At
the UN, New Phrase Passes Resolution called Gangster-Like by North Korea; A Deputy on the Law
Byline:
Matthew Russell Lee at the U.N.
Updated
July 25, 2006, out of respect for a Deputy Ambassador with a unique view of
off-the-record status
UNITED NATIONS, July
15 -- Using a phrase that was until now nowhere in Google, the U.S. and Japan on
Saturday got Security Council approval of a resolution condemning North Korea's
missile tests. The phrase, leaked Friday night and seen in text on Saturday, is
"acting under its special responsibility for the maintenance of international
peace and security." As of 3:48 p.m. on Saturday as the Council met to vote, a
Google search found not a single hit. Innovative, then. Or otherwise said, a
legal fiction.
At 3:48
p.m., the Security Council passed the resolution 15-0. The U.S. and Japan can
claim it's binding, and China and Russia can point to the lack of any reference
to the UN Charter's Chapter VII. In the lead up to the invasion of Iraq, the
U.S. pointed repeatedly at three prior resolution under Chapter VII. While that
Chapter was not cited in authorizing the 1950 action on the Korean peninsula, it
may be hard to argue that the Council's practice in the 56 years since have not
created a new understanding. We shall see. The matter will certainly be back.
Gangster-like? DPRK
promises more missile tests
After the
vote, the Envoy of the DPRK stepped to the stakeout mike and said: "It is
gangster-like for the UN Security Council to debate the missile test trials of
the Democratic People's Republic of Korea. We totally reject the resolution that
was adopted at the current meeting of the Security Council." Then he strode away
from the mike with his entourage, as Inner City Press asked, "Do you think the
resolution is binding?"
In a written
statement, the North Korean envoy promised that North Korea "will go on with
missile launch exercises" and "will have no option but to take stronger physical
actions of other forms, should any other country dares [sic] take issue with the
exercises and put pressure upon it." So more fireworks can be expected.
In the
interim it's the rule of law that's under fire. In post-vote stakeout
interviews, both French Ambassador de La Sabliere and Russian Ambassador Churkin
evaded questions about the effect of omitting the initial reference to Chapter
VII from the final resolution. In response to Inner City Press' question, Amb.
de La Sabliere said only that the resolution is binding and he is happy with it.
Of Amb.
Churkin, Inner City Press asked, "Since the week's negotiations were about the
inclusion or omission of Chapter VII, can you describe the effect of its
omission? How is the resolution different? Is it on the use of force?"
Amb.
Churkin answered, "I don't want to enter into a very length expose of the
various aspects of it. this is the best and balanced and adequate way to respond
to the challenge posed by the missile launch in North Korea. Thank you very
much." And then he left, as Ambassadors Bolton and Wang had, without taking any
questions.
Next
week's action will include Iran, and the expanding Middle East war. Will Uganda,
Ivory Coast, Somalia and the other crises recent cast even more to the side get
consideration or action? The staff of the Security Council president has
indicated to Inner City Press that Amb. de La Sabliere is aware of Gbagbo's
backsliding in Ivory Coast, refusing to begin the identification process that's
required before the already-delayed election can be held. The world is
unraveling, and even the UN Charter Chapter concerning the maintenance or
restoration of international peace and security goes unexplained by those who
wield it.
How is the rule
of law possible if no one will explain what the law is? And again, where
except at the point of a gun is the arbiter of the meaning of the UN Security
Council's resolutions and actions?
A Deputy UN Ambassador,
who as noted above has since asserted that the comments below were "personal"
and were not meant to be attached to the Deputy Ambassador's name (hereinbelow "DepAmb")
answered some of Inner City Press' question in this regard in an impromptu
interview on Saturday after the Security Council was briefed and consulted on
Lebanon. DepAmb reminded
reporters that the afternoon's agenda was for consultations and not voting.
(At a formal
stakeout, a representative of Lebanon described as that country's ambassador to
Mexico said that only one country had opposed some
action on
Lebanon, that being the one which vetoed the draft Gaza resolution on July
13, the United States. "And the four abstainers on the Gaza resolution, did they
support action on Lebanon?" "Yes," the representative answered. When asked for
his name and title, there was no immediate answer.)
Asked to explain
the practical difference of dropping the reference to Chapter VII from now
Resolution 1695 on the North Korean missiles, DepAmb said that China and Russia
felt that Chapter VII would lead inexorably to one step after another toward
military force. DepAmb predicted that if North Korea continues its
current course, China and Russia would not oppose additional Council action. But
if the situation calms down, and the U.S. or Japan seek further debate or
resolutions, then the lack of Chapter VII in Resolution 1695 will be raised by
China and perhaps also Russia.
"But who decides
on the meaning of Council resolutions?" asked Inner City Press. "In the U.S. for
example there's a Supreme Court which rules on laws passed by Congress."
"There may be some circumstances in which the
International Court of Justice could rule on Council resolutions," DepAmb
said. Later DepAmb amended the answer, nothing that the ICJ is, like such bodies
at the International Atomic Energy Agency, under the jurisdiction of the
Security Council. DepAmb said, "So you might call the Security Council..."
"Lawless?"
"No, not
that. Self-referential."
"How can
the UN promote the rule of law when there is no agreement on, and no process for
deciding or publicly articulating what the law is?"
DepAmb said, "You've got a point there," and headed out onto First Avenue.
As noted above, ten days later DepAmb asserted that the views above were
"personal views" and the DepAmb would be "disappointed to see them associated"
with DepAmb's name. So, one wag concluded, not only is there no one to determine
or explain was Security Council resolutions mean, but even those Security
Council (Deputy) Ambassadors who at first provide some views later run away from
them. Generally, the presumption is that comments are on the record, unless "off
the record" is clearly used (and also agreed to, in many journalists' view). But
it's nice to be nice...
