When IOs grow strong and powerful so do the money and interests involved in their missions. Because of the tragic weaknesses of human nature this may lead to extreme cases of malfeasance. The importance of transparency and openess has already been discussed under the second research angle, but as this case visualizes the affect on the private sector, this particular failure is discussed under the third research angle.
The Oil-for-Food Programme (OIP) was established by the United Nations in 1995 as the largest humanitarian initiative in UN history with the mission to allow Iraq to sell oil on the world market in exchange for food, medicine, and other humanitarian needs for ordinary Iraqi citizens without allowing Iraq to boost its military capabilities. The objective had at least to some degree a nobel cause - help the Iraqi civilians that suffered because of the sanctions imposed on Iraq by the UN Security Council. Yet due in great part to mismanagement and fraud, the OIP led to hefty profits for Saddam Hussein, hundreds of foreign companies, and several UN officials. The illegal profit for Saddam’s regime alone was about $2 billion. According to the independent think-thank organization, the Council on Foreign Relations, nearly half of the 4,400 companies involved in the program participated in bribery and kickbacks to benefit from the program. Over hundreds of western banks participated in the shady dealings and the former head of the OIP, Benon Sevan, himself received vouchers for at least 11,000,000 barrels (1,700,000 m³) of oil, worth some $3.5 million in profit.
This shameful conduct certainly shook the hole UN up and poses as a sad example of how partnerships between IOs and the private sector can lead to shameful briberies. A UN summit in September 2005 addressed several management reform initiatives, including reforms for: ensuring ethical conduct and strengthening internal oversight and accountability in the UN programmes and initiatives.
While access to information is considered a human right and while democratic states have strict rules about the right to access to information this is, however, not the case when it comes to IOs. These organizations are not bound by the same rules as states are and yeat they often exercise the same sorts of powers - IOs are composed mainly of sovereign states and are a very important aspect of public international law. On top of this, IOs are often considered quite bureaucratic, which is sometimes problematic as IOs exercise a great amount of power. Check out the article by Alasdair Roberts to the left for more information on this particular subject.
© Grigorescu Alexandrue: Horizontal Accountability in Intergovernmental Organizations, Ethics and International affairs volume 22, issue 3 (2008), Wiley Online Library.
Robert McMahon: The Impact of the UN Oil-for-Food Scandal, Council on Foreign Relations Web page (cfr.org), published May 11, 2006 5:01 pm (EST).
George Bartsiotas: An expanding role: internal auditors in intergovernmental organizations are seeing an increase in their governance responsibilities, Internal Auditor (Vol. 65, Issue 2), april 2008.
Alasdair Roberts: A Partial Revolution: The Diplomatic Ethos and Transparency in Intergovernmental Organizations, Public Administration Review (PAR), volume 64, issue 4, Wiley Online Library, 16 July 2004.