When the cat's away the mouse will play

The Governing Council of a local Cambodian NGO, elected representatives of community self-help groups of disabled people, who pursued a complaint against a UK charity 2008-13 on behalf of their members, 800 families in Tuok Phos District, Kampong Chhnang province, Cambodia. Photograph John Lowrie.

Foreword:

Public life comes under scrutiny and fire whenever someone falls from expected standards. In developed democracies where there is good knowledge of standards, usually people falling well-short - and superiors responsible for them - can be held to account. Those are the advantages of an educated population; a system of checks and balances; rule of law and a free press to try to bring about accountability.
  

When it comes to “#foreignaid” and charities operating abroad, such as OXFAM and Save the Children who were recently caught up in scandals, those advantages don't usually exist. It's where all kinds of malfeasance can occur.

It is therefore almost inevitable that some people will take advantage of such laxities.

The point I want to make is that where you have people prone to taking advantage of laxities, you should not examine incidences in isolation, as tends to be the case. Even then they are examined only when transgressions come to light, when many never emerge; they're covered up.  If not often a quick-fix solution is sought, sometimes simply cutting off funding that punishes beneficiaries not perpetrators. My argument is that we need to change the operating climate, to create a culture of ethical-working and while each organisation must foster its own, I still maintain that external inspection is needed to underpin and enforce it. There must be inspectors to inspect and regulators to regulate. The possibility alone of such visits is the best way to counter climates of complacency and impunity.

This article was drafted with this in mind at the request of one website but so far it has not appeared.

Foreign Aid scandals: unexpected by many; but no surprise to few. 

The “OXFAM” scandal broke recently at the same time as the world of football or soccer was rocked by revelations of widespread abuse against schoolboy budding stars. They were soon eclipsed by the Hollywood-led #Metoo campaign after long-held allegations emerged of sexual abuse by Movie Mogul Harvey Weinstein. Then as if those scandals were not enough to reveal what a sordid world it is in which we live, the Australian Royal Commission on child sexual abuse published its findings.

Such unexpected news of what goes on in well-known established institutions was no surprise to some of us but unexpected to most of the general public. Some of us knew that it was bound to come out sooner or later. Wherever there is any kind of abuse, there are powerful people taking advantage of vulnerable people. They have a hold over them. They use their position to carry out all kinds of abuses; in secrecy, with impunity, and in the most unlikely of places.

My colleague Andrew Little and I were not expecting to receive death threats in 2001. We were working in a Cambodian human rights organisation, the most unlikely place to violate the right to life. We took the hint and moved on to diverging careers, continents apart. Since then the two of us have stayed in touch, with a few new like-minded friends, to pursue the ethical causes originating in those unexpected times.

Andrew had joined me when I was suddenly thrust in charge of a human rights organisation after its Executive Director and its Finance Director feuded. The latter wrote an eight-page Christmas letter to donors alleging systematic fraud. Our task was to keep the NGO going and to arrange proper investigations. We organized an immediate external audit. However we needed to do more as the auditors would only examine the finances within their limited professional mandates. The allegations extended in to nepotism and cronyism. Andrew's task was therefore to conduct what we called a “staff audit” to expose the full picture.

Our case all those years ago should have been an early lesson for the foreign aid fraternity. It wasn't. Only 20 years later are public perceptions changing so “unexpected and uncharacteristic” is replaced by “expected; quite likely and not at all untypical”.

The essential lesson was simple. Wherever there is impropriety of any kind, for example fraud, you will find other improprieties exist - in the way that people are employed; rewarded, promoted and allowed to behave. Transgressions flourish because of serious gaps in the governance of organisations and failures in vital processes designed as checks and balances or to meet due diligence criteria. In essence, you have what is second nature to air-crash investigators, that rarely is there just one cause to a disaster but usually a combination of causes. Whereas that lesson applies to prevent other air crashes, Andrew and I had discovered, unexpectedly, no equivalent in the world of foreign aid and public service to avoid foreseeable disasters.

“Capacity-building” is a vogue term in #foreignaid. It means training sessions to add skills and knowledge. Indeed it is one of the largest elements in budgets especially where it takes place in 4/5 star hotels the favoured choices. It occupies vast use of human resources often greater than expended in the field implementing development aid or human rights projects. Too often the primary purpose is overlooked that it is all intended to help poor beneficiaries, to make a difference in their lives, not just of salaried public service and NGO workers.  A means to an end, not an end in own right.

