Finland halted tens of millions of euros in funding to numerous UN development agencies—the majority of its UN development funding—in the wake of suspected misconduct in a UN programme based in Helsinki.
An Yle investigation earlier in June extensively covered how the United Nations Office for Project Services (UNOPS) Sustainable Investments in Infrastructure and Innovation (S3i) programme put tens of millions of dollars in jeopardy in an attempt to build affordable housing in developing countries.
The UN is now investigating how its internal oversight could have failed. However, Finland does not view this as adequate and wants to prevent similar cases of misconduct in the future. The country is now requiring all UN development organisations which receive Finnish funding to justify their risk management protocols.
Finland largest funder to UN Women
Titta Maja, head of the Development Policy Department at the Ministry for Foreign Affairs, told Yle that payments from Finland were suspended last week for the UN Population Fund, UN Women, the UN Development Programme (UNDP), UNICEF, and a slew of smaller UN organisations.
Maja estimated that roughly 60 to 70 million euros in general support will not be paid this year to the aforementioned UN agencies.
The funding will be suspended until each organisation clarifies its methods for risk management and passes an assessment.
The risk management reports examine, among other things, whether each development organisation has an independent oversight system and whether employees have a genuine opportunity to report wrongdoing within the organisation.
This decision is significant, as most of Finland's development to the UN is general support that goes directly to the organisation's activities. Finland is the largest general sponsor of UN Women and the fifth largest donor to the UN Population Fund.
"Both the UN Population Fund and UN Women are going to be processed quickly because Finland wants the organisations to be able to continue the necessary and good work they do," Maja told Yle.
According to the Foreign Ministry, Finland is so far the only country to have taken such extensive measures. Maja claimed that the reason is that Finland has been at the centre of a scandal involving the management of the S3i programme office in Helsinki.
"Before any further decisions are made, it is important that systemic problems are not revealed from other UN development agencies we fund. We can longer find ourselves in a similar situation as a financier," Maja said.
Maja added that the organisations have reacted to Finland's decision "in a spirit of cooperation". Decisions to continue funding will be made in the coming months.
"This is always a business where anything can happen when dealing with fragile states, but there is no way any of these organisations can take control of such systemic corruption. It ruins the credibility of the entire UN development system," Maja clarified.
Member countries expect swift action
The misconduct scandal was discussed last week at a meeting of the UNOPS Executive Board—Finland being a member of the board—at UN Headquarters in New York.
After the discussion, the Board requested an external study on S3i's investments and regarding UNOPS' internal oversight systems and governance structure. UNOPS has until mid-July to explain how it intends to implement the required measures.
Finland is awaiting a decision from the UN Legal Service in order to take its own legal action to recover 10 million euros that was donated to the S3i programme.