GA/AB/3871

BUDGET COMMITTEE DEBATES PLANS TO INTEGRATE PROCUREMENT TASK FORCE FUNCTIONS INTO OFFICE OF INTERNAL OVERSIGHT SERVICES

23 October 2008
General AssemblyGA/AB/3871
Department of Public Information • News and Media Division • New York

Sixty-third General Assembly

Fifth Committee

11th Meeting (AM)


BUDGET COMMITTEE DEBATES PLANS TO INTEGRATE PROCUREMENT TASK FORCE


FUNCTIONS INTO OFFICE OF INTERNAL OVERSIGHT SERVICES

 


As the Fifth Committee (Administrative and Budgetary) took up the investigative capacity of the United Nations this morning, delegates debated plans to integrate the functions of the Procurement Task Force into the Investigations Division of the Office of Internal Oversight Services (OIOS), following the cessation of its operations at the end of this year.


Singapore’s representative said his delegation had strongly supported the Task Force when it had originally been set up in 2006 as a stopgap measure to investigate the “procurement mess that was the oil-for-food programme”.  However, over the past three years, additional problems caused by “an entity with little legislative mandate and even less accountability” had become evident.  At the same time, not many steps had been taken to strengthen OIOS’ own Investigations Division to handle procurement.


Presenting the results of a recent audit by the Board of Auditors of the Procurement Task Force, Olivier Myard, Chairman of the Board’s Audit Operations Committee, said the Task Force’s skills and competencies should be incorporated permanently in the United Nations investigation system, which should be reviewed as a whole.  The Board had found that the Task Force had worked professionally and in compliance with United Nations rules and regulations, but, despite some cases of fraud and criminal conduct, it had not highlighted widespread corruption at the United Nations.


The representative of the Russian Federation, however, expressed surprise that the Assembly was being asked to take a decision on transferring the cases of the Procurement Task Force to OIOS.  His delegation had serious doubts over the very manner in which the question of the integration of Procurement Task Force functions and “skills” had been presented.  The investigative functions had existed in OIOS from the outset and did not need any integration from outside.


The representative of Antigua and Barbuda, speaking on behalf of the “Group of 77” developing countries and China, cautioned that any transfer of institutional experience should be subject to the existing rules and regulations.  The Group of 77 agreed with the Board of Auditors that investigations conducted by the Procurement Task Force had suffered as a result of the circumstances under which it had been created and then operated.  In particular, he noted that the boundaries between an investigation, an audit and a disciplinary procedure were not always made clear to staff under investigation.  The Procurement Task Force had been created outside the usual budgetary review process -- and pressed by certain Member States -- and the Group of 77 looked forward to a successful resolution to that “anomalous situation”.


While recognizing the importance of investigations which impacted the positive morale and well-being of the staff and Organization, he also expressed concern over the fact that some 60 per cent of all companies related to procurement cases were domiciled in the countries of North America and Europe, which represented less than 20 per cent of the entire United Nations membership.  He also noted the Procurement Task Force’s estimate that the overall value of the contracts in which irregularities had been suspected was around $630 million, although the actual loss was much less, at $25 million.  The figures were remarkable and deserved closer scrutiny.


The United States representative strongly supported the integration of Procurement Task Force function into the Investigations Division of OIOS, which needed to be strengthened to address the caseload that would be transferred from the Task Force.  Despite the temporary nature of its mandate, the Task Force had tackled an impressive 437 cases, completing 222 investigations since its inception.  The work of the Task Force had proven critical in the effort to identify and deal with fraud, waste and mismanagement within the United Nations.


Inga-Britt Ahlenius, Under-Secretary-General for Internal Oversight Services, said that, before the end of the year, the Task Force planned to issue at least 8 more reports.  It was clear, however, that many cases would remain to be addressed, many others would be in the midst of investigation and completed investigations would need to be followed up by OIOS and others.  She assured the Committee that she would do everything within her authority to ensure that the unfinished work of the Task Force continued to be addressed, the competencies and experience gained was retained in OIOS, recommendations were implemented and viable changes continued to be pursued.


The Committee also considered reports providing information on all United Nations entities involved in administrative inquiries and investigations; the status of work to establish a training capacity for the Investigations Division to enable programme managers to handle cases of possible misconduct with lower risk to the Organization; and the Organization’s cooperation with national law enforcement authorities in relation to United Nations staff, officials and experts on mission.


