Source: http://www.un.org/News/Press/docs//2007/gaab3829.doc.htm http://www.un.org/News/Press/docs//2007/gaab3829.doc.htm
Date: November 20, 2007

20 November 2007
http://www.un.org/News/Press/docs/unlogo_blue_sml_en.jpg \* MERGEFORMATINET
General Assembly
GA/AB/3829 





Department of Public Information • News and Media Division • New York
Sixty-second General Assembly 
Fifth Committee 
20th Meeting (AM)

BUDGET COMMITTEE TAKES UP REPORT OF TASK FORCE ESTABLISHED
 
TO INVESTIGATE UNITED NATIONS PROCUREMENT
 

As the Fifth Committee (Administrative and Budgetary) took up the work of the Task Force that had been established in January 2006 to investigate United Nations procurement activities, speakers this morning expressed concern over its findings of corruption, fraud, waste, abuse, negligence and mismanagement in a number of the Organization’s high-value contracts and debated the future of that unit.

As explained by Inga-Britt Ahlenius, Under-Secretary-General for Internal Oversight Services, the Procurement Task Force was established within the Office of Internal Oversight Services (OIOS) in response to “signs of irregularities, fraud and corruption in the procurement service of the Organization” as identified by OIOS and other sources, including the oil-for-food inquiry, and a recognition that a specialized and dedicated capacity was needed to address procurement concerns effectively and comprehensively.

She added that, during the 18-month reporting period, the Procurement Task Force had issued 22 reports covering a total of 63 procurement-related cases.  Those reports had identified 10 significant corruption schemes in procurement and led to the expulsion of 20 corrupt vendors from United Nations rosters.  Since then, an additional three reports had been issued, and another 11 vendors had been removed.  According to the Secretary-General’s report on the matter, it was expected that the work of the Task Force would be concluded on 31 December, with any residual cases to be handled within the regular caseload of the Investigation Division during 2008-2009. 

Ms. Ahlenius said that, as of today, more than 250 cases remained, and additional matters continued to be referred to the Task Force.  It was in the best interest of the Organization for that specialized unit to be retained to address those cases and continue its commitment to high-level investigations.  To let the Task Force expire would undo the great work that had been accomplished thus far, and expose the Organization to greater risk.  In her proposals for strengthening the OIOS Investigation Division, she had, therefore, outlined the process for establishing specialized teams or units for investigating two broad categories of cases:  sexual exploitation and abuse; and economic and financial offences.  Thus, the concept of the Task Force would be incorporated in the Investigation Division’s basic structure in the course of 2008.

In that connection, the representative of Portugal, speaking on behalf of the European Union, said that the Union saw clearly the merits of the activities and the competence of the Task Force and believed that it was important that it be in a position to finalize its caseload during 2008.  In order to have a comprehensive approach to the work of the Task Force and the overall investigation activities of OIOS, the Secretary-General should make all possible effort to submit to the General Assembly the report requested in the sixty-first session on the review of the Investigation Division of OIOS as soon as possible.

The representative of Pakistan, on behalf of the “Group of 77” developing countries and China, however, said the Group was “clearly against a piecemeal approach in dealing with an issue of such importance”.  In the absence of the comprehensive report requested by the Assembly, the Group was not in favour of informal consultations on the issue.  Instead, the Group was requesting that the item remain open and that the Secretary-General present the relevant report as requested by the Assembly, so that the issue could be dealt with in a comprehensive manner.

The representative of the United States stressed the need to engage in the discussion on the matter, without prejudging the outcome of those negotiations.  The Task Force was to be commended for reporting on more than 10 significant fraud and corruption schemes in cases with an aggregate value of approximately $610 million, involving misappropriation of $25 million.  It was imperative that the unit continue its important work and it was necessary to review the ad hoc nature of the Task Force’s original establishment and make arrangements to ensure long-term support for the investigation of procurement and other irregularities.  It was important to consider how best to integrate the work of the Task Force into the overall investigation function of OIOS, taking into account the Office’s recently completed special review of its Investigations Division and the importance of strengthening the investigative capacity of the Organization.

In that connection, the representative of Portugal said that the European Union was fully prepared to discuss how to proceed in informal consultations without pre-empting any outcome, even while waiting for relevant reports.