Feedback: editorial
[at] innercitypress.com
UN Office: S-453A,
UN, NY 10017 USA Tel: 718-716-3540
At
UN, North Korean Knot Attacked With Fifty Year Old Precedent, Game Continues
Into Weekend
Byline:
Matthew Russell Lee at the U.N.
UNITED NATIONS, July
14, 10 pm, updated 11:42 pm -- The result of ten days of talk about the North
Korean missiles was, on Friday night, legal semantics from the U.S. Ambassador
John Bolton and Japan's Amb. Kenzo Oshima. Just after distributing a new draft
resolution which still includes a reference to UN Charter Chapter VII, Amb. John
Bolton said that a even if Chapter VII gets dropped on Saturday, the sanctions
could still be required of the 192 members states.
For this
proposition, Amb. Bolton had to cite back more than 50 years. "If you look at
the resolutions in 1950 that authorized the use of force against the North
Korean invasion of South Korea, it doesn't say, acting under Chapter Seven."
While he didn't cite it by number, that was Resolution 85, available through
this web page.
The USSR, it's worth noting, did not vote on that one.
Perhaps
foreshadowing an envisioned Saturday compromise, Amb. Bolton said, "I want it
understood now" that "it can be under Chapter Seven" without the words Chapter
VII being in the text, or "without using the word abracadabra."
As the AP's at
once intrepid and venerable Edith Lederer will soon report, inside the Council it
was the UK and France who fastened on the "binding without mentioning Chapter
Seven" compromise, which the Greeks and others quickly embraced.
This late-night
hair-splitting is almost comical, if it didn't involve nuclear weapons held by a
state that brooks no dissent. One wag mused that the UN blurs law and power.
Since no court interprets Chapter Seven, Amb. Bolton can claim victory, and
China can say it saved face. Peace on earth? Hardly. Look at Lebanon. And for a
more marginal example, Ivory Coast (see below).
Amb.
Bolton's staff continued telling reporters, Look at the Charter, look at the
Charter, while Amb. Bolton argued essentially the China and Russia are being
brought along, from wanting only a press statement, to a presidential statement,
to a binding resolution.
Tellingly, perhaps, Argentina's Ambassador Mayoral told reporters, as he headed
to the escalators to leave, that he's rather pass a resolution without Chapter
VII than not pass one with Chapter VII in it.
The
Council will reconvene Saturday at 3 p.m.. "Will they vote Saturday?" Inner
City Press shouted to Amb. Mayoral in Spanish. "Yo creo que si," he
answered -- "I think so," or "I think that yes." We'll see... Earlier Ivory
Coast story below.
Stakeout
madness
Meanwhile, UN Stasis
as World Unravels Gives Space to Ivory Coast's Gbagbo and Others
Byline: Matthew
Russell Lee at the U.N.
UNITED NATIONS, July
14 -- The world, it is reported here and elsewhere, is unraveling. And as the UN
Security Council remains this Friday night on hold, canceling a meeting
scheduled for 5 pm so that the Permanent Five Plus Japan can meet at the U.S.
mission, in the wider world there are grabs to take or cling to power. In Cote
D'Ivoire, for example, the process of identification for the already-postponed
election now slated for October 30 was supposed to begin this week. It did not
however begin.
At the
UN, Inner City Press asked the Security Council president Jean-Marc de La
Sabliere about events in Ivory Coast. The French mission provides this
transcript:
Inner City Press Q: On Côte d’Ivoire, the
identification process has been suspended. Do you have a comment?
Amb. de La Sabliere A: "This is a great
concern. What the Council has done this month is to listen and react to a
briefing from Mr. Guéhenno who was in Banjul and Yamoussoukro with the Secretary
General. We are now preparing a PRST to support the conclusions of the
Yamoussoukro meeting where new commitments were made. We want those commitments
to be implemented. The PRST will be adopted, I hope, very early next week. Next
step: the GTI will meet in Abidjan on the 20th of July. The Council will meet on
the 26th.
"Going back to your question: the
identification is a major element of the agreement. It was agreed upon by the
parties of Côte d’Ivoire that identification and disarmament would go along. So,
we cannot organize elections if the identification process is not done. So,
identification is important, and the Council will have to assess what happened
yesterday. As French Ambassador, I can say that the PRST will take that into
account.
Q2: As French Ambassador, would it be your
view that if elections are not held…?
A2: "My answer is that there will be a
Summit in September. We will see what happens then."
Unless of course
there are other higher profile crises in September... In the run-up to the 90
p.m. let down, at 5 p.m. the press corps assembled for a scheduled Council
consultation. Then cell phones and Blackberries went off, announcing the meeting
was cancelled. In the lull before the 9:40 conclusion (see above), the stakeout
scuttlebutt, at least among reporters, was that the U.S. veto on Thursday
emboldens China to veto the draft Chapter 7 resolution on North Korea. Also in
the lull, some drifted over to stakeout the U.S. mission. Others retired to the
Delegates' Lounge, where Inner City Press Friday interviewed the Permanent
Observer from Palestine, Riyad Mansour, who confirmed Inner City Press' finding
that the U.S. government's Overseas Private Insurance Corporation insured the
Gaza power plant, since Enron built it, click
here for that
harder-news story, and see below.
Bombed Gaza Power Station Built by Enron, Insured by U.S. Government's OPIC,
According to UN Sources
Byline:
Matthew Russell Lee at the U.N.
