Non-Transparency of the United Nations: How the UNDP distributed millions of dollars in assistance to B&H to fight COVID

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UNDP BIH procured medical equipment in an extremely non-transparent manner through the “Response to COVID 19” program. With the budget funds of the citizens of this country, as well as with the donations for the fight against the pandemic, this international organization favoured certain suppliers and signed contracts with companies that were involved in the scandals that marked this year.

By: Predrag Blagovčanin

Respirator purchases worth millions through the company “Srebrna Malina” and the purchase of other medical equipment through fictitious companies such as “Patrio” LLC from Visoko, which were addressed by the portal Tačno.net, were one of the main arguments to the representatives of various levels of government in Bosnia and Herzegovina to leave the responsibility of transparent spending of donations and budget funds to the UNDP.

We remind you that in response to the corona virus pandemic, the UNDP B&H formed an internal team with the aim of supporting the authorities and health institutions of Bosnia and Herzegovina in the procurement of medicine, coordination, the assessment of economic and social effects. Thus, since March of this year, the UNDP B&H has been procuring medical equipment with money from various international and domestic donors, which, according to this organization, is a confirmation of UNDP’s role as a partner for performing complex tasks in times of crisis.

As of December 15^th, of this year, the Governments of the Posavina Canton, the Sarajevo Canton, the Central Bosnia Canton, the Herzegovina-Neretva Canton, the West Herzegovina Canton, the Zenica-Doboj Canton, as well as the Institute of Public Health of the Republic of Srpska and the city of Doboj, paid a total of just over 16 million BAM for the procurement of medical equipment.

In addition to the budget funds of Bosnia and Herzegovina, the UNDP has 7 million euros of European Union assistance to our country at its disposal, as well as donations from the Swiss and Norwegian governments, donations from the Novartis pharma service in the amount of 150.000 BAM and its own funds in the amount of 488.000 USD.

Transparent?

The Sarajevo Canton has so far transferred 8.5 million BAM to the UNDP account. In April of this year, Prime Minister Mario Nenadić pointed out that public procurement should be channelled as much as possible through the UNDP for arguing efficiency, savings and transparency.

However, in hindsight, it is obvious that the process of procurement of medical equipment carried out through the UNDP B&H did not bring savings, and certainly not transparency.

At the end of November, a group of UNDP tender bidders contacted the Tačno.net portal, claiming that the procurement process had been compromised with the aim of favouring certain distributors of medical equipment.

“The UNDP carried out the procurement as it pleased. They set the criteria as certain suppliers told them to and they changed them from procedure to procedure. If a certain supplier was registered with the B&H Medicines Agency or had a registered medical device, then it was requested, and there were cases when specific requests were made knowing beforehand who could satisfy them or that such requests didn’t make sense in a certain procedure. Let’s not forget that the UNDP does not have medical device experts in the organization, but it relied on suppliers and their input, and sometimes even from the end user, which is clear from the tenders and the way they were created. Even the general criteria didn’t have to be met. None of us could ever see or find out who got the contract. Transparency in the UNDP is at zero.”

Following this information, the Tačno.net portal addressed the UNDP office with a request to submit a list of awarded contracts as well as the amounts paid. The UNDP provided a link to the list, which was deleted within 24 hours.

UNDP BIH Headquarters – Sarajevo/tačno.net

In the period from the initial communication with UNDP representatives until today, the list of awarded contracts has been modified several times, including the amounts paid for individual procurements. When asked why we are witnessing constant changes, the UNDP answered that the problem is of a technical nature.

That the branch of this international organization in Bosnia and Herzegovina has a problem with procurement transparency, as well as obvious technical problems, is shown by the fact that on the official UNDP website you can find awarded contracts in countries like Honduras or Zambia but contracts from Bosnia and Herzegovina cannot be found.

A source of the Tačno.net portal from the UNDP B&H, who, as he emphasized, cannot speak publicly due to sanctions, points out that a number of tenders were made for specific suppliers.

