2/4 UNODC - Current financial and institutional status

Reviewing current UNODC finances and budget capacities remain important elements in order to comprehend the efficacy and limitations of the organization.

Just as UNDCP, UNODC has three different income streams:

• Regular funding provided by the U.N. Regular Budget (RB), “received from the biennial programme budget of the United Nations.” (UNODC, 2014c) These funds “cover normative programme activities approved by the General Assembly.” (Ibid.) It must also be noted that the GA “allocates less than one per cent of the United Nations regular budget to UNODC.” (Ibid.) In theory these funds are not tied to country members priorities and remain at the disposal of the ED.

• Voluntary contributions, are tied to the country member who provided the fund. Voluntary contributions can in turn, be divided into:

• General Purpose funds (GP, un-earmarked) which are “allocated to finance, inter alia: policy and strategic direction; corporate oversight; normative/research activities; and programme/organizational development.” (Ibid)

• and Special Purpose funds (SP, earmarked), “provided to finance technical assistance activities at UNODC’s headquarters in Vienna and in the approximately 60 programme and project offices in the field.” (Ibid.) A fixed portion of the latter, called Programme Support Costs (PSC), “goes to finance the indirect support activities related to programme delivery.” (Ibid)

Recent years have shown a strong ascendancy in earmarked funding, arguably restricting the UNODC’s leeway. Further corroborations include demands from country representatives at the CND 58th Session that attention be drawn “to the specificity of UNODC, in which 80 per cent of all posts are funded from extrabudgetary resources.” (CND 58th Session, Item 3, 2015) (understood as earmarked funding).

In order to give the agency more credibility, policy space and a certain, - although limited - level of independence, several recommendations were made during a 2012 CND meeting by the "standing open-ended intergovernmental working group on improving the governance and financial situation of the United Nations Office on Drugs and Crime” (Ibid.), and within which was found:

• a demand for an extension of the mandate of the working group, (which would entail us to think that the task was far from being over);

• the repeating expression of their “continued concern about the governance and financial situation of” (Ibid.) the agency and of “their awareness of the continued need to address these issues in a pragmatic, result-oriented, efficient and cooperative manner.” (Ibid.);

• the demand for the continuation of a "dialogue" between UNODC and donors in order to increase general-purpose funds as to restore an adequate operational balance;

• finally with regard to gender balance, “concern about the low representation of women at senior levels.” (Ibid.)

As mentioned before, general purpose and soft-earmarked funds, contrary to the dominant trend of hard earmarked funds, offer a basis for more flexibility as to where donor’s money is spend, (including towards project that do not receive earmarked funding and are deemed necessary by local offices and UNODC management). Another issue is concerned with the fact that such financial limitations make effectively administering human resources quite problematic. Additionally it is also certainly a cause for job insecurity among the UNODC staff (1) as the length of their renewable contract does not generally exceed six to twelve months. This fact remains important as it has “allowed the previous executive director to fire a number of qualified professionals who dissented from and were critical of his authoritarian tendencies.” (Thoumi & Kamminga, 2004)

In the OIOS 2013 “Audit of UNODC global projects”, and covering the period from January 2010 to December 2012, overall results related to the management of global projects (4) were initially assessed as “partially satisfactory.” (UNODC IAD, 2013) Regarding these reforms, it would be interesting to examine data regarding the proportionality of staff looking to be transferred to other U.N. agencies in the quest for a more stable position, which could further jeopardize the intent to stabilize the organization.

precedent article, the UNODC started as a drug control agency under the auspices of UNDCP and is today in charge, additionally from drug control, of fighting transnational criminal organizations, corruption, money-laundering and terrorism. Yet over the years, the evolution of its overall budget has not reflected such an increase in mandate. Indeed, while the twenty-first century missions of the agency increasingly concern new ranges of complex and inter-related issues, it could be argued that UNODC is still being operated under inadequate funding while keeping with the oversight of programs related to the critically rising production, consumption and trafficking of traditional and new illicit drugs. In this regard, one could question the priorities of the organization, as to the dedication of U.N. country members to reach the proclaimed goals of drug control highlighted under the UN. 2009 Political Declaration (UNODC, 2009b). Indeed, budget examination indicates that non-drug-related issues are steadily substituting UNODC traditional core activities while the overall budget remains somehow stable. As we saw in the