A short statement was also made by the representative of France, on behalf of the European Union.  Other reports before the Committee were introduced by Nancy Hurtz-Soyka, Director of the Office of the Under-Secretary-General for Management; Peter Taksoe-Jensen, Assistant Secretary-General for Legal Affairs; and Susan McLurg, Chair of the Advisory Committee on Administrative and Budgetary Questions (ACABQ).


The Fifth Committee will continue its work at a date to be announced.


Background


The Fifth Committee (Administrative and Budgetary) met this morning to consider the investigative functions of the United Nations, including the activities of the Procurement Task Force.


The first document before the Committee was the Secretary-General’s report on information requested in paragraph 17 of General Assembly resolution 62/247 (document A/63/369), which provides information on all entities other than the Office of Internal Oversight Services (OIOS) carrying out administrative inquiries and investigations; and the status of work to establish a training capacity for the Investigations Division to enable programme managers to handle cases of possible misconduct with lower risk to the Organization (so-called category II cases), such as personnel matters, traffic-related inquiries, simple thefts, contract disputes, infractions of regulations and basic mismanagement issues.


OIOS generally investigates serious misconduct (category I cases), but may refer some of those cases to other entities for action.  Category II cases are normally investigated by a head of office, the Department of Safety and Security or the Office of Human Resources Management.  Administrative instruction ST/AI/371 provides that heads of office or responsible officers shall undertake a preliminary investigation where there is reason to believe that a staff member has engaged in unsatisfactory conduct for which a disciplinary measure may be imposed.  The report also includes information on the activities of the Ethics Office, Panel on Discrimination and Other Grievances, and the Boards of Inquiry at peacekeeping missions.


In his report on United Nations cooperation with national law enforcement authorities in relation to its staff, officials and experts on mission (document A/63/331), the Secretary-General concludes that the Organization has not experienced any problems in sharing information or material for criminal investigations.  However, there has been a significant increase in the number of such requests from national law enforcement authorities.  The United Nations is currently cooperating with law enforcement authorities in 65 jurisdictions of 28 States, and that has generated a significant increase in the workload of relevant entities of the Organization, in particular the Office of Legal Affairs.


The document also explores the legal basis for cooperating with law enforcement authorities of Member States and outlines the rights, privileges and immunities of the United Nations, its officials and experts on mission, as determined by the United Nations Charter, the General Convention and certain types of agreements, such as the headquarters agreements with host States.  According to the report, the Secretary-General has the right and duty to waive United Nations officials’ immunity, where, in his opinion, it would impede the course of justice and could be waived without prejudice to the interests of the United Nations.  As reaffirmed by the International Court of Justice in its advisory opinion on immunity from legal process of a special rapporteur of the Commission on Human Rights, such a decision is for the Secretary-General alone to make.


The Advisory Committee on Administrative and Budgetary Questions (ACABQ), in a related report (document A/63/492), recommends that the General Assembly take note of the information provided by the Secretary-General in response to the request in resolution 62/247.


In connection with the report on information-sharing practices, the Advisory Committee was informed that the Secretary-General strives to establish as much consistency as possible in handling criminal cases within the system and seeks to uphold respect for the law by United Nations personnel and their accountability for breaches, as well as the protection of the privileges and immunities essential for the Organization’s independence.  The Advisory Committee requested information containing data on the waiver of immunities of United Nations officials and experts on mission from 1 January 2004 to the present.  This information should be provided directly to the Assembly.


According to the report, information-sharing practices between the United Nations and national law enforcement authorities, as well as referrals of possible criminal cases related to the Organization’s staff, officials and experts on mission, are extremely important issues that go to the heart of the independence of the international civil service and the ability of other officials to carry out their duties effectively, including accountability for personal conduct.  ACABQ notes that the issues dealt with in the Secretary-General’s report have administrative and far-reaching legal implications, affecting United Nations officials all over the world.  The procedures for such cooperation with host countries, in particular in situations involving requests for waivers of immunity, must be consistent and transparent.


The Advisory Committee takes note of the Secretary-General’s report and suggests that the Assembly may wish to consider whether the document should also be considered by the Sixth Committee (Legal), together with the report on criminal accountability of United Nations officials and experts on mission.


The Committee also had before it several reports on the Procurement Task Force, which was set up in January 2006, for an initial period of six months, in response to perceived problems in procurement identified by the Independent Inquiry Committee into the “oil-for-food” programme and the arrest of Alexander Yakovlev, a former procurement officer.  The establishment of the Task Force also supported the Organization’s ambition to fight against corruption.  The mandate of the Task Force was later extended to the end of 2007.