Also this morning, as the Committee continued its consideration of the proposed budget for the newly-established African Union-United Nations Hybrid Operation in Darfur (UNAMID), several speakers insisted on the need to provide adequate financing for that unique mission, calling for its speedy and effective deployment.

While stating his country’s full support for UNAMID, Singapore’s representative also expressed great concern that the Secretariat appeared to have not followed proper procurement procedures in preparing for UNAMID, despite having significant lead time.  In particular, he questioned the procedure followed in granting a $250-million procurement contract to a single company, without competitive bidding.

While emphasizing the need to provide the mission with all its needs on the basis of realistic requirements, the representative of the Russian Federation expressed regret that, during the adoption of resolution 1769 that established UNAMID, the Security Council had not been informed that its implementation would involve adoption of extraordinary measures.  Deployment of any peacekeeping mission took place in an emergency situation, but he did not believe that that should serve as pretext for violating [resolutions].  Suspension of procurement procedures and granting of contracts without the normal bidding process was an extreme case requiring serious investigation.

Also participating in today’s debate were representatives of Japan, Nigeria, Ethiopia and China.  Short statements were also made by Alicia Barcena, Under-Secretary-General for Management; and Bock Yeo, Officer-in-Charge of the Peacekeeping Financing Division.  Reports were introduced by Georgette Miller, Director of the Division for Organizational Development, Office of Human Resources Management; and Andrzej T. Abraszewski, Vice-Chairman of ACABQ.

The Committee will meet again at a time to be announced.

Background

The Fifth Committee (Administrative and Budgetary) met this morning to consider several reports on the Procurement Task Force and continue its discussion of the proposed budget for the African Union-United Nations Hybrid Operation in Darfur (UNAMID) (for details, see Press Release http://www.un.org/News/Press/docs/2007/gaab3828.doc.htm GA/AB/3828 of 19 November).

According to the Secretary-General’s report, the Procurement Task Force (document A/61/603) was established in January 2006 within the Office of Internal Oversight Services (OIOS) in response to perceived problems in procurement identified by the Independent Inquiry Committee into the oil-for-food programme and arrest of Alexander Yakovlev, a former procurement officer.  The establishment of the Task Force also supported the Organization’s ambition to address and fight against corruption in the Organization. 

The Task Force became fully operational in mid-2006 and, since then, has focused primarily on matters related to staff members placed on administrative leave with pay.  Those investigations, although only a portion of the procurement-related matters to be addressed by the Force, required the dedication of virtually all its investigators.  The Task Force has several significant complex matters in its inventory of cases, including more than 20 cases that justify continued examination.  It is expected that the work of the Task Force will be concluded on 31 December, with any residual cases to be handled within the regular caseload of the Investigation Division during 2008-2009.

The report states that, given the nature and scope of its activities, charges for the Procurement Task Force will be apportioned between the peacekeeping budgets and the regular budget on the basis of the nature of the cases, and will be dealt with in the context of the related performance reports.  Consequently, no additional appropriation is requested.

Another report before the Committee elaborates on the activities of the Procurement Task Force (document A/62/272).  According to this document, during the 18-month period ending 30 June, the Task Force completed 63 investigations and issued 22 reports, having identified more than 10 significant fraud and corruption schemes in cases with an aggregate contract value in excess of approximately $610 million, which resulted in an approximate misappropriation of resources in excess of $25 million. 

At the initial stage, the Task Force focused on eight staff members placed upon special leave with pay pending the conclusion of the investigation.  The Force concluded a case of an elaborate scheme by one of the eight staff members, former procurement official Sanjaya Bahel, and the representatives of the vendor Telecommunications Consultants of India Ltd. (TCIL), to steer approximately $100 million in contracts to the company.  Following a referral of his case for criminal prosecution, Mr. Bahel was found guilty of bribery, wire fraud, and mail fraud by a United States court.

While six of the eight staff members were charged with misconduct, five cases remained under consideration at the time of the writing of the report.  The investigations also concerned numerous procurement exercises and valuable contracts concerning six of the seven peacekeeping missions examined, including those in the Sudan, the Democratic Republic of the Congo and Haiti.  The Task Force reports highlighted significant findings of corruption, fraud, waste, abuse, negligence and mismanagement in a number of high-value contracts, which reflect in part a deficiency in the internal control systems in the Organization.  A number of cases have been referred to national authorities for criminal prosecution or to the Organization for consideration of subsequent legal action.  The Task Force has also recommended civil recovery of monetary damages.

