When UN Loses Money to Dictators, It Resists Disclosure, Unlike Even Corporations

Byline: Matthew Russell Lee of Inner City Press at UN
www.innercitypress.com/un1disclosed120508.html

UNITED NATIONS, December 5, updated -- Following the exposure of the UN's quiet currency exchange losses to the governments of Myanmar and Zimbabwe, Inner City Press on December 5 asked a member of the UN's Responsible Management Education group what the UN should do when it faces or discovers such losses. "Disclose," said John Fernandes of the Alliance to Advance Collegiate Schools of Business. Gerard Van Schaik of Belgium's EFMD added that such disclosure should be to society at large, and not only to donors. Video here, from Minute 36:52.

Minutes later, Inner City Press asked the UN's humanitarian chief John Holmes if he agrees with and will implement these views of the UN's business partners. Holmes claimed that the UN had been "perfectly transparent" about its losses in Myanmar. But his colleague Dan Baker, when Inner City Press asked him about the losses on July 10, said incorrectly that Myanmar's "government does not benefit." Video here from Minute 46:20.

In fact, Baker and the UN only admitted their losses to Myanmar's military government after Inner City Press continued asking about it, in light of a June 26 UN internal memo which put the level of losses as high as 25%. Holmes on December 5 said that the UN still "has no systematic mechanism" to look for losses, but acknowledged only one other country where this has happened, Zimbabwe. But before Inner City Press last week asked about the UN's losses to Robert Mugabe, the UN had publicly disclosed nothing about those losses either.

Inner City Press asked Holmes, if the UN in the future losses money to government required currency exchange, will it as recommended disclose the level of losses in its Consolidated Appeal documents or other fund-raising pitches. Video here, from Minute 36:50. Holmes answered, apparently without irony, "I'm sure it will come out one way or another." Apparently, only if the information leaks to the press, and even then, the UN's first instinct, like Baker's, is usually to deny it.

Inner City Press is most often skeptical of corporation which come to drape themselves in the UN's blue flag -- on December 5, Inner City Press asked about the UN Global Compact membership and reporting of BHP Billiton, which is the subject of an undisclosed OECD Guidelines complaint for destruct act mining in Colombia. Video here from Minute 20:07, and see update below. But in this case, the UN is not even living up to or follow the minimally-responsible advice of the business school executives it has invited to its corporate society responsibility events. In fact, the UN's willful non-disclosure of losses would, if done by a publicly-trade business, trigger fines and imprison. But the UN is (still) benefiting from immunity, and impunity. This all needed to change.

Update: Less than 12 hours after the Global Forum for Responsible Management Education press conference, the Global Compact provided the following statement by its Director Georg Kell about the BHP Billiton / OECD matter:

To answer your question, here is a bit of a perspective on the OECD story
(attributable to Georg Kell):

"The Global Compact is about dialogue and learning. We try to foster change by providing incentives and recognizing good practices. Of course, no organization, large or small, can claim to be perfect, and there is always room for improvement. The main thing to understand is that the GC is not a compliance-based instrument. In situations where individual incidents require solution-finding, we very much welcome the constructive efforts of the OECD.

"But, as this case may illustrate, disclosure by companies on non-financial performance is not necessarily synonymous to implementation and does not cover all incidents that occur in a global organization. The Global Compact is aware of this, and we are undertaking efforts to make reports submitted under the reporting (COP) framework more tangible and meaningful."

We hope to be able to report more about these efforts. Later on December 5, Inner City Press asked Secretary General Ban Ki-moon if and how private corporations should deal with Myanmar's government at this stage. Despite having addressed the Global Forum for Responsible Management Education only hours earlier, Ban replied that he cannot comment on specifics, adding that "whoever has influence" should try to convince Myanmar to improve its record. Click here for that.

And see, www.innercitypress.com/un1disclosed120508.html