The surveys reveal that while many Haitian businesses have won contracts or subcontracts since the earthquake, many others have been left out. There is also a severe disconnect in many areas between local contractors and international organizations. While procurement officers were generally supportive of local procurement, the report does not, as the authors point out, provide an idea of the actual level of local procurement taking place since the respondents were primarily organizations that had used the PDT marketplace previously. Explaining this bias the report states, “PDT is a well-known advocate for local procurement in Port-au-Prince, hence those that were willing to take part in a survey from PDT are more likely to support local procurement themselves.”
PDT interviewed 303 Haitian construction companies and while the percentage of those that received a contract from an international organization increased from 25 percent to 45 percent since the earthquake, many reported feeling excluded from the contracting process. For instance, the survey found that “[a]pproximately 43% of the Haitian businesses surveyed believed that international organisations were neither good nor bad for the economy. Eleven per cent even stated that international organisations do the Haitian economy more harm than good.” Only half of Haitian companies believed international organizations were interested in working with local companies. PDT is advocating for a “Haiti First” policy, “in which both the Government of Haiti and the international community agree to procure locally as often as possible and adopt recognised best practices that ensure maximum development impact from local procurement.”
Interestingly, despite their professed preference for local businesses, 67 percent of procurement officers interviewed “do not believe the local market can deliver technical work to the required quality without high levels of supervision and guidance.”
Filmmaker Michele Mitchell presented her documentary, "Haiti: Where Did the Money Go?" at a congressional briefing yesterday sponsored by Rep. Yvette Clarke, Rep. Barbara Lee, and Rep. Donald M. Payne (CEPR Co-Director Mark Weisbrot spoke at the briefing, and CEPR helped to publicize the event.) Through visits to Haiti in 2010 and 2011 in which she conducted interviews with IDP camp residents, NGO spokespersons, aid workers, and others, and through other background research, Mitchell examines why so many people (currently half-a-million) remain stuck in tent camps with few services, despite the billions of dollars pledged for relief following the earthquake. The film is currently airing on dozens of PBS stations around the U.S.
One NGO that Mitchell focuses on, in interviews, and in on-the-ground examination of the situation in IDP camps, is the Red Cross. Mitchell notes that the Red Cross is the biggest NGO operating in Haiti, and American Red Cross (ARC) Senior Vice President International Services David Meltzer is provided with a significant portion of screen time to explain the Red Cross’ activities in Haiti, and why some services – such as shelter and sanitation – appear to be so sorely lacking. As the Huffington Post’s Laura Bassett describes:
A senior Red Cross official for international aid is interviewed extensively throughout the film, and Mitchell said she repeatedly asked ARC to answer questions and corroborate facts during the production process.
Despite the prominent role that Meltzer has in the film, and Mitchell’s apparent reaching out to the organization, staff from the American Red Cross attended the briefing yesterday, handing out copies of a document titled “Correcting Film@11’s Errors and Distortions on the Haiti Response” (which we have posted here in PDF format). The several ARC staffers from the Washington office also interrupted a panelist (see the video here, 50:40) by complaining that the film was imbalanced and that Meltzer was not given sufficient notice ahead of the event (he was invited six days earlier, according to organizers).
In a front page Washington Post article, William Booth reports on the luxurious lifestyle that former dictator Jean-Claude “Baby Doc” Duvalier has been living since his return to Haiti last year. Although officially on house arrest, Booth reports that Duvalier “dines with his many admirers at the chic bistros of Petionville” and last week for the two year anniversary of the earthquake “Duvalier drove himself — with a police escort — to the government’s memorial ceremony to mark the second anniversary of Haiti’s cataclysmic earthquake. The audience, which included Haiti’s President Michel Martelly, his prime minister and former president Bill Clinton, rose to greet him.” (Journalists on the scene noted that both Martelly and Clinton also shook Duvalier’s hand.)
Duvalier’s presence at the ceremony in Titanyen was particularly troubling because, as Susana Ferreira pointed out in an article for TIME:
Titanyen, located north of Port-au-Prince, has been used as a body dumping ground for decades. It's where the Tonton Macoutes, the feared militia of the 1957-86 Duvalier family dictatorship, buried many of its estimated 30,000 victims.
