has now issued a
robust new whistleblower policy and is seeking the views
of staff before formally promulgating it. The policy is
designed to reassure staff that they will be protected
against retribution when reporting on misconduct. The
release of the draft policy was accompanied by a
circular (ST/IC/2005/19) outlining to staff all existing
avenues for the reporting of misconduct.
Status: A new draft Whistleblower Protection
will be submitted for approval to the Management
Committee in September 2005. The draft took into account
more than 100 comments garnered from the formal
consultations with staff around the world, as well as
external partners. The policy will be then consulted
with staff representatives for final comments before it
- Incorporating Ethics into staff training
A new training module in the form of a CD-ROM on
integrity and ethics provisions has been developed. The
intention is that all levels of Secretariat staff would
be required to complete the module. In addition, ethics
modules have been added to all existing training
programmes for UN staff and managers.
Further, a UN-wide ethics training and certification
programme entitled "Harassment, Sexual Harassment, &
Abuse of Authority" has also been developed, in
collaboration with the UN Development Group. It is
intended to reinforce the UN's zero tolerance policy.
Status: Ethics modules have been
mainstreamed into all training programmes. In addition,
the adaptation of an online training programme for use
throughout the Secretariat has been completed. The
launch of the UN-wide ethics training and certification
programme will be rolled out over the coming months with
versions ready in multiple languages by the end of the
- Responses to allegations of sexual misconduct by
The Organization is taking systematic disciplinary
action where individual cases of sexual exploitation
and/or abuse have been identified. Across all missions,
186 peacekeepers have been investigated over the past 20
months; seven UN civilian staff have been fired and 80
"blue helmets" have been expelled from missions.
Investigations are ongoing in several missions -
Burundi, Cote d'Ivoire, the Democratic Republic of
Congo, Liberia, Haiti and Georgia. In addition, a number
of short, medium and longer-term initiatives are
- The introduction of a unified standard of
conduct across all categories of peacekeeping
personnel. Training has been integrated into all
mission induction programmes.
- Credible complaints mechanisms have been
established in all missions, including telephone
hotlines and confidential email accounts.
- A global review on the state of discipline in
peacekeeping missions was undertaken by OIOS in
April 2005 and the resulting report is currently
- Missions are ensuring that victims of sexual
abuse are referred to existing emergency assistance
in the mission area (medical, psycho-social, legal).
- DPKO has established a conduct and discipline
unit at UN Headquarters, which is expected to be
fully operational by end of September 2005.
- Over the coming months, similar units will be
established in eight DPKO missions. They will focus
on preventing misconduct through various means
including training, monitoring and providing
improved welfare and recreation facilities. Missions
will continue to work with in-country networks
developed to better coordinate and share
- In the longer term, the Secretary-General will
undertake a comprehensive review of the welfare and
recreation needs for all peacekeeping personnel as
well as the development of a comprehensive strategy
for victim assistance. The model agreement with
troop-contributing countries will be reviewed to
strengthen its content on conduct and discipline. In
addition, a group of legal experts will be examining
ways to ensure that UN staff and experts on mission
are held accountable for the consequences of
criminal acts committed in countries where no
functioning judicial system exists.
Status: In June 2005, the General Assembly
approved the creation of 19 new OIOS investigator
positions as well as additional investigative resources
for following up allegations of misconduct in peace
missions. Resources were also earmarked to enhance the
Department of Peacekeeping Operation's capacity for
supporting and advising staff on conduct-related issues.
A multidisciplinary workshop on victim assistance,
drawing on the experience of Member States and civil
society groups, was held on 16-17 June 2005.
- Financial Disclosure Policy for Senior Officials
The UN Department of Management has conducted a review
of disclosure practices in comparable organizations with
a view to expanding the scope of financial disclosure
currently required of senior officials, including those
employed on a short-term basis or under special
conditions. The appropriate mechanisms for monitoring
these disclosures are also under review for immediate
Status: A new Financial Disclosure
Policy was approved by the Management Committee on 12
July. A new Secretary-General Bulletin reflecting the
new requirements will be issued shortly. Staff at the
Director level (D-1s and D-2s) will be encouraged to
comply with the new disclosure requirements, pending a
General-Assembly mandated change to the pertinent Staff
- Enhancement of Codes of Conduct/Conflict of
While the UN has in place a detailed Code of Conduct, it
has not been disseminated to staff in an effective
manner. The Office of Human Resources Management (OHRM)
is reviewing the practices of other organizations in
disseminating such information in more accessible and
easy-to-read forms (web pages, handbooks, orientation
guides, etc). Special additional rules are also being
developed for staff engaged in procurement activities. A
UN Supplier Code of Conduct is also being formulated.
Status: A user-friendly booklet for
staff on Status, Basic Rights and Duties, as well as the
Standards of conduct, has been drafted with the
assistance of outside expertise. The draft text is
currently being reviewed. The final text is expected to
be finalized September/October 2005.
- Protection against harassment in the workplace
While the UN has a strict sexual harassment policy in
place, OHRM is now finalizing a new, broader policy to
encompass wider forms of harassment for consultation
with the Staff Representative bodies. It is also
assessing more effective ways of disseminating the
provisions of this new policy.
Status: The new harassment policy is
to be consulted with the staff this fall. In addition a
UNDG-led online learning programme on the prevention of
harassment, sexual harassment and abuse of authority is
due to be issued in English, French and Spanish language
versions in September/October 2005.
- Access to Information
Currently, there is no established policy for
determining which UN documents should be accessible
outside the Secretariat. While a large number of
documents are currently accessible, the UN needs a clear
and consistent policy that increases transparency while
ensuring confidentiality where needed. The Office of
Legal Affairs has carried out an assessment of best
practices in public administrations around the world.
The Management Committee is monitoring this work and
will provide recommendations.
Status: The Office of Legal Affairs
has solicited external expertise to develop a policy
based on existing models in a range of different
countries and organizations. The new policy will be
formulated during the course of the fall.
- External validation of the UN procurement system
The Volcker Inquiry has been critical of various UN
procurement cases in the early years of the Oil-for-Food
Programme. Since the mid-1990s, the UN's procurement
process has undergone several reforms, making it more
transparent and addressing many shortcomings identified
in a number of reviews. The UN Department of Management
commissioned a review conducted by the US National
Institute of Government Purchasing (NIGP) which was
submitted in June 2005. Further revelations have
necessitated an additional review to look exclusively at
the adequacy of the financial and internal controls on
the procurement system. At the same time, OIOS is
continuing its investigations into the allegations of
misconduct arising from the Volcker Inquiry.
Status: The Reform Group reviewed
the NIGP report on 11 August and recommended that an
additional review of financial and internal controls be
conducted by the end of September 2005.
- Policy guidance on pro-bono contracts
A working group led by the Office of Legal Affairs has
drafted a new policy on the provision of pro-bono goods
and services offered to the UN, building on a body of
disparate existing practice and precedent.
Status: Draft guidelines will be
endorsed by the Management Committee in September. A
circular containing the final guidance will then be
issued to all Secretariat offices.
Report from: "Reform at the U.N. by