Ethics Review Nemeth

8/9/2019 Ethics Review Nemeth

1/8

Ethics O ffice of the United Nations Secretariat

Review of the External Independent Review Panel's Report:UnitedNationsDNelopmnt Prog,rlammeA c f h r b n theDemocraticPeople'sRepublic of Korea, 1999-2007

lconducted by the Director of the United Nations Ethics Office

Ethics Office of tht! United Nation# ~eeretaria'tHeadqllarters - S-3001N e w I.ork, N Y 10017Tel . 1 I 917) 367 -9859Fax. 1 :917) 367-9861Email: et11icsoff [email protected]


2/8

l Jnited Nations Ethics Off ice Shkurtaj / UNDP

1 . The External Independent Invesl: gative Review Panel (EIIRP) was formed by theIJnited N ations Development Programme (UND P) in September 2007 in order to conducta "comprehensive and detailed investige.tive review o f the UNDP D emocratic People'sRepublic of Korea (D PRK ) country offi::e operations during the period 1 January 1999 toI March 2007."7-. On Z . June :!008, a copy o f the C1,afidential Report on United NationsDevelopment Programme Activities in t: ~ e emocratic People's R epublic of Korea,1999-2007, dated 3 1 May 2008 was pro id e d to the Director, UN Ethics O fic e. On thissame day, a copy of the e ntire EIIRP R eport was posted on U NDP's internet website.3. 'The Terms of Reference of the E':IRP, as they specifically relate to the UN EthicsO fic e, provide:

"A complaint has been lodged thilt UNDP retaliated aga inst an individualfor "blowing the whistle" on irre jylarities in its operations in DPRK. Inthis respect, [the EIIRP shall] relsiew he compla inant's allegations relatedto these operations and the allegr d retaliation, make every effort toestatllish the facts, including abo .it the spec ific events in DPRK andregarding applica tion of relevant protection policies. After completing thereview, the Independen t Review 'Team shall share its findings on thisaspect of the Independent Investilgative Review with the Director, UNEthics Office. The D irector, UN zthics Office, could then provide anopinion and formulate recomrner, ations, asmay be appropriate, on theretaliation allega tions in light of i.5ese findings. If the UN Ethics Officerequires further investigation of this specific issue, after having reviewedthe findings of the investigative rr:view, it can arrange for such follow-upbefore providing its recomrnendar ions, w ith the full cooperation ofIJNClP."

Backgrouncl4 . Prior to the release of the EIIRP l;:eport, UN DP's activ ities and opera tions in theDPRK had been subje cted to review and comment by two other 'independent' entities.The UN Board of Auditors made observittions, and th e US Permanent Subcomm ittee onInvestigations (Conunittee on Homeland Security and Government Affairs) wasinvestigating UNDP 's op erations in the I:IPRKprior to UNDP suspending its operationsin DPRK on 1 March 2007. UNDP's sus:en sion of operations followed the failure ofDPRK to agree to c ertain conditions that had been mandated by the Executive Board ofUNDP on 25 January 2007.5 . In relation to some of the irregularities in UNDP's operations in the DPRK , thefollowing observations have been made 11y he independent entities reviewing the matter.--

Pg.


3/8

llnited Nations Ethics Office Shkurtaj I UNDP

6. The EIIRP in its' findings noted that:"Sir ce 2005 , Shkurtaj has consi:;tentlyexpressed concerns about hardcurrzncy paym ents to the DPRK and the national staff. Similarly,Shk ~ r t a jepeated ly raised concc .ns about the degree to which DPRKimpeded UNDP's access to the lloreign Trade Bank,where UNDP's localbad ; accounts were held, by req ir in g Li Kum Sun [National s t 4 ohandle all transactions with the lrank... and]. . At va rious points, Shkurtajflagged concerns about issues SLlh as the in ternational s t a s ack ofaccess to the DPRK's Foreign T!ade Bank, insufficient projectmonitoring, and the degree to wllich the DPRK government monitored andcontrolled UNDP's operations."

7 . The Board of Auditors 3 1 May 1:007 Report indicated that the AdvisoryComm ittee Dn Adm inistrative and Budgetary Questions (ACABQ) requested the Board toconduct its audit of the U nited N ations organizations in the Dem ocratic Republic ofNorth Korea, focusing on three (3) area :(a ) foreign currency transactions(b) staff hirins(c) access to I-eviewing ocal projec:ts, including direct paym ents for NationalExecution (NEX) projects.

