TRANSCRIPT OF PRESS CONFERENCE BY DEPUTY SECRETARY-GENERAL LOUISE FRECHETTE

AT UNITED NATIONS HEADQUARTERS, 15 FEBRUARY 2005

The Deputy Secretary-General:  Good afternoon.  You have heard the Secretary-General and Mark Malloch Brown, in briefings, refer to a number of management reform initiatives we are working on.  This morning, I want to address two of these issues, namely, procurement and internal oversight.  I hope that from time to time we will be coming back to you with briefings on other aspects of this multifaceted management reform we are undertaking.

First, as regards procurement in the Secretariat, a lot has happened since 1996, which is the period that was the object of the review of the interim Volcker report.  In a minute, I will give the floor to Andrew Toh, who is our Assistant Secretary-General for Central Support Services.  He will be in a position to explain -- in somewhat more detail than I, as a non-expert, am able to do -- the basic features of the procurement system and the reforms that were introduced in recent years.

I will limit my own comments on procurement to saying that I believe our system has become more transparent and professional than it was eight years ago.  For instance, all purchasing requirements are now posted on our Web site; readers can track the progress of a given transaction.  The details of awards are also posted on the Web site.  Nevertheless, we do intend to take another look at our procurement system to make sure that it is consistent with best practices in other organizations.  But, as I said, Andrew Toh will give you more detail on the system itself.

As regards oversight -- and, more specifically, the audit function -- as you all know, the Office of Internal Oversight Services (OIOS) was established only 10 years ago.  Until then, the Organization had only a small, under-resourced Internal Audit Office, reporting to the Under-Secretary-General for Administration and Management, and no inspection or investigative capacity.

The Office was established, as I said, 10 years ago with a dual reporting line to the Secretary-General and the General Assembly.  Since then, the Office has reported more than $150 million in financial recoveries.  In 1995, the Office had a total of 110 positions; by June of 2004, that number had increased to 180.  It is probably one of the few departments in the Secretariat that actually saw its resources increase.  At present, they have 27 resident auditors and eight regional investigators deployed to peacekeeping missions in the field.

Now, I know that you have met many times with Mr. Nair, the Under-Secretary-General for Internal Oversight Services, and the people in the Office of Internal Oversight Services (OIOS) are the best placed to provide you with more of a background briefing on their operations themselves.  What I want to point out this morning is a few innovations that are in the process of being introduced in the area of oversight.

First, Mr. Volcker had raised the issue of the Secretariat’s own ability to monitor and follow up on audit recommendations.  He had done that in relation to the “oil-for-food” programme, but I think he has identified a weakness in our management system that we intend to correct.  In order to ensure that, we have a way to follow through on the recommendations of our various audit and oversight bodies -- the OIOS, the Board of Auditors, which are the external auditors, and a third oversight body called the Joint Inspection Unit.  In order to do that, we will set up an internal oversight committee which would consistently monitor the management responses and implementation status of the recommendations arising from these various oversight bodies.  And at least one of the members of this review committee would come from outside the Secretariat, so as to ensure that we have the benefit of an outsider’s view on how well our management teams are doing in implementing and following up on the various recommendations.  We expect to have this Committee in place shortly.

I also want to draw your attention to the fact that the Secretary-General, already back in December, had recommended to the General Assembly that it initiate an independent assessment of OIOS operations, with a view to strengthening its functions and independence.  I think that, in the context of such a review, the many very pertinent observations made by Mr. Volcker in his interim report could very well be taken into account in designing that review.

More specifically, the Secretary-General has recommended that a multidisciplinary panel of outside experts be formed to undertake this assessment.  The panel could ensure that the Office’s mandate, reporting and capacity is in line with institutional best practices.  It will also deal with the issue of whether or not OIOS should be financially independent of the rest of the United Nations Secretariat, which is something that Mr. Volcker picked up in his own interim report.

Now, this message from the Secretary-General to the Member States was made last fall in the context of the annual resolution of the General Assembly on the OIOS report.  At that time, they did not follow through on his own recommendation.  We will certainly follow up with the Member States of the Assembly, and I think that, in the light of Volcker’s report, there are more reasons now to actively follow up on the Secretary-General’s recommendations.

There are two other features that have recently been introduced in relation to oversight.  One is that the General Assembly has altered the reporting procedures of OIOS so that now reports from OIOS go directly to the Member States, with the Secretary-General being given the opportunity to comment separately.  In the past, reports from OIOS went through the Secretary-General, or were transmitted through the Secretary-General.  He was not allowed to modify the content of OIOS reports, but could pass on the reports with his own comments attached.  This time, it will be two separate channels -- to reinforce the notion that OIOS has full liberty to report directly to the membership.

