UN agency faces corruption, fraud allegations at climate projects: Report

The United Nations Development Programme (UNDP) is facing several allegations of fraud and corruption linked to the multibillion-dollar Global Environment Facility, according to documents seen by the Financial Times (FT).

A copy of a draft report by UNDP’s office of audit and investigations, dated November 2020, described “financial misstatements” worth millions of dollars across UNDP’s portfolio of GEF-funded projects around the world. The report highlighted problems including signs of “fraudulent activities” at two country offices and “suspicions of collusion among the various project managers” at another, without naming the countries.

“Issues identified by the audit could seriously compromise the achievement of the objectives of the audited entity,” the report said.

The GEF was set up in 1991 as part of the World Bank to help fight environmental challenges such as deforestation, species conservation and pollution. It has since split out to become an independent organisation and dispersed more than $21 billion in 170 countries, including $7 billion in projects managed by the UNDP.

The audit of the UNDP’s GEF-funded projects — which covers 2018 and 2019 and is the first review of its kind since 2013 — comes against a backdrop of rising concern from some donor countries over management and oversight issues at the UNDP. An investigation by Foreign Policy in 2019 published whistleblower accounts alleging the misappropriation of millions of dollars at a UNDP-run GEF project in Russia. Twelve donor countries — including the US, France, Australia and Japan — have since sought an independent review of the UNDP’s handling of that project, according to a letter seen by the FT.

“Matters of misconduct and misappropriation of funds continue to obstruct sustainable development across the world,” the donors said in March in the letter to Achim Steiner, the UNDP administrator since 2017.

In a written response to the FT, the UNDP said it “takes all cases of financial mismanagement and other irregularities extremely seriously”, adding that its GEF projects were some of the organisation’s “most closely monitored”. “The portfolio, the majority of which is implemented by national and subnational institutions, civil society organisations as well as other UN organizations, is subject to an intricate system of regular reviews, independent assessments and audits,” the UNDP said.