Last December, the Assembly noted the ad hoc nature of the Task Force and requested the Board of Auditors to conduct an audit of its activities, including its compliance with established transparency and accountability measures of OIOS.  Currently, arrangements are in place for the Task Force to continue its operations until 31 December 2008, but it will cease to exist in its current form in accordance with its provisional status.


In its “strengthening investigation” report (document A/62/582), the Administration has outlined plans to preserve the competencies and experience of the Task Force by incorporating them into the Investigations Division of OIOS.  In that respect, the Board of Auditors, in its report on the activities of the Procurement Task Force for the period from 1 January 2006 to 30 June 2007 (document A/63/167), expresses the view that reinforcement and restructuring of the Investigations Division should be accompanied by a review of the investigative function of the United Nations as a whole.  The efforts of the Task Force did not expose widespread corruption at the United Nations, but the Board considers that it may have served as a deterrent.  It also helped to eliminate undesirable suppliers from the Organization’s list of vendors.


The Board states that overall value of the contracts in which irregularities were suspected was estimated to be around $630 million, but the actual value of the losses incurred was difficult to calculate.  The Task Force was only able to identify clear losses of $25 million, of which $20 million related to the same person.  At the same time, the Task Force uncovered many examples of mismanagement, some of which did not constitute violations of existing regulations.  According to the Board, this result, together with the fact that the Task Force was put in charge of a large number of cases, reinforces the need to clearly and strictly define the conditions under which an investigation should be launched.


According to the report, the Task Force’s level of funding remains moderate and does not warrant particular comment.  It has not spent its entire allocated budget, which has been closely managed by the OIOS Executive Office.  On the whole, while recognizing that the United Nations needs a highly efficient investigation mechanism, the Board is of the view that an investigation procedure must not be used routinely to improve accountability and efficiency of management.


The Board’s recommendations relate to the need to incorporate into the permanent investigations system of the United Nations the skills and competencies of the Procurement Task Force, as well as the lessons learned from its operations, while reviewing the investigative function in the United Nations as a whole.  At the same time, the investigation procedure should be used very cautiously, only when there are well-founded suspicions that rules have been broken, and only after all other reasonable actions have been duly envisaged.  The Board also draws attention to the need to standardize and consolidate the rules and procedures applicable to all investigations, which should be systematically given to the staff interviewed.  It is also necessary to ensure proper handing over of pending investigations when the Procurement Task Force ceases to operate.


According to the Secretary-General’s report on the implementation of the Board’s recommendations (document A/63/167/Add.1), the Administration has concurred with the recommendations of the Board.  In implementing those recommendations, high priority is being given to ensure that the institutional knowledge of the Procurement Task Force is transferred to the Investigation Division so that the remaining caseload is professionally investigated, and lessons learned incorporated into its operations.  A review will be conducted of investigations across the system with the goal of establishing a comprehensive approach throughout the Organization.


According to the OIOS report on the Procurement Task Force (document A/63/329), the Task Force has been responsible for examining all procurement cases in OIOS since 2006.  This effort has been handled by a team of 10 to 18 investigators, as well as a Chairman and two support staff.  Since its inception, the Task Force has been assigned an extraordinary caseload of 437 cases, completing 222 investigations and issuing 29 significant reports with an average length in excess of 80 pages, and more than 100 additional reports in summary form.  These results were achieved despite the temporary, short-term nature of its mandate, which also caused a fairly rapid staff turnover.  The disruption was most severe at the end of 2007, following the extremely late decision on the funding for the Task Force for 2008, which resulted in the departure of investigators and interference with ongoing operations.


During the reporting period of 1 July 2007 to 31 July 2008, the Task Force has reported on five significant fraud or corruption schemes in cases with an aggregate contract value in excess of $20 million.  As a result of its work, a total of 22 vendors have been sanctioned by the Administration in the reporting period.  Since its formation, the Task Force has identified more than 20 significant fraud and corruption schemes in cases with an aggregate contract value in excess of $630 million.


The Task Force has continued to focus on allegations of corruption and fraud in procurement in peacekeeping missions and overseas offices, as well as cases at Headquarters, the report states.  Among other things, investigations have identified improprieties, corruption and malfeasance in the Assembly-mandated review of the pay and benefits system; a steered contract for air charter services in the United Nations Organization Mission in the Democratic Republic of the Congo (MONUC); and a scheme to steer multiple contracts to preferred vendors in offices in the United Nations Office for Project Services (UNOPS), Nairobi.  After the completion of investigations, a number of cases have been recommended for referral to national authorities for criminal prosecution, or for consideration of subsequent legal action.  The Task Force has also recommended that the Organization seek civil recovery of monetary damages in a number of cases.