Finally, as many of you are aware, the Member States have decided that all original versions of OIOS reports, including those previously internal and confidential, are now to be made available to any Member State upon request.  I might add there that, as part of an Organization-wide attempt to improve the openness and transparency of the Organization, the Secretary-General intends to review, in a more comprehensive fashion, the rules and guidelines pertaining to access to United Nations documentation.  Right now there is not a very clear set of rules on that issue, and the intention would be to do a comprehensive review and, hopefully, to arrive at a clear set of rules as to what is accessible and what is not, and to bring some clarity and consistency into the practice.

So, with these comments, I will now invite Andrew Toh to say a few words about the procurement process, and then we will be happy to take your questions.

Mr. Toh:  Procurement reform actually started under the term of the previous Secretary-General in 1994 under the scrutiny of the General Assembly itself.  In 1999 the current Secretary-General was not happy with the pace of reform and installed a new management team in the procurement division, and the new management team basically focused on two key areas in procurement, one of which is transparency and accountability, and the other one in terms of tightening the internal processes.

Now, as the United Nations is a global organization and, therefore, has a global constituency, it was felt that whatever we did in terms of projecting transparency and enhancing accountability should be in terms of being accountable to the global community.  So, the conveyance that was selected to do this was, obviously, the Internet Web site, and the procurement division in 1999 created the most comprehensive -- I think that, to this day, it is probably one of the most comprehensive and transparent procurement Web sites on the Internet.

The Web site consists of all relevant information that is needed, not only for vendors to know what is going on in procurement, but also for Member States and, basically, as I mentioned, the world community, to actually, with the click of a mouse, find out anything and everything that actually happens in the procurement process of the United Nations.

For instance, it has a full list of all the vendors registered with the United Nations for procurement.  Its previous practice of shortlisting vendors -- for instance, when you have 20 vendors for some product, previously maybe five or seven would be shortlisted to be invited for bids -- that practice was discarded.  All vendors registered for that product are automatically invited and have been since 1999, so this has removed that degree of discretion that procurement officers had, which could be misinterpreted.

Annual procurement plans are posted on the Web site, which, in addition to providing advance information, also allows vendors that are not registered with the procurement division to actually perform the registration process and participate, to ensure a very open process.

All future bids are posted to ensure that people are forewarned of what is coming.  All current bids are there, and this allows all the vendors that are registered to ensure that they have been invited, and, in the event that they have not been invited, to raise the red flag.

More importantly, and perhaps very uniquely, all contract awards are posted on the web site, and you will see from that page that the procurement division’s information in that area is unique, in the sense that it has all the information relating to that contract award.  It has the full name and address of the vendor that has been awarded.  It has the destination of the product and the service of the product, and, more importantly, it has the cost, or the price that was paid.

Now, this allows all vendors and, for that matter, the international community, to monitor every penny that we have actually paid for our products, and if there is any vendor that has put in a lower bid, it allows that vendor, then, to either file a complaint or seek an explanation of why, having submitted a lower bid, it was not awarded the contract.

Another unique feature, which is very rare as you browse through procurement Web sites, is a complaints letter.  There are three levels of complaints:  to the chief of procurement, to his boss, and then to the Assistant Secretary-General for Central Support Services.

In addition to providing or enhancing transparency and accountability, we also focus on tightening internal processes.  Obviously, you can have all the rules in the world, but if you do not have professional staff to interpret the rules or to adhere to the processes, it does not work.  So a lot of training has been given, both internal and external and, in this respect, a lot of focus was given in terms of training our procurement officers in the field, because that is one area where we had been very weak before.

Unknown, perhaps, to many, one of the most vulnerable points in a procurement process is not actually the procurement action itself, but the step that goes preceding the procurement process, which is the definition of the specifications.  You can define specifications in such a way that it is tailored towards a certain manufacturer, make or model of a product.  So, to do that we have a rule that only generic specifications will be permitted.  So you will not have a situation, if somebody wants to buy a car and asks for a car with an engine of 1,872 cubic centimetres, which only manufacturer XYZ produces -- that sort of thing.  So we’ve done away with all that.  We ensure that only generic specifications are permitted and put in the bids.

One area of weakness that was clearly identified in the IIC report was how evaluation criteria change along the way.  We instituted a system whereby the evaluation criteria, the weight given to each criterion, is decided before the bids are open.  So that means that you will not have a situation where the goal post is changed in the midst of the process, and that criteria that are agreed by both the requisitioner or requisitioning office and the procurement officer are cast in stone.  That cannot change.

