press conference by administrator of United Nations Development Programme

“We finally have some closure on the allegations made against UNDP,” the United Nations Development Programme’s top executive said today while welcoming yesterday’s publication of the “very thorough and exhaustive” independent external review of the Programme’s activities in the Democratic People’s Republic of Korea.

UNDP Administrator Kemal Derviş stressed at a Headquarters press conference today that he would not interpret or paraphrase the Németh report, named for Miklos Németh, Chairman of the independent external review panel.  The document contained valuable recommendations for the Programme’s work, particularly in the most “challenging environments”.

Stressing that UNDP should improve further, he said:  “For more than a year we have been the target of various serious allegations.  Sometimes these allegations have taken fantastic and irresponsible forms.”  Every UNDP employee had the right to be treated with respect and could at all times safely use available channels to raise issues of concern.  “At the same time, I intend to protect the organization and the resources entrusted to us for development purposes from frivolous actions with obvious ill intent.”

Mr. Derviş said he would organize management follow-up regarding the report’s “very useful proposals” on how to improve the effectiveness of UNDP’s work.  Of particular importance was full implementation of the new Accountability Framework, on which Associate Administrator Ad Melkert had taken the lead and which was now in place.

He said the “Report on United Nations Development Programme Activities in the Democratic People’s Republic of Korea, 1999-2007” (available at www.undp.org) addressed issues such as payments to local staff; project implementation; “dual-use” equipment; counterfeit United States dollars and “whistleblower” issues.

Regarding payment modalities, he quoted the report as stating, “The analysis provided confidence that the amounts detailed in UNDP-DPRK financial systems data are reliable and the scope of the cash inflows is reasonably quantified.”  On project implementation, the report states, “[…] relevant documentation […] demonstrates that the majority of the programme, and more importantly the larger, more complex, or higher-risk projects, were managed, monitored and evaluated substantially in accordance with UNDP requirements”, and that allegations that field visits had not occurred were unfounded.  As for dual-use equipment, the report states:  “In many instances, questions of applicability [of international law] remain unresolved.”

As for the counterfeit issue, Mr. Derviş said, the panel found that “representatives of the country office and UNDP Headquarters knew of concerns about counterfeit currency in the DPRK.  […] communications between the country office and UNDP Headquarters were inadequate.”  As for the “whistleblower” issue, the panel concluded that UNDP had not retaliated against [whistleblower] Shkurtaj for his role in raising concerns about UNDP’s operations in the Democratic People’s Republic of Korea.

At the outset of the press conference, the Administrator expressed condolences to the family of a UNDP colleague killed earlier today in a car-bomb explosion outside the Danish Embassy in Islamabad, Pakistan, in which six other UNDP staff members had been injured, some severely.  “Our thoughts and prayers also go to all the other victims of today’s attack.”  At least six people had been killed and 30 injured in the attack.

The independent external review panel comprised Miklos Németh, former Prime Minister of Hungary and a current member of the Advisory Council of Transparency International; Chander Mohan Vasudev, former Permanent Secretary of Public Expenditure in the Indian Ministry of Finance; and Mary Ann Wyrsch, former United Nations Deputy High Commissioner for Refugees and currently Chair of UNDP’s External Audit Advisory Committee.

Responding to a question as to why “the accused” was introducing the report, Mr. Derviş said it had been the panel’s preference to report first to the Board of UNDP, which would meet in Geneva on 24 or 25 June.  After that, panel members would be available for the press.  They had agreed to have UNDP put the report on its website.

Asked whether the allegations against UNDP had been politically motivated, given their clear origin in the United States Mission, he said they had clearly been vastly exaggerated, based on misunderstanding or even “ill intent”.  However, since Zalmay Khalilzad had taken office as Permanent Representative of the United States to the United Nations, questions had always been asked with the “utmost courtesy”.  Member States were equal “under the law” and UNDP had to navigate with respect for sovereign States and the Board, given existing political tensions and personal views.  Member States, however, must also respect the United Nations Charter and fulfil their obligations.

To a suggestion that the panel would not have been established without “excellent” reporting by Fox News and Inner City Press, among others, Mr. Derviş replied that the report had been triggered by questions from the United States that had then been taken up by the media.  The extent of allegations made by some, however, bordered on the “fantastic and irresponsible”.

Asked about dual-use equipment, in the particular context of a country accused of proliferation, he said that according to the panel, all immunities applied for the United Nations, while vendors and suppliers were responsible for applying the laws of their home countries.  While UNDP could not be held responsible for that, the United Nations system must do further work on clarifying dual-use export regulations.  The Organization’s regulations had been followed and there was no evidence that material had been used for harmful purposes.

Responding to a question about counterfeit dollars, some of which had been found in the UNDP safe, the Administrator said the Programme had no proof that the Government of the Democratic People’s Republic of Korea was directly behind the production or distribution of the fake money.  The counterfeit cash found in the safe consisted of defaced, unusable bills that were the personal property of a consultant.  Personal property should not be kept in a UNDP safe and it had been wrong not to report the matter to UNDP headquarters.

There was no conflict of interest, Mr. Derviş stressed in reply to a question about the inclusion on the panel of the Chair of UNDP’s External Audit Advisory Committee.  Ms. Wyrsch was not part of the Programme’s management and worked in an unpaid, external advisory function.

Asked whether he would make internal audits available, he said that for now they would be made available to Member States on request and on a confidential basis, adding that they involved donor and programme countries and some Member States had expressed some discomfort about making them publicly available.  UNDP could not decide unilaterally on that issue and its Board would discuss their availability in September.

In answer to another question, he said it had been the Board’s decision not to continue operations in the Democratic People’s Republic of Korea until agreement was reached with the Government on the hiring of local staff.  A recommendation on UNDP’s return would depend on consultations with other agencies and programmes.  Discussions with the Democratic People’s Republic of Korea could take place after the Board’s June meeting in Geneva.

Asked about the “whistleblower”, Mr. Derviş said that person no longer worked for UNDP, adding that the report’s conclusions were “pretty clear”.  Robert Benson, the United Nations Ethics Officer in the Secretariat, would take a look at the report and possibly come up with some recommendations.

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For information media • not an official record