The Task Force’s focus on serious issues has meant concentration on cases involving allegations of vendor misconduct, including corruption in United Nations contracts, bid rigging, favouritism and collusion.  Through its investigations, the Task Force has also assisted the Vendor Review Committee, the Procurement Division, the Headquarters Committee on Contracts, and the Controller on numerous vendor issues.  In 2008, on the basis of the Task Force’s experience, along with its analysis of comparative international investigative bodies, OIOS formally made recommendations and proposed amendments to the system of vendor sanction, rehabilitation and reinstatement.


With the Task Force funded only until 31 December 2008, it is not possible to complete the current caseload and ongoing investigations by that date, the report states.  More than 150 cases will remain.  Further, the Task Force will not be able to reach and examine procurement cases and allegations in overseas offices and peacekeeping missions within this time frame.  It is also expected that additional cases will continue to be referred to the Task Force.  The intention of OIOS is to transfer the remaining caseload of the Task Force to its Investigations Division at the beginning of 2009 and to ensure the required skill and capacity there.


According to the report, success of any anti-corruption initiative is equally dependent on the committed participation of all relevant offices, and a functioning and effective system of administration of internal justice.  Effective partnerships must continue to be developed throughout the United Nations, with the committed participation of the Department of Management (including the Procurement Division and Vendor Review Committee), the Office of Human Resources Management and the Office of Legal Affairs, to pursue recoveries and sanctions and address misconduct.  Department heads and programme managers must take steps to seriously address issues of severe mismanagement.  This combined effort must also operate as a part of a well-functioning system of internal justice.  The role of the Task Force and OIOS is just one component in this system.


The Secretary-General’s comments and clarifications in connection with the OIOS report are contained in document A/63/329/Add.1.  The Secretary-General stresses that, as many of the cases summarized in the OIOS report remain under consideration, the findings of the Procurement Task Force should be regarded as those of the Task Force, and not a final determination by the Organization.


The Independent Audit Advisory Committee, in its first report (document A/63/328), states that all divisions of OIOS, including the Investigations Division, should prepare annual workplans, which should be used as the basis for requesting resources.  Those workplans should be completed prior to preparation of the budget, which was not the case for 2008-2009.  Nevertheless, the Audit Committee recognizes the extensive work undertaken by OIOS to develop its workplan using a risk-based approach and suggests that OIOS consider highlighting risks in a high-risk list, to give those programmes greater visibility.


ACABQ, in a related report (document A/63/490), welcomes the Board of Auditors’ report and recommends that the Assembly endorse its recommendations, taking into account the Advisory Committee’s own comments.


In connection with the types of violations uncovered in the reports of the Procurement Task Force and the nature of the resulting proceedings, the Advisory Committee stresses that the Secretary-General may wish to pay particular attention to addressing the underlying reasons for these occurrences, among other things by improving awareness of staff rules and regulations, as well as expeditiously improving and updating the procurement and investigation manuals.


While the Board of Auditors did not find any violation of the rules of procedure as set out in the investigation manual, its report includes criticisms expressed by staff questioned by the Procurement Task Force on the rules applicable to the investigations.  These relate to the absence of formalization, dissemination and transparency in the rules followed by the Task Force; the conditions for the application of the existing rules; the desire for additional rights; and the clarification of the audit and investigative role of the Task Force and applicable rules of procedures.  Commenting on these issues, ACABQ states that the Secretary-General should draw on the issues raised by the Board and the experience gained by the Procurement Task Force, in order to ensure that the Organization has the internal capacity to deal with such matters in the future, so as to avoid the need to resort to ad hoc measures.


The Advisory Committee further stresses the need to complete work on investigation manuals and training as soon as possible.  A Secretary-General’s Bulletin would be the appropriate means for conveying to staff the standardized and consolidated rules of procedure applicable to all investigations in the United Nations.  As for the efforts to guarantee security and confidentiality of documents used in investigations, the Advisory Committee concurs that the Administration must become more vigilant to prevent the breaching of the confidentiality of its work.


In connection with the vendor-related recommendations of OIOS, the Advisory Committee notes that many of those were within the Secretary-General’s responsibility and welcomes the measures presented in his report.  In particular, the Secretary-General indicated his support for proposals for strengthening the vendor sanctions regime and stated his belief in the advisability of undertaking an in-depth review of the procedures other institutions have in place, and to obtain lessons learned information from them.  The Advisory Committee recommends that the Secretary-General proceed with such a review and make recommendations on the legislative framework for establishing such a regime.


