Colum Lynch
By Colum Lynch
When UN Secretary-General Ban Ki-moon and Russian President Vladimir Putin met in Sochi, Russia, they were supposed to discuss the civil war in Syria. But the Russian leader — joined by his top diplomat, Sergei Lavrov, and Defence Secretary, Sergei Shoigu — suddenly changed the subject to more mundane matters.
UN reforms aimed to streamline billions of dollars of spending on peacekeeping pose a threat to Moscow’s commercial interests. Putin and his national security team politely but firmly pressed the UN leader to back off, according to several senior UN-based sources briefed on the meeting.
The high-level intervention on UN spending marked only the latest example of Russia flexing its diplomatic muscle to protect its commercial position at the UN.
For much of the past decade, Russia has been engaged in a systematic effort to stymie attempts to root out corruption in UN spending. The Russians have pushed out UN reformers. They’ve defanged watchdogs. And they’ve blocked internal budget reforms aimed to save costs.
Russia’s zeal for turning back reform has been felt most powerfully in the UN’s leasing of aircraft — a $1bn a year market — that provide transport for the world’s second-largest expeditionary force.
An examination of UN procurement practices in the air-transport sector — drawing on dozens of interviews with UN-based officials and diplomats, and a review of internal UN communications and audits — suggest that Russia has enjoyed unfair advantages, including contracts that all but demand that the UN lease Russia’s Soviet-era aircraft.
The dispute provides a textbook example of the difficulties of implementing basic financial reforms at the UN when major powers have conflicting commercial interests in the outcome.
As such, the secretary general and key countries have been unwilling to openly confront Russia because its cooperation is required on a wide range of critical issues at the UN.
Since the end of the Cold War, Russian entrepreneurs have turned the Soviet-era air fleet into a thriving business, supplying the UN and other international agencies with low-cost surplus aircraft, including Antonov transport planes and Mi-8 and Mi-26 helicopters.
The low-cost aircraft — which Russian factories continue to produce — have largely dissuaded Western air operators from competing for UN contracts, which must go to the lowest bidder. Russian companies now account for about 75 percent of all contracts for commercial helicopters, the most lucrative segment of UN peacekeeping’s multibillion-dollar marketplace.
But the near Russian monopoly is facing challenges from neighbours such as Ukraine, which produces similar helicopters. The US and European powers like Germany, France, Italy and Spain are also looking for new business opportunities as the Nato mission in Afghanistan winds down. Those countries have privately raised concern with the UN about the integrity of its procurement process.
They claim that the UN’s purchasing system is rigged to favour Russian aircraft; its bidding specifications — for instance, requirements of seating capacity for more than 20 passengers — are tailored to exclude most competitors.
“Procurement is done in a way which directly specifies a Russian helicopter,” said one senior European diplomat. “We have asked for more transparency; we want to change to a new [bidding] system as soon as possible.”
Requests for helicopters and transport planes originate from the UN’s 15 peacekeeping missions and are routed through headquarters’ air-transport section before being sent on to the UN procurement department, which invites companies to bid.
Western diplomats have expressed concern that many of the key players — including a Ukrainian procurement chief and a Russian aviation specialist — come from countries with a major stake in the aircraft market.
But a spokesman for the UN peacekeeping department, Kieran Dwyer, dismissed those concerns.
“The secretariat has a system of management checks and balances that mean that no one individual can unilaterally set the procurement specifications for aviation requirements,” he said.
“It is true that helicopters from the Mi-8 family of aircraft do play a leading role in peacekeeping aviation assets and operations.
These helicopters have key features which make them suitable to peacekeeping needs, including their flying range and payload capacities and the fact that they are economical.”
Several years ago, the UN launched an effort to enact a series of procurement reforms. One idea was to replace the practice of issuing vendors “invitations to bid” — which sometimes specify the particular aircraft being sought — with “requests for proposals,” which define the UN’s general needs and allow helicopter operators the freedom to propose their own solutions using a wider variety of aircraft.
“There are many cases where different types of flying equipment can perform the required tasks,” according to a confidential review of UN bidding practices by the International Civil Aviation Organisation. “A tender process requesting offers only for a specific type of equipment does not allow maximisation of choice in the selection process.”
For several years, the Russian government has also dragged out negotiations in the UN budget committee aimed at implementing the UN chief’s procurement reforms, according to senior Western diplomats.
Russia’s UN Ambassador, Vitaly Churkin, said his government has no objections to reforming the UN’s buying practices, but he sees a raft of reforms as a direct threat to Russia’s commercial interests at the UN.
“Generally speaking, we are a little bit concerned about the number of reforms,” Churkin said in an interview with FP. “We don’t mind the competition. We understand that business is about competition. We don’t want monkey business.”
In May, travelled to Sochi meet Putin and Lavrov to forge a diplomatic strategy for ending the war in Syria.
But the conversation quickly segued into a discussion of Russian misgivings over procurement matters.
The Russian leadership was alarmed by a plan to delegate authority for leasing helicopters to UN field missions and logistical hubs in Entebbe, Uganda, and Brindisi, Italy, a move that would limit the ability of Moscow’s powerful UN delegation to monitor and influence decisions.
The Russians also objected to the plan to upgrade the bidding process. They pushed back on a plan to promote “staff mobility,” a key element of Ban’s reform effort. The initiative is aimed to offer UN officials a greater range of experiences and skills by having them periodically serve in the UN’s far-flung missions.