8. 'The Board of Auditors findings indicate that, in relation to:(a) foreign currency transactions - 3cal paym ents made in foreign currencies werewithout requisite authority;(b) staf'f hiring - local staff were hi~,:d hrough a governm ent agency of DPRK,contrary to relevant instruction! and procedures; and(c) access to reviewing local projec.s, including direct payments for NationalExe:cution (NEX) projects - pro ~e ct isits had taken place, but were done undersupervision of the DPRK autho aities except for one repo rted project in UNICEF.

9. The :StaffReportof the US Perm:ment Subcommittee on Investigations(Committee on Homeland Security and (;!overn men f ffairs) in making itsrecommendations spe cifically noted:"The factspresented in this R e p c ~ t ight not have come to light absent theactions of Artjon Shkurtaj, who rilised repeatedly concerns about UNDP'spractices in North Korea."

1 0. And, later ill the Report when coll~m enting pon the concerns that Mr. Shkurtajhad been raising, it indicates:"In p.articulw, he identified probl ;:mswith the manner in which paymentswere made, the use of foreign cw rency for certain paym ents, insufficient--

Pg.


4/8

United Natior s Ethics Office Shkurtaj / UNDP

project m onitoring, counterfeit I.S currency, and the lack of securecommuniciitions in the UND P C ffice in Pyongyang."I I . And finally, when com menting upon UNDP's E xecutive Board decision towithdrawal from the DPR K, the report i ~idicates:

"In March 2007, in an unprecedt:nted action, UNDP suspended itsoperations in North K orea and ir~formedDPRK g overnment that it wouldbe unable to continue operating : I the country unless, among other steps,the I>PRK Governm ent agreed tc: accept all UNDP paym ents using N.Korean local currency; permitted UNDP to select local staff who wouldwork in its offices; and ensured on-site project inspections would takeplac~:without delays."12. In summ arizing the findings of eilch of these independent reviews, it is readilyevident from the abov e, that the issues ri~ised y Mr. Shkurtajwhich related to: the use ofhard currency; lociil staff hiring; and prc: ect monitoring, were con firmed by all threeindependent entities to be either:

(a) action:; taken without requir ite authority or contrary to relevant instructionsor procedures (Board of Aucl'itors)c'b) management and operatione ! deficiencies US Permanent Subcommittee onlnvesligation s (Committee (:InHomeland Security and Government Affairs)(C) legitimate concerns about U:VDP's operations (EIIRP)

Ethics 0ffic:eOpinion13 . ' f ie ~nan date f the EIIRP, as it specifically relates to the Ethics O ffice, provides:

"The Directo r, UN Ethics Office! could then provide an opinion andiormulate recomm endations, as n..ay be appropriate, on the retaliationallegations In light of these findir~g s."13. In providing tha t opinio n, a revie V of the Panel's findings must obviously beundertaken; however, in the conduct of s~ ic h review one must be ca reh l not substitutehis or her views of the ev idence for thost: of the EIIRP's and ensure that some deg ree ofdeference is given to the findings of credibility made by th e EIIRP.15 . The EIIRP, at page 339 of their R :port, has indicated that it:

".. has em ployed the p rinciples sa; t forth in the Secretary-Gen eral sBulletin dated D ecember 19, 200 .: (i.e. ST/SGB/2005/2 - "Protectionagainst retaliation or reporting r ~risconduct nd for coopera ting with du lyau th~ viz ed udits or invesfigatiol:) regardless of applicability to UNDP.The F'anel has undertaken such ar analysis to afford Shkurtaj every benefitof the doub t and to ensure substantive review of his claim."Pg.


5/8

1Jnited Nations Ethics Office Shkurtaj / UNDP

16. Although the EIIRP did not articulate the principles set forth in ST/SGB/2005/2I,"Protectionagainst retaliationfor rep0 ,ting misconduct andfor cooperating with dulyauthorized audits or investigation I, the ~aelevant rinciples to th is case are:

a the cornplainant must have ;ngaged in a protected activity, that is:(i) the complainant reports, in good faith and provides information or2vidence to sup port a reasonable belief that misconduct (i.e. failure ofm e or more staff me r~~ be rso comply with his or her obligations,mder the Charter o f t he United Nations, the StaffRegulations andStaff Rules or other relevant administrative issuances, the FinancialRegulations and Ru le:, or the Standards of Conduct of thehternational Civil Se vice ) has occurred; or(ii) I he com plainant has cooperated in good faith with a duly authorized;nvestigation or audit:(b ) the allcged retaliation (that i:;, any direct or indirect detrimental actionrecommen ded, threatened c taken) occurred because the individual engagedin a protected activity ; and(c ) th e burden of proof shall resl w ith the Administration, which must prove byclear and convincing evider ~ c ehat it would hav e taken the same actionabsenl the protected activity [Section 1 .4,2 .1, and 2.2 refers].

