PRESS CONFERENCE BY United Nations Development Programme

 

on Democratic People’s Republic of Korea

 

A top official from the United Nations Development Programme (UNDP) today said that the agency would stop paying cash for its operations in the Democratic People’s Republic of Korea, and would launch an independent audit following press reports about the lack of oversight of its multimillion-dollar projects in that country.  The announcement came after United Nations Secretary-General Ban Ki-moon said he would call for an “urgent” investigation into all global activities by United Nations agencies.

During a Headquarters press conference, UNDP Associate Administrator Ad Melkert told correspondents that the agency was taking all necessary measures to avoid “misperceptions or unintended consequences” of UNDP’s activities in the Democratic People’s Republic of Korea.  Along with ending all payments in hard currency to local staff, partners and vendors by no later than 1 March, Mr. Melkert said UNDP intended to discontinue the practice of allowing the North Korean Government to contract national staff, and to put in place appropriate mechanisms to monitor the execution of all UNDP’s programmes in that country.

While, over the course of approximately two decades, many countries had altered their systems, “the essential way North Korea operates has not changed during that time,” he said, and, therefore, the terms of reference governing the work of not just UNDP, but also the United Nations Children’s Fund (UNICEF), United Nations Population Fund (UNFPA) and the World Food Programme (WFP) had remained the same.

He also noted that the Democratic People’s Republic of Korea had gone through a series of “horrific humanitarian crises” during the 1990s, and UNDP and other agencies had responded with significant humanitarian programmes.  After the crisis period subsided, the focus of UNDP’s activities shifted back to achieving longer-term development goals, such as the Millennium Development Goals.  The agency’s operations evolved in recent years, and he said the Security Council’s two-month-old resolution placing sanctions on the North Korean Government had sparked a “further tightening” of the way UNDP operated in the country.

“So this is the point at which we find ourselves today,” he said, urging journalists to see the issue in its historical context.  But at the same time, Mr. Melkert acknowledged that, during the late 1990s, the agency’s own internal auditors had raised “many concerns” about the Democratic People’s Republic of Korea programmes with management, and that it had been up to management to formulate a response.

So with all that in mind, he said that at next weeks’ meeting of the UNDP Executive Board –- made up of 36 Member States, and this year, including the Democratic People’s Republic of Korea -- the agency would propose “a full, independent external audit in order to make sure that we really understand what it means to work in a country like North Korea”.  Mr. Melkert stressed that, while UNDP’s work in many countries was an “easy ride”, that was certainly not the case in North Korea, where the agency’s staff had been dealing with serious issues for many years.  So, an external, independent audit was “a good point to get to the knowledge that we need for the future”, he said.

Asked about a letter from the United States, which said that UNDP failed to bring “widespread violations” in the Democratic People’s Republic of Korea of its own rules to the attention of the Executive Board, Mr. Melkert said all UNDP audits were submitted to and considered by the United Nations Board of Auditors, which in turn was responsible for bringing critical issues to the attention of Member States.  “It is our task as management to follow-up on internal auditors’ recommendations,” he said.

To a question on why UNDP, which has recently stated its commitment to transparency, does not make all of its audits available to Member States -- as did the Secretariat -- Mr. Melkert said the issue was under discussion.  “Basically we believe that internal audits should be available to members of the board and UN Member States,” he said.  “That will take some time, but we will discuss it and we will come back on that.”  He added that the agency had shown the Board that it really wanted to share concerns and points of contention brought forward by Member States, and that was what had led to the correspondence with the United States.

Mr. Melkert said that, although the United States had raised the question of whether the agency had violated its own financial regulations, “the answer to that question is ‘no’”, because much of the in-country decision-making for UNDP was handled by resident coordinators, who were given the authority to make practical choices, including how to deal with hard currency issues.  The Board had asked the agency to find a way to keep the agency’s programmes operating in “difficult circumstances” and that meant that tough decisions had to be taken.

Asked if it was more important to simply just “play ball” with the Government on matters like the hiring and payment of local staff in order to ensure some kind of United Nations presence in a country like the Democratic People’s Republic of Korea, Mr. Melkert disagreed, saying that, while the Board had always considered it necessary for the agency to be in North Korea, it had taken a look at past practice and had decided to end Government secondment of local staff.  That practice had been a holdover from some 20 years ago, and it was UNDP’s decision to end it.  “Our position is we won’t give in on that,” he said.

Asked about the level of funding involved, Mr. Melkert said, “We’re not talking about hundreds of millions of dollars,” adding, “Over a period of 10 years, it is of course tens of millions.”

Responding to questions as to whether UNDP could be assured that currency it paid was not converted into the country’s weapons programme, he said, “that question cannot be answered because of the general way in which you operate in any country that you are doing business with”.  Operating in a country often required bringing in currency, in this case, either dollars or euros.  There was no way around that.

At the same time, he stressed that “from the audits, there has been no indication whatsoever that would say anything in relation to your question”.  He added that before the new measure’s he announced went into effect, UNDP intended to consult with the relevant Security Council sanctions committee to see if UNDP complied with the Council’s resolution.

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For information media • not an official record