Fraud prevention and detection in humanitarian assistance: The Syria context

The conflict in Syria continues to affect millions of people both within Syria’s borders and in neighbouring countries. Despite modest hopes for a constructive political process in 2017, the need for humanitarian assistance will most likely continue.

Last year, almost half of the funding in response to humanitarian appeals worldwide was for Syria, Iraq and neighbouring countries. So far this year, UN appeals have requested a total of almost USD 10 billion for Syria, Iraq and the affected countries in the region.

Norway is a major donor to the UN appeals and the humanitarian agencies. We channel funding through 18 partners in five countries working on education, health, food security, water and sanitation, sexual- and gender-based violence, livelihoods, humanitarian de-mining and removal of improvised explosive devices (IEDs), and protection.

The London conference ‘Supporting Syria and the region’ in 2016 was a milestone in the efforts to get the international community to do more for the civilians affected by the conflict. The conference was initiated and co-hosted by Norway. At the conference, we pledged NOK 10 billion, or almost USD 1.2 billion, for Syria and it neighbouring countries for the period 2016-2019. This contribution makes Norway the fifth largest donor country in this context.

At the Syria conference in Brussels in April this year, we reiterated our commitment to continue a high level of support to the neighbouring countries, alongside our support to the civilians in need within Syria.  

As a major donor Norway needs to focus on all aspects of this complex humanitarian situation. There are political dimensions, moral dilemmas and risks.  

Human rights and international humanitarian law form the basis for our normative humanitarian work. This means putting needs at the centre of all that we do, and emphasising participation, non-discrimination, accountability, and fundamental rights – such as the right to life, food and health. All our humanitarian action is based on the humanitarian principles of humanity, neutrality, impartiality and independence. We require our partners on the ground to operate in accordance with the humanitarian principles. In order to clarify what this means in practice, we have developed, together with the main Norwegian humanitarian organisations, a Guidance Note for NGOs on ensuring respect for the humanitarian principles.  

The volatile and highly complex conflict situation inside Syria makes the delivery of humanitarian assistance very challenging. Working in Syria involves a number of risks, both for us as donors and for our partners. The most serious risk is to the lives of humanitarian workers all over the country, and far too many have been killed. There is also the risk of funds being diverted and the possibility of doing more harm than good.

Increasingly, we are using cash-based solutions to support refugees and other civilians in need. Cash can be a very effective tool in middle-income countries with well-functioning markets and bank systems, like Lebanon and Jordan. We believe that providing cash makes it possible to get more out of each krone or dollar and reach more people in need. Moreover, initial surveys from Syria and neighbouring countries show that this form of aid enhances the dignity of the beneficiaries.  

Norway strongly supports increased efficiency and innovation in humanitarian assistance. This means moving from in-kind to cash-based assistance, where appropriate, and linking humanitarian efforts more closely with longer-term development. It is also crucial to ensure accountability to the affected populations and to establish social protection schemes. Cash-based assistance does, however, account for less than 10 % of global humanitarian assistance. There is a considerable potential both for scaling up at a faster pace, and for better international coordination.  

It is vital to prevent mismanagement of funds in cash-based programmes, as is the case in all other humanitarian and development interventions.  

Every year, Norway and many other donors provide considerable amounts of money through various channels with the aim of saving lives, alleviating suffering, and promoting social and economic development in a wide range of countries, and often in fragile situations. Many of the recipient countries have a low score on Transparency International’s Corruption Perceptions Index.

Our agreement partners engage local partners to implement projects, and procure goods and services from various companies. In some contexts, monitoring these activities is difficult or impossible because of the security situation. The probability of fraud, corruption, theft, or other financial irregularities is obviously very high. In addition, the consequences for the intended beneficiaries can be severe.  

In other words, good intentions and generous funding are not enough. Effective risk mitigating measures must be implemented to prevent unethical behaviour and to enhance goal achievement. These include insightful assessment of partners, plans and budgets, sound agreements, and vigilant follow-up. Quality at entry is a key to attaining the desired results.

The first step in fighting fraud, corruption and other financial irregularities is to identify the risk factors, acknowledge their probability and understand the consequences. Do not underestimate the risks! We then need to realistically assess the situation and implement risk mitigation measures throughout the project or programme cycle, and throughout the supply chain. We need to understand the motivation, opportunities and the rationale for unethical behaviour and put in place appropriate countermeasures.

However, even though we make every effort to prevent fraud and corruption, we are unlikely to do so completely. It is therefore crucial that our partners are vigilant, that they detect fraud and corruption at an early stage and immediately report any suspicions in accordance with the agreed procedures. In some cases, the Foreign Service Control Unit in the Ministry will initiate an investigation and will advise the agreement partner on what actions to take. In other cases, the agreement partner will conduct its own investigation and report to the Foreign Service Control Unit. When investigations confirm suspicions, we apply sanctions.

Some may claim that we devote too much time and effort to control measures. After all, the main objective is to save lives, alleviate suffering and promote development. Our response is that increasing awareness about fraud and corruption, implementing adequate mitigating measures, and dealing with actual cases of fraud and corruption in a professional way will increase the resources available to achieve our goals. We can do so much more to assist the target groups if we can stop funds being diverted for corrupt and fraudulent purposes.

In addition, we need to be aware of the risk that, in certain societies, humanitarian assistance may actually fuel fraud and corruption and exacerbate the situation in general. Poor planning and weak follow-up can provide opportunities for fraud and corruption and may even pave the way for the legitimisation of such practices. Anti-corruption is a cross-cutting issue in all interventions funded by the Ministry of Foreign Affairs. This means that the risk of corruption is to be assessed in all projects, and action is to be taken to ensure that we do no harm. Our efforts must not, under any circumstances, prolong suffering for civilians, or benefit profiteers.  

In a still larger perspective, let me highlight the destructive nature of corruption and the crucial need for international cooperation in order to fight it in all its forms.

Looking at Transparency International’s Corruption Perceptions Index for 2016, the overall picture is not encouraging. Over 120 countries score less than 50 on a scale from 0 (highly corrupt) to 100 (very clean). The world average is 43. More countries have moved down the list than up. Bribery, extortion, misappropriation of funds, shady deals, illicit financing, tax evasion, money laundering and nepotism are still widespread in many countries.

Corruption undermines economic, social and political development. It fuels inequality, social exclusion, alienation, anger, conflict and violent extremism.  Corruption is a cause – not a result – of global instability.

We can confront corruption in so many ways; from national compliance with international conventions, to individuals refusing to pay facilitation money for services that are supposed to be free.

Today, you will be exploring fraud prevention and detection in humanitarian assistance, with particular emphasis on the Syria context. I am happy to note that the Foreign Service Control Unit and the USAID’s Office of the Inspector General have joined forces for this purpose. 

And I am very pleased to see so many representatives from organisations that are involved in the region, as well as representatives from Norad and the Ministry. I know that humanitarian partners have already done a lot  to meet the challenges in the region by implementing important innovative measures. These include new monitoring and evaluation technology, such as GPS confirmation, third party monitoring, and dissemination of information to beneficiaries on the distribution of aid. And your presence here today signals a desire to learn more. 

I wish you a very successful workshop and hope it will strengthen our joint effort to fight grand and petty corruption in Syria as well as in other contexts.    

Thank you for your attention.