Introduction of Documents


OLIVIER MYARD, Director of External Audit of France and Chairman of the Audit Operations Committee of the Board of Auditors, introduced the Board’s report on the Procurement Task Force.  He said that one of the key findings of the report was that the Procurement Task Force had worked professionally and in compliance with United Nations rules and regulations, notably those of the Investigation Division of OIOS.  Despite some cases of fraud and criminal conduct, the Task Force had not highlighted widespread corruption at the United Nations.  The Board had also found that the skills and competencies of Task Force should be incorporated permanently in the United Nations investigation system, which should be reviewed as a whole.


He added that the Administration should use the investigation procedure very cautiously, only when there were well-founded suspicions that rules had been broken and only after all other reasonable actions had been duly envisaged.  The Board had also recommended that the Administration should standardize and consolidate the rules and procedures applicable to all investigations under the instruction of the Secretary-General.


Introducing the OIOS report on the matter, the Under-Secretary-General for Internal Oversight Services, INGA-BRITT AHLENIUS, said that, importantly, the Task Force had sought to pursue its work with integrity and fairness, and had pursued exculpatory evidence with the same vigour as inculpatory evidence.  The efforts of the Task Force had been to assist the United Nations to better its practices and promote a fair and thorough investigative approach to the high-risk area of procurement.  While the Board of Auditors had concluded that the Procurement Task Force effort had not exposed widespread corruption at the United Nations, she would like to clarify that a number of extensive corruption schemes had been exposed at Headquarters, as well as in peacekeeping missions.  The Task Force’s work over the past 33 months had highlighted significant findings of corruption, fraud, waste, abuse, negligence and mismanagement in a number of high-value contracts.  She also emphasized that failing control systems left the Organization open to waste, abuse, fraud and corruption.  Another point that was highlighted in the report before the Committee was that, historically, the United Nations had been slow and even resistant to hold culprits accountable -- and not proactive in seeking to recover damages caused by corrupt conduct.


It was extremely important that the Organization sent a strong message that it was serious about addressing the risks posed by fraud, corruption and financial malfeasance, not only from within the United Nations itself, but also from individuals and companies outside the Organization, she continued.  In cases in which it was clear that a vendor or individual had defrauded the Organization or caused it to suffer damages, cases should be pursued not only within the framework of the internal administration of justice, but externally, as well, through civil and criminal courts and the arbitral process.  A message of deterrence needed to be made, in appropriate cases, that the Organization would not allow itself to be exploited and victimized, regardless of the expenditure of pursuing such cases.  The tangible and intangible benefits, in the long run, would outweigh any short-term expenditure needed to pursue appropriate action.


She added that, before the end of the year, the Task Force planned to issue at least eight more reports.  It was clear, however, that many cases would remain to be addressed, many others would be in the midst of investigation and completed investigations would need to be followed up by OIOS and others.  She assured the Committee that she would do everything within her authority to ensure that the unfinished work of the Task Force continued to be addressed, the competencies and experience gained was retained in OIOS, recommendations were implemented and viable changes continued to be pursued.


NANCY HURTZ-SOYKA, Director of the Office of the Under-Secretary-General for Management, introduced the Secretary-General’s report on information requested in paragraph 17 of resolution 62/247 and implementation of the Board of Auditors’ recommendations, as well as the Secretary-General’s comments on the activities of the Procurement Task Force.


The Secretary-General concurred with all five recommendations of the Board of Auditors, she said.  In the relevant report, information was provided on the time frames, identification of office holders responsible for implementation and the priorities for implementation.  With regard to the recommendation that the Administration incorporate into the permanent investigations system the skills and competencies of the Procurement Task Force, she said that OIOS had the primary responsibility for ensuring that the Task Force’s institutional knowledge be transferred to the Investigations Division.  The implementation of the recommendation was targeted for completion in the first quarter of 2009.


She said that the Secretary-General, in his comments on the OIOS report on the Task Force, stressed that, as many of the Task Force’s reports remained under review, the findings should be regarded as those of the Task Force, and not a final determination by the Organization.  The Secretary-General underscored that the amounts referred to in the OIOS report did not reflect financial loss, but rather total contract value.  Additional information was provided on a Board of Auditors recommendation concerning the preparation of an instruction of the Secretary-General to standardize and consolidate the rules and procedures applicable to all investigations.  Clarification was also provided on the determination of whether a particular action constituted misconduct.  It was emphasized that the decision on what action should be taken rested with the Secretary-General and that the provision of legal advice rested with the Legal Counsel.