1 7. In relatio n ta th e first princip le that is, the complainant should have engaged in aprotected ac tivity, the EIIRP concludes, .it page 314 :"In short, the Panel concludes t h ~ :hkurtaj raised legitimate concernsabout UNDP's operations in the I:IPRK particularly with respect to hardcurrency payments being made tc the DPRK. To be sure, Shkurtajwasnot revealing problems that were unknown to UNDP officials.Nevertheless, by confronting his :iuperiors and bringing h is concerns tolJNDP Headquarters, Shkurtajwas shining a spotlight on serious issuesthat requirecl UNDP to act in a mc:aningful way. At a minimum, hkurtajwas rq or tin g potential violations of policy and procedure. As such, hecanftzirly be described as someor !e who has reported complianceconcerns and who thus is entitled roprotection porn retaliation. For thepurposes of the discussion that fo 'lows, he Panel has treated himaccordingly. (emphasis added)

18. Following the EIIRP's determinat:.on hat M r. Shkurtaj is an individual entitled toprotection from retaliation, the report the]:.provides that the ". ..question then distils towhether the IJNDP responded appropriate: y to Shku rtaj s co mplaints.. .19. Unfortunately, the issue following,a finding that Mr. Shkurtaj s an ndividual". . entitled tcl protec tion from retaliation .. ." s not whether the O rganization wasaddressing his concc:rns, but w hether the .!idm inistration(UNDP) has been able to--

Pg. 5


6/8

l nited hations Ethics Office Shkurtaj 1UNDP

discharge the burden o f proving by clear and convincing evidence that it would havetaken the action(s ) absent the p rotected rictivity.20 . Befc~re orrlmenting generally ullon whether or not UNDP has discharged thisburden of proof, a comment is warrante:l in relation to one particular finding made by theEIIRP. That particu lar finding is in relalion to what the Panel describes as the 'flawed'hiring process assoc iated with the UNDI1-DPRK ALD Operations Manager position, aposition t h a Mr. S hkurtaj had applied f :lr and been selected as the successful candidate.The EIIRP indicates:

-'The Panel is troub led by several facts it has been ab le to establish. First,between March 17 ,20 06 and Ar:il 13,2006, the DPRK govenunentcomplained to Pakkala about Sh a rt aj 's interpersonal skills and histreatment of the national staff. I:I fact, when Pakkala sent Ri Hung Sik aletter on M u c h 20 ,20 06 , requesting NCC-UNDP's concurrence withShkurtaj's continued role as Operations Manager, Ri Hung S ik expressedhesitation ill a respons ive letter c ~ t e d pril 12,2006. Second, Domingodid ro t d etermine that the process was flawed until nearly four weeks afterPakkala's initial selection of Shklrta j. Circumstantially, this sequence ofevents is consisten t with the idea that in response to concerns raised by theIIPRK governm ent, Pakkala cha.lged his mind about hiring Shkurtaj, afterwhich Domingo invalida ted the t.:lection process.""The Panel is unable to co nclud e, however, that the reversal of the initialselection of S hkurtaj was reta1iat:)ry."

2 1. This particular finding is troublir g, as the EIIRP is essentially saying that theburden of proof on UNDP to establish b:, clear and convincing evidence that it wouldhave taken the ac tion, absent the protected activity has not been discharged. However, theEIIRP Report, while still comm enting upon this 'troubled' matter, provides:"According to Do mingo, no one .old her that representatives of the DPRKhad co mp la~n ed bout Shkurtaj, i nd nothing other than an objec tivelyflawed pro cess motivated her dec uion. On these points, she wasuneqlrivocal. Dom ingo stated fbr her that in her position asHumanReso x ce s Business A dvisor, she periodically reverses selection decisionsand identifies flaws in selection1 ecesses. She thus explained that hertreatrnent oSShkurtaj's applicatic 1was not a unique event." (emphasisadded)