UNITED NATIONS, July
14 -- The bombed Gaza power station was covered by a $48 million insurance
policy, it has emerged. The insurer is the U.S. government's Overseas Private
Insurance Corporation, OPIC. This was because of the plant's ownership by the
Enron Corporation, whose chairman Ken Lay died last week while awaiting
sentencing for business fraud. OPIC has insured other Enron power plants, in the
Philippines, Turkey and India.
The head
of the UN's Office for the Coordination of Humanitarian Affairs (OCHA), Jan
Egeland, told reporters on July 11 that the plant was insured by "an American
insurance company" and that the policy might not be paid on, due to sanctions
against the Hamas government. Immediately following Egeland's briefing, Inner
City Press asked OCHA staff for the name of the American insurance company, as
well as who had been paying the insurance premiums. Having not heard back, on
July 12 at the Office of the Spokesman for the Secretary-General's noon
briefing, Inner City Press asked:
"In his briefing yesterday, Jan Egeland...
mentioned that there is an insurance policy on the power plant by an American
insurance company, but that they may not be able to pay because of US sanctions
against Hamas. It’s a factual question of, like, what’s up with the insurance,
but does the UN agree -– does the Secretariat agree with Jan Egeland that Israel
should be responsible for rebuilding the power plant?
Deputy Spokesman: ...In terms of the details of who’s paying for the insurance
and all of that, I think that’s something you may want to follow-up with the
agencies on the ground, or we could look into it for you.
Question: I asked OCHA and, even though they said it, they didn’t seem to know.
It would be good to know.
Deputy Spokesman: We’ll address it to the agency on the ground."
The answer
subsequently provided, through officials who spoke only on background, is that
the Gaza power plant was a joint venture between the Palestinian company
Consolidated Construction Corporation, CCC, and the Houston-based Enron, and was
covered by a $48 million insurance policy from the U.S. Overseas Private
Insurance Corporation.
On the
afternoon of July 14, Inner City Press interviewed Riyad Mansour, the Permanent
Observer of Palestine to the UN, who stated that OPIC is the insurer, and "they
have to pay." Mr. Mansour added, "Let them collect from Israel."
An agency
of the U.S. government, OPIC describes itself as "support[ing] U.S. investment
in emerging markets worldwide, fostering development and the growth of free
markets." The description is from the OPIC.gov web site, which perhaps
understandably does not list the Enron joint venture power plant in Gaza as one
of its "project
profiles," the lead one of
which involves importing tea from Rwanda.
OPIC provided
insurance to Enron's Dabhol power plant in India, to other Enron power plants in
Turkey and in Subic Bay in the Philippines, and other Enron projects in
Argentina and Uzbekistan (a project that never came to fruition). A search on
July 14, 2006, of OPIC.gov results in only one mention of Enron, and that along
with BP Amoco and ABB as being involved in renewal energy.
The
generators in the Gaza power plant were specially built by ABB, according to Jan
Egeland. One of impacts of their destruction by bombs is to interrupt the flow
of both water and sewage. UN's World Health Organization estimated, prior to the
current crisis, that 64% of the health problems in Gaza were due to water
quality.
The
officials interviewed by Inner City Press, speaking only on background, also
noted that the blockade of Gaza has interrupted not only the trucking-in of gas,
including for backup electricity generators, but also the flow of gas through a
pipeline, through which neither people nor arms could be traveling.
Friday at
the UN, Under Secretary for Political Affairs Ibrahim Gambari came to the
Security Council stakeout and read a statement that "the Secretary General...
reminds all of their obligations to take absolute care to spare civilian
populations from harm, and to protect their life, infrastructure and
livelihoods. In particular, care should also be taken to avoid damaging power
stations, water supply and sanitation facilities."
Mr.
Gambari begrudgingly took a single question from the media: Inner City Press'
question about the electrical power situation in Gaza. "This is about Lebanon,"
Mr. Gambari replied, adding before he left that the brief statement he had read
was intended to help avoid a repetition in Lebanon of the bombing of the Gaza
power station.
Previously, Inner City Press asked Israel's Ambassador to the United Nations Dan
Gillerman for his response to the UN's Jan Egeland's statement that Israel
should repair the Gaza power plant. Amb. Gillerman responded that Israel does
not intentionally target civilians, but that he has no information about Israel
repairing the power plant. Inner City Press asked U.S. Ambassador John Bolton
if he had any comment on Jan Egeland's call for Israel to repair the power
plant; Amb. Bolton said, "I have no comment on that." Developing...
Below: BTC Pipeline, UNHCR Program & MMB Quote, etc
BTC
Briefing, Like Pipeline, Skirts Troublespots, Azeri Revelations
Byline:
Matthew Russell Lee at the U.N
UNITED NATIONS, July
13 -- An oil pipelines gambit came to interim fruition on Thursday. The Baku -
Tblisi - Ceyhan curving route, avoiding Armenia, breakaway parts of Georgia and
most Kurdish parts of Turkey, is a testament to its precarious position. At a
briefing at the UN,
Inner City Press asked the
outgoing Ambassador of Georgia Revaz Adamia to explain BP's funding of a 700
person defense force for the pipeline. "They are not soldiers," Amb. Adamia
answered. "They are high tech people."
Inner
City Press asked the Ambassador of Azerbaijan Yashar Aliyev about the avoidance
of Armenia. We cannot deal with them until they stop occupying our territory, he
said. "You mean Nagorno - Karabakh?" Not only that, Amb. Aliyev answered. That's
only four percent. Few people know this, but Armenia has occupied twenty percent
of our territory.
But we
digress. The pipeline is more than a tube for oil, the Ambassadors read from
their scripts. A four-minute movie was shown. Later the full 20-minute film was
screened, as waiters served lamp chops and salmon on a skewer. "Bill Clinton was
there at the birth," a Georgian representative said. "He offered American
guarantees so the work would get done. It avoids this" -- he pointed on a map at
Russia -- "and here," pointing to Iran and the Middle East. "If only
Turkmenistan agrees to provide its gas," he said wistfully. He added his view
that Armenia gets away with incursions in Azerbaijan due to U.S. support. It's
an issue rarely touched on at the United Nations.