Regarding Alexander Yakovlev, the Task Force established that, beginning in or about 1993 and until his arrest in 2005, Mr. Yakovlev engaged in a corrupt scheme to solicit and accept sums of money and items of value from a number of vendors seeking to obtain United Nations contracts.  The staff member and entities and individuals associated with him cumulatively received over $3.5 million from at least five vendors in exchange for confidential United Nations documents and information, as well as assistance in steering the contracts towards those vendors.  Most of the proceeds of the staff member’s illegal activities were disbursed into a number of bank accounts in several countries.  Some of those accounts still contain substantial assets, and efforts have begun to recover the corruptly obtained money. 

According to the report, the Task Force has faced a number of challenges that related to difficulties in obtaining relevant data, the lack of compulsory process outside the United Nations system, and limited cooperation from some parties.  Several key witnesses could not be located or would not agree to an interview.  These challenges must be addressed urgently for more effective investigation. 

While it is unlikely that remaining cases at Headquarters and the rest of peacekeeping missions will be finalized by the end of the year, the Task Force is funded for the period until 31 December.  OIOS recommends that the competence of the Task Force be incorporated into the overall capacity of the Office.

The Secretary-General’s note contained in the addendum to the report (document A/62/272/Add.1) provides comments and clarifications on each section of the OIOS report and addresses the broader issues raised by the Task Force.  It also includes an overview of the procurement reform initiatives and established procedures for addressing cases of fraud and presumptive fraud arising from investigations, as well as further information on the major investigations summarized in the report.

With regard to cases of staff members under active consideration, the Secretary-General notes that the summary of the report states that “the findings of the Task Force should be regarded as those of the Task Force, and not a final determination by the administration or the Organization”.  The Secretary-General stresses that each of the staff members concerned is presumed innocent pending the conclusion of his or her case.

According to the document, a large number of issues addressed by the Task Force have been or are being addressed by the Organization.  The Secretary-General’s report on investing in the United Nations for a stronger Organization worldwide:  procurement reform (A/60/846/Add.5 and Corr.1) included a number of recommendations made pursuant to an independent study of the internal controls in United Nations procurement operations using a risk-based diagnostic framework.  The Procurement Service has already implemented a number of the Secretary-General’s proposals and has additionally adopted even wider reforms in the context of its overall operational improvement.  Risks associated with procurement will again be assessed as part of the current enterprise risk management and internal control framework review.

Among actions to improve procurement, the report lists the establishment of the Procurement Reform Implementation Team, which initiated development of procurement training material, staff training, and promotion of ethics and integrity awareness.  In addition, the revision of the Procurement Manual and the development of a system to handle vendor appeals are being initiated.  The Planning, Compliance and Monitoring Section was established in the Procurement Service in May 2007; and a Vendor Registration and Management Team became operational in August 2007, with a mandate to institute procedures consistent with the proposals presented in A/62/272.  The High-Level Committee on Management Procurement Network is establishing a framework for the imposition of sanctions against suspect vendors, and a senior vendor review committee is being established to cover non-routine matters, so that the existing Vendor Review Committee can focus on routine issues. 

Rotation of staff involved in procurement is a vital element in the maintenance of a robust framework of internal controls, the report states.  A number of measures to strengthen the internal control system have been undertaken by the Headquarters Committee on Contracts.

One of the most significant reforms relates to the post-employment restriction, which is designed to eliminate the risk of conflict of interest even after the separation of procurement staff from the United Nations.  Promulgated by the Secretary-General on 26 December 2006, ST/SGB/2006/15 prohibits employment by vendors of former United Nations procurement staff for a minimum of one year following separation, and renders any vendor of goods or services subject to disbarment, suspension or termination in the event of violation of this restriction.  The bulletin also prohibits serving staff members from accepting any promise or offer of employment from any contractor or vendor, and prescribes the procedure to be followed by a staff member who receives such a promise or offer.  Failure to comply with the provisions of the bulletin renders a staff member subject to disciplinary action.