In parallel, the financial situation of the agency remains critical. Its consolidated budget for the biennium 2014-2015 totals $760.1 million, of which 11.7% comes from regular budget funds and 83.3% from extra-budgetary resources. (CND 58th Session, Item 3 and 8, 2015) As the CND declares: “Low levels of non-earmarked or soft earmarked funding represent a key challenge to the effective implementation of the mandates and programmes of UNODC and put a strain on the management, coordination and normative functions.” (Ibid.) Pledges from the largest donors (2) for voluntary contributions in 2014 are estimated to amount to approximately $272.5 million, and general-purpose contributions (3) are projected to reach $16.8 million, including $8.9 million at the end of 2014 (compared with $9.5 million in 2013), further accenting the funding unbalance.

UNODC budget for the year 2014 was composed of $310 million in contribution from member states,: including $287 million in Special purpose and program support cost and only $22.8 million from U.N. general budget (UNODC, 2014c). In 2014, the contributions of the “six largest donors providing funding for technical assistance used outside their own countries were the European Commission ($45.6 million), the United States ($41.3 million), the Netherlands ($12.6 million), Sweden ($11.7 million), the United Kingdom ($10.3 million), and Japan ($8.7 million). The largest national donor was Colombia ($64.7 million), followed by Brazil ($11.6 million) and Mexico ($3.6 million).” (UNODC, 2014c)

Additionally, it must be noted that traditionally, within the “Major Donors Club” as Francisco Thoumi and Jorrit Kamminga (2004) refers to, the power is “distributed according to this principle. Three donors (Italy, the USA and Sweden) traditionally formed the power triumvirate where the traditional biggest donor (Italy) automatically received the position of UNODC Executive Director.” Observation and assessment of modern Russian Federation drug-related positions and practices are to be put in parallel here with the country's growing UNODC funding participation, and the nomination of current UNODC ED Yuri Fedotov, former Kremlin's ambassador to the U.K.

It could be argued that the current reform process undertook by the agency come somehow short in regard the resolution of the structural knot of interplay between the CND, the largest member states contributors and the agency itself. Several speakers at the 58th session of the CND, “mentioned that the current strategic framework of the Office needed further improvements to create better links between regional and thematic programmes, clearer prioritization and transparency. Some speakers also stressed the importance of transparent and results-based and mandate-based management.” (CND 58th Session, Item 3, 2015)

de factoCustomarily, the CND, which represents the interest of U.N. drug control conventions signatory member states, should be at the core of decision and policy making in order to provide UNODC with guidance and operational directions. In practice, as mentioned earlier, the biggest contributors to hard-earmarked fundings, act as the executive body of the agency. As such, the biannual meeting between these funders and UNODC senior staff create an opaque and restricted power space with oligarchic tendencies as well as a financial model directly restating the status quo and where the majors donors represent the real-decision making body.

It would be argued here that if UNODC was to be capable of fulfilling its mandates, it would require more independence from donor countries, in order to build efficient and coordinated strategies, grounded in science and validated by empirical evidences. This could theoretically be made possible only by increasing its share of Regular Fundings. “If this is not achieved, the current changes would, at best, produce an honest organization that would continue implementing policies that have been highly questioned in the past. In other words, transparency and accountability must be applied to the policy formulation and implementation aspects of UNODC, not only to bureaucratic issues such as personnel appointments, consulting jobs assignments and the like.” (Thoumi & Kamminga 2004).

The current financial situation of the U.N. drug control agency has had and continues to have profound impacts on the way UNODC develops its programs and on its ability to develop as a strong, open and accountable agency. In this regard, it must be acknowledge that, paradoxically, this precarious situation could have helped the agency revise certain of its most controversial stances and policies as we will explore in the next article.