We introduced a two-tier procurement process, bid process.  Again, this is one of the areas that were highlighted by IIC recently, but we had already identified that weakness in 1999.  Two-tier in the sense that a sealed technical bid is separate from the financial bid, so that when the requisitioning office does the technical evaluation, they only get the technical part of the bid.  And all bids, by the way, are opened in public.  So that you have a situation where the requisitioning office is not going to be influenced by -- or, for that matter, has any information about -- the cost of each of those bids.  It is only after the technical evaluation is completed that the sealed financial bid is opened and the matrix is produced in order to determine which is the lowest qualified bidder.

We produced also, in addition to a very comprehensive Internet site, a very comprehensive intranet site so as to be able to educate all parties involved in the procurement process.  I mentioned earlier that, in fact, one of the most vulnerable parts of the procurement action is in the creation of a statement of works or the definition of the product.  On our intranet site, we have guidelines for requisitioning officers to inform them as to what they can or should not do in terms of producing specifications, in terms of the procurement process, the evaluation process and so on.

Lastly, we instituted, as part of our internal accountability -- and this is very unique, I think -- we have an online requisitioning tracking system which allows the requisitioning office on the intranet to actually track the movement of the procurement action.  If a department were to ask for the purchase of item Y, first there would be an automated response to the requisitioning officer to nominate the procurement officer who is responsible for it, and then thereafter the requisitioning office can actually track the movement so that this will allow the procurement to be directly accountable to the party that is actually performing the procurement action.

And finally, what is perhaps most important in all procurement actions is the oversight.  And as the DSG has mentioned earlier, there has been a great deal that has been done in the area of audit.  In fact, the Procurement Division is one of the areas which is essentially audited to death.  In 2004, there were 47 procurement-related audits, which is equivalent to about one audit a week.  So, a lot of effort is spent in ensuring that we not only do our actions right, but that it is also perceived by auditors to be correct.

Now, I have taken the liberty to make photocopies of two sample pages on the procurement service Web site -- one on the contract awards, the very minute details that are posted on the Web site; and the other one on what, again, we think is a very important feature in our procurement process, which is to allow a facility for anybody to file complaints.

Question:  On the question of procurement, you’ve gone through a great deal of detail on what you intend to do, but in the past -- particularly peacekeeping operations -- procurement of heavy equipment has often fallen, obviously, to industrialized countries, but to a very few industrialized countries, regardless of the cost.  Are you confident that you are going to be able to get your systems going to remove that imbalance, that discrimination?

Mr. Toh:  First, what I have listed is not what we intend to do.  It is what we did.  We have done this since 1999.  Secondly, I think geographical equity is something that the General Assembly, particularly the “Group of 77”, has been very, very concerned about for many years.  We are actually very proud of our record in the last five years and the General Assembly has acknowledged this.  We have brought the share of the developing countries with economies in transition from around 20-odd per cent -- 27, 28 per cent -- in 1998 to almost 50 per cent in the last two years.  So we are not only confident; I think we have demonstrated that we have been able to balance procurement geographically.

Question:  To Ms. Fréchette:  first of all, could you just give more details of how many people and who is going to be on this multidisciplinary panel/committee you mentioned?  Also, with regard to access to audits, does the Secretariat undertake to make public all internal audits that it conducts on its own affairs to the press from now on?

And then, for Mr. Toh, just a couple of things.  One -- I mean, I’m looking at this sheet you gave out, and it’s not very helpful.  I mean, I see motor vehicles and parts:  $120,000.  I don’t know how many motor vehicles, what parts, whatever.  I’m also wondering how does this help anyone, and I’m also wondering if, when you award a contract, do you give the list of all the people who applied and why one was chosen?  The reason I ask that is because, if one thing that the Volcker report showed, is there’s the mysterious process -- or used to be, that you say now has been addressed -- whereby lots of people apply and someone pops out at the end for a political reason.  Do you think now that it is no longer possible for a company or services to be engaged essentially for political reasons, and is that clear on your Web site as to why someone was chosen at each stage?

The Deputy Secretary-General: On the question relating to the multidisciplinary panel, I assume you refer to the recommendation of the Secretary-General regarding a review of OIOS.  No, we don’t have a number.  That would be the prerogative of the General Assembly to determine how big a panel, the composition, the background of the people, but presumably they wouldn’t go for a very large number.  And they haven’t decided yet.