To cut a long story short neither of us were able to complete our mission. The NGO folded. We lacked unanimous support within the NGO, from most of its staff whose loyalties were elsewhere. Their jobs were at serious risk. So was the excellent work they were doing to promote and protect human rights in a population still suffering from and traumatized by severe violations. Yet most would not help us. It was clear to us that what had gone wrong reflected badly on them and very many other stakeholders responsible for the foreign aid money supporting the NGO. That was why we think that a calculated decision was made, far away, that with or without our efforts this NGO should be sacrificed for the greater good of the wider aid sector, and to avoid high-level attention descending on donor and diplomatic capitals.  Fortunately or unfortunately , depending on your perspective, the OXFAM scandal has not escaped a similar fate, not yet.

Our salutary experience was to prove to be neither our first nor our last one in our long overseas careers. Andrew first:

“I once found myself in whistle-blowing capacity for a protestant church in another country. It had long been mired in financial corruption protected through bullying by a clique, a culture of cover-up and other issues that included incidental abuse of orphan children. There were good people there, but they felt helpless against the entrenched power structure. Eventually the situation reached the tipping point where it was intolerable for all but a few, but neither did those who had concerns feel that they had a voice, and so it fell to me to blow the whistle. My efforts were rewarded by a thorough shoot-the-messenger response from an expatriate mentor of the most senior member of hierarchy.

What was most disconcerting, like in other situations, was the sense of helplessness among those who knew what was happening, knew full well it was wrong and ostensibly had the ability to do something about it. Their sense of disappointment and even cynicism ran deep. The situation turned around only after the person most responsible for the corruption was declared “persona-non-grata”. The church lost a lot of its young members who had cherished its ideals, all apparently to no avail. However, at least this episode made for an earlier and more just outcome than for perpetrators of abuse in the Catholic Church and the Cardinals and Bishops who sheltered them. There, the pattern of abuse bears some similarity to what has happened in some NGOs. Victims were routinely silenced and the power structures perpetuated a culture of cover-up. In these situations, the welfare of the abused must, as it appears, be sacrificed on the altar of ‘the good reputation and fine deeds’ of the institution, but it is precisely this hypocrisy that hollows out the value of work being done and leaves many conscientious people, whether working for an NGO or members of a church, in a position of feeling thoroughly betrayed.”

Betrayal is also how 800 poor Cambodian families living with disability In Kampong Chhnang felt when their complaint against a UK charity was rejected after 5 years of trying and exhausting all options. I had helped them to pursue it as far as it could possibly go in the UK; in Cambodia; in Australia and in other donor countries all to no avail. When thanking those who had helped them I said this in early 2014:

"I have tried (and so far failed) to persuade UK authorities, that what is needed is a deterrent culture in overseas development when working in third world countries with deficient rule of law."

Should UK regulators have listened? Basically the 800 families had been promised certain benefits; they claimed that they had received only a small fraction of them, but an external audit to determine the facts was blocked by the charity. The beneficiaries thought that the UK Charities Commission would support them and order the audit investigation to proceed. They were wrong. It ruled that “Charity trustees have a wide discretion as to how to run their charities and it is prohibited from interfering in the internal administration of a charity”. That ruling was then endorsed by an Independent Complaints Reviewer and by the Parliamentary and Health Commissioner (Ombudsman). UK Ministers and MPs could not act either. Separation of powers meant that they could not tread on the "sacred ground" of charities. Only the Public Accounts Committee of the UK Parliament remained open to the question of whether or not the Charities Commission was appropriately exercising its regulatory powers. (Please see  latest update from UK's National Audit Office below.)

In #foreignaid in developing countries, it is easy and even obligatory for volunteers or development workers to be photographed with children or vulnerable people. This is perhaps the only one taken of me in 20 years but even then I was careful to be with adults. Unfortunately others are not so careful. Innocent ones collect such images to post in their social media to show friendly encounters, even their good deeds. Not so innocent ones exploit a lax environment for their own devious ends.

Apart from the protracted Kampong Chhnang case, around the same time, I was involved in cases of serious sexual misconduct at work within British NGOs operating in Cambodia. One was my responsibility; police and judicial authorities were involved and I dismissed the perpetrators. The other was with a partner NGO that took no action despite my remonstrations. I should clarify that the crimes were committed by local employees, not by expatriates.

Back to Andrew: “The point being is that there's a similarity in underlying dynamic. There's too much at stake in organisations to allow problems to surface. So they fester and continue to rot unseen.”

Is this not what the Archbishop of Canterbury was thinking when after a long pause he told the Child Sex Abuse enquiry that he had "learned to be ashamed again of the Church”.

Is this dynamic changing for once and for all? Or when the dust settles will things go back to were they were, with even cleverer more subversive efforts to cover up?