Georgia
Inner
City Press asked outgoing Georgian Ambassador Ademia where he's going. "Back to
science and business," he answered. "Oil," guess-whispered one wag -- not this
one -- in the crowd.
Full disclosure:
this reporter consumed, on the pipeline proponents' tab, several skewers of meat
and a glass of Borjomi mineral water, named for a national park in Georgia which
environmentalists say is put at risk by the BTC pipeline.
UN's Corporate Partnerships Will Be Reviewed, While New Teaming Up with
Microsoft, and UNDP Continues
Byline:
Matthew Russell Lee at the U.N.
UNITED NATIONS, July
13 -- The UN under Kofi Annan has increasingly worked with corporations.
Questions have been raised about background checks and safeguards. A day after
Inner City Press reported that the UN's Geneva-based refugee agency had not
known that Swiss banker Ivan Pictet is on the UN Investment Committee when the
UNHCR Kashmir Relief Note placed money with the Pictet Funds India Equity fund,
the agency's spokesman mused, "Isn't the UN Investment Fund based in New York?"
Inner
City Press asked if it would have been helpful to UNHCR if the UN system had a
database of the companies controlled by the outside business people who serve on
bodies like the UN Investment Committee. A Google search for that committee and
Pictet found close to nothing. It appears that there is no easy way to find who
is on the UN Investment Committee.
UNHCR's
Ron Redmond answered that that it would "have been helpful to have that type of
information... For UNHCR to look it up is labor intensive, with all the possible
company names." He later added in writing, "Any additional information on
prospective corporate partners is of course always welcome; it would facilitate
our screening processes." Mr. Redmond states that UNHCR was never required to
ask SocGen to cease using the UNHCR visibility logo, in part because the
brochure that it was on was only intended to be used for a brief period. But
records show that individuals high in UN Headquarters chided UNHCR for the use
of such terms as UNHCR "teams up" with SocGen. Despite this in-house chiding, or
perhaps because the chiders refuse in their defensiveness to comment for the
record, this practice continues in the UN system to this day, literally. Click
here to
view the UN's World Tourism Organization's July 12, 2006 press release, "UN
tourism agency teams up with Microsoft,"
which was published on the UN News Center just as UNHCR SocGen-derilab's April
5, 2006 press release was. They just keep teaming up.
As the UN
increasingly has intercourse with corporations, basic safeguards are still not
in place. Inner City Press has previously reported on the lack of background
checks when corporations are allowed to join the UN Global Compact, and has
twice been rebuffed in requests to interview or ask questions of corporate CEOs
who have come to meet the Secretary General or on other Global Compact business.
At
Thursday's noon
briefing,
spokeswoman Marie Okabe was asked if any of the individuals in the Secretariat
who were asked to comment on the UNHCR - Pictet - Societe Generale transaction
had in fact spoken or provided guidance. We're still working on it, Ms. Okabe
answered.
Near six
p.m., Ms. Okabe called Inner City Press and said she had spoken about the
matter, as requested, with Under Secretary General Mark Malloch Brown. "They are
aware of the issues," Ms. Okabe said. "This case highlights the complexities of
the UN's partnerships with the private sector and so current guidelines and
practices of various funds and agencies and programs will be reviewed" to try to
avoid "potential conflicts of interest" and misuses of UN logos.
Great.
But what about the continued "teaming up," now with Microsoft? There's more work
to be done.
[A note on UNHCR's
work about Uzbekistan: the agency managed to visit in Kazakhstan with
Gabdurafikh Temirbaev, the Uzbek dissident threatened with refoulement
back to Tashkent, and has, its spokesman said, gotten a commitment to be able to
review Uzbekistan's extradition request.]
Alongside
UNHCR's work, unlike at the
UN Development Programme, at least UNHCR answered the questions and acknowledged
that things could be better. On UNDP and human rights, on UNDP and refusal to
answer press questions, what will happen?
Zimbabweans
On the
issues surrounding UNDP, the Office of the Spokesman for the Secretary-General
managed to get some response from UNDP to a question Inner City Press asked UNDP
in writing more than a week ago: why does UNDP help the government of Uzbekistan
to collect taxes, given the UN Office of the High Commissioner for Human Rights'
finding that this government shot and killed its own people in Andijan in May
2005. Here now is UNDP's response:
"As far as your UNDP/Uzbekistan questions
from the other week, here's what I can tell you... in Uzbekistan and most of the
140 developing nations where UNDP operates, UNDP works with government and civil
society on a broad range of governance projects, including economic reforms, of
which tax administration and fiscal policy are a significant component. Other
governance projects in Uzbekistan focus on gender equality, internet access, and
public administration reform. It may be worth noting that UNDP works in a wide
range of political environments, from Costa Rica to North Korea, with the belief
that UNDP's mandate as a development agency is to work constructively on behalf
of the people of the developing world wherever and whenever possible."
One wag
wondered if UNDP's programs in Uzbekistan might involve technical assistance on
not putting political dissidents in boiling water, as the U.K.'s former
ambassador in Tashkent has testified takes place. And see above, that UNHCR has
managed to visit in Kazakhstan with Gabdurafikh Temirbaev, the Uzbek dissident
threatened with refoulement back to Uzbekistan, where he would face
torture -- perhaps with tax funds UNDP helped to collect. UNDP has still not
even purported to answer the week-old question about
UNDP's funding of
Robert Mugabe's purported "Human Rights Council." Now the Zimbabwe Lawyers for
Human Rights has
called for a boycott.