On the internal committee, we have not finalized that yet, but I assume that it wouldn’t be more than half a dozen people.  We would want to have a representative group of management plus at least one person from outside, and set up a system whereby we systematically review what is the performance of individual offices in pursuing recommendations made by the review offices.  What we do have are general statistics that are provided by OIOS, by the Board of Auditors; but we need something that will go in much greater detail into who’s doing what, what recommendations are followed, which are not and why not. The statistics tell you only so much, and the purpose of that committee would be really as a tool to help the Secretary-General hold his managers accountable.

As for the access to audits and whether they are being made public as of now -- as of now they are accessible by Member States; this was a decision of the General Assembly.  What I’ve said, however, is that we are undertaking a full review of this question, the accessibility of documents, accessibility by Member States, accessibility by the public.  We would like to have a transparent, comprehensive regime that would govern the question of access to information in the future.  We were not going to move piecemeal on that; we would want to have a more developed, comprehensive regime.  I assume that this is something that the Member States would have to look at, at some point.

Mr. Toh: With regard to the price -- if you look at that page and you see the reference number, that reference is the bid, and that bid actually defines all the details.  Trust me; those people who have bid for this will be watching this very closely, and they know exactly what we are talking about.

As far as political influence is concerned, in any procurement process, regardless of whether it is governmental or private, there is always some element of political influence.  The important thing is not so much whether ... to eliminate political influence or any other influence requires discipline on the part of people who are influencing it, and that’s not exactly the easiest thing in the world.  I think the important thing -- and this is what we’ve done -- is to ensure that everything is documented and reported so that there is always an audit trail.  There is no way, right now, where any political influence can be brought to bear without public notice, in a sense that all bids are sealed and remain sealed in a secure room that is monitored in terms of the electronic lock, where we do audits of who’s gone in and out.  There is a very stringent process as to who has access to that room.  There is no one individual who can access that room; it’s always by two designated procurement officials.  The bids are opened in public.

But there will always be, I think, some degree or some attempt to influence by somebody.  But I think the process that we have will review this.  I am confident that what has happened in the past will not happen.  First, you will not have a situation where the requisitioning officers will have information on the cost, to be able to talk to somebody else, because, as I said, we have this two-tier system.  The evaluation criteria have been agreed and cast in stone even before the bids are open.

The Deputy Secretary-General:  We have to make a distinction between political pressure -- which I think, we have to expect that; countries will continue to lobby for their companies, just private-sector companies or even local, elected representatives continue to lobby for their companies in a national context for procurement.  No system can ensure that there’s no political pressure.  What we think our procurement rules and the much greater degree of transparency that has been introduced [are] designed to do is to prevent that pressure from affecting the decisions that we make.  The best protection you can have is if you are transparent.  Because for every Member State that tries to promote its company, there is another Member State that’s trying to promote its company, and if that company is on the losing side and there is transparency as to who the winner is and at what amount, it means that, if there’s any cheating or manipulation in the system, then other Member States will respond.  So there’s great value in the transparency element in keeping the whole system honest.

Mr. Toh: The scrutiny we come under, even in the bid-opening process, is very great, because several Member States send their representatives to attend bid openings.  They either send representatives from their missions, or their consulates or their trade missions to attend these bid openings.

Question:  There is a Senate hearing in Washington going on about the procurement process.  Just before I came down, Senator Coleman complained that Dileep Nair was absent.  Can you explain why he was not allowed to testify?  And if someone was sent in his place, why they are not testifying today?

The Deputy Secretary-General:  We have indicated that we do want to cooperate with the various Congressional committees.  When Mark Malloch Brown went down to Washington last week, it was very much for the purpose of discussing this cooperation.  What we have indicated to Senator Coleman is that we would be happy to provide information to the various committees that are interested in the audits.  In this case, it wasn’t about procurement; it was about audits, if I’m not mistaken.  We feel that the best person to provide the information is the head of the audit department, who has hands-on and immediate knowledge of the details of all the audits that were carried out for the oil-for-food programme.  That person was not available today for those briefings but would be made available at a date that would be convenient for all the committees so they can receive that briefing together.

By practice, and in light of the fact that the UN and UN employees have immunity, we do not send people to testify in front of Congressional committees, but we do provide staff to provide information and briefings, and we are very anxious to do that.

Question:  Just to clarify:  UN officials are not allowed to testify in Congressional committees?  Because he said that there had been precedents of 60 instances of cooperation; this is Senator Coleman talking.

The Deputy Secretary-General: Well, there is a difference between testifying under oath under a Congressional committee, and providing information and briefings.  We are ready to provide information and briefings; we have done that very often.  We have done that in the context of the oil-for-food.  At an earlier stage, a number of our colleagues went down, provided detailed briefings.  We’re ready to cooperate in relation to this request for information and on the audit they mention.  Hence the offer to send the head of the audit department.

