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As UN Global Compact Lauds Sri Lanka's Hayley Group, Cigarette Filter Production Deemed Not Serious

Byline: Matthew Russell Lee of Inner City Press at the UN

UNITED NATIONS, March 19 -- The UN Global Compact, a corporate initiative of Kofi Annan, on Monday held its first press conference at UN Headquarters since Ban Ki-moon took over. The Hayleys Group, a Sri Lankan conglomerate involved among other things in textiles, teas and "activated carbon" used in cigarette filters, received a plaque for a program in which it will insert a Global Compact flier in every tea container, and devote 1.5 cents per sale to housing for the workers on what it calls its plantations.

            The Global Compact's self-description is that it "catalyzes actions in support of UN goals." The UN's World Health Organization helped organize in 2003 the Framework Convention on Tobacco Control, since ratified by nearly all UN member states. At Monday's press conference, Inner City Press asked Hayley's Group chairman N.G. Wickremeratne about the cigarette filters as well as how the Group deals with the 20-year conflict in the country. Video here, from Minute 27:54.

            Of cigarette filters, Mr. Wickremeratne said that "if someone wants to buy our product, unless we know for certain.... we would not not sell." He added that if asked, "We will produce a better quality filter" for cigarettes.

            But how does this relate to the Global Compact, and to the UN's Framework Convention on Tobacco Control? Inner City Press asked the two questions, conflict and tobacco, to Global Compact head, Goerg Kell. On the first, Mr. Kell spoke of how business can foster islands of stability. He did not, in this first crack at it, address the tobacco issue. When Inner City Press followed-up, Mr. Kell said, "I don't believe it is a very serious issue," and called it a third-level issue. We are here to talk about tea, he said, noting that there is "no explicit prohibition" against tobacco and that it is a "fully legal product." He concluded, "We do not see this as an ethical issue." Video here, from Minute 37:51 [but, for update, click here.] Many in the responsible investment community see it differently. And the Global Compact's own website touts its co-hosting of dialogues to "promote sustainable lifestyles." Smoking, it seems clear, not only does not represent a sustainable lifestyle, it does not sustain life, much less style.

Global Compact beams tea at UN HQ on Monday

            Sri Lanka is a signatory to the UN's Framework Convention on Tobacco Control. On Monday, Sri Lanka's Ambassador to the United States, Bernard Goonetilleke, responded to Inner City Press' question about business in conflict areas, but not on the question of cigarettes and filters. Ambassador Goonetilleke emphasized that cease fires are arranged, even in areas controlled by the Tamil Tigers, to arrange for the vaccination of children, and that the central government pays for schooling in those areas. A similar point, regarding the country's rules against child labor, was made by Ravi Fernando, who along with being the Global Compact's "focal point" in Sri Lanka also works for garment manufacturer MAS Holdings, one of the products of which is described as "the ethical bra." Beyond Sri Lanka, MAS has factories in India, Maldives and Vietnam.

             Relatedly, Mr. Kell indicated that his office and experts will be providing information from its "work stream" on the relation between the Compact and conflict prevention, or as Inner City Press put it, peace and security. The connections and disconnections between the evolving principles and methods of the Global Compact and the wider "community" of socially responsible investment is a topic deserving of more coverage. What, for example, is the Global Compact's view of predatory lending?  Would the Global Compact say that climate change and standardless greenhouse gas emissions, like tobacco and the production of cigarette paraphernalia, is not "an ethical issue," not even " a very serious issue?"  We will continue to cover the Compact.

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With Audit Starting in NY, UNDP Manager Akiko Yuge Leaves Town, Sale-of-Jobs Unanswered

Byline: Matthew Russell Lee of Inner City Press at the UN: News Analysis

UNITED NATIONS, March 19 -- As the delayed "urgent audit" of North Korea programs called for by Ban Ki-moon on January 19 today begins at the UN Development Program, the director of UNDP's Bureau of Management Akiko Yuge has conveniently left town, internal UNDP e-mails obtained by Inner City Press show.

            Sources say that UNDP's legal chief James Provenzano and finance director Darshak Shah may also have left. (Since UNDP no longer answers even basic questions, this cannot be confirmed. As to Ms. Yuge, see the intra-UNDP email below.)