What was that again, about UNDP working with civil society? To be continued.
Feedback: editorial
[at] innercitypress.com
UN Office: S-453A,
UN, NY 10017 USA Tel: 718-716-3540
Conflicts of Interest in UNHCR Program with SocGen and Pictet Reveal Reform
Rifts
Byline:
Matthew Russell Lee at the U.N.
UNITED NATIONS, July
12, 11:45 am, updated 7 pm -- Eager to "team up" with banks Societe Generale
and Pictet & Company, the United Nations' refugee agency allowed SocGen to use
the UN logo in a way subsequently criticized by UN legal staff, and to invest
Kashmir Relief Notes funds in a Pictet & Cie fund despite owner Ivan Pictet
being a member of the UN Investment Committee. Criticized by other UN units,
UNHCR agreed to cease renting out the UN logo, but said nothing can be done
about the investment with Pictet et Cie.
Inner City Press
first raised these matters in April 2006. Earlier today UNHCR in Geneva finally
responded, confirming but defending the investment in a Pictet fund. UNHCR's
Ron Redmond wrote to Inner City Press that
"based on the information available to us,
there is no conflict of interest created for Mr. Ivan Pictet, managing partner
of Pictet & Cie, and ad hoc member of the UN Investments Committee, by the fact
that Pictet Funds Indian Equities is one of the funds in which KRN funds are
invested. Societe Generale, the issuer of the Note, is solely responsible for
choosing the funds and this selection is based on recognized risk management and
hedging criteria; UNHCR plays a purely passive role as the recipient of a
donation and has no interest in the performance of the Note. Moreover, Mr.
Pictet's membership in the UN Investments Committee was unknown to all parties
involved in drawing up this investment product, and we trust therefore that the
decision to include a fund managed by Pictet & Cie was taken in good faith."
Whether this
is in keeping with current and proposed UN standards of ethics and transparency
will be seen in coming days. Whether the stated lack of knowledge of Mr.
Pictet's membership on the UN Investment Committee comports with minimal
corporate or competence standards is also in question. The problem is a wider
one: in a defensive internal memo reviewed by Inner City Press, UNHCR lawyer
Helmut Buss argues that UNICEF similarly partners with FIFA and NIS Petrol Co,
and that the World Food Programme does the same with TNT Airways and the World
Rugby Board. Nevertheless, UNHCR has agreed to drop the logo use and the "teams
up" language deployed in its
April 5 press release.
The investment in a fund controlled by a member of the UN Investment Committee UNHCR defends, including by pointing out that
Morgan Stanley's Francine Bovich
is also on the UN Investment Board, while the UN does much business with
JPMorgan Chase. (Morgan Stanley and JPMorgan Chase, despite the comment
reference to Pierpont, are not related companies.) The UNHCR memo's argument is that it's too
complicated or burdensome to avoid conflicts of interest. UNHCR's earlier
justification to Inner City Press argued that "we are
not talking about the usual procurement procedure," when talking about an
investment in a fund controlled by a member of the UN Investment Committee.
This
conflict-or-reform debate has included at least in the carbon copies Deputy Secretary-General Mark Malloch-Brown,
who appears to have agreed that UNHCR's actions were improper. The paper trail
may be important. The story began with a
UNHCR press release on
April 5 of this year, headlined "New corporate
investment scheme helps fund UN quake relief efforts" and stating that "the
United Nations refugee agency has teamed up with two Swiss investment
companies in a scheme that will benefit its earthquake relief operation in
Pakistan. The joint project launched by the UN High Commissioner for Refugees (UNHCR),
Zurich-based Societe Generale Corporate & Investment Banking, and derilab s.a.,
a derivatives company, will allow investors to participate in a financial
product that affords a unique opportunity to support reconstruction and relief
efforts."
Inner City Press
inquired into the release and published a round-up
article on April 11 questioning
the partnership: "It might well be on the level. But
it's not yet clear that if it weren't, the scheme would not proceed. It would
help if the follow-up questions were answered."
Inner City Press' article included at length the
statement of UNHCR's Olivier Delarue:
From: Olivier
Pierre Delarue
To: Matthew.Lee [at] innercitypress.com
Sent: Thu, 6 Apr 2006 14:18:54 +0200
Subject: Re: Fwd: Press inquiry concerning how Societe Generale Corporate &
Investment Banking, and derilab s.a were selected for participation with UNHCR
I work in
UNHCR's Private Sector Fund Raising Service as Senior Corporate Relations
Officer and your query about this fund raising initiative was forwarded to me...
Based on the previous exchange of email you sent, your focus seems to be on the
procurement and bidding process done by the UN. This particular initiative,
however, is a fund raising project first proposed by corporate entities and
aimed at raising funds for UNHCR's humanitarian program. Therefore, as with any
fund raising project, we are not talking about the usual procurement procedure.
In my capacity
as Senior Corporate Relations Officer, my role is to work on creating new
partnerships with the corporate world in order to increase our donor base and
receive greater financial and expertise from the private sector. In this
particular case, Derilab s.a. approached us in the aftermath of the earthquake
in South Asia and proposed to assist us pro bono in finding new ways of raising
donations from the financial market for this emergency. As this was never done
in the past, a financial product which incorporated a charity/donation component
was not easy to build. Derilab presented the project to all the major banks
involved in structured and derivative products. Only Societe Generale showed a
serious interest in working on this new concept. As matter of principle, UNHCR
screens all new partnerships with the private sector. Societe Generale, the only
bank to show an interest for this project, was screened. As a result of our
careful review, Societe Generale was screened positively for various reasons,
including their participation in the UN Global Compact. Please note that in the
case of this initiative, UNHCR is only a receiver of donations through this
financial product -- but is not endorsing the product itself
The phrase "we are not talking about the usual
procurement procedure" may have been an understatement, given the investment
with a company controlled by an individual who is a member of the UN Investment
Committee. Regarding the last above-quoted phrase, even the UN Headquarters
staff who subsequently questioned UNHCR's program apparently found dubious this last point:
the use of the phrase "teams up" implies an endorsement, the question-memo
noted. ICP reiterated its broader questions to UNHCR in Geneva on June 1,
including directly to Mr. Delarue, to whom UNHCR's spokesman's office also
forwarded the request.