Question: I’d like to ask about one thing that came up today in the hearing that suggests a trend, especially in light of one of the findings of Volcker’s report that showed that former Secretary-General Boutros Boutros-Ghali actually participating in the selection of BNP for the oil-for-food programme.  They presented a memo written by a Cotecna employee to Robert Massey, the President, reporting on the tender process to replace Lloyds, before Cotecna actually won the bid, and said that they needed to get their final information in because the SG needed to review it and would be making the decision at the end of December 1998 -- which implied that the SG had a hand in the selection.

The Deputy Secretary-General: I’m not aware of that.  If you say it happened this morning in the Senate committee, we’ll have to review the transcript.  Have you seen anything, Fred?  I haven’t seen anything.

Question: So, even without having seen the transcript, can you tell us if the SG had a hand in selecting the contracts for Cotecna, Saybolt or Lloyds and continues to have a hand in the selection of contracts?

The Deputy Secretary-General:  He doesn’t have a hand in the selection of contracts.  With respect to Cotecna, the Volcker Commission will be submitting a second interim report that will focus only on the issue of Cotecna, so I assume they will answer that question at that time.

Question: Following up a little bit on what Maggie said, but in a broader sense, how, overall, would you answer the original allegations that were made both by Volcker and others that the United Nations is not up to tackling major procurement and other large projects, for instance, like the tsunami disaster?  How would you answer it in an overall context to all of these congressional committees in light of what you have said today about the measures that you’re taking?

The Deputy Secretary-General:  Well, I think the interim report suggested that there had been irregularities in the process of selecting contractors for the United Nations.  The report is fully documented.  What we have tried to brief this morning is on the important changes that have taken place since that particular episode and that suggest that the internal rules for procurement have become much tighter and, more importantly, much more transparent than they were at the time of the episode described by the interim report of Mr. Volcker.  It doesn’t mean that we are not going to take account of Mr. Volcker’s observations.  We certainly are taking to heart everything that he’s put in this interim report, and, as I said in my presentation, while we believe that we have introduced a lot of very significant changes in our procurement process, we will take another look to make sure that we are up to the best practices standards in terms of the process that we have put in place.

Question:  Could you clarify a few points, if you don’t mind?  First of all, all OIOS documents, are you saying, will be made available to Member States, including the ones that had formerly been called “internal management tools”?  Those will all be going public?

The Deputy Secretary-General: That’s exactly what... The internal audits and investigations were considered not accessible by Member States.  They now are going to be accessed.  I think the Member States have agreed to leave a certain discretion when it comes to investigations to make sure that information that might be... that it might be necessary to maintain as confidential information in the context of possible judicial action -- has been accepted by Member States.  But otherwise, these documents, which were formerly not accessible by Member States, will be from now.

Question:  And if I understood you correctly, you will be making Mr. Nair available to the Hill investigators at some point, when his schedule permits?

The Deputy Secretary-General: I said that... no, the chief auditor [Dagfinn Knutsen] -- I don’t have his name; I think, Fred, you have it -- who was the head of the Audit Section and the one that has really hands-on and detailed knowledge of all the audits that were carried out for the oil-for-food programme, will be available to go down for briefings.  Unfortunately, the reason why he couldn’t go today is that he’s not in the United States today.  He’s on duty somewhere in Africa; otherwise he could have gone today.

Question: Is this a new effort to be more cooperative with the Hill, perhaps, or is this just a continuation of...?

The Deputy Secretary-General: Well, we have indicated that we want to be as cooperative as possible and that’s a manifestation of our desire to be as cooperative as possible.

Question: You said that part of the new reforms, the audits, will now be available directly to the Member States.  I wonder why, then, that very proposal by Mr. Nair was denied towards the end of November 2000, and apparently by you personally in a phone call to Mr. Nair.  Perhaps you could explain your decision then and tell us the details of that phone call.  Also, secondly, given that there were all these problems between Mr. Nair and Mr. Sevan and that Mr. Volcker has now laid bare the inadequacy of both the auditing process and the management process of oil-for-food, as you were their boss, are you considering resigning?

The Deputy Secretary-General: I was the boss of who?

Question: Mr. Sevan and Mr. Nair.

The Deputy Secretary-General: I’m not the boss of Mr. Nair.  The General Assembly is the boss of Mr. Nair.

Question: But you were talking...  You...  You denied a proposal Mr. Nair made.  That would seem to imply that you have some power over Mr. Nair.