          Mr. Shah and Ms. Yuge were among the eight UNDP officials to whom the Executive Secretary of the UN Board of Auditors, Swatantra Goolsarran, sent his March 1 memo scoping out the audit including requested interviews, their absence from headquarters during the audit has raised questions about staff. So has the fact that the scope of audit memo was not sent to UNDP's Asia chief, Hafiz Pasha, but only to his ostensible deputy, David Lockwood. The credibility of the audit is increasingly doubted by knowledgeable sources inside UNDP.

            UNDP's large but recently lethargic (at least on this issue) communications office has not helped dispel the doubts. A series of questions about the audit and UNDP's North Korea program have done unanswered. Even two non-North Korea questions asked on camera then in writing last week, regarding UNDP's reported support of a gold mine in Romania and the selling of jobs and promotions alleged by UNDP staffers, have been entirely ignored.  UNDP's David Morrison was asked these questions at the March 13 noon briefing filmed by UN TV, click here for video, from minute 40:30 to 42:39.

  Inner City Press followed this up with an email:

Subj: Follow-up to today's UN noon briefing, & some long-outstanding questions, thanks 

Date: 3/13/2007 2:05:40 PM Eastern Standard Time

To: david.morrison [at], ad.melkert [at], kemal.dervis [at]

CC: [cc's deleted in this format]

 From: Inner City Press

Hello -- This follows up on questions asked at today's UN noon briefing. On  deadline,  need a yes or no answer on whether the previous head of the Department  of  Management ever imposed conditions appointments or promotion (or in  cases of demotion / re-classification downward). We are told that this was  sometimes explained as being akin to a "headhunter's fee."

  Because we are on deadline, we are also cc-ing some of the  individuals, who we have been told may on this question have knowledge. [Ed.'s note: cc's deleted in this format.]

I am attaching for your comment and explanation three documents  concerning the controversy regarding UNDP's position on, and involvement in, gold mining project in Romania.  Also, a breakdown of the $10.88 million  you cited today, and your response to Ben's question about the $151 million  figure in OCHA's consolidated appeal. I am pasting below yesterday's reminder email, and note that a  long-ago asked question -- how many people work for UNDP? --  message, which  included other still-unanswered questions, pasted below -- has yet to be  answered. Ad Melkert is cc-ed because he indicated such answers would  become faster.

 And again, we believe that Mr. Dervis as Administrator should come  and give a briefing in 226, given the issues that have been raised. 

  Still, no response whatsoever. Therefore, for now, here is an edited version of one of the UNDP staff complaints that has been directed to Inner City Press, despite David Morrison's counter-story that procedures and whistle-blower protections exist in UNDP such that no one should go to the press:

Subject: Re: Attn: Mr. Matthew Russell Lee
Date: 3/2007 [Date and time omitted due to last line of 2d email, below]
From: [Name withheld, entitled to all whistle-blower protections]
To: Inner City Press

 ...on jobs for favors first. I know some people to whom Brian Gleeson offered promotions or appointments in exchange of the cash equivalent of the first salary. He mentioned this option to me as well when my post was re-classified downwards. I pretended it was a joke, but afterwards the relations became very strained. For quite some time I was kind of sidelined...

   Then --

Subject: Re: Attn: Mr. Matthew Russell Lee - many thanks, some [follow-up] questions
Date: 3/2007 [Date and time omitted due to last line of this email]
From: [Name withheld, entitled to all whistle-blower protections]
To: Inner City Press

...Usually $10,000 or first salary. Brian was quoted to say that as UNDP was becoming corporate-like, it would be normal to charge as head hunter agency would charge.

...Our I.T. manager said that the management could track what we do on the Internet at any instant. So much for our rights, which could be another topic for you to explore.

  Yes, that will be another topic. And on the Romania gold mine controversy, we have tried another route, which we hope will soon bear fruit, at least a response of some sort. But why would UNDP made no response at all for six days to questions about these sale of jobs and promotions allegations, questions raised in a formal UN-televised press briefing and then also in writing, with additional names provided? \

  This was sent out, Friday after close of business:

From: Bernadette Jones

Sent: Mar 16, 2007 18:10

Subject: O-I-C of BOM

Dear All,

This is to advise that Ms. Akiko Yuge will be away from Headquarters from 18 to 31 March 2007, inclusive.   During her absence Ms. Jocelline Bazile-Finley will be the Officer-in-Charge of the Bureau of Management. Please also note that Ms. Bazile-Finley is the Acting Chief Procurement Officer for this period.