The Secretary-General expresses concern that OIOS, in its report, included information regarding the Task Force’s resources without any consultation with the Department of Management, which, in accordance with the Financial Regulations and Rules of the United Nations, has the delegated authority to prepare and present budget proposals and financial information to legislative bodies.  In his previous report on the Task Force, the Secretary-General had informed the Assembly that charges for the Procurement Task Force would be apportioned between the peacekeeping budgets and the regular budget on the basis of the nature of the cases involved. 

Introduction

Introducing the OIOS report on the Procurement Task Force, Under-Secretary-General for Internal Oversight Services, INGA-BRITT AHLENIUS, said that the Task Force’s initial caseload had consisted of over 300 separate allegations of irregularities in procurement, most of them referred from the Investigation Division.  The allegations were wide-ranging, from corruption, fraud and illegality in major contracts, intermediaries and staff, to single episodes of mismanagement, misconduct and violations of the rules and processes in smaller procurement exercises.  In the 18-month reporting period, the Task Force had issued 22 reports covering a total of 63 procurement-related cases. 

OIOS attached equal significance to inculpatory and exculpatory reports, she continued.  The 22 reports identified 10 significant corruption schemes in procurement and led to the expulsion of 20 corrupt vendors from United Nations rosters.  Since the reporting period, an additional three reports had been issued, and an additional 11 vendors had been removed, bringing the total number of vendors to 31.  Many of the Task Force’s recommendations concerning those companies had been adopted by the Vendor Review Committee and accepted by the companies affected, and had led to rehabilitation and reinstatement of some vendors and the adoption of greater responsibility by vendors to ensure appropriate conduct in the execution of United Nations contracts.

In connection with the eight staff members placed on special leave with pay, she stressed that the action in their respect had been taken by the administration, as it was management’s responsibility to follow-up on OIOS reports.  The responsibility of OIOS was to establish facts and report on them.  Following investigation of those eight cases, the Task Force had recommended one criminal referral, three exonerations, and that action be taken for four staff members where the Task Force identified violations of United Nations rules and regulations.  Based on new evidence, one of the three initially exonerated was later found by the Task Force to have also violated United Nations rules. 

In 2007, the Task Force had been able to turn its full attention to significant vendor procurement contracts.  The reports of the Task Force described in detail how deficiencies in internal controls had contributed to the irregularities in procurement, again underscoring the need for a robust internal control framework.  The Task Force had also been of assistance to the Department of Management, the Procurement Service, its Vendor Review Committee, the Controller and various other offices and agencies that had consulted the Task Force on large-value contracts, procurement exercises and vendors. 

On “an important issue which has unfortunately been severely misreported lately, namely the process by which the PTF conducts its investigations and addresses its cases”, she said that the Task Force operated under the Investigation Division’s Manual of Investigation Practices and Policies.  The investigations conducted by the Task Force were administrative and fact-finding in nature.  In that respect, the office acted in accordance with established practice.  Absolutely every effort was made to ensure investigations were carried out in a highly professional manner, and to ensure that staff were fully informed of their full rights as they pertained to an administrative investigation.

She added that, since June, the Task Force had been addressing the most significant cases yet, including a potential multi-million dollar scheme by a host of vendors, significant cases of waste and abuse in several United Nations missions, and at least four additional corruption investigations.  She expected that those reports would be issued in the coming months.  The Task Force was also completing a significant report on the contracts for the review of the United Nations pay and benefits system, which had been requested by the Assembly.

As of today, more than 250 cases remained, and additional matters continued to be referred to the Task Force.  It was fully in the best interest of the Organization for that specialized unit to be retained to address those cases and continue its commitment to high-level investigations.  To let the Task Force expire would undo the great work that had been accomplished thus far, and expose the Organization to greater risk.  In her proposals for strengthening the Investigation Division in OIOS, she had, therefore, outlined the process for establishing specialized teams or units for investigating two broad categories of cases, sexual exploitation and abuse; and economic and financial offences.  Thus, the concept of the Task Force would be incorporated in the Investigation Division’s basic structure in the course of 2008.

GEORGETTE MILLER, Director of the Division for Organizational Development, Office of Human Resources Management, introduced, on behalf of the Under-Secretary-General for Management, the Secretary-General’s report on the Procurement Task Force and the comments on the report of OIOS, adding that the Secretary-General’s comprehensive report on United Nations procurement activities would be submitted separately during the course of the current session. 