Booth reports that Duvalier’s attorney believes all charges will be dropped, “He will be cleared of all charges. It is almost finished now; the judge is typing up the order to throw it all out,” Reynold Georges told Booth. This should come as little surprise given that President Martelly has consistently voiced his support for amnesty for the former dictator, telling Booth “It is part of the past. We need to learn our lessons and move forward.” Additionally, as Booth points out, “Martelly’s government includes many officials with ties to Duvalier’s government.” The AP’s Trenton Daniel reported in October that:
Now, a former minister and ambassador under the regime is serving as a close adviser to Martelly. And at least five high-ranking members of the administration, including the new prime minister, are the children of senior dictatorship officials.
Miguel Vivanco, the Americas director of Human Rights Watch said when Duvalier returned a year ago, that "Duvalier's return to Haiti should be for one purpose only: to face justice. Under the presidency of Duvalier and his Tonton Macoutes, thousands were killed and tortured, and hundreds of thousands of Haitians fled into exile. His time to be held accountable is long overdue." Amnesty International issued a statement this week calling on the Haitian government to prosecute Duvalier. Amnesty’s statement is even more forceful, placing blame directly on Martelly and his administration for delaying the prosecution:
“The authorities haven’t made a serious effort to look into past events that afflicted a generation of Haitians with torture, enforced disappearance, extrajudicial executions, arbitrary arrests and other serious human rights violations.”
“The investigation seems to have deliberately stalled by changing Public Prosecutors multiple times,” said Javier Zúñiga.
“It has become evident that in Haiti, the independence of the judiciary is just a mirage.”
In the weeks prior to the 2nd anniversary of Haiti’s January 12, 2010 earthquake, an unprecedented U.S. State Department public relations offensive has unfolded. On December 28 the U.S. State Department released 11 fact sheets, celebrating the achievements of the U.S. humanitarian and development assistance in Haiti in areas ranging from shelter to food security. To make sure the message got through to journalists, on January 6th the U.S. government partnered up with UN entities and held a joint press teleconference on Haiti to discuss the “amazing” work done removing rubble and providing clean water and shelter to those made homeless by the quake.
The effort continued with an op-ed by Cheryl Mills, Counselor and Chief of Staff to Secretary of State Hillary Clinton that appeared on January 9thin the Huffington Post. The piece was then sent out widely by the State Department public affairs office. Finally, on the day of the anniversary, additional op-eds were published by Rajiv Shah, the head of the U.S. Agency for International Development (USAID) and Mark Feierstein, Assistant Administrator, Bureau for Latin America and the Caribbean at USAID. Shah and Feierstein appeared to have received the same memo: their talking points were strikingly similar and the two articles had nearly the same titles “Haiti Is on the Move” and “Haiti ‘a country undeniably on the move’”.
Clearly, there is heightened concern – within the U.S. foreign policy machine – about the perception of U.S. efforts in Haiti, given the increased press scrutiny generated by the 2nd quake anniversary commemorations. A lot of money has been spent - $2.2 billion by the US alone according to their fact sheet on funding - and it’s important to show some results after two years. And, apparently, there are plenty of results on display, as Cheryl Mills has emphasized in her piece, which rolls out ten impressive-sounding achievements. But are these achievements real, and – if they are – do they really represent significant steps forward? Let’s try to go beyond the hype by taking a closer look at Cheryl Mills’ article “Haiti – Two Years Post-Earthquake: What You May Not Know,” and providing the reader with a few additional facts that Mills and the U.S. State Department may prefer you not know:
There have been a host of assessments in the media over the past week examining the state of recovery in Haiti two years after the earthquake. All of these present a mixed review, usually noting early on, as this one from Reuters’ Kevin Gray and Joseph Guyler Delva does, that “More than a half a million people still live in a critical situation in crowded tent camps, many without running water or electricity.” Gray and Guyler Delva also mention that “throngs of Haitians line the streets every day in a jarring reminder that 70 percent of the population is either unemployed or underemployed.”
Reuters goes on:
"It's been two years and I'm still here in the camps," said Jerome Mezil, a 28-year-old who lives in the Sainte-Therese tent camp in the capital's Petionville district.
Some tent camp dwellers say they fear life outside the camps will be even tougher.
