Scandal shakes the UN and gives us lessons in how to reform it

Getty / The National

by Mukesh Kapila at

May 20, 2022- A little-known UN agency is being dogged by allegations of serious corruption

Although we lump them all together as the UN, the United Nations system has 37 bodies and numerous other programmes, each with its own purpose, tasks and, of course, acronym. You could be forgiven if you have never heard of one of them: Unops, the United Nations Office for Project Services.

This is the workhorse of the UN system ― providing just about any service in any sector ― albeit for a hefty fee. That includes backroom project administration, procurement, personnel recruitment, payroll handling, financial management, logistics and infrastructure. Unops is a big business, with gross assets approaching $4 billion, operating in 80 countries through 12,000 personnel.

But it made headlines this month, for all the wrong reasons, when UN Secretary General Antonio Guterres forced the resignation of Unops executive director Grete Faremo. This also embarrassed Norway, a major UN funder, because Ms Faremo is a former Norwegian politician and cabinet minister, and her ignominious departure echoes the 2018 downfall of another senior Norwegian, Erik Solheim, who headed the UN Environment Programme.

Ms Faremo’s transgressions include questions about her Sustainable Investments in Infrastructure and Innovation (S3i) initiative. It appears, according to the results of a UN audit, that Unops leaders discarded their own ethical and transparent business rulebook to bestow millions of dollars on a single business partner, a holding company called Sustainable Housing Solutions (SHS), chosen without the competition, diligence and safeguards that are mandatory under UN procedures.

The UnopsS partnership with SHS was supposed to build a million affordable houses for poor people in six places: India, Pakistan, Nigeria, Ghana, Guinea and the Caribbean. Not a single house has yet been built, while $22 million of the nearly $60m investment has been written off. It is doubtful the rest will be recouped any time soon.

Over the years, misconduct, mismanagement, fraud and corruption have been uncovered in several UN agencies. However, the Unops case is unique because what happened there is alleged to have occurred with the careless connivance of its top leadership. For those familiar with the UN’s history, it evokes a parallel with the notorious UN Oil-for-Food Programme in Iraq, which hastened the end of former secretary general Kofi Anan’s tenure.

The Unops problem emerged only because a whistleblower had the courage to complain. Their reward, they say, was harassment and intimidation, an experience that the organisation’s staff have attested is not uncommon at Unops. Beyond this case, however, wider questions about multilateral principles, integrity, accountability, oversight and governance arise.

The UN’s ideals are outlined in its poetic founding charter, which simmers with idealism and brings hope for the downtrodden everywhere. The UN is there to bring succour without personal benefit. Obviously, its work must be paid for somehow, but it is not supposed to profit from human misery, or turn its programmes into profit-making opportunities. And yet, that is exactly what Unops did, by overcharging other UN agencies for its services, which allowed it to accumulate huge reserves of about $286m. Of that sum, about $100m was then put aside for gambling, through shaky business investments such as S3i.

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