With regard to vendors, the note highlighted the steps already being taken in line with the recommendations of the Task Force, she said.  However, should the Assembly agree with the Task Force’s recommendation that a mechanism should be implemented to publicize the names of vendors removed from the United Nations vendor database after having been fully provided with due process, significant resources would need to be authorized.  With regard to financial disclosure to investigators, the Secretary-General was in agreement with OIOS that existing regulations provided sufficient authority in the context of investigations.  It was stressed, however, that the authority was linked to specific investigations of allegations against a staff member and the Secretary-General retained his discretion as to what matters should be referred for disciplinary action, as provided under the current rules. 

With regard to recovery action in cases of fraud or corruption, she assured Member States that every effort would be taken to minimize the financial exposure of the Organization, including seeking financial restitution.  On the matter of consistency in handling cases, she pointed out that each of the Task Force’s reports referred for action against staff had been subject to the same rigorous analysis by the administration, including a thorough consideration of the evidence available, the applicable rules and aggravating and mitigating factors.  The administration would continue to handle the cases using the same standards.  With regard to the issue of due process in the context of investigations, the guidance of the United Nations Administrative Tribunal had been sought, given its recent judicial decisions in that regard. 

She added that a separate report on the future of the Task Force would be submitted for Member States’ consideration.  The Task Force had raised many important issues.  The Secretary-General would ensure that those issues, as well as specific recommendations, were being satisfactorily dealt with.

ANDRZEJ T. ABRASZEWSKI, Vice-Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), orally introduced the report of ACABQ on A/61/603, saying that it was the view of ACABQ that the General Assembly should take note of that report.

Statements

CLOTILDE MESQUITA (Portugal), on behalf of the European Union, said that the report of OIOS gave useful clarifications regarding the activities and findings of the Task Force, and further information might be needed on its establishment and financing.  The report contained findings related to individual cases.  The information relating to those cases needed to be handled with care and with regard to the right to due process.  At the same time, the Union noted with concern the findings of the Task Force on corruption, fraud, waste, abuse, negligence and mismanagement in a number of high-value contracts. 

The note of the Secretary-General showed further the complexity of the work of the Task Force pertaining to procurement, due process and its functioning, she went on.  The Union saw clearly the merits of the activities and the competence of the Task Force and believed that it was important that it be in a position to finalize its caseload during 2008.  In order to have a comprehensive approach to the work of the Task Force and the overall investigation activities of OIOS, the Secretary-General should make all efforts to submit to the General Assembly the report requested in the sixty-first session on the review of the Investigation Division of OIOS as soon as possible.

IMTIAZ HUSSAIN ( Pakistan), on behalf of the “Group of 77” developing countries and China, said that the Group was clearly against a piecemeal approach in dealing with an issue of such importance.  The General Assembly had requested the Secretary-General to present a comprehensive review.  That report had not been presented.  In the absence of that report, the Group was not in favour of the informal consultations on the issue, as indicated in the Committee’s work plan for today.  Instead, the Group was requesting that the item remain open and that the Secretary-General present the relevant report as requested by the General Assembly so that the issue could be dealt with in a comprehensive manner.

BRUCE RASHKOW ( United States) said that the Procurement Task Force had achieved significant results since its establishment by OIOS in 2006.  Having completed 63 investigations and 22 reports to date, it had successfully identified multiple instances of waste, abuse, negligence, fraud and corruption resulting in criminal prosecution and appropriate disciplinary action.  It was to be commended for reporting on more than 10 significant fraud and corruption schemes in cases with an aggregate contract value of approximately $610 million involving misappropriation of $25 million in Member States resources.  Nonetheless, the Task Force had much work left to be done.  It had over 270 cases still to be addressed.  It was, therefore, imperative that it continue its important work.

He added that the ad hoc nature of the Task Force’s original establishment needed to be reviewed and more secure arrangements made to ensure long-term support for the investigation of procurement and other irregularities.  It was necessary to consider how best to integrate the work of the Task Force into the overall investigation function of OIOS, taking into account the recently completed special review of its Investigations Division and the importance of strengthening the investigative capacity of the Organization. 