The Deputy Secretary-General: I am not the authority over Mr. Nair.  Mr. Nair has a special status in the Secretariat.  He can carry out activities as he sees fit.  I think there is an example, for instance, in the Volcker report where Mr. Nair, in spite of contrary opinions by the Legal Office here, carried on some audits of the Compensation Commission, which suggests that he has enough freedom to do what he wants.

Question: On page 186 of the Volcker interim report, Mr. Nair is quoted as having said to the Volcker investigators that you personally denied his proposal to give the audits directly to the Member States.  Do you recall that conversation?

The Deputy Secretary-General:  I don’t recall that conversation, but I’m quite prepared to accept Mr. Nair’s recalling the conversation.

Question:  So what was the reason for denying that proposal when you’re accepting it now?

The Deputy Secretary-General: Since I don’t recall the conversation, I’m not sure that I can give you the details of what I was thinking at the time, but I assume that, if indeed that conversation took place, the reasoning was that, at the time -- and it was still the case up until December this year -- internal audits were not accessible to Member States.  Internal audits were considered a management tool that were to be used only by internal managers of the United Nations system.  In the meantime, things have changed and the General Assembly has now decided that these reports should be accessible.  So my reaction, if indeed I had that reaction, would have been based on practice at the time.

If you ask me whether, in retrospect, I would say that it’s probably a good practice to make these reports accessible, my answer would be yes.

Question: And are you considering resigning?

The Deputy Secretary-General: No.

Question: [inaudible] has suggested that the United Nations lift the immunity of Mr. Sevan.  Would you consider that?  And also, the Committee has suggested that the Secretary-General has not been fully forthcoming and cooperative with the oil-for-food probe.  How would you characterize his cooperation thus far?

The Deputy Secretary-General:  On the first point, I haven’t seen the transcript.  We would have to see exactly what was said and we’ll consider what was said or requested, if there was any specific request.  As for the second question, as I’ve said we want to cooperate as much as possible and I believe we have done that.  That’s why Mark Malloch Brown went to Washington last week:  to see how we could offer that cooperation, at the same time as remembering that we have an investigation going on that is led by Mr. Volcker, with which we also have to cooperate.

Question: If I could follow up from Mr. Sevan, in light of further grievances on his part -- maybe more than $1 million stolen, maybe -- wouldn’t that be sufficient to lift his immunity?  And regarding the Secretary-General, wouldn’t his presence in front of the Committee be a sign of more cooperation?

The Deputy Secretary-General:  Well, you’re asking me to comment on new allegations or bits of information that have come out in the last few hours.  We’d need to look at what exactly was said and what this is all about, and then the Secretary-General will have to decide what he wants to do.

Question: And what about regarding the Secretary-General’s showing up in front of the Committee?  Would you not advise him that would be a sign of more cooperation, of good will on the part of the United Nations?

The Deputy Secretary-General: Who appearing before the Committee?

Question: The Secretary-General himself.

The Deputy Secretary-General: Well, this is totally hypothetical.  I’m not going to answer that.

Question:  Two quick questions.  From what I understood, the Committee asked for Mr. Nair.  Why is it that in the case of Mr. Nair you invoke diplomatic immunity, whereas you say that you will send the head of auditing?

Secondly -- a conceptual question, maybe; or maybe hypothetical, which I know everybody hates to answer, but -- if oil-for-food were to be launched today, do you believe that all the reforms that you have already put in place would be able to solve the problems that the Volcker Committee pointed to?

The Deputy Secretary-General:  On the first question, we have offered to send the head of the audit Office for briefings, because that person has the most detailed knowledge of the audits that were carried out at the time of the oil-for-food programme.

Question:  [Inaudible].

The Deputy Secretary-General:  Well, because this head of audit has all the information, and we believe he is the best placed to answer the detailed questions that are bound to come out in that kind of briefing.

On the second point -- and, personally, I hope to God we never get another oil-for-food programme or anything approaching that kind of responsibility, which was tantamount to trying to oversee the entire import/export regime of a country of 24 million people, which was a tall order -- I do think that we have learned a lot of lessons from that experience.  We certainly have taken pride in the fact that the programme has served to feed and provide basic necessities to people and that their own personal faith improved over the life of the programme.  But we have also seen that the programme has revealed some basic weaknesses in our own internal systems.  Some of them had already been spotted before the interim report.  That was what this morning’s briefing on procurement was about.  But, clearly, there were other weaknesses in that system, from which we are learning.  If ever, God forbid, we were to be given that kind of responsibility in the future, we certainly would go about it differently and we certainly would apply the lessons that we are learning from the exhaustive investigations that are going on at the moment.

