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TSUNAMI IMPACT: U.N. Vows to Track Massive Aid Spending

Thalif Deen

UNITED NATIONS, Jan 19 2005 (IPS) - With billions of dollars pouring into emergency relief funds and post-tsunami reconstruction projects, the United Nations has pledged not only to police itself but also to ensure that aid money is not diverted to the pockets of corrupt officials or individuals, whether in governments or non-governmental organisations (NGOs).

"We plan to strengthen our tracking system to follow the money," says Kevin Kennedy, a director at the U.N. Office for the Coordination of Humanitarian Affairs (OCHA).

David Nussbaum, chief executive of the Berlin-based watchdog group Transparency International noted that "it is crucial that the private sector, local authorities and international donors agree on a transparent system of tendering and reporting on expenditure."

This is not only necessary to avoid corruption and diversion of funds, Nussbaum said, "but also to ensure value-for-money and safety and quality standards in the reconstruction process."

For the first time, the United Nations has accepted the pro bono services of an outside accounting firm, Price Waterhouse Coopers, to help improve the tracking of emergency assistance provided by donors.

The U.S.-based auditing firm will also assist the United Nations with "prompt investigation into any credible allegations of fraud, waste or abuse, if any such charges arose regarding the relief effort," Kennedy told reporters.

The move towards transparency and accountability comes at a time when the United Nations is facing widespread charges of waste, mismanagement and corruption in its own backyard.

Last week, several internal audit reports released here revealed overpayments to contractors in the U.N.’s now-defunct oil-for-food programme in Iraq, and also over-billing by the U.N. Compensation Commission assisting victims of the 1990-1991 Iraqi invasion of Kuwait.

The estimated overpayments by the Compensation Commission alone amounted to over 500 million dollars.

"We do not work directly on issues of U.N. accountability," says Patti Lynn, campaign director of Corporate Accountability International, a U.S.-based NGO.

"But we do have strong opinions about the influence of transnational corporations over the United Nations and its agencies," she told IPS.

"As far as relief efforts for the tsunami disaster, we are concerned about corporations using this as an opportunity to further their own private gain, in some cases at the expense of people’s health," she added. "We will be keeping a close eye on those developments."

The World Bank, which along with the Asian Development Bank will lead the reconstruction efforts in tsunami-affected countries, has also pledged to track the flow of aid monies.

"A lot of money is going to go directly to governments," World Bank President James Wolfensohn told reporters last week, but this will be within the framework of normal support for governments.

He said he had suggested to some of the disaster-stricken countries "that the world community and they will be well served if we can separate out the tsunami funding in a transparent way, and each of governments seemed very responsive," he added.

Of the 12 countries affected by the tsunami, India and Thailand have said they are capable of handling the reconstruction themselves and therefore do not need any international financial assistance.

Seychelles is seeking a debt moratorium, while Malaysia, Myanmar, Bangladesh, Somalia, Kenya and Tanzania have said they are not appealing for assistance "at the moment" because their damages are minimal.

The bulk of the reconstruction aid will, therefore, go only to three countries: Indonesia (with a population of about 215 million people), Sri Lanka (19 million) and the Maldives (300,000).

The World Bank is in the process of estimating the total needs of all the three countries, which could run into billions of dollars.

The Indonesian government has already estimated its requirements at 4 to 5 billion dollars.

But since Indonesia is a country where bribery and corruption are highly institutionalised – described by Transparency International as one of the world’s most corrupt nations – the donor community is facing a dilemma as to how it should handle the problem.

At a press conference in Jakarta last week, U.S. Ambassador Lynn Pascoe admitted that "high level corruption" in Indonesia was "a very serious problem" for the donor community.

The problem was also highlighted at a one-day seminar on corruption held in Jakarta last week, which was jointly sponsored by the United Nations, the Indonesian government and humanitarian relief agencies.

The three panel discussions were appropriately titled "Eliminating Corruption Within the Bureaucracy", "Eliminating Corruption in the Attorney General’s Office" and "Eliminating Corruption Within the Police."

In Jakarta, a non-governmental group calling itself Indonesia Corruption Watch has been set up to specifically monitor the flow of aid to Aceh, the province that was hit hardest by the tsunami.

The total death toll in the region now stands above 226,000 people.

Transparency International says that civil society organisations in Indonesia and Sri Lanka and other recipient countries should be part of the monitoring process. Such organisations should also promote public participation in decisions about aid allocation and project design.

Wolfensohn said that each of the governments he spoke to during his recent visits to the region is working on a methodology that, within the context of their regular government expenditures, would help make the tsunami efforts transparent and public.

"And then of course, they are subject to auditing and everything else," he said.

Responding to an U.N. appeal for 977 million in funds, the international donor community last week pledged over 717 million dollars.

"That is 73 percent of the total," Jan Egeland, U.N. Under-Secretary-General for Humanitarian Affairs told reporters. "This has never ever happened before: that two weeks after a disaster, we have 717 million dollars that we can spend on the immediate emergency relief effort."

U.N. appeals for emergency assistance had often elicited only about 14 percent of the needed funds.

Kennedy said donations were coming from thousands of different sources and going to hundreds, if not thousands, of different programmes.

The United Nations, he said, could track those programmes and would do its best to go beyond that as well.

"How best to do that would be worked out with Price Waterhouse Coopers. Obviously, the United Nations was very interested in being accountable and transparent," he added.