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Photo: Gerald Bourke/WFP |
In January 2007, amidst allegations by the U.S. Mission to the UN (USUN) of irregularities in UNDP’s program in the Democratic People’s Republic of Korea (North Korea), UN Secretary-General Ban Ki-moon called for an audit by the UN’s external Board of Auditors of UN agencies operating in the country.
At the same time UNDP’s Executive Board mandated several changes to UNDP’s programmes and operations in North Korea. At the beginning of March 2007, when it became clear that the North Korean authorities were not going to implement the mandated changes, UNDP suspended its operations and withdrew its staff from the country.
The 31 May 2007 External Audit report found that UNDP and other UN agencies did not operate in North Korea according to the standards and practices they used elsewhere worldwide, and said that in some cases they had violated their own rules (e.g. by accepting local personnel sent by the North Korean government, rather than recruiting them competitively). UNDP’s Management Response pointed out that UNDP’s operational practices were imposed on it by the North Korean government, dated back 27 years, were known to its Executive Board, and were similar to those followed other by UN agencies, international NGOs and foreign missions.
In June 2007, USUN came forward with a new set of allegations, including detailed charges that UNDP had underreported its funding levels, that large amounts of UNDP funding had been diverted by the North Korean authorities, that UNDP had supplied North Korea with potential “dual use” technology, and that UNDP had engaged in illicit transactions with entities tied to the North Korean armaments program. UNDP contested these charges, pointing out that the sums being alleged were larger than its total resources in the country, that there was not a single match between alleged payments and its own financial records, and that the documents being used by USUN to substantiate its charges contained incorrect UNDP financial codes.
In light of the ongoing uncertainty, after consultations with its Executive Board, UNDP decided to commission an External Independent Investigative Review Panel led by former Hungarian Prime Minister Miklos Németh, to get to the bottom of all allegations. The Panel's Terms of Reference included establishing the facts around charges by a former UNDP employee that he had suffered retaliation for “blowing the whistle” on irregularities in UNDP’s North Korea operations. Relevant parties, including USUN, have been supportive of the Panel’s work.
Also in 2007, a Subcommittee of the U.S. Senate decided to launch an investigation into UNDP’s North Korea operations. Published on 23 January 2008, the Subcommittee’s report charged UNDP with exercising insufficient financial and administrative controls in North Korea, and with impeding reasonable oversight by failing to share internal audits. The Senate report did not substantiate USUN’s allegations about funding diversion, provision of dual use technology, and illicit transactions with entities tied to North Korea’s armaments program.
UNDP received the report of the External Independent Investigative Review Panel (“Nemeth Report”) on 1 June 2008. The Nemeth Report will be discussed at a meeting of UNDP’s Executive Board in Geneva near the end of June. Decisions on any future UNDP operations in North Korea would be taken by the Member States on UNDP’s Executive Board.
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