Week in Review

NZ’s involvement in UN corruption claims

A UN whistleblower is among multiple officials and experts to have expressed concerns about a climate change project in Russia - and New Zealand features in several aspects.

The Russian whistleblower at the heart of United Nations corruption claims has said he contacted Helen Clark about his concerns during her time at the organisation, but never heard back.

However, another Kiwi at the United Nations Development Programme (UNDP) appears to have played a crucial role in the allegations coming to light.

Last month, American news outlet Foreign Policy reported on multiple allegations of corruption levelled against the managers of a UNDP project to reduce greenhouse gas emissions in Russia.

While the UN and donor governments had dismissed or ignored the claims, Foreign Policy said its investigation had provided further evidence to support them, including a confidential audit document which found “strong indicators of deliberate misappropriation” of millions of dollars.

Dmitry Ershov, a Russian who was hired to manage the Standards and Labels project at the heart of the allegations, had spent years lobbying for action after his misgivings did not result in change.

In an interview with Newsroom, Ershov said he first developed concerns about the project within weeks of taking up his management position due to the lack of oversight compared to similar programmes he had worked on.

“Because I was closely involved in the EU operations in Russia I knew all these procedures, I sit in the evaluation committees - here I see that there is no control...there was no international expert nearby or above.”

Helen Clark said she did not recall being made aware of allegations regarding a UNDP Russia project during her time leading the organisation. Photo: Getty Images.

After raising his concerns with the UNDP’s Ethics Office and its Office of Audit and Investigation, Ershov said investigators’ interest dropped off after just a few months - a sign of what he said were shortcomings in the oversight process.

“I was in communication for about two or three years with all of them, and I failed - I failed completely because I received these messages saying, ‘OK Dmitry please stop, we don’t want to continue to contact you any more because we have already answered you, there was no wrongdoing’.”

His efforts extended to writing directly to Clark, the head of the UNDP at the time. Ershov provided three emails from February and March 2017, showing his attempts to bring what he deemed “systematic corruption practices” to Clark’s attention.

However, Clark told Newsroom she had “no recollection of being aware of these allegations while at UNDP”, with emails sent to her formal UNDP address handled by her staff and directed to others in the organisation who were directly responsible for investigating the claims.

She had not been contacted by New Zealand officials about the allegations since leaving the UNDP, “nor would I have expected them to have done so as I am no longer Administrator”.

“I had, and have always had, zero tolerance for corruption and would have expected that any such allegations would have been inquired into,” Clark said.

Foreign Affairs Minister Winston Peters was briefed on allegations levelled against a UNDP project in Russia six months before the claims became public. Photo: Sam Sachdeva.

In its article Foreign Policy said New Zealand, along with the Netherlands, had “continued to press UNDP to demonstrate it can effectively monitor its environmental programs”, although it was unclear whether that had extended to seeking accountability in relation to the Russia allegations.

Briefing for Peters

The Ministry of Foreign Affairs and Trade (MFAT) briefed Foreign Affairs Minister Winston Peters on the claims in a February briefing, a heavily redacted copy of which has been obtained by Newsroom under the Official Information Act.

The ministry’s briefing said officials had reviewed documentation and the UNDP’s response after the claims had been brought to its attention by somebody whose name has been redacted.

However, “given the project and the office in question are already closed, and New Zealand had no specific interest in them, we consider a detailed re-investigation by New Zealand would be of limited benefit”.

Officials said the allegations did not contain enough evidence to withhold the $8m in annual funding New Zealand contributed to the organisation, while there were no “systemic concerns with UNDP audit processes”.

However, New Zealand would make clear its “expectations of sound financial management and investigation of allegations of impropriety” through a side letter delivered with its UNDP funding for 2019. It also appears that officials took other action, although the specifics were withheld by MFAT.

An MFAT spokesperson said New Zealand did not provide direct funding for the Russia project, while the country had sought assurances that the UNDP had addressed governance issues raised by its audit office "including that UNDP senior management have sufficient oversight of high-risk or poor-performing projects".

John O’Brien, a New Zealander working for the UNDP as a regional technical advisor with expertise in climate change mitigation, seems to have played an important role in the allegations eventually coming to light.

John O'Brien, a New Zealander working for the UNDP, was among officials and experts to express concerns about a Russia greenhouse gas reduction project. Photo: IISD Reporting Services.

The Foreign Policy investigation quoted an internal memo written by O’Brien in 2011, raising concerns about the lack of progress and suggesting it be designated as a “problem project” - a request which was overruled.

“I believe that the risk of the project not delivering on its outcomes is currently very high,” he said. “The project has spent or is about to have spent so far $1.4 million dollars with very little visible or defined results so far.”

In a 2014 email obtained by Foreign Policy, O’Brien said there were “very serious issues” with the programme, citing concerns about spending raised by three independent consultants.

“I have some concerns about where this might lead for UNDP,” he said.

O’Brien did not respond to several emails from Newsroom requesting comment.

The UNDP has challenged the allegations about the Russia project, with a spokesperson telling Foreign Policy an investigation by its Office of Audit and Investigations “did not find evidence of misappropriation of funds, but separately after review did conclude that project management had not met expected standards”.