Concerning vendors, she said a number of measures had been undertaken to facilitate cooperation of vendors with investigations, including the applications of new registration criteria for potential vendors, the adoption of new Conditions of Contract, as revised in January this year, and application of the United Nations Supplier Code of Conduct.  Support was given to OIOS recommendations to strengthen the Organization’s vendor sanctions regime.  In addition, the report provided clarification on the actions taken by the United Nations in response to the recommendations of the Task Force, particularly with regard to referral to national authorities and recovery actions.


All reports and recommendations of the Task Force were actively considered and, where accepted by the Secretary-General, appropriate action was taken, she continued.  In the first quarter of 2008, the Management Committee had conducted a review of the implementation of Task Force recommendations and would conduct another review by the end of the year.  While action on investigation reports was taken as expeditiously as possible, such matters required careful review by all concerned units of the United Nations.


PETER TAKSOE-JENSEN, Assistant Secretary-General for Legal Affairs, introduced the Secretary-General’s report on practices relating to sharing information with law enforcement authorities of Member States.  Highlighting the key points of the document, he said the practices relating to sharing information, as described in the report, were applicable beyond the narrow category of officials and experts on mission.  It also extended to other categories of personnel who might be assigned functions under the authority of the United Nations.  Thus, while military contingents of peacekeeping operations were under the exclusive criminal jurisdiction of troop-contributing countries, information concerning criminal acts attributed to such personnel would be shared by the United Nations with relevant national law enforcement authorities in the same manner as in cases involving officials and experts on mission.  The approach of the Secretary-General was to strike a balance between the imperatives of upholding respect for the law and facilitating proper administration of justice, and the protection of privileges and immunities essential for the Organization’s independence in the fulfilment of its purposes.  In every case where the issue of immunity arose, the interests of the United Nations, as determined by the Secretary-General, were a paramount consideration in making a decision whether to waive immunity.


The Chair of ACABQ, SUSAN McLURG, introduced three ACABQ reports before the Committee.  She said, among other things, that the Advisory Committee had noted that the Secretary-General, in his response to the Board of Auditors, indicated that arrangements were being made for the transfer of knowledge, as well as proper transfer of the remaining caseload of the Procurement Task Force, into the OIOS Investigations Division by the end this year.  In incorporating the competencies of the Task Force, account should be taken of the comments and recommendations made in previous reports of the Advisory Committee (documents A/62/7/Add.35 and A/62/855), which had been endorsed in resolutions 62/247 and 62/270.


Statements


CONRAD HUNTE (Antigua and Barbuda), speaking on behalf of the “Group of 77” developing countries and China, reiterated the Group’s recognition of the importance of investigations, which impacted the positive morale and well-being of the staff and Organization.  He noted that the Procurement Task Force had reported receiving 64 additional procurement-related cases in addition to the nearly 400 cases since its inception.  Approximately 60 per cent of all companies related to those cases were domiciled in North America and Europe.  Considering that those countries represented less than 20 per cent of the entire United Nations membership, that statistic was of concern to the Group of 77.  He requested further information on the matter.


Further, he said that, while the Procurement Task Force estimated that the overall value of the contracts in which irregularities had been suspected was around $630 million, it had stated that the actual loss was significantly less, at $25 million.  The figures were remarkable and deserved closer scrutiny.  He requested further information on the criteria applied to contracts before they were determined to be tainted.  Regarding vendors, he agreed that the Procurement Manual should be strengthened to prevent blacklisted companies from trying to re-enter the vendor system under other guises, and noted the recommendation to strengthen the sanctions regime against malfeasant vendors.  That issue required closer scrutiny, as it related to the Secretary-General’s proposal on a comprehensive review on investigations.


Commenting on the report of the Board of Auditors, he said that the investigations conducted by the Procurement Task Force suffered as a result of the circumstances under which it had been created and then operated.  In particular, he noted that the boundaries between an investigation, an audit and a disciplinary procedure were not always made clear to staff under investigation.  It was difficult to imagine another outcome, as the Task Force had been created outside the usual budgetary review process, and pressed by certain Member States.  The Group of 77 looked forward to a successful resolution to that anomalous situation.