Question:  Would you go before the Senate committee or the Congressional committees?

The Deputy Secretary-General:  That is a purely hypothetical question.

Question:  Madame Fréchette, you mentioned a gentleman who would be sent to brief the Committee on the oil-for-food audit because he was the most familiar.  The person who actually headed the audit division and signed all the audits was actually not a gentleman but a woman.  I am wondering why you would not send her to brief the Committee.

The Deputy Secretary-General:  Do we have the name of the person?

Question:  Esther Stern.

Mr. Eckhard:  The name of the person that we would be sending is Dagfinn Knutsen, the United Nations chief auditor of the oil-for-food programme.

Question:  But, in fact, at the time the audits were conducted, the Internal Audit Division was headed by a woman, Esther Stern, who signed all the audits and was head of the Division at that time.

Question:  [Inaudible] extensively by the Volcker committee.

The Deputy Secretary-General:  Well, that could be.  Listen, I am sorry to tell you that I was not involved in that decision.  Maybe, Fred, you are better placed than I am to answer it.

Mr. Eckhard:  I am not, except to say that she no longer works for the Office of Internal Oversight Services.

Question:  Right, but she still works for the United Nations.

The Deputy Secretary-General:  Yes, but she cannot brief on the programme if she no longer is with the Office of Internal Oversight Services.

Question:  She briefed Volcker.

Question:  She briefed Volcker on the programme.  According to the Volcker note, she briefed him extensively.

The Deputy Secretary-General:  She was interrogated like all of us are being interrogated by Volcker.  There is a difference.

Question:  She cooperated.

The Deputy Secretary-General:  We all cooperate with Volcker.

Question:  Do you not think that increasing political pressure against Mr. Annan is linked to his reputed position on the United States attack on Iraq and the Israeli-Palestinian issue?

The Deputy Secretary-General:  I am sorry.  I do not think that I...

Question:  I will repeat it again.  Do you not think that increasing political pressure by a few press [members] and Congressmen here is linked to the United States attack on Iraq and Mr. Annan’s position on the Israeli-Palestinian issue?

The Deputy Secretary-General:  I think that, in order to know the motivation you would have to ask the people concerned.  What I know is that there have been requests and criticisms made.  We are trying to address them to the best of our ability.  We have, I think, demonstrated that we are committed to getting to the bottom of the oil-for-food issue.  Whatever the motivation of some of the people who are directing criticism at the United Nations at the moment, there are real questions relating to oil-for-food.  We are not denying that.  That is why the Secretary-General took the initiative himself to create a commission that is acting totally independently, why he named someone of unimpeachable credentials such as Paul Volcker to head it, as well as why we are all under instructions to cooperate with Volcker, that includes myself and everybody else in the system, and that is why we are committed to taking the conclusions and recommendations on board and taking whatever measures are necessary to ensure that whatever weaknesses are revealed are corrected and that we learn the lessons from that very complicated programme.

Question:  I just have a quick clarification.  Is what you are saying about sending United Nations officials to Congress that you will send officials to brief Congressional committees and to talk to them but that the United Nations will not send them to testify as such, where they have to be sworn in before a committee in a legal process?

The Deputy Secretary-General:  Yes.

Question: Could you clarify what your job was in the oil-for-food programme, in terms of running and supervising the programme?  Can you clarify your role there, please?

The Deputy Secretary-General:  Mr. Sevan reported to the Secretary-General through me.  But let us remember that he also reported to the Security Council.  The job of my Office, for instance, was the clearing of his reports to the Security Council, which were issued in the name of the Secretary-General.  Those were cleared through my Office.  He could turn to me for advice and support when he needed help, particularly in coordinating the work of the various funds and programmes that were involved in the programme.  But I did not have a day-to-day management responsibility vis-à-vis the programme.

Question:  What is the status of Boutros-Ghali in relation to the diplomatic community?  Does Boutros-Ghali have any residual diplomatic immunity as a former Secretary-General and, if he does, is the current Secretary-General willing to lift that if, at any stage, there are any criminal charges against the former Secretary-General?

The second quick question I have is about Samir Vincent’s allegations in the New York court, that somebody at the United Nations was bribed in the drafting of the memorandum of understanding.  Can you tell us who was involved and how that was handled -- the drafting of the memorandum of understanding that led to the oil-for-food scheme in early 1996?

The Deputy Secretary-General: On the first question, I really don’t know the answer.  We would have to refer that to the Legal Office and provide you with a reading on whether or not...

Question:  You will do that, I assume?

The Deputy Secretary-General:  Yes, I will.  Of course.