In my last two NGOs in Cambodia, not long ago, I requested support to investigate suspected improprieties including theft of funds meant to go to beneficiaries. The donors concerned in both cases, both international foundations, chose to take no action other than to end their funding, including insisting upon strict instructions of no publicity nor referral to local authorities.  They both concluded that their own organisations and other partners would be damaged more by revelations of a scandal – harming their future fundraising - than by writing-off whatever funds and benefits had gone astray. My suspicions in both cases proved correct but neither perpetrator has faced justice.

A Community Self-help group in Mondulkiri just like the ones who never received the money awarded and promised to them.  Those who took the money and were negligent in the process have never been held to account.

Andrew's and my early experience in Cambodia did lead to efforts intended to prevent future scandals in NGOs. Through the NGO umbrella organisation “Cambodia Co-operation Committee” the sector developed an NGO governance and code of conduct scheme that is still in operation. It has many merits as well as some drawbacks. The most important merit - if it can be developed to work well - is to encourage positive results through best conduct, for the “good apples in the barrel” to flourish, not the rotten ones. So far, however, it hasn't been a total success. Improprieties within NGOs persist, followed by inaction or cover-ups, instead of corrective action.

This well-intended governance scheme has two major drawbacks. (1) The weakness of any kind of legislation or regulation relying on self-policing . (2) The absence of a marked cultural shift in attitudes and behaviour. In reality the scheme is regarded as a series of administrative formalities to be overcome or to be got around. We have advocated wider and more stringent measures to all “stakeholders” such as these outlined below but so far there has been little or no interest. Some stakeholders are complacent, confident in their own measures, or they just do not fear being found lacking in a country of impunity. Others take the view that any public questioning of them and their local partners will only play in to the politics of Cambodia's ruling party, a worse scenario. Like governments in other authoritarian countries, and some democratic ones, the ruling party remains deeply suspicious of NGOs, accusing them of actively supporting the Opposition under the pretence of promoting essential freedoms. So worthy efforts to root out misconduct within NGOs would be avidly received to place even more restrictions on all NGOs including the best ones.

Bearing that scenario in mind, here are 10 collaborative actions that can be taken.

Recommendations:

• Avoid mixed messages. All stakeholders, including private foundations and philanthropists, need to much clearer in their core values and principles as well as indicators of positive results. They should fully share them for optimal collectivized oversight. All parties must practice what they preach.
• The cultural or ethical climate matters most more so than detailed codes of conduct that will always be subject to different interpretation in local contexts and circumstances. “Keep things simple” applies also to project management mechanisms that can be too complex to be understood where they matter most, i.e. at local implementation-levels.
• Retain competent expertise, have experienced locally-available/proficient personnel on your staff or on-call as advisers. Too many foreign aid staff are on short-term tours of 2-3 years; working without proper in-country induction or close supervision. They lack local knowledge of peculiarities and malpractices. They must not “rock the boat”, their next career-move depends on it.
• Insist on maximum transparency, especially with your beneficiaries having full information about the changes to be brought about, far more detail than they are usually given. It is they who are by far and away best able to decide if foreign aid interventions work for them.
• Deal promptly with transgressions. All organisations should be able to act promptly, mobilising support for managers to validate their actions or to replace them, including acting decisively when whistle-blowers blow whistles. Investigators need to be multi-disciplinary. No-one should rely solely on regular auditors or evaluators because of bias. They may have a vested interest in repeat commissions. However their institutional knowledge built up over time is indispensable.
• Report to local police and judicial authorities but do not rely solely on them. Instead make sure you can take action against employees and partners within employment contracts and partnership agreements. This way you can exercise your own judgements based on evidence, using your own mechanisms that meet principles of natural justice and best international standards. In countries like Cambodia, official authorities are unpredictable. They may under-react as when they indulge in extra-judicial settlements between perpetrators and victims. Or they may over-react, when they resort to torture and extra-judicial detentions to extract confessions.
• Preventive strategies - invest maximum time and effort to help build and complement your internal ethical culture with documented operating procedures conveyed and reinforced in induction training; and through regular staff; partner and beneficiary meetings.
• Conduct thorough due diligence checks: (a) Human resources - so key personnel are vetted, with proper references and complete employment and performance records; (b) Governing Board or other effective supervisory structures exist and operate, and (c) annual external full organisational audits are conducted as well as external evaluations by genuine independent consultants.
• Incorporate random unannounced external inspections to take place both during projects and up to two years afterwards to see that key benchmarks are accomplished; that resources are expended as per contracts and for the purposes for which the funds were raised, and that they stay in the service of the intended beneficiaries.
• Regulators must regulate. Distance should not mean foreign aid activities are beyond the reach of regulators, if there is to be an effective deterrent culture against misconduct and a prevailing affirmative one to produce positive results.