“There is direct communication with suppliers and purchases are made directly from them or their equipment specifications are listed in tenders. Certain things were bought at much higher prices than the market value. You have tenders that were only open for 2 hours in order to hire a supplier who was prepared to respond so quickly because his specification was in the tender. But what is worrisome is that no one reacted to any attempt to point out these problems.”

Thus, in certain tenders, depending on the procurement, the accompanying permits of the Agency for Medicinal Products and Medical Devices of B&H or the annual turnover equivalent to the value of the bid were listed as an element for disqualification. This was not the case in other tenders for medical equipment.

When asked why these elimination factors are present in certain tender documents and not in others, we were told that the UNDP uses different procurement methods depending on the goods and services it procures.

“Procurement procedures are designed and implemented in accordance with the principles of the best value for money, integrity, competitiveness and transparency. All specifications, as well as criteria related to COVID-19 were prepared in consultation with end users, health institutions, the World Health Organization and UNDP experts.”

When asked which experts participated in the creation of tender specifications for the procurement of medical equipment, they did not give an answer, considering that, as they stated, the policy of the UNDP is not to provide information about employees.

They also point out that the UNDP is fully committed to helping countries and its residents, using donor and partner resources as professionally as possible.

“The response to COVID-19 required working on time to deliver medical supplies to hospitals and front-line health workers across the country in order to save lives.”

Who should we thank for the “saved lives”?

On the webpage that is still available at the time of writing, there is a list of companies that were awarded contracts for the purchase of medical equipment from March to November of this year.

Thus, on March 23^rd, the UNDP B&H signed a contract with the company “Cubicus” LLC Sarajevo worth 114 thousand dollars.

This company was a participant in a series of scandals, such as the purchase of 40 respirators for the University Clinical Centre Sarajevo worth 3 million BAM. The respirators were never delivered. Also, in the midst of the pandemic, “Cubicus” delivered 20.000 tests to the Federal Administration of Civil Protection at an enormously high price of 1.3 million BAM. According to the Žurnal.info portal, at that time this company did not have a permit from the Agency for Medicinal Products and Medical Devices of B&H.

The UNDP B&H is signed two contracts with “Panta Rei” Sarajevo, the first in May and the second in September of this year. The total worth of contracts signed with the company “Panta Rei” is a little more than 140 thousand dollars.

“Panta Rei” became the focus of the B&H public in early May when media outlets published the information that this company, a seller of pastry products, owned by Bariša Bejtović, son of cantonal representative Bilsena Šahman, signed a contract with the Federal Administration of Civil Protection for the purchase of masks worth 52 thousand BAM.

Furthermore, the UNDP B&H signed a contract worth 173 thousand USD with “Licentis” LLC, which procured the drug Favipiravir for hospitals and health centres in Sarajevo. According to the Fokus.ba portal, this medicine appeared in free sale in Sarajevo pharmacies at a price of 300 BAM, although the clinical trial was never completed.

The most important supplier of COVID tests for the UNDP is the company “CEE MED”, owned by Medin Okić. In the period from March to December, at least according to the last update of the official UNDP website, this company signed 10 tender contracts with a total value of 1 million and 244 thousand USD, or approximately 2 million BAM.

According to the data of the business portal AKTA.ba, this company has an annual turnover of 260.000 BAM and one employee. Indicatively, criteria such as the annual turnover were not an elimination factor in the tender for this company. The question of the company’s earnings on contracts signed with the UNDP is also raised.

According to the data of the Issued Approvals for Intervention Import for the period from the 15^th of March to the 31^st of May “CEE MED” LLC had three imports of COVID tests. The first import date is on March 23^rd, with a value of just over 30.000 BAM. Three days later, “CEE MED” imports another contingent of corona virus kits worth 52.000 KM. At the beginning of April, the same company imports 500 COVID detection kits with a total value of 293.000 BAM. The value of total imports in this period is slightly more than 375 thousand BAM.