In paragraph 84 of its 14 July 2006 report on proposals for strengthening its operations (document A/61/901), OIOS informed Members of its intention to conduct a comprehensive assessment of the functions, structure and work processes of its Investigations Division, he went on.  ACABQ took note of the OIOS proposed review of its investigative function in paragraph 74 of its 1 December 2006 assessment of the comprehensive report on governance and oversight (A/61/605), and expressed the opinion “that the investigations function should be maintained in OIOS with such refinement as may be possible after the completion of the special review”.  The General Assembly endorsed that recommendation in its resolution A/61/245.  Subsequently, ACABQ requested that the Committee be provided with the results of the OIOS comprehensive review of investigations in the context of the proposed programme budget for 2008-2009 “and any change envisaged”. 

It was, therefore, clear that expediting the release of the OIOS comprehensive report was deemed a priority by ACABQ and most Member States, he continued.  Now that OIOS had submitted its report to the Secretary-General for his comments, the Secretary-General should finalize immediately any comments he might wish to make regarding that report and release it promptly.  Member States would like to have before them the OIOS review of its investigations function as they considered the proposal to continue the work of the Task Force.  Should the Secretary-General not be able to provide his comments in a timely manner to the Fifth Committee, he should submit them separately and OIOS immediately submit the report directly to the Committee for its consideration.  Member Sates could not engage in a productive discussion concerning possible integration of the Task Force into the overall OIOS investigative capacity without clearly understanding how OIOS envisioned strengthening its Investigation Division. 

TAKESHI MATSUNAGA ( Japan) said his delegation welcomed the overall observations of OIOS, expressed in the report before the Committee, based on the Procurement Task Force investigations.  He took note of the observation that the Task Force’s experience in the past 18 months had enabled it to determine that there was a pressing need to bring sweeping changes to the United Nations procurement system.  The Office had also found that there was a need to overhaul the manner in which procurement was handled and strengthen the oversight and investigative capabilities of the United Nations.  It was important to take into account that corruption, in a number of instances, stemmed from vendors, intermediaries and their agents who sought to exploit weaknesses in the system.  Some schemes emanated from those companies and their principals. 

He said OIOS had stressed the fact that numerous cases of mismanagement, fraud and corruption reflected the need to establish a robust internal control framework.  His delegation concurred with those observations of OIOS.  He welcomed the intention of the Office to submit a comprehensive report on the management of the procurement systems and reform.  He trusted the report would focus on the most acute needs of the Organization, ensuring internal control in procurement activities. 

Turning to the OIOS observations on specific areas where improvement in the regulatory framework should be urgently made, he also noted the Secretary-General’s comments in that regard and said he looked forward to addressing them in an informal setting.  Concerning the resources for the Task Force, he fully shared the concern of the Secretary-General that it was not OIOS, but the Department of Management that had delegated authority to present budget proposals to the Assembly.  There should be no misunderstanding in that regard.  As for the plan for completion of the work of the Task Force, he expressed concern about the lack of clarity in that regard.  The plan made it difficult for the Committee to have a broader and comprehensive picture regarding future work. 

OIOS was considering proposing that the competence of the Task Force be incorporated in the overall OIOS capacity, he said.  That piecemeal approach made it difficult to consider OIOS work in a comprehensive manner.  The Task Force was an ad hoc entity, but it had been around for two years.  The Task Force plan of work and concomitant resource requirements should have been reflected in the budget proposals for 2008-2009.  As an internal auditor, OIOS should present itself as a model in observance of rules and procedures.

ALICIA BARCENA, Under-Secretary-General for Management, said that, based on several resolutions, the Secretary-General had given precise instructions on preparing a report on strengthening the Organization’s investigative capacities.  Given the fact that the document was to be presented within the framework of budgetary issues, the Department of Management was to take charge of its preparation, based on the draft prepared by OIOS.  The review would also take into account models from other organizations and contain comparative analysis of similar intergovernmental practices.  OIOS had submitted its draft at the end of October, and the comprehensive report would be soon in front of Member States.

The Committee’s Secretary, MOVSES ABELIAN, informed the delegates that ACABQ had completed its work on the formal arrangements for the Procurement Task Force.  The document would be issued in all languages on Friday.

Mr. RASHCOW (United States) said that his delegation felt strongly that, with a little over four weeks left until the end of the session, the Committee had to engage in a discussion on the matter and examine the reports before it, irrespective of the position to be taken, in the end, on the issues of the Investigative Division and the Task Force.  The outcome of the discussions was a separate matter from the Committee’s responsibility to respond to the reports.  He hoped others would join his delegation and at least begin consideration of the issue, without prejudging where it might go.