As for the second question, it was before my time.  I am not quite sure who was involved in the drafting.  I know that the Legal Office was probably in the lead on that.  But who was involved exactly and who was consulted on the memorandum of understanding, I do not know.

Question:  One of the problems we have with this, of course, is that every United Nations officials who comes here -- including Mr. Malloch Brown the other day -- says, “Oh, it was not me, I was not here at the time so I do not know anything about it”.  But you are all officials of the United Nations, and we are looking not for personal knowledge, we are looking for institutional knowledge.  And so I trust that you will also then refer that to people in the United Nations who do know that answer and find for me the answer of how that memorandum of understanding was drafted and who was involved in the drafting of the memorandum, and particularly the involvement of senior officials such as Mr. Boutros-Ghali and various Under-Secretaries-General who were working for him then on the case.

The Deputy Secretary-General:  Well, this is where your request for information to us brings into play the investigation that is happening...

Question:  It is not a question about the United Nations.  It is a factual question like we ask every day.  [There are] many factual questions about the United Nations business.  It is a factual question that can be easily consulted in the United Nations files.  And I consider it an excuse for you to say there is the Volcker investigation going on.  I am not asking about wrongdoing.  I am asking a factual question about who was involved in the drafting of the memorandum of understanding.  How was that handled?

The Deputy Secretary-General:  I cannot answer that.

Question: Could you find somebody?  As the Deputy Secretary-General, perhaps you could work a little harder and find somebody who would answer that.

The Deputy Secretary-General:  All the files are with the Volcker commission.  I do not even have my own working files to answer you what my role was.

Question:  Can you not find anybody in the building who was involved in it, who would remember that then, and ask them?

Question:  What is the URL for the contract?  Is that open to everyone?

To Ms. Fréchette:  the House International Relations Committee has said that it wants to investigate a whole pile of agencies, and one of them is the meteorological one.  They say that Annan -- the Secretary-General -- if he does not have the audits, the internal audits, can find them.  Is that like asking him for the audits of the IMF, or it this something that floats across his desk?

The Deputy Secretary-General:  Do you want to answer the first question, Andy?

Well, anyway, I will take the question on the WMO [World Meteorological Organization].  The specialized agencies are not accountable to the Secretary‑General.  They have their own -- their heads are elected by the collectivity of member States.  They have their own internal systems, they have their own rules.  The Secretary-General cannot instruct the head of a specialized agency to do anything.  They are accountable to their own member States.

When it comes to the question of audits, I think that question should be asked -- should be directed at WMO.  Of course, we would be happy to talk to our colleagues in WMO and draw their attention to this request.  But, strictly speaking, the head of WMO does not answer to the Secretary-General, he answers to his assembly of member States.

Mr. Toh:  The URL is at the bottom of the sample page that you have.  Do you see the bottom right-hand corner?

Question:  You said, “Oh, God, I hope no one ever gives us anything like this again.”  So, would you basically appeal to the Security Council that, if they want to set up anything like the oil-for-food programme again, that they look elsewhere than the United Nations Secretariat?

The Deputy Secretary-General:  I do not want to speculate.  It was more an expression of realization what a tremendously complicated task this was.  I am not sure that that there are other institutions that are better equipped, because the alternative is to set up something from scratch.  It takes time.  Will you get better results?  I am not sure.  It is just to underline what a huge programme, what a complicated programme, this was -- which is really quite different from anything else that we do.  That is why trying to draw a conclusion from how we set ourselves up to do the oil-for-food programme, on how we deliver on our current mandate, on how well-equipped the various funds and programmes are to deliver on their ongoing activities and how solid their management systems are -- I think there is a difference in nature in that programme.

Question:  [inaudible] at the time put their hand up and said, “We don’t have the expertise, we don’t have the systems, we don’t have the management, we don’t have the staff -- we can’t do it”.  Did anyone even suggest that?

The Deputy Secretary-General: I don’t know.  You would have to review all the files and interrogate everybody who was involved at the time to know whether they had any qualms, whether they at the time realized.  I think one of the things that Volcker has pointed out, for instance, is that in many respects there were not enough staff to do that job.  But, you know, the Security Council at the time had said, you have to keep the administrative costs to as little as you can -- keep them down, keep them down.

I am not sure that anybody fully realized what the implications of that programme and what it would take to have the kind of detailed control -- that now appears to have been deficient -- to actually make sure that every transaction was reviewed, vetted, that every inspection on the ground was rock solid, and so on.  I am not sure that anybody at that time saw the magnitude of that task. This is where, I think, we are learning a lot of lessons.

Mr. Eckhard: Thank you very much, ladies and gentlemen.

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