Several UN officials contacted Inner City
Press about its initial story. Subsequently UN staff in New York wrote to UNHCR
in Geneva, demanding an explanation including of the seemingly violative use of
the UN logo contrary to GA Resol. 92(I) of 1946. More than a month later,
UNHCR's Helmut Buss sent back a multi-page memo, acknowledging the investment in
Pictet Funds Indian Equity Fund, and that Ivan Pictet is on the UN Investment
Committee. Mr. Buss claimed to have determined that this conflict had been
stumbled into "in good faith," and that avoiding conflicts would be difficult,
given for example that
Morgan Stanley's Francine Bovich
is also on the UN Investment Board.
How
will conflicts of interest be avoided in the future? More than 12 hours before
initial publication of this report, Inner City Press put these questions to UNHCR in
Geneva, as well as to Ivan Pictet by fax at his place of work. Inner City Press' request for UNHCR's comment stated that "while it
shouldn't need to be said, Inner City Press has been appreciative of UNHCR's
responses, when received, on refugee-related questions on Zimbabwe, Uzbekistan,
etc.. This inquiry, which began in April and was attempted to be concluded in
June, is neither anti-refugee nor anti-UNHCR. As many have said, transparency is
good for the UN system, in the long run. In this short-run, this is a formal
request for UNHCR's written comment as quickly as possible."
In the
short and medium-run, UNHCR has declined to answer press questions about this,
back in April, in early June, and now. What will happen in the longer run
remains to be seen.
At 8:15
a.m. New York time, 12 hours after sending its written request for comment,
Inner City Press telephoned UNHCR deputy spokeswoman Jennifer Pagonis in Geneva and
reiterated the request for comment. Ms. Pagonis indicated that the request had
already been forwarded to Mr. Delarue for response by midday. But since he had
been asked back in early June to comment on developments of which Inner City
Press was even then aware, and he did not respond, to await Mr. Delarue's
belated second response seemed neither necessary nor appropriate. "It is not really
about Mister Delarue," Inner City Press explained to UNHCR's Jennifer Pagonis.
"It's about UNHCR and the wider United Nations." Subsequently, the following
was received:
From: REDMOND [at]
unhcr.org
To: Matthew.Lee [at]
innercitypress.com, BUSS [at] unhcr.org, DELARUE [at] unhcr.org
Sent: Wed, 12 Jul
2006 11:01 AM
Subject: Re: Request
for comment asap on UNHCR / Societe Generale's Kashmir Relief Note/ Pictet Funds
- on deadline
Dear Mr. Lee,
Olivier Delarue and
colleagues have looked into your questions and their reply follows.
- Use of UN name and
logo: UNHCR has not authorized Societe Generale to use the UN name and logo, nor
of the UNHCR official logo, both of which are indeed protected under GA/RES/92(I)
of 1946. In line with the "Guidelines on Cooperation between the United Nations
and the Business Community", issued by the Secretary-General on 17 July 2000,
however, UNHCR has, for the sole purpose of the raising of funds for UNHCR,
allowed SocGen to use, on its brochure announcing the KRN, the UNHCR "visibility
logo" with the addition "in support of". For your information, Article 16 (d)
(ii) of the a/m Guidelines authorizes the use of the name and emblem "to assist
in the raising of funds for the Organization".
- Potential conflict
of interest: Based on the information available to us, there is no conflict of
interest created for Mr. Ivan Pictet, managing partner of Pictet & Cie, and ad
hoc member of the UN Investments Committee, by the fact that Pictet Funds Indian
Equities is one of the funds in which KRN funds are invested. Societe Generale,
the issuer of the Note, is solely responsible for choosing the funds and this
selection is based on recognized risk management and hedging criteria; UNHCR
plays a purely passive role as the recipient of a donation and has no interest
in the performance of the Note. Moreover, Mr. Pictet's membership in the UN
Investments Committee was unknown to all parties involved in drawing up this
investment product, and we trust therefore that the decision to include a fund
managed by Pictet & Cie was taken in good faith. In any event, Mr. Pictet had no
involvement whatsoever in UNHCR's decision to accept the funds thus raised by
SocGen. Finally, you may also note that the volume of this investment (US$1
million shared over a number of funds, only one of which is Pictet & Cie's)
cannot be considered to benefit Mr. Pictet in any substantial manner.
- Screening of
Corporate Partners: Societe Generale is a member of the Global Compact .
Moreover, our research at the time demonstrated that Societe Generale was rated
over the past years as one of the best banks in the world, and the best in terms
of derivative products. For your information, private sector partnerships are a
relatively recent addition to UNHCR's fundraising strategy. In its dealings with
the private sector, UNHCR consistently bases itself on the a/m Guidelines issued
by the Secretary-General. In addition, UNHCR is in the process of installing an
advisory board to ensure even more checks and balances. This process, by the
way, was already on the way before the KRN was even first considered.
Derilab, finally, is
not a signatory to the Global Compact. It is a very small Swiss company
consisting of former bankers, that offered to provide its expertise in the
highly specialized field of derivative products to come up with innovative
approaches that could increase UNHCR's ability to raise funds from the financial
market.