22 . Had it not been for Ms. Domingo's unequivocal testimony regarding the DPRKOperations Manage r position the M r. S hliurtaj had competed for and w as se lected, theburden of proof would no t have been disl:harged; however, Ms. Domingo's unequivocaltestimony is clear and conv incing eviden;:e that her intervention and reversal of the initialselection was not a vetaliatory act. Indeec ,on this matter the Panel concluded:--Pg.6


7/8

{JnitedNatiorlsEthics Office Shkurtaj I UNDP

"Thf: Panel has struggled with tl ~ eequence of events in March and April2006 and notes clear communic.! ion failures between D omingo , Pakkalaand Bhatia Nevertheless, the dccision to reverse the initial selection ofShkurtaj was not a retaliatory m i:asure designed to punish Shkurtaj fo rcomplaining about UND P-DPRC."23 . In relation to the remaining allei:a tions, while the EIIR P pursued its examinationof these allegations from the perspectivc: of w hether UN DP responded appropriately toMr. Shkurtaj's com plaints , the record c11:arly show s that UNDP has demon strated thateach of the alleged retaliatory acts occu..red indepen dent of the protected activity. UNDPhas therefore, discllarged the required b ~ .den o f proof.24 . Accordingly, even though M r. S ~ k u rt a j as been officially identified by the EIIRPas an individual entitled to pro tection folm retaliation, the record show s that each of theactions oc c~ ~r redndepend ent of the pro1 mted activity and therefore w ere not retaliatory.

25. .4s indicated above, the EIIR P fc und that Mr. Sh kurta j was an in dividu al "entitledto protectior~ rom retaliation" and, the e> lidenc e upports the fact that UN DP haddischarged the burden o f proof that it (C'VDP) would have taken the a ction(s) absent theprotected activity.26. How ever, tlle E I IW in its report ng on this matter, also made specific reference(s)to Mr. Shkuaj's credibility as it related to a number of issues, including his PersonalHistory Fonn s (P. 11) .27 . While it is cer tain ly within the p10:rogative of an Independe nt Inquiring body toassess and rrtake findings a s to the credibility of witnesses, in doing so, should anindividual against whom adverse fulding 3 are to be made, be provided an opportunity toprovide a reitsonable exp lanation?28. Regarding this particular matter, ~ ~ef eren ces made to the Inv estigative Guidelinesof The Independenr Inquiry Committee i , ~ t ohe United Nations O il-for-Food Program me,which specifically provide:

"Before the Com mittee makes ad3ie rse indings against any person orentity in a written report, such pet son or entity shall be inform ed of theproposed finding(s) and the infor :nation upon w hich it is based, and m aymake representations thereon perionally, o r with a legal representative toplace before the Com mittee relevimt additional information or w rittensubmissions with regard to such li.nding(s)"29. Providing a11 individual w ith an 01)portunity to pro vide a reasonable explanationdoes not mezn he or she mu st be provided a copy of the Independ ent Inquiry's en tirereport. It does mean, however, that as a i:linimum, extracts from the report u pon w hich

Pg. 7


8/8

United Nations Ethics Office Shkurtaj/ UNDP

an Independent Inquiry 's adverse findir 3s are based, should be given to an individual inorder to prcvide that individ ual the oppt:lrtunity to provide a reasonable explanatio n.30. U n f ~ t u n a t e l y ,t does not appear from the record that Mr. Shkurtaj was offered anopportunity to provide a reasonab le explanation in relation to th e relevant facts uponwhich the E.IIRP based its adverse findi ~ g s .3 1. 'J'heEIIRP's failure to provide hl[r.Shkurtajwith an opportunity to provide areasonable cxplanittion is, in my opin iol ~, due process failure. How ever, based upon therecord, this due process failure did not impact upon the EIIRP's finding that Mr. Shkurtajwas an individual entitled to p rotection iiom retaliation and UNDP ischarging itsobligation (burden of proof) to establish by clear and convincing evidence that it wouldhave taken the action(s) absent the protected activity.Recommendation32 . Since the Report has been re1easi:d publicly and the EIIRP, as an entity, is now,functusofzcio, there is no means by which to address this matter other than by means ofrestitution. Accorclingly, it is recommer.ded that UNDP pay Mr. Shkurtaj fourteen (14)months net base salary as compensa tion :at the rate in effect at the tiine of his separationfrom service) for the due process failure

----Pg.

Documents

Ethics Review Nemeth