Thank you

Bernadette Jones , Executive Assistant to the Assistant Administrator and Director, Bureau of Management

            We will have more about UNDP's procurement. But why would UNDP send its new director of Management, Brian Gleeson's successor, away from headquarters precisely during the two week New York period of the "urgent audit" of UNDP's management of its North Korea program? Questions, questions...

    Again, because a number of Inner City Press' UN sources go out of their way to express commitment to serving the poor, and while it should be unnecessary, Inner City Press is compelled to conclude this installment in a necessarily-ongoing series by saluting the stated goals of the UN agencies and many of their staff. Keep those cards, letters and emails coming, and phone calls too, we apologize for any phone tag, but please continue trying, and keep the information flowing.

At UNDP, Audit Delayed and Questions Deflected As Other Scandals Brew

Byline: Matthew Russell Lee of Inner City Press at the UN: New Analysis

UNITED NATIONS, March 13 -- The urgent audit of the UN Development Program called for by Ban Ki-moon on January 19 has been postponed for another week. UNDP spokesman David Morrison on Tuesday took questions on camera, and stated that UNDP has expended $47.5 million in North Korea in the past decade, $10.88 million of which was on behalf of other UN agencies, "the vast majority" being for the UN Population Fund. Asked about the $151 million UN Consolidated Appeal for the country issued in 2004, Morrison said he was not aware of the appeal and would get back to reporters with answers about it. Ten hours later, the answers had been provided to this or several other follow-up questions posed by Inner City Press.

            Morrison largely deflected questions by referring to the now-postponed audit, and saying he can't or won't answer until the audit is completed. Video here, from Minute 30:50 to 35:22. Morrison said, "On questions of site access, currency, computers and inventories... we think we should all wait for the results" of the audit that has yet to begin.

            A March 1 memorandum from Mr. Swatantra Goolsarran of the UN Board of Auditors to Kemal Dervis and the heads of UNFPA, UNOPS and UNICEF said that the audit would begin on March 12. Tuesday Inner City Press asked Morrison to explain the new one-week delay. Morrison said to ask the auditors, then added that it is his understanding that they couldn't get all the auditors in place by March 12. The memorandum states that there are only three auditors: team leader Ms. Odette Anthoo of South Africa, Mr. Dioni Abalos of the Philippines and Ms. Martine Latare of France.

   Tellingly, Morrison had less than a week ago been quoted as to his "understanding was that the agency had never had problems with site visits." Tuesday Inner City Press asked about this quote and Morrison claimed he "did not say they never had problem." But any discussion of the lack of access, according to him, must wait until the completion of a still-not-begun audit.

Work-for-food project in N. Korea, UNDP not shown

            Separately, the World Food Program's New York spokeswoman has explained to Inner City Press why WFP was not included in Mr. Goolsarran's March 1 memo, nor in the Board of Auditor's audit:

Subj: Audit 

Date: 3/13/2007 10:10:36 AM Eastern Standard Time

From: Spokeswoman of WFP

 To: Inner City Press

Dear Matthew, here's more on the audit request:

WFP does not fall under the control of the Board of Auditors (historic reasons dating back to our time as part of FAO whose EB requests external audits).  Our external audits can only be requested by our Executive Board. WFP's Executive Board at its first regular session from 19-21 February, took the following decision:

"Noting the Secretary General's proposal, the Executive Board decided to request the WFP external auditor to carry out a special audit of the WFP operations in the Democratic Peoples Republic of Korea as a matter of priority and report its findings to the Board. The WFP external auditor might wish to consult and coordinate with the UN Board of Auditors which may be undertaking a special audit of United Nations organizations in the Democratic Peoples Republic of Korea, including the United Nations Funds and Programs that fall within its mandate."

Given this decision, it is now up to the WFP external auditor to set up its audit schedule. Hope this helps.