Indeed, this echoes what respondents told the International Organization for Migration last year regarding their decision to leave camps: "Poor conditions in the IDP site", "eviction", "high incidence of crime/insecurity in the IDP site", and "rain/hurricane" were cited by 77.9 percent of respondents. These answers contradict claims by the Washington Post that “most were pulled away [from tent cities] by programs that gave them rent subsidies or assistance to repair a home.”
As the two year mark approaches, many are justifiably asking, where did the money go? With billions pledged by donors, and billions more in private donations, it is a natural question. As important as the level of disbursement is the question of where that money has gone and whether it has been spent appropriately. Independent evaluations have shown that many NGOs were responding more to their donors than to those whom they are supposedly in Haiti to help. Last year, the United Nations Special Envoy to Haiti (OSE) released a report, “Has Aid Changed? Channeling Assistance to Haiti Before and After the Earthquake,” which analyzed whether donors “have changed the way they provide their assistance in accordance with the principle of accompaniment” which “is specifically focused on guiding international partners to transfer more resources and assets directly to Haitian public and private institutions as part of their support.”
Yet the vast majority of aid projects and donor support bypassed the Haitian government. In fact, there was less direct budget support in 2011 than there was in 2009 before the earthquake. Additionally, many aid projects were undertaken outside the purview of the government. Rather than reinforcing the government’s capabilities, these types of projects have historically undermined them. Despite this, there are examples of aid done right; the construction of a new teaching hospital in Mirebalais by Partners in Health is one such example.
Partners in Health/Zanmi Lasante (PIH) had been in Haiti for 25 years before the earthquake and has a history of working closely with the government. Dr. Paul Farmer of PIH, writing in the introduction of the OSE report referenced earlier, stresses the importance of working with, not around Haitian institutions:
We know from our shared experiences in Haiti and elsewhere that the way aid is channelled matters a great deal, and determines its impact on the lives of the Haitian people. For example, with over 99 percent of relief funding circumventing Haitian public institutions, the already challenging task of moving from relief to recovery—which requires government leadership, above all—becomes almost impossible.
We have heard from the Haitian people time and again that creating jobs and supporting the government to ensure access to basic services are essential to restoring dignity. And we have learned that in order to make progress in these two areas we need to directly invest in Haitian people and their public and private institutions. The Haitian proverb sak vide pa kanpe—“an empty sack cannot stand”—applies here. To revitalize Haitian institutions, we must channel money through them.
As media coverage intensifies around the two-year anniversary of the earthquake in Haiti, there appears to be a serious effort on the part of the largest donors and aid organizations to present the relief and recovery in Haiti as an unmitigated success. One notable exception is Oxfam, which released a two-year report critical of the reconstruction effort. The State Department, on the other hand, issued 11 separate fact sheets on the U.S. response in Haiti; none of them suggested that the U.S. had learned from its mistakes, or indeed that any mistakes had been made at all. One of the key statistics that is most frequently touted to suggest that big advances have been made is the decline in the number of internally displaced persons (IDPs) living in camps. In a State Department blog post (also published on the Huffington Post) Cheryl Mills, chief of staff to Hillary Clinton, points to the reduction of IDP numbers as a clear sign of progress:
Almost two-thirds of the estimated 1.5 million Haitians living in tent shelters after the January 2010 earthquake have left camps, many returning to houses that have undergone structural improvements or moving into temporary shelters and permanent homes.
Of course, a reduction in people living in IDP camps seems like an entirely positive development. Yet a closer look at this development reveals significant problems with both the relief and reconstruction effort and a much more tepid success story.
In March, the International Organization for Migration (IOM), which tracks the IDP camp population, found that there were 680,000 people living in the camps. So by March the majority of the decrease Mills cites had already taken place. Yet what the IOM found was that many people were leaving the camps for even more precarious living situations, not for new homes or T-shelters. The IOM study shows that only seven percent indicated that an "assistance package was provided" (2.0%), "my home was repaired" (4.7%) or "transitional shelter was provided" (0.3%) as reasons for leaving IDP sites. On the other hand, "Poor conditions in the IDP site", "eviction", "high incidence of crime/insecurity in the IDP site", and "rain/hurricane" were cited by 77.9 percent of respondents. Between June 2010 and March 2011, some 230,000 people were evicted from IDP camps and more than 100,000 still face the constant threat of eviction.