Ms. MESQUITA ( Portugal), on behalf of the European Union, said that the Union was fully prepared to discuss how to proceed in informal consultations without pre-empting any outcome, even while waiting for the relevant reports.

The Chairman informed the Committee that the Bureau would discuss the matter within the Bureau and report back to the Committee.

Turning to the financing of UNAMID, ADEMOLA BALOGUN ( Nigeria) aligned himself with the position of the African Group and the Group of 77 and said that Nigeria had already committed three battalions of military personnel to the mission and hoped to add another one, as well as a hospital in due course.  His country considered the Secretary-General’s budget proposals for UNAMID to be of paramount importance.  The Operation was unique and, therefore, deserved the support of all Member States.  The recommendation of ACABQ regarding a 10 per cent reduction in the budget proposals should be revisited, with a view to ensuring that the principal objective of the Operation was not sacrificed on the altar of financial considerations.  The reasons articulated for the reduction by ACABQ were understandable, but the unique nature of the mission necessitated the need to be forward-looking. 

Given the enormity of the reality on the ground, the proposed budget of $1 million for quick-impact projects was less encouraging, he continued.  As a region in the Sudan, Darfur covered a vast area requiring provisions of basic infrastructure to ensure rehabilitation and capacity-building to enable the people to get back on their feet and look to the future with hope.  He believed that allowance should be made for future improvement in the budget allocation to quick-impact projects. 

In conclusion, he reiterated that the African Union-United Nations Operation was unique.  In order to save it from any problems at take-off, proper harmonization of the command and control structures was needed, to ensure the right synergy between the principal actors and to minimize conflict.  The elaborate arrangements made for the deployment of a robust peacekeeping force notwithstanding, all stakeholders in the conflict in Darfur should faithfully pursue the course of peace and reconciliation through dialogue.  However, their effort should be complemented by the international community through adequate resources to ensure the success of the Operation.

YOSEPH KASSAYE ( Ethiopia) said that the efforts to bring sustainable peace in Darfur should be commended and should be strongly supported by adequate financial and human resources.  Adequate availability of resources would contribute effectively to ensure the implementation of the conclusions of the high-level meeting held in Addis Ababa on 16 November 2006, which laid down the elements for a three-phased approach, and the subsequent Security Council resolution 1769.  In light of those, and given the complexity and the multidimensional task of the hybrid peacekeeping force, Ethiopia welcomed the proposed budget of $1.478 billion.

Ethiopia was of the view that any reduction in the proposed budget might adversely affect the entire peacekeeping operation and could also impede the overall efficiency of the UNAMID force, he went on.  That would have a negative impact on the overall efforts to bring peace and stability in the region.  In line with the structure of the hybrid mission proposed by the Secretary-General, the recruitment of civilian staff and the filling of proposed posts in a timely manner would create the ground for effective coordination between all relevant entities.  That would provide the opportunity for the United Nations and the African Union to prove to the international community that, in collaboration with the Government of the Sudan, they could respond effectively to the existing challenges in Darfur.  Constructive consultations, based on transparency and flexibility, were required on the issue.

SHEN YANJIE ( China) said that the adoption of resolution 1769 had been a very important step, pushing for an early and fair settlement of the conflict and realization of peace and stability in Darfur, the Sudan and Africa as a whole.  His delegation supported the deployment of the African Union-United Nations Hybrid Operation in Darfur, which should receive adequate financing to ensure efficient implementation of its mandate. 

He went on to take note of the concerns expressed by ACABQ and some Member States on the extraordinary measures adopted by the Secretary-General.  The Secretariat should have adequately planned ahead of time to avoid the use of those measures.  Regarding the acceleration of procurement, he agreed that the Secretariat should avoid the practice of granting single-source contracts.  Effective competition should be held among all eligible suppliers on a wide geographical basis.  In conclusion, he expressed hope that all Member States could proceed on the basis of hoping to reach a long-term goal of settlement in Darfur, and could reach consensus as soon as possible on the budget of the mission.

HOE YEEN TECK ( Singapore) said that his country shared the deep concern about the situation in Darfur.  Every delegation that had spoken yesterday had called for a speedy and effective deployment of UNAMID.  His delegation felt the same way.  The situation in Darfur was a life and death matter that required the Assembly’s urgent attention.  Delay might result in more suffering.   Singapore fully supported prompt establishment of the African Union-United Nations hybrid force as envisioned in resolution 1769.  It was necessary to ensure that UNAMID was ready to deploy fully by 31 December.

