UNITED NATIONS, Feb. 22, 2006 (IPS/GIN) - The 132-member Group of 77, which represents more than two-thirds of the membership of the United Nations, rebuffed a U.S. claim that it has a right to virtually dictate the agenda on U.N. peacekeeping because it pays 27 percent of the budget.
Singling out the three major contributors to the budget, Ambassador Dumisani Kumalo of South Africa told reporters Wednesday that "just because United States, Japan and Germany pay more than 50 percent of the budget does not mean they have 50 percent of the voice at the United Nations.
"This is not a private corporation or a Fortune 500 company," he said. "They don't own class 'A' stock and the rest of us own only common stock. We are all assessed according to our ability to pay," said Kumalo, speaking in his capacity as chairman of the Group of 77.
Kumalo challenged the argument that the United States and Japan should have a larger voice because they pay more money.
Currently, the assessed contribution for the United States is 27 percent of the peacekeeping budget, for Japan 20 percent and for Germany 8.7 percent.
On Wednesday, the 15-member Security Council, presided over by U.S. Ambassador John Bolton, held a rare meeting on a U.N. audit report on peacekeeping operations.
The audit highlighted several cases of fraud, corruption and mismanagement in its overseas missions. The Secretariat has temporarily suspended -- with full pay -- eight staffers who are currently under investigation.
Despite protests by the Group of 77 that procurement and management were not within the purview of the Security Council, Bolton went ahead with a meeting of the council arguing that U.S. taxpayers had the right to know how its money was being spent or misspent by the world body.
Currently, the United States is also the largest single contributor to the U.N.'s regular budget accounting for 22 percent of the budget, followed by Japan (19.6 percent) and Germany (9.8 percent).
Bolton said the problem of procurement fraud and waste directly affected U.S. tax dollars, as the United States was the organization's largest contributor. "That meant that the United States paid one-fourth of every case of waste, fraud and abuse," he said.
Kumalo told the Security Council that the fundamental principle underpinning this collective effort is that the United Nations is an inter-governmental body where the voice of each and every member state must be heard and respected, regardless of the contributions made to the budget of the organization.
"The fact that there may be a difference in the level of monetary contribution to the organization does not imply any difference in the decision-making role of member states in the United Nations," he argued.
Ambassador Kenzo Oshima of Japan told delegates "that it goes without saying that in our countries good governance must ensure that taxpayers' money is spent not only wisely but also accountably, adhering to rules and regulations.
"The same should hold true for inter-governmental bodies, including the United Nations," he said.
In an implicit threat to reduce Japan's funding for peacekeeping, Oshima also said: "I feel compelled to say that, unless immediate and convincing measures are taken to redress this problem, my government, which currently contributes about 20 percent of the peacekeeping budget, will find it very difficult to maintain domestic support for underwriting peacekeeping operations."
This, he said, applies to both ongoing operations and new operations, including one possibly in Darfur, Sudan, which is still a work in progress.
Kumalo said the audit report, which was produced by the Office of Internal Oversight Services (OIOS), was requested by members of the Group of 77 and China. Therefore the insinuation that somehow developing countries may be tolerant of corruption, mismanagement and fraud is wrong, he added.
Kumalo said the Group expects the secretary-general to take immediate action in cases of corruption, fraud or any wrongdoing within the Organization.
Kumalo pointed out how the Security Council was criticized last year for failing in its oversight function over the administration of the $64 billion now-defunct oil-for-food program in Iraq -- a program that "was created, managed and overseen by the Security Council."
Ambassador Vanu Gopala Menon of Singapore referred to the "voluminous report" on the mismanaged oil-for-food program. "Perhaps some of our reform zeal should be apportioned to look into how billions of dollars seem to have been mismanaged in the oil-for-food program," he said, pointing a finger at the Security Council.
This, he said, is an issue "I believe the Security Council is aware of." Menon quoted H.L. Mencken who once said: "Injustice is relatively easy to bear. What stings is justice."
Perhaps stings need to be applied more evenly, Menon added, pointing out that "if the evidence points to charges, then make them so that the staff in question can defend themselves."
If the eight suspended staffers are unable to do so, then find them guilty of wrongdoing and deal with them accordingly, he said. Conversely, if they are exonerated, they should be reinstated and given a full apology, he added.
Menon also said that this should be done before the current secretary-general steps down. "I say this because investigations in the United Nations have an odd habit of dragging on to become another person's problem. So let us approach the issue of reform and its facets with even-handedness and equal fervor. As Martin Luther King Jr. once wrote, 'Injustice anywhere is a threat to justice everywhere.'"
Mark Malloch Brown, chief of staff to Annan, told the Security Council that with the growth of peacekeeping itself, peacekeeping-related procurement has been the single fastest-growing segment of U.N. Secretariat operations.
During Annan's nine years in office, he pointed out, the value of U.N. global procurement, 85 percent of which represents peacekeeping, has grown from around $400 million to more than $1.6 billion last year. In 2006, the peacekeeping budget is expected to exceed $2 billion.
He said the bottom line of the audit report was three-fold:
First, that the organization is exposed to serious risk of financial loss because internal controls are inadequate, managerial supervision and strategic guidance has, at times, been lacking, and management has not done enough to exercise due diligence and establish high levels of ethical behavior and accountability, despite numerous irregularities reported in previous audits.
Second, OIOS believes there is evidence of financial loss having occurred through over-budgeting or inflation of requirements, while controls to ensure the organization received value for money in its procurement activities, including lack of document submission and performance guarantees, were lacking.
Third, that there are some indications of serious potential irregularities, including collusion or conflict of interest with vendors as evidenced by inappropriate communications between U.N. officials, a national government and vendor representatives, bid cancellation and resubmission without proper justification, and alteration of bid prices by procurement officers.
"This is very alarming and merits urgent investigation," he added.
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