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(1) “For the biennium 2014/2015, the UNODC budget included 560 posts comprising 383 in the professional and higher categories and 177 in the general services category.” (UN OIOS, 2014)

(2) In 2015, Australia, Brazil, Colombia, Denmark, the European Commission, Germany, Japan, Norway, Sweden, the U.K. and the U.S. (CND 58th Session, Item 3 and 8, 2015)

(3) General-purpose funds were almost exclusively provided by the following donors: Algeria, Austria, Bangladesh, Chile, China, Denmark, Finland, France, Germany, India, Japan, Kuwait, Liechtenstein, Luxembourg, Oman, Pakistan, Panama, Republic of Korea, Russian Federation, Singapore, Sweden, Thailand, Tunisia, Turkey, United Arab Emirates and United States, as well as Hong Kong, China. Significant cost-sharing of the local support budget were provided by Brazil, Mexico and Panama. (CND 58th Session, Item 3 and 8, 2015)

(4) “Global projects were introduced in UNODC in the early 1990s. They have since secured substantial extra-budgetary resources while ensuring the implementation of substantive activities with global scope. Over the years, more and more activities have been formulated as global projects resulting in a portfolio of 45 different projects with a multi-year approved total budget of nearly $339 million as of 30 November 2012.” and the evaluation was undertook “due to the risk of inadequate policy framework and management oversight over the global projects, (and) given their high financial value and the inherent complexity of managing a portfolio of multiple projects on a global scale.” (UNODC IAD, 2013)

• (CND 58th Session, Item 3, 2015) Commission on Narcotic Drugs, Fifty-eighth session, Vienna, 9-17 March 2015, Item 3 of the provisional agenda, 13 January 2015, E/CN.7/2015/6-E/CN.15/2015/6, http://daccess-dds-ny.un.org/doc/UNDOC/GEN/V15/001/77/PDF/V1500177.pdf?OpenElement, Accessed: 25/10/15.

• (CND 58th Session, Item 3 and 8, 2015) Commission on Narcotic Drugs, Fifty-eighth session Vienna, 9-17 March 2015, Items 3 and 8 of the provisional agenda, E/CN.7/2015/2-E/CN 15/2015/2, Policy directives to the drug programme of the United Nations Office on Drugs and Crime and strengthening the drug programme and the role of the Commission on Narcotic Drugs as its governing body, including administrative, budgetary and strategic management questions. Preparation for the special session of the General Assembly on the world drug problem in 2016, December 29, 2014, http://daccess-dds-ny.un.org/doc/UNDOC/GEN/V14/088/76/PDF/V1408876.pdf?OpenElement, Accessed: 23/10/15.

• (Thoumi & Kamminga, 2004) F. E. Thoumi and J. E.M. Kamminga, The recent changes at UNODC and its role in advancing and innovating anti-drug policies: Old Wine in New Cleaner Bottles?, Paper presented on the occasion of the Second International Symposium on Global Drug Policy, Vienna, March 16, 2004, http://www.jorritkamminga.com/sites/default/files/A60_JK_Kamminga_Thoumi_UNODC.pdf, Accessed: 16/09/15.

• (UN OIOS, 2014) United Nations Office of Internal Oversight Services, “OIOS Audit report of the recruitment process at the United Nations Office on Drugs and Crime”, Internal Audit Division Report 2014/156, Assignment No. AE2014/360/01, December 29, 2014, https://oios.un.org/page?slug=report, Accessed: 12/02/16.

• (UNODC, 2009b) United Nations Office on Drugs and Crime, Political Declaration and Plan of Action on international cooperation towards an integrated and balanced strategy to counter the world drug problem, Vienna, 2009, https://www.unodc.org/documents/ungass2016/V0984963-English.pdf, Accessed 10/10/15.

• (UNODC, 2014c) United Nations Office on Drugs and Crime, UNODC 2014 Annual Report, United Nations, Vienna, https://www.unodc.org/documents/AnnualReport2014/Annual_Report_2014_WEB.pdf, Accessed: 03/07/15.

• (UNODC IAD, 2013) United Nations Office on Drugs and Crime, Internal Audit Division, “Audit Report 2013/059”, Audit of the United Nations Office on Drugs and Crime global projects, Assignment No. AE2012/360/01, July 16, 2013, https://oios.un.org/page?slug=report, Accessed: 12/02/16.