Apologies for the
delay in getting back to you. The past month is one of the busiest times of the
year at UNHCR.
Regards, Ron Redmond
Head, Media Relations
& Public Information, UNHCR Geneva
Update 1 p.m. July 12
-- Asked at
the noon briefing if UNHCR is correct in invoking in its defense of this
program and investments Kofi Annan's "Guidelines on Cooperation between the
United Nations and the Business Community," spokeswoman Marie Okabe said that
UNHCR has submitted a detailed response and that she, and presumably for now the
Secretariat, have nothing to add to it. While UNHCR's written response was, as
always, appreciated, on-the-record inquiries will continue, first into whether
this UNHCR program, SocGen's initial use of the logo and the investment with
Pictet & Cie, are viewed within the Secretariat and elsewhere as comporting with
current and proposed standards of transparency and ethics. Inner City Press is
aware of views within the Secretariat, not close to the ground, which are at
odds with UNHCR's positions and actions. These views are being solicited,
on-the-record.
If Ambassadors to the
UN, even from the Permanent Five, answer questions at the Security Council
stakeout about their positions on such issues as amnesty for the Lords
Resistance Army's Joseph Kony, and who should repair the Gaza electrical power
plant, the Secretariat should answer regarding this UNHCR program. Watch this
space [and see Report of July 13, 2006, above.]
Inner City Press'
earlier story on this, followed by UNDP - Uganda, etc.
Inner City Press
Global Inner Cities Report - April 11, 2006
Byline: Matthew Russell Lee at the UN
UNITED NATIONS, April 11 --
An
inquiry to the Office of the UN High Commissioner for Refugees, about what they
called a financial "scheme" with
Société Générale and derilab s.a., resulted in the following answer:
From: Olivier
Pierre Delarue
To: Matthew.Lee
[at] innercitypress.com
Sent: Thu, 6
Apr 2006 14:18:54 +0200
Subject: Re:
Fwd: Press inquiry concerning how Societe Generale Corporate & Investment
Banking, and derilab s.a were selected for participation with UNHCR
I work in
UNHCR's Private Sector Fund Raising Service as Senior Corporate Relations
Officer and your query about this fund raising initiative was forwarded to me...
Based on the previous exchange of email you sent, your focus seems to be on the
procurement and bidding process done by the UN. This particular initiative,
however, is a fund raising project first proposed by corporate entities and
aimed at raising funds for UNHCR's humanitarian program. Therefore, as with any
fund raising project, we are not talking about the usual procurement procedure.
In my capacity
as Senior Corporate Relations Officer, my role is to work on creating new
partnerships with the corporate world in order to increase our donor base and
receive greater financial and expertise from the private sector. In this
particular case, Derilab s.a. approached us in the aftermath of the earthquake
in South Asia and proposed to assist us pro bono in finding new ways of raising
donations from the financial market for this emergency. As this was never done
in the past, a financial product which incorporated a charity/donation component
was not easy to build. Derilab presented the project to all the major banks
involved in structured and derivative products. Only Societe Generale showed a
serious interest in working on this new concept.
As matter of
principle, UNHCR screens all new partnerships with the private sector. Societe
Generale, the only bank to show an interest for this project, was screened. As a
result of our careful review, Societe Generale was screened positively for
various reasons, including their participation in the UN Global Compact. Please
note that in the case of this initiative, UNHCR is only a receiver of donations
through this financial product -- but is not endorsing the product itself.
Inner City Press responded with follow-up
questions, including regarding Societe General's long embroilment in a money
laundering scandal, and asked:
-is membership in the Global Compact the main
screen UNHCR applies to its corporate engagements, whether philanthropic or in
procurement? What are the other "various reasons"? Did your careful review of
Soc Gen -- just as an example -- include the issues raised by the money
laundering allegations sketched below, including those in Nigeria (we're aware
that Soc Gen has not been convicted of anything, but that wouldn't seem to be
the standards for a careful review).Again, these questions don't go to the
merits of how the funds are used by UNHCR -- as an aside, hats off for your work
in the Balkans and with Return, Afghanistan, etc.
- is derilab s.a a signatory to the Global
Compact? (I'm aware I could look it up, but the question also includes -- if a
company is not a signatory to the Compact, what else do you look at?)
Neither question
has yet been answered. A Web search for derilab reflects that nearly all of the
"hits" are about its recent "scheme" with UNHCR. It's own
web site says
only
"derilab(R) was recently founded by
experts in the field of financial derivative and structured products. derilab's
focus is to provide it's [sic] customers with key information on derivative and
structured products. derilab also advises on the structuring of financial
products."
It might well be on the level. But it's
not yet clear that if it weren't, the scheme would not proceed. It would help if
the follow-up questions were answered.
Other Inner City Press
reports are archived on
www.InnerCityPress.org -
UN Grapples with
Somalia, While UNDP Funds Mugabe's Human Rights Unit, Without
Explanation
In North Korean
War of Words, Abuses in Uganda and Impunity Go Largely Ignored
On North Korea,
Blue Words Move to a Saturday Showdown, UNDP Uzbek Stonewall
As the World
Turns in Uganda and Korea, the UN Speaks only on Gaza, from Geneva
North Korea in
the UN: Large Arms Supplant the Small, and Confusion on Uganda
UN Gives Mugabe
Time with His Friendly Mediator, Refugees Abandoned
At the UN,
Friday Night's Alright for Fighting; Annan Meets Mugabe
UN Acknowledges
Abuse in Uganda, But What Did Donors Know and When? Kazakh Questions
In Uganda, UNDP
to Make Belated Announcement of Program Halt, But Questions Remain (and
see
The New Vision,
offsite).
