UN Green Fund Under Fire

    Stockholm (NordSIP) – The UN Development Programme (UN DP) is in the prongs of a scandal involving allegations of corruption at the Global Environment Facility raised by the UN DP’s own audit office, according to a draft of the audit seen by the Financial Times.

    The document describes billions of dollars worth of “financial misstatements”, and localised signs of “fraudulent activities” at two country offices and “suspicions of collusion among the various project managers” at another. “Issues identified by the audit could seriously compromise the achievement of the objectives of the audited entity,” the Financial Times quoted the audit as stating.

    Not the First Scandal

    The GEF was established in October 1992 as a US$1 billion pilot programme aimed at environmental protection. It is as a partnership of 18 organisations, including UN agencies, multilateral development banks, national entities and NGOs working with 183 countries. Its investment have since grown substantially.

    The GEF Small Grants Programme provides grants of up to US$50,000 directly to local communities including indigenous people, community-based organizations and other non-governmental groups for projects in Biodiversity, Climate Change Mitigation and Adaptation, Land Degradation and Sustainable Forest Management, International Waters and Chemicals.

    This is not the first time the GEF has come under fire. A 2019 investigation by Foreign Policy suggested similar problems have been known within the UN since 2011.  “A 2017 confidential audit appendix found ‘strong indicators of deliberate misappropriation’ of millions of dollars in funds from the project between 2010 and 2014,” the article says. The report cites efforts by John O’Brien, then UNDP’s regional technical advisor in Istanbul, to flag it as a “problem project”.

    Structural Problems

    In retrospect, if confirmed, the allegations raised by the FT report are not surprising. An independent analysis of the GEF’s anti-corruption processes by Elges, Norwsworthy, van Asselt, Atteridge, Benzie Persson, and Remling for the Stockholm Environment Institute (SEI)  highlighted pertinent issues back in 2014.

    “In terms of accountability, clear and comprehensive processes are in place to ensure the investigation and sanctioning of the secretariat and trustee. However, further rules and procedures regarding behaviour of council members and the council as a body are needed. Sanctions for GEF partner agencies are also not sufficiently clear,” the researchers say.

    “Project-level accountability is delegated to partner agencies. The effectiveness of this is difficult to assess given the scant availability of information. Downstream accountability needs to be much better demonstrated in clear and consistent ways.”

    A similar analysis by Elges for Transparency International in 2014 repeated similar recommendations.

    Image by Rudy and Peter Skitterians from Pixabay

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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