John Lowrie is a human resources officer by profession. He has been an aid and development worker since 1985, working in five developing countries, and Cambodia since 1998 where he has been country representative of three international NGOs and formal adviser to seven local development and human rights organizations.

Andrew Little is an international translator by profession, originally in Indonesia before moving to Cambodia and now Germany. He too has worked with international and local organisations including as a consultant/adviser and reporting officer to major donors and diplomatic missions.

Update 10 May 2018

We make the case for external inspections and regulation to help bring about a better ethical culture and improved standards and practices on the part of all concerned in development and human rights projects in developing countries.  In this article we referred to what we saw as past shortcomings of the Charities Commission.  We have just received a letter from the UK's National Audit Office that sets out clearly measures that have been adopted, with early signs of success, as a result of its efforts; those of the Public Accounts Committee of the UK Parliament, and like-minded colleagues within the #foreignaid sector.  It's a promising step forward but only a start not an end and of course this is just one donor country showing the way.  Others must follow if there is to be consistency in the international community.  Too many donor countries apply their own conditions, not subscribing fully to international co-operation and efforts to promote foreign aid effectiveness. (Paris, Accra, Busan, etc.)

Update 30 July 2018 – Only one election winner in Cambodia: Impunity.

People are still digesting the results of yesterday’s election when inevitably Cambodia returned to one-party control after a 25 year flirt with democracy.  During those 25 years, every reform, every concession, every benefit to poor Cambodians, had to be dragged out of the elite. At the same time, the process went on of trying to limit abuse and exploitation of land-grabs and state-captures.  Today there is no political opposition to challenge rulers; there’s only a cowed international community, the remains of a damaged Civil Society, and Media stripped of freedom to report. Impunity is the winner.  The winning party well set about settling old scores, re-imposing the old order.

It would be easy to write off 20 years of work in Cambodia. Yes, indeed my mission and that of many others like me may be over.  But that doesn’t mean we give up.  Nor can its stop lessons learned to be shared with the wider world – both good and bad.

Bad lessons often feature in my blogs for good reason.  Take one – fraud or financial malfeasance. My first NGO in Cambodia imploded after a feud between the Director and Financial Manager who sent an 8 page Christmas letter to donors outlining systematic fraud over many years. The Director tried to pin all of the fraud back on his erstwhile close aide who admitted only to his “share”.  There would only be one outcome. People lost jobs; thousands of victims of human rights were abandoned to such a more likely fate.

If that was my first experience in Cambodia, it was not be my last. My last was in 2015 when.....the Cambodian manager of one NGO absconded with US$3,300 he was supposed to be passing on to a community group, despite the oversight of a French colleague.  The donor wondered why he could see nothing for his money in the village. The pair tried to keep the explanation from him. There would only be one outcome. People lost jobs; hundreds of intended beneficiaries never received their benefits.

In between, there were also the 800 poor families {described above in this blog) living with disability who claimed that US100,000 worth of money and benefits promised to them were never received. Despite a remarkable campaign inside and outside of Cambodia, they never did get the investigation they wanted.

Poor people especially women in self-help groups are good at looking after money, if it gets to them.

In Cambodia there is a “Cooling-Off Day” between the final day of the campaign and polling day.  An old colleague returned from Yangon to vote. We met up after an absence of 4-5 years.

Then small world coincidences, crossed paths, kicked-in.

He told me that he was a Director of a localised Board of another of my former international NGOs. As a financial professional himself, he was not overly-impressed with the first report from its newly-appointed Director. Then the board learned that instead of dispatching staff to an expenses-paid overseas training course, he’d sent his relatives. Finally another Board member, a one-time donor representative of my first NGO in Cambodia, recognized the face.

The name was different, so were the qualifications – a new one from Australia not real as it happened, to go with a carefully-penned CV and special referees to vouch for its authenticities.

By now you will have surmised. Yes, it was indeed the return of the Financial Manager who’d admitted to fraud, and who had circumvented all the usual checks and balances to protect donors and beneficiaries.  Impunity had won again. Thankfully this time it was short-lived but more by good luck than by design – one more little “Island of Propriety in a Sea of Corruption”.

Conclusion – a few colleagues and I have for years been working on ways to improve ethics in foreign aid, especially better systems for setting and keeping standards, with improved due diligence and remedial measures.  So far there has been little real interest but recent events may be changing that.