Disarmament
Abuse in Uganda Leads UN Agency to Suspend Its Work and Spending
Disarmament
Abuse in Uganda Blamed on UNDP, Still Silent on Finance
Alleged Abuse in
Disarmament in Uganda Known by UNDP, But Dollar Figures Still Not Given:
What Did UN Know and When?
Strong Arm on
Small Arms: Rift Within UN About Uganda's Involuntary Disarmament of
Karamojong Villages
UN in Denial on
Sudan, While Boldly Predicting the Future of Kosovo/a
UN's Selective
Vision on Somalia and Wishful Thinking on Uighurs
UN Habitat
Predicts The World Is a Ghetto, But Will Finance Be Addressed at
Vancouver World Urban Forum?
At the UN, a
Commando Unit to Quickly Stop Genocide is Proposed, by Diplomatic Sir
Brian Urquhart
UN's Annan
Concerned About Use of Terror's T-Word to Repress, Wants
Freedom of Information
UN Waffles on
Human Rights in Central Asia and China; ICC on Kony and a Hero from
Algiers
At the UN,
Internal Justice Needs Reform, While in Timor Leste, Has Evidence Gone
Missing?
UN & US,
Transparency for Finance But Not Foreign Affairs: Somalia, Sovereignty
and Senator Tom Coburn
In Bolton's Wake,
Silence and Speech at the UN, Congo and Kony, Let the Games Begin
Pro-Poor Talk and
a Critique of the World Trade Organization from a WTO Founder: In UN
Lull, Ugandan Fog and Montenegrin Mufti
Human Rights
Forgotten in UN's War of Words, Bolton versus Mark Malloch Brown: News
Analysis
In Praise of
Migration, UN Misses the Net and Bangalore While Going Soft on Financial
Exclusion
UN Sees Somalia
Through a Glass, Darkly, While Chomsky Speaks on Corporations and
Everything But Congo
AIDS Ends at the
UN? Side Deals on Patents, Side Notes on Japanese Corporations,
Salvadoran and Violence in Burundi
On AIDS at the
UN, Who Speaks and Who Remains Unseen
Corporate Spin on
AIDS, Holbrooke's Kudos to Montenegro and its Independence (May 31, 2006)
Kinshasa Election
Nightmares, from Ituri to Kasai. Au Revoir Allan Rock; the UN's
Belly-Dancing
Working with
Warlords, Insulated by Latrines: Somalia and Pakistan Addressed at the
UN
The Silence of
the Congo and Naomi Watts; Between Bolivia and the World Bank
Human Rights
Council Has Its Own Hanging Chads; Cocky U.S. State Department Spins
from SUVs
Child Labor and
Cargill and Nestle; Iran, Darfur and WHO's on First with Bird Flu
Press Freedom?
Editor Arrested by Congo-Brazzaville, As It Presides Over Security
Council
The
Place of the Cost-Cut UN in Europe's Torn-Up Heart;
Deafness to Consumers, Even by the Greens
Background Checks
at the UN, But Not the Global Compact; Teaching Statistics from
Turkmenbashi's Single Book
Ripped Off Worse
in the Big Apple, by Citigroup and Chase: High Cost Mortgages Spread in
Outer Boroughs in 2005, Study Finds
Burundi: Chaos at
Camp for Congolese Refugees, Silence from UNHCR, While Reform's Debated
by Forty Until 4 AM
In Liberia, From
Nightmare to Challenge; Lack of Generosity to Egeland's CERF, Which
China's Asked About
The Chadian
Mirage: Beyond French Bombs, Is Exxon In the Cast? Asylum and the
Uzbeks, Shadows of Stories to Come
Through the UN's
One-Way Mirror, Sustainable Development To Be Discussed by Corporations,
Even Nuclear Areva
Racial
Disparities Grew Worse in 2005 at Citigroup, HSBC and Other Large Banks
Mine Your Own
Business: Explosive Remnants of War and the Great Powers, Amid the
Paparazzi
Human Rights Are
Lost in the Mail: DR Congo Got the Letter, But the Process is Still
Murky
Iraq's Oil to be
Metered by Shell, While Basrah Project Remains Less than Clear
At the UN, Dues
Threats and Presidents-Elect, Unanswered Greek Mission Questions
Kofi, Kony,
Kagame and Coltan: This Moment in the Congo and Kampala
As Operation
Swarmer Begins, UN's Qazi Denies It's Civil War and Has No Answers if
Iraq's Oil is Being Metered
Cash Crop: In
Nepal, Bhutanese Refugees Prohibited from Income Generation Even in
their Camps
The Shorted and
Shorting in Humanitarian Aid: From Davos to Darfur, the Numbers Don't
Add Up
UN Reform:
Transparency Later, Not Now -- At Least Not for AXA - WFP Insurance
Contract
In Congolese
Chaos, Shots Fired at U.N. Helicopter Gunship
In the Sudanese
Crisis, Oil Revenue Goes Missing, UN Says
Empty Words on
Money Laundering and Narcotics, from the UN and Georgia
What is the Sound
of Eleven Uzbeks Disappearing? A Lack of Seats in Tashkent, a Turf War
at UN
Kosovo: Of
Collective Punishment and Electricity; Lights Out on Privatization of
Ferronikeli Mines
Abkhazia:
Cleansing and (Money) Laundering, Says Georgia
Post-Tsunami
Human Rights Abuses, including by UNDP in the Maldives
Who Pays for the
Global Bird Flu Fight? Not the Corporations, So Far - UN
Citigroup
Dissembles at United Nations Environmental Conference
Other Inner City Press
reports are archived on
www.InnerCityPress.org -
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