WP-BLOOMBERG
By Colum Lynch
When UN Secretary-General Ban Ki-moon and Russian President Vladimir Putin met in Sochi, Russia, they were supposed to discuss the civil war in Syria. But the Russian leader — joined by his top diplomat, Sergei Lavrov, and Defence Secretary, Sergei Shoigu — suddenly changed the subject to more mundane matters.
UN reforms aimed to streamline billions of dollars of spending on peacekeeping pose a threat to Moscow’s commercial interests. Putin and his national security team politely but firmly pressed the UN leader to back off, according to several senior UN-based sources briefed on the meeting.
The high-level intervention on UN spending marked only the latest example of Russia flexing its diplomatic muscle to protect its commercial position at the UN.
For much of the past decade, Russia has been engaged in a systematic effort to stymie attempts to root out corruption in UN spending. The Russians have pushed out UN reformers. They’ve defanged watchdogs. And they’ve blocked internal budget reforms aimed to save costs.
Russia’s zeal for turning back reform has been felt most powerfully in the UN’s leasing of aircraft — a $1bn a year market — that provide transport for the world’s second-largest expeditionary force.
An examination of UN procurement practices in the air-transport sector — drawing on dozens of interviews with UN-based officials and diplomats, and a review of internal UN communications and audits — suggest that Russia has enjoyed unfair advantages, including contracts that all but demand that the UN lease Russia’s Soviet-era aircraft.
The dispute provides a textbook example of the difficulties of implementing basic financial reforms at the UN when major powers have conflicting commercial interests in the outcome.
As such, the secretary general and key countries have been unwilling to openly confront Russia because its cooperation is required on a wide range of critical issues at the UN.
Since the end of the Cold War, Russian entrepreneurs have turned the Soviet-era air fleet into a thriving business, supplying the UN and other international agencies with low-cost surplus aircraft, including Antonov transport planes and Mi-8 and Mi-26 helicopters.
The low-cost aircraft — which Russian factories continue to produce — have largely dissuaded Western air operators from competing for UN contracts, which must go to the lowest bidder. Russian companies now account for about 75 percent of all contracts for commercial helicopters, the most lucrative segment of UN peacekeeping’s multibillion-dollar marketplace.
But the near Russian monopoly is facing challenges from neighbours such as Ukraine, which produces similar helicopters. The US and European powers like Germany, France, Italy and Spain are also looking for new business opportunities as the Nato mission in Afghanistan winds down. Those countries have privately raised concern with the UN about the integrity of its procurement process.
They claim that the UN’s purchasing system is rigged to favour Russian aircraft; its bidding specifications — for instance, requirements of seating capacity for more than 20 passengers — are tailored to exclude most competitors.
“Procurement is done in a way which directly specifies a Russian helicopter,” said one senior European diplomat. “We have asked for more transparency; we want to change to a new [bidding] system as soon as possible.”
Requests for helicopters and transport planes originate from the UN’s 15 peacekeeping missions and are routed through headquarters’ air-transport section before being sent on to the UN procurement department, which invites companies to bid.
Western diplomats have expressed concern that many of the key players — including a Ukrainian procurement chief and a Russian aviation specialist — come from countries with a major stake in the aircraft market.
But a spokesman for the UN peacekeeping department, Kieran Dwyer, dismissed those concerns.
“The secretariat has a system of management checks and balances that mean that no one individual can unilaterally set the procurement specifications for aviation requirements,” he said.
“It is true that helicopters from the Mi-8 family of aircraft do play a leading role in peacekeeping aviation assets and operations.
These helicopters have key features which make them suitable to peacekeeping needs, including their flying range and payload capacities and the fact that they are economical.”
Several years ago, the UN launched an effort to enact a series of procurement reforms. One idea was to replace the practice of issuing vendors “invitations to bid” — which sometimes specify the particular aircraft being sought — with “requests for proposals,” which define the UN’s general needs and allow helicopter operators the freedom to propose their own solutions using a wider variety of aircraft.
“There are many cases where different types of flying equipment can perform the required tasks,” according to a confidential review of UN bidding practices by the International Civil Aviation Organisation. “A tender process requesting offers only for a specific type of equipment does not allow maximisation of choice in the selection process.”
For several years, the Russian government has also dragged out negotiations in the UN budget committee aimed at implementing the UN chief’s procurement reforms, according to senior Western diplomats.
Russia’s UN Ambassador, Vitaly Churkin, said his government has no objections to reforming the UN’s buying practices, but he sees a raft of reforms as a direct threat to Russia’s commercial interests at the UN.
“Generally speaking, we are a little bit concerned about the number of reforms,” Churkin said in an interview with FP. “We don’t mind the competition. We understand that business is about competition. We don’t want monkey business.”
In May, travelled to Sochi meet Putin and Lavrov to forge a diplomatic strategy for ending the war in Syria.
But the conversation quickly segued into a discussion of Russian misgivings over procurement matters.
The Russian leadership was alarmed by a plan to delegate authority for leasing helicopters to UN field missions and logistical hubs in Entebbe, Uganda, and Brindisi, Italy, a move that would limit the ability of Moscow’s powerful UN delegation to monitor and influence decisions.
The Russians also objected to the plan to upgrade the bidding process. They pushed back on a plan to promote “staff mobility,” a key element of Ban’s reform effort. The initiative is aimed to offer UN officials a greater range of experiences and skills by having them periodically serve in the UN’s far-flung missions.
WP-BLOOMBERG