            It does, including by contract to UNDP. When UNDP's Morrison on Tuesday was asked to explain still not having provided information that he on Monday committed to produce, he again referred to waiting to the audit. Given that on Monday he said, we'll get back to you with that, what changed in the past 24 hours? Nothing, Morrison said. And in the hours after Tuesday's noon briefing, the status quo of non-response was maintained. Two separate controversies that Inner City Press asked about -- video here, from Minute 40:30 to 42:39 -- and on which Inner City Press submitted follow-up email reminders including to Kemal Dervis, Ad Melkert and others, were left entirely unaddressed by UNDP. Watch this site.

            After telling Inner City Press on Monday that he had no idea what UN Resident Representative Timo Pakkala is bringing from Pyongyang to New York on March 17, Tuesday Morrison acknowledged having said that Pakkala is bringing electronic records, "the highest priority documents."

            Within UNDP, there is speculation one of the two UN official with intimate knowledge of the program" quoted in the Chicago Tribune's article which called UNDP an "ATM" for Kim Jong Il may be Timo Pakkala, and that the May 2006 warning referred to by the Tribune was a communication from Pakkala to Kemal Dervis. Others ask, what could Pakkala gain by blowing the whistle?  Morrison on Tuesday referred repeatedly to staffers' "recourse" in UNDP, and to "whistle-blower" protections. But the stakes are high.

   UN and UNDP staff who have due to their employment G4 visas to be in the United States, would be required to leave the U.S. within thirty days of termination.  A simple reform that the U.S. Congress could enact, advance earlier by this publication and to be reported on from Washington DC later this week, would be to amend immigration rules to extend any whistleblower's right to remain in the U.S.. Developing.

At the IMF, Comment on Global Subprime Contagion Deferred For Already-Leaked Report

Byline: Matthew Russell Lee of Inner City Press in DC: News Analysis

WASHINGTON, March 15 -- As the failures of two dozen subprime lenders and rising delinquency and foreclosure rates roil the global markets, on Thursday the spokesman for the International Monetary Fund was asked for the IMF's view on slow downs and housing. David Hawley, formally the Fund's senior advisor for external relations, largely dodged the question. He repeated a view that "recent turbulence appears to reflect a market correction," then deferred any more specific comment until the IMF releases its World Economic Outlook publication in April.

            Also garnering no-comments or dodges were questions about Turkey exceeding the IMF's budget target, and about Italy. The entire bi-weekly press conference took barely 11 minutes. No questions were taken online. Whether any were submitted is not known.

            Mr. Hawley declined to comment on a Dow Jones reporter's question about leaks of the WEO data. Earlier on Thursday, Reuters reported on a purloined WEO draft, that the IMF's projection for U.S. economic growth in 2007 is now 2.6%, down from the 2.9% it projected back in September. Is the melt-down in the mortgage market part of the reason for the revision downward? Mr. Hawley wouldn't say.

IMF @ UN, on peace-building, not predatory lending

            In fact, beyond the contagions that now spread from one stock market to the next, several Europe- and Asia-based banks are deeply involved in the U.S. subprime market. Inner City Press has fielded calls from reporters in London and the Netherlands about what they call the U.S. mortgage crisis. Royal Bank of Scotland, for example, has been a major provider of financing to subprime lenders, through its Greenwich Capital Markets subsidiary.  HSBC's problems since buying Household International are well known. Barclays has bought a subprime servicer, from Wachovia, and now an originator too. Nomura is involved in the securitization of such loans. Deutsche Bank has gone further, buying up dubious originators in order to guarantee themselves a stream of high-cost loans.  Now Wall Street is feeling the heat, at least temporarily. As Jesse Jackson said here on Wednesday night, "now the hunter is being trapped with the game."

            And as while question mount about the role and future of the IMF, it would seem they'd have something to say on this global subprime contagion. We'll see.

Other, earlier Inner City Press are listed here, and some are available in the ProQuest service.

            Copyright 2006 Inner City Press, Inc. To request reprint or other permission, e-contact Editorial [at] -

UN Office: S-453A, UN, NY 10017 USA Tel: 212-963-1439

Reporter's mobile (and weekends): 718-716-3540