Continuing, he also noted with great concern that the Secretariat appeared not to have followed proper procurement procedures in preparing for UNAMID, despite having significant lead time.  The Security Council had passed resolution 1663 on 24 March 2006, requesting the Secretariat to expedite planning for the hybrid force.  On 31 July, resolution 1769 had established UNAMID.  The Department of Peacekeeping Operations had 16 months to plan the deployment.  According to publicly available information, despite the long lead time, the Department had still not finalized its list of requirements by April 2007.  On 19 April, it had requested approval for a comprehensive procurement contract to be given to a company without competitive bidding.  The reason given was that it was the only competent company in Darfur, as it was already providing some services to the African Union Mission in the Sudan (AMIS).  The request did not mention the size of the contract or the items required.  Even so, it was approved by the Budget Office on 25 April, without first going through a review of the contract by the Headquarters Committee on Contracts.  That was a breach of established rules.  The Headquarters Committee on Contracts had only conducted an ex-post facto review four months later, on 31 August.

The contract turned out to be worth some $250 million, exceeding the $50 million spending authority that ACABQ had previously approved, he said.  It also turned out that the Headquarters Committee on Contracts had been urgently convened on 30 August and was asked to conduct its ex-post facto review by midnight the next day.  The Headquarters Committee on Contracts pointed out that it did not have sufficient information to make a considered assessment, including details of the contract.  Given the urgency of the request and the fact that the Budget Office had already approved it, the Headquarters Committee on Contracts had recommended accepting the company, albeit with reservations. 

In that connection, his delegation had some questions for the Secretariat.  In particular, he wanted to know if the procedure followed had been a proper one.  In that connection, it was worth noting that, within three months of receiving approval, the Department of Peacekeeping Operations had been able to send a list of requirements to the company in question.  Was the company awarded the contract the only one capable of fulfilling all aspects of the contract?  Was there no other company?  It appeared that there was at least one other competitor in the field that could do the same work.  There were also several smaller companies currently providing services to AMIS.  Could the contract not have been split up and put through competitive bidding?  Given that approval for the contract had been given on 25 April, what was the point of having a Headquarters Committee on Contracts review?  Why had the Headquarters Committee on Contracts been made to rush through a decision by 31 August, despite not having sufficient information?

He added that internal controls were there for a reason, serving as guideposts for the Organization to conduct business on behalf of Member States, especially in uncertain situations.  The United Nations had been preparing for UNAMID for almost two years.  Could it not have prepared for Darfur speedily, but also properly?  Breaches of the Organization’s rules, especially by the United Nations itself, raised the issue of accountability.  The issue of proper procurement procedures should be looked into as it related to future deployments.

ANDREY KOVALENKO ( Russian Federation) said that his country attached great significance to the speedy deployment of UNAMID.  It believed that that mission should receive sufficient financing for the implementation of its mandate.  However, there were aspects of the draft budget that prompted concern.  The proposal gave the impression that funds had been borrowed from the UNMIS budget.

Also, on the Secretary-General’s letter informing the Committee that the Secretariat had had to resort to some extraordinary measures, he expressed regret at the fact that, on 31 July, during the discussion and adoption of Security Council resolution 1769, the Council had not been informed that the implementation would involve adoption of extraordinary measures.  The Russian Federation doubted the validity of the measures set forth in the letter.  While recognizing that deployment of any peacekeeping mission took place in an emergency situation, it did not believe that it should serve as pretext for the violation of resolutions.  Undertaking such extraordinary measures undermined peacekeeping operations.  The suspension of procurement procedures and the granting of contracts without going through the normal bidding process was an extreme case requiring serious investigation.

He emphasized, however, that, in consideration of the UNAMID budget, he believed the mission should be provided with all its needs, on the basis of realistic requirements.

BOCK YEO, Officer-in-Charge of the Peacekeeping Financing Division, told the Committee that the Secretariat had carefully recorded all the questions that had been raised and was preparing a detailed response in writing to all of them.  The Controller and the head of procurement would be at the next informal meeting of the Committee to address questions relating to the single-source contract.

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For information media • not an official record