In March 2010, the New Orleans inspector general found that a major contractor for the city’s recovery efforts, MWH Americas, had been overcharging the city. The Times-Picayune reported at the time:
The controversial engineering firm hired to manage New Orleans' massive rebuilding effort has been operating for more than two years under a dubiously awarded contract that has allowed it to overbill the city repeatedly even as the bricks-and-mortar recovery work it oversees has lagged, according to a draft report by the city's inspector general.
Now this same company accused of wrongdoing in New Orleans has landed a USAID contract for work in Haiti. And it's not the first time this has happened. MWH announced on December 21 that it had received a $2.8 million contract to conduct a feasibility study for port infrastructure in northern Haiti (the contract was signed on September 23). The company’s release goes on:
The $2.8 million contract will include a market demand and project finance structure study, economic feasibility analysis, and the preparation of a detailed technical study including geotechnical, environmental assessment, operational performance, water supply system, emergency response, access roads and institutional and regulatory assessment. The project is expected to be complete in May 2012.
The awarding of the contract to Colorado-based MWH, despite a record of waste and abuse, is consistent with other contracts awarded by USAID in the aftermath of the January 2010 earthquake. Overall, USAID has awarded over $300 million in contracts, with only 0.02 percent going directly to Haitian firms. The largest contractor is Chemonics, a company with a long record of waste and abuse in Afghanistan and which was criticized by the USAID inspector general last year for its work in Haiti. MWH Global, the parent company of MWH Americas, spent over $675,000 dollars on lobbying expenses in 2011, according to OpenSecrets.org, although it was below the $1.2 million spent in 2010.
A recent report by Haiti Grassroots Watch examines Haiti’s much trumpeted apparel manufacturing, planned for significant expansion with the new Caracol Industrial Park, which is “being built with 124 million dollars of U.S. taxpayer funds, and another 55 million dollars from the Inter-American Development Bank.” At the park’s groundbreaking ceremony last month, Haitian President Michel Martelly said "Haiti is open for business," and "This model of investment will allow Haitians to feel proud.” Reuters reported that “Martelly said the park could eventually provide jobs for 65,000 workers, which would increase Haiti's garment industry workforce by more than 200 percent.”
But among HGW’s key findings are that:
HGW’s investigative reporters interviewed a factory worker named Evelyn Pierre-Paul, who
hasn't been able to save up a year's rent yet. Twenty-three months after the catastrophe that killed hundreds of thousands, she and her children are still living under a tent in one of the capital's hundreds of squalid refugee camps.
Pierre-Paul's average daily take-home wage is actually more than Haiti's minimum factory wage of 150 gourdes, or 3.75 dollars, a day. She earns about 236 gourdes, or 5.90 dollars a day. But that doesn't cover even one-quarter of what would be considered a family's most basic expenses.
If an international agency brought a deadly disease to New York City that killed more people than the 9/11 attacks, what would be the consequences? Could they simply brush it off and have nobody hold them accountable for the damages? The answer is obviously "no," and the same would be true for most of the countries in this hemisphere. But so far, it looks like they can get away with it in Haiti.
For some reason the “international community” thinks that it can get away with anything in Haiti. More than 7,000 Haitians have been killed since October of 2010 by the deadly cholera bacteria that UN troops brought to Haiti. More than 500,000 have been infected, and the disease – which Haiti has not had in more than a century – is now endemic to the country and will be killing people there for many years to come.
Last week, UN officials once again denied responsibility for the disaster, and even lied publicly about the available scientific research – some of which was included in the UN’s own report on the epidemic. On Thursday Nigel Fisher, the UN’s Deputy Special Representative for MINUSTAH said, "The cholera strain we have in Haiti is the same as the one they have in Latin America and Africa. They all derive from Bangladesh in the 1960s so they are all an Asian strain.
"But the UN’s own report stated definitively that this was not true: "Overall, this basic bacteriological information indicates the Haitian isolates were similar to the Vibrio cholerae strains currently circulating in South Asia and parts of Africa, and not to strains isolated in the Gulf of Mexico [or] those found in other parts of Latin America ...”
So according to the UN’s own research, Fisher was lying. The UN’s denials of its responsibility for introducing cholera in Haiti are analogous to the dishonesty of “climate change deniers.” The evidence for the origin of the epidemic is overwhelming.