Agreeing with recommendations of the Board of Auditors and ACABQ, he said that the rules and procedures applicable to all investigations should be standardized and consolidated under an instruction of the Secretary-General, and systematically provided to staff being interviewed.  He further agreed that investigation procedures should be used only when there were well-founded suspicions that rules had been broken and only after all other reasonable actions had been envisaged.  That was critical, as the vast majority of staff were well intentioned.


Regarding the transfer of caseloads, skills and competencies of the Task Force into the Investigations Division, he cautioned that any transfer of institutional experience should be subject to the existing United Nations rules and regulations, including those governing human resources management.


GREGORY CAZALET ( France), speaking on behalf of the European Union, simply wanted to express the Union’s readiness to work constructively with other delegations when negotiations commence.


HOE YEEN TECK ( Singapore) supported the statement made on behalf of the Group of 77.  He then said that, in its summary, the Board of Auditors acknowledged that it had not been able to “hear individual cases of possible violations of due process”, nor should its conclusions “prejudge the assessments of courts called upon to hear such cases”.  He noted that deciding whether due process had been properly afforded to staff under investigation rested with the tribunals of the United Nations.  The United Nations tribunals had faulted OIOS and the Procurement Task Force in numerous judgements.


He noted the Board’s identification of several problematic issues in the conduct of investigations by the Procurement Task Force, including a lack of formal and transparent rules for it to follow; conditions for applying existing rules; and even clarity as to what rules were applicable in the first place.  All of those were issues that his delegation had raised previously.  The audit also noted that the Administration had not been vigilant enough in protecting the confidentiality of staff under investigation, a basic right under any review mechanism.


He said his delegation had strongly supported the Procurement Task Force when it had originally been set up as a stopgap measure to investigate the “procurement mess that was the oil-for-food programme”, given the inadequacies of OIOS own Investigations Division.  Over the past three years, however, the additional problems caused by “an entity with little legislative mandate and even less accountability” had become evident.  At the same time, not many steps had been taken to strengthen the OIOS Investigations Division to handle procurement.  He asked: “Are we expected to continue relying on stopgap measures?”


Noting that the audit was a step in the right direction, he made three suggestions relating to what the Secretariat could learn from past mistakes.  First, the investigation process needed to be thoroughly vetted.  Fair and transparent rules for investigations were essential.  OIOS should finalize its long-promised investigations manual as soon as possible.  That manual should be comprehensive and clearly address all relevant issues, including complaints made by the United Nations own tribunals about due process rights.  Programme heads and other United Nations staff should also finalize their investigation procedures, drawing from the OIOS manual where appropriate, to ensure a minimum standard.  Then, the Secretariat should ensure that all investigators received sufficient training.


His second recommendation was that those rules and regulations should be disseminated in a clear and simple manner, so that all who came under investigation, from regular staff to contractors, would understand what applied to their specific cases.  Perhaps information regarding all rules and regulations relating to investigations could be posted on the Intranet, he suggested.


The final suggestion he made was that the investigation process be made more efficient and effective.  The Secretariat should be able to handle many routine investigations, as well as the high-profile ones.  He noted that there was no systematic assessment of how investigations should be conducted.  OIOS had proposed a reorganization of its Investigations Division late in the game, while the Secretary-General had indicated his intention to pursue a comprehensive review of United Nations investigations, apparently without coordinating with OIOS.  He hoped to see the report called for in General Assembly resolution 62/247, to understand how to proceed further.


CHERITH NORMAN (United States) said she strongly supported the work of the Procurement Task Force and was pleased with the efforts it had made since 2006 to preserve the integrity of the United Nations and its operations.  Despite the temporary nature of its mandate, the Task Force had tackled an impressive 437 cases, completing 222 investigations and issuing 29 significant reports and over 100 shorter reports.  Since its formation, the Task Force had identified 20 significant fraud and corruption schemes in contracts worth over $630 million.  Since the work of Procurement Task Force had proven critical in the effort to identify and deal with fraud, waste and mismanagement within the Organization, the United States strongly supported the integration of its functions into the Investigations Division of OIOS.  Her delegation continued to urge that the capacity of the Investigations Division be strengthened, making sure that properly skilled personnel were employed in the Financial Crimes Unit of the Investigations Division to address the caseload that would be transferred from the Task Force.  Concerned that the current capacity and staffing in OIOS would not be able to adequately address the additional burden, she would like to receive assurances that the matter would be addressed on a priority basis.