In the same period, “CEE MED” sells tests to the UNDP B&H through three tenders with a total value of approximately 785 thousand BAM.

We tried to contact Medin Okić, the owner of the company “CEE MED” LLC Sarajevo, in order to clarify the differences in prices of some 400 thousand BAM, as well as the way the company does business with the UNDP. In a response from this company, they thanked us for the interest, but refused to speak for the Tačno.net portal, stating that they do not have the permission of the UNDP to publicly give out business data.

The largest single procurement of the UNDP in the past period was the purchase of 30 respirators on April 14^th at a price of one million and 125 thousand dollars. The contract for the procurement of respirators was singed with the company “IDS – Zdrava sredina”, which is otherwise a company engaged in disinfection, deratization and disinsection of spaces.

This company primarily works with public institutions. From 2017 until today, according to the data of the Public Procurement Agency, it has signed 85 contracts with a total value of 285.000 BAM.

In the period since the beginning of the pandemic, “IDS – Zdrava sredina” has procured 30.000 protective masks for 58.000 BAM, 11.616 hand sanitizers “Handysept” and 6.600 of the disinfectant “Dezi Clean”. The value of this procurement amounted to 308 thousand BAM.

According to information coming from the UNDP B&H, in the past period, they signed direct agreements worth less than 2 million dollars.

We were unable to find a tender for the procurement of respirators purchased from “IDS – Zdrava Sredina”.

The question is how did “IDS – Zdrava Sredina” manage to get this contract amounting to one million and 125 thousand dollars without servicers, authorization from manufacturers and staff to install these respirators?

We did not receive answers to our questions regarding the business practices of this company during the publication of this text, and the director of “IDS – Zdrava Sredina”, Tarik Vatreš, did not respond to our request to comment.

Edis Arifagić and Mario Nenadić/foto: press KS

Edis Arifagić, former manager of the Flood Repair Program, today’s head of the Local Development Program, pointed out that he was satisfied with the current activities in the procurement of medical equipment. He could not discuss individual procurements. He denied any favouring of bidders in the UNDP B&H tenders, justifying the approval of tender documents to the organization’s teams in Istanbul and New York.

From Infected Raspberries to the COVID-19 Response

In the period from 2014 to 2016, according to media reports and internal reports, the UNDP B&H donated raspberries infected with bacterial root cancer through the project “UN Response to Floods in B&H”. Due to this omission, a number of farmers experienced astronomical losses, since after planting the land remained contaminated for a period of 5 years.

“I put in a lot of effort. I introduced irrigation, took a loan to buy sticks, wire. I spent 2 years ploughing and digging – this is a disaster. I also took a loan for raspberries worth 3000 m². This loan is 10,000 marks with an interest rate of 17%. I can prove it to you. Please visit me at the farm. My family is very dissatisfied. I also had to buy a plot and adjust it to agricultural activities, which was a significant investment. I am disappointed in the UNDP Sarajevo; I feel pressured by them. That is why I have prepared a lawsuit due to land pollution and loss of income in the past 2 years. Instead of getting raspberries for 4000 m², and I prepared the land for that amount, I got raspberry seedlings for 3000 m², or Polka seedlings for 1500 m² and Miker seedlings for 1500 m². Only 1% of Miker seedlings were fruitful, so I don’t trust anyone anymore.” the official report states.

The scandal over infected raspberries has never been fully clarified, nor have the authorities who allowed such an omission been held accountable, but what is surprising is that the UNDP B&H did not learn any lessons from this affair.

This is exactly what we see in the UNDP program “Response to COVID-19”, which abounds in procurement activities executed in an extremely non-transparent manner. The irony of the whole story is reflected in the fact that the representatives of this international institution will soon organize a forum on the transparency of public procurement or express concern about the level of corruption in Bosnia and Herzegovina. However, the UNDP B&H also bears part of the responsibility. Because this time it is not about infected raspberries, but as they also claim, it is about human lives.