An independent evaluation of shelter provision released last week by Estudios Proyectos y Planificación S.A., under commission of the International Federation of the Red Cross, provides perhaps the first systematic evaluation of the provision of shelter since the earthquake nearly two years ago. The report, while acknowledging the tremendous constraints in post-earthquake Haiti and pointing to some notable successes, is highly critical of the overall effort on the part of the international community despite the fact that “money was not an issue for the shelter response.”
The report focuses on the Shelter Cluster, which took the lead in providing emergency and then interim shelter solutions in Haiti, finding that affected populations and Haitian institutions were excluded from the process and a rigid, singular focus on transitional shelters (T-shelters) hindered the ability to develop a comprehensive housing solution.
Meetings were most often conducted in English and access was restricted inside the UN Log base leading to “a barrier between the international response system and the Haitian institutions.” One government official states that, “[o]ur ideas were not taken too much into consideration. Some said it is because we didn’t have the capacity [to actively participate in the cluster’s decisions] (…) Perhaps we were weak but we were there and tried, but they [shelter agencies] wouldn’t listen to us.”
The evaluation found that “a more participatory strategy would have been desirable to better address the affected population’s needs and plans and to seek collaboration with them, to allow a more self-driven response and to reduce the burden on the humanitarian actors.”
“Affected people were not consulted nor their capacities considered, the response was what those with the [foreign] money decided,” one interviewee told the evaluation team.
The United Nations Peacekeeping operation in Haiti, MINUSTAH by its French acronym, has been the target of recent popular protests and a source of controversy because of its role in re-introducing cholera to Haiti, the sexual assault of a young Haitian man and other past abuses. On November 3, 2011 the Institute for Justice and Democracy in Haiti and Bureau des Avocats Internationaux filed a legal complaint on behalf of over 5,000 cholera victims seeking damages from the United Nations. The UN has so far not responded or given a timetable for a response.
Here is MINUSTAH, by the numbers:
Percent of worldwide UN peacekeepers that are in Haiti, despite it not being a war zone: 12.5
Number of MINUSTAH troops (military and police) currently in Haiti: 12,552
Rank in size among the 16 UN peacekeeping operations worldwide: 3
Rank in size of Darfur and the Democratic Republic of Congo, respectively: 1, 2
Percent of Haiti’s annual government expenditures to which MINUSTAH’s budget is equivalent: 50
Percent of Haiti’s GDP to which MINUSTAH’s budget is equivalent: 10.7
Total estimated cost of MINUSTAH since the earthquake: $1,556,461,550
Percent of UN peacekeeping operations worldwide funded by the United States: 27
Percent the U.S. has disbursed out of its $1.15 billion pledge at the March 2010 donor conference: 18.8
Percent of the U.S.’ contributions to MINUSTAH since the earthquake that this represents: 41
Factor by which MINUSTAH’s budget exceeds the amount of funds the UN’s cholera appeal has raised: 8
Percent of MINUSTAH’s budget it would take to fully fund the UN’s cholera appeal: 1.7
Number of days operating expenses it would take to fund a cholera vaccination campaign that would cover the entire country: 18
Percent of a single day’s MINUSTAH budget that the cholera vaccination pilot program will use over its multiple-week lifespan: 40
Minimum number of people killed from cholera in Haiti since October 2010: 6,908
Number of people killed by homicide in Haiti in 2010: 689
Number of people, per 10 million (roughly the population of Haiti), killed by homicide in Brazil, the largest troop contributor to MINUSTAH: 2,270
Number of cholera victims who filed a claim with the UN seeking damages: 5,000
Number of cholera victims: 513,997
Rate per minute that Haitians were falling ill with cholera in July 2011: 1
Amount by which MINUSTAH’s budget exceeds the UN’s 2012 humanitarian appeal for Haiti: $562,517,100
Number of MINUSTAH personnel who were repatriated this year after a cell phone video emerged showing troops sexually assaulting a young Haitian man: 5
Number of successful prosecutions against over 100 MINUSTAH troops repatriated to Sri Lanka after allegations of involvement in child prostitution surfaced in 2007: 0
Number of standing claims commissions set up by the UN under Status of Forces Agreements so that local population may have means of redress from peacekeepers, historically: 0
Years MINUSTAH has been in Haiti: 7
Shortfall in trained national police officers that are supposed to take over for MINUSTAH: 10,000
Rank among Haiti’s top donors, including governments, that MINUSTAH would be if its budget went towards relief and reconstruction efforts: 3
Date on which cholera was discovered: October 21, 2010
Date the head of MINUSTAH was reported saying it was “really unfair” to accuse the UN of bringing cholera to Haiti: November 22, 2010
Distance, in miles, from the Nepalese MINUSTAH base to the location of the first reported case of cholera: .1
Date on which scientific paper confirmed that Haitian and Nepalese samples of cholera were "almost identical": August 23, 2011
Days since the cholera outbreak it has taken for the UN to accept responsibility: 413 (and counting)
Date on which MINUSTAH’s mandate was extended through 2012: October 14, 2011
Percent of Haitians in a recent survey who said they wanted MINUSTAH gone within a year: 65
Following the devastating earthquake in Haiti on January 12, 2010, the U.S. launched an unprecedented relief effort, eventually totaling over one billion dollars. But the lead agency in the immediate aftermath was not the U.S. Agency for International Development (USAID), as is typically the case when our nation provides humanitarian assistance, but the military. Just after the earthquake, the U.S. had over 20,000 troops in Haiti. Of the $1.1 billion in humanitarian funding from the U.S. in 2010, nearly half was channeled to the Department of Defense.