Agreeing with the Advisory Committee’s conclusion that almost all the corrective actions were within the authority of the Secretary-General, she requested that the Secretariat take the needed actions without delay.  She was pleased that development of a comprehensive investigation manual was well advanced, but wanted to receive an update on whether the draft had been completed.  She would also like to learn of recent progress in developing the investigation learning programme modules for programme managers.  Further, she wanted to know about the status of the implementation of the recommendations for strengthening United Nations procedures and against corrupt and irregular vendors and contractors.  For example, paragraph 38 of the OIOS report made a strong case that the United Nations should implement a vendor sanctions system that included public disclosure of its decisions.


While noting that the Board of Auditors had concluded that Procurement Task Force had not exposed widespread corruption at the United Nations, she also agreed that the existence of the Task Force might have served as a deterrent and had been helpful in eliminating undesirable suppliers from the United Nations.  Related to that, she would like to know what was being done to eliminate those undesirable suppliers from the United Nations system.  Overall, the United States agreed with the Task Force’s recommendation that companies and individuals needed to be held accountable for financial losses and damages resulting from misconduct.  She thanked the Task Force for its work and urged the Secretary-General to act without delay in implementing its recommendations.  She also reiterated the importance of retaining the investigation capability within OIOS.  For the sake of the betterment of the Organization, it was crucial to keep the investigative function of OIOS intact and effective.


ANDREY KOVALENKO ( Russian Federation) said his country attached great importance to strengthening internal oversight of the Secretariat.  The United Nations had been entrusted with colossal responsibilities, which required significant material and human resources.  Huge amounts were spent on peacekeeping operations, and Member States were naturally entitled to demand accountability for the use of those resources.  Unfortunately, the cases of mistakes, irregularities and misappropriations still took place.  He was convinced that OIOS had not exhausted its potential in that regard and could make a further contribution to improving the use of United Nations resources.


From the start, the functions of OIOS, in addition to auditing, had also included investigations, inspection and evaluation of programme activities, and he believed that strengthening the Office’s investigative functions for procurement, while very important, must not be done to the detriment of other functions of the Office.  During discussions on that matter, the Russian Federation intended to pay attention to the parameters of investigative procedures, their consequences and proposals on structural changes to integrate the functions of the Procurement Task Force into OIOS.


At the present stage, he wanted to say that his delegation had serious doubts –- not to say it was perplexed -- over the very manner in which the question of the integration of Procurement Task Force functions and “skills” had been presented.  The investigative functions had existed in OIOS from the outset and did not need any integration from outside.  As for skills, it was a strange way of putting it; to say the least, it did not correspond to United Nations rules and regulations or procedures on human resources management.  He was surprised how the question had been put, in particular that the need for the adoption of a General Assembly decision on transferring the cases of the Procurement Task Force to OIOS had been raised.  He wanted to receive clarifications in that regard.


Turning to the report on sharing information with law enforcement entities of Member States, he said that the Secretary-General’s report confirmed his opinion that certain problems existed in that area which could not be reduced to technicalities.  The issue affected the legitimate interests and rights of United Nations officials and experts on mission.  The mechanism of interaction in that regard needed to be improved, from the point of view of greater protection of the rights of the individuals he had referred to.  For example, greater attention should be paid to the transparency of decisions on immunity.  It was also necessary to develop the practice of immediately informing the countries of nationality of the individuals concerned, in cases where they faced criminal prosecution.  In a number of cases, that could be the sole means of guaranteeing their individual rights.


Noting that she would address most questions that had been raised during informals, Ms. AHLENIUS responded to several allegations made by the representative of Singapore in his statement.  She said she had been unable to find references, in the report of the Board of Auditors, relating to finding fault with OIOS and the Procurement Task Force on numerous judgements in matters of due process.


Noting that the Procurement Task Force’s terms of reference had been extended by the General Assembly in December of last year and that it was still active, she said that 2008 had provided her with the opportunity to prepare for its integration into the Investigations Division of OIOS.  Noting that the number of cases from the field was declining, she said further that the Investigations Division would be restructured in New York, Vienna and Nairobi to absorb the leftover caseload from the Task Force.  Finally, as for the assertion that there was a lack of accountability for the Procurement Task Force, she said she herself was accountable for both its performance and work.  She further looked forward to continuing the discussion in informals.


Mr. HOE ( Singapore) felt compelled to respond to some comments the Under-Secretary-General had made regarding his statement.  He said he would be happy to go through the United Nations tribunal reports with her, paragraph by paragraph, to point out the references she had been unable to locate that supported the conclusions he had come to in his statement.  He further noted that he was happy to hear that accountability rested with the Under-Secretary-General.


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For information media • not an official record
For information media. Not an official record.