UNDP faces graft allegations in climate projects: report

The report was based on a copy of a draft report by UNDP's office of audit and investigations, dated November 2020. The draft 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, according to the FT.

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 disbursed 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 UN agency.

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 organisations, is subject to an intricate system of regular reviews, independent assessments and audits," the UNDP said.

While there have been "allegations of misuse of funds" at certain projects, such complaints affected "a tiny fraction — 1.4 per cent" of the UNDP's GEF-funded portfolio, it added.

Other project audits from independent consultants as well as written complaints from current and former UNDP staff, all seen by the FT, suggest that concerns over alleged financial misconduct and poor oversight at the UNDP may be widespread.

"What happened in Russia is a Russian problem. But things going wrong are very common," said Frank Klinckenberg, a European environmental expert who has reviewed GEF programmes across the world for more than 10 years.

An independent review of a GEF-funded UNDP project in Uzbekistan warned that financial information provided by the UNDP was not reliable and "must be questioned". "As a further result, this [midterm review] is required, by UNDP guidelines, to refer this project for a fraud investigation," the draft report said.

The claims of misconduct at the UNDP are not the first allegations of impropriety linked to the UN's climate work and represent one of the many challenges facing the UN as it seeks to coordinate a global response to climate change.

The UN-backed, South Korea-based, Green Climate Fund, the world's largest climate finance institution, has faced a recent wave of internal misconduct complaints, including allegations of sexism and harassment in the workplace, the FT reported in August.

"The words 'climate' and 'corruption', people see these as two different worlds, but there is a lot of overlap," said Brice Böhmer, the head of climate governance integrity at Transparency International, the global anti-corruption group.

Böhmer said governance at the GEF had improved in recent years, but noted that the GEF had limited authority over UNDP projects, which are implemented according to UNDP standards, according to the FT article.