As has been the case in Iraq and Afghanistan, relief efforts have relied heavily on contractors, a number of which have a history of waste, fraud and abuse. An analysis of federal contracts has revealed that Kuwait-based Agility Logistics (formerly PWC Logistics) -- currently under indictment for overcharging the U.S. military by up to $1 billion -- has benefited from over $16 million in funding awarded in the aftermath of the earthquake.
With so much on the line, the U.S government, across the board, must step up its oversight of contractors to ensure taxpayer dollars are not wasted on companies with poor track records.
Agility has been barred from receiving government contracts since November 2009, when a federal grand jury indicted the company for overcharging the U.S. military on $8 billion in contracts to supply food for troops in Iraq, Kuwait and Jordan. Agility was accused of “intentionally failing to purchase less expensive food items, knowingly manipulating and inflating prices, and receiving product rebates and discounts that it did not pass on to the government as required.” The prospect of additional charges still exists.
In November 2009 Agility was added to the U.S.’s Excluded Party List System (EPLS), which prevents them from procuring contracts from any government agency. The EPLS designation has been extended to over 125 related organizations as the investigation has continued; all of them have been indefinitely barred.
Despite the blacklist designation Agility was able to secure government funding for work in Haiti through a joint venture. An analysis of the Federal Procurement Data System shows that Contingency Response Services LLC (CRS) has received over $16 million in government funding from the Department of the Navy since the earthquake. The particularly bland sounding Contingency Response Services consists of three defense contractor giants -- Dyncorp, Parsons and Agility Logistics (then PWC logistics).
This is the final part of a series of posts analyzing USAID's increasing reliance on contractors and how this has affected efforts to provide greater oversight, implement procurement reform and improve the efficacy of U.S. aid. Part one is available here, part two here.
As was discussed in the previous post, the lack of oversight of large USAID contractors makes tracking the percent of funds disbursed to local subcontractors nearly impossible, yet this is not the only reason for increased transparency. It is also justified given that many of these contractors have previously been found to have performed their missions inadequately. Without increased efforts to monitor their actions, the likelihood of increased waste, fraud and abuse is only heightened. In addition to their work in Haiti, Chemonics has received hundreds of millions of dollars for activities in Afghanistan, including a $153 million contract in 2003 to improve the agricultural sector. In 2005, the GAO found that Chemonics had failed to "address a key program objective", and that "consequently, during its first 15 months, the project’s progress in strengthening Afghanistan`s market chain was limited."
Despite this, Chemonics received a contract in 2006 for $102 million. Once again, the USAID Inspector General found significant problems with the program:
Chemonics reported results for all eight indicators for the first year of the program. However, the audit identified that for two of the eight indicators, reported results fell considerably short of intended results. Targets had not been established for the other six indicators making it difficult to tell how well the project was proceeding. In addition, Chemonics did not have documentation to adequately support reported results for six indicators. In two of the six cases, the support was inadequate, while in four cases there was no support at all. For example, Chemonics had inadequate support for the reported result that 1,719 individuals had received short-term agricultural training, and no support for the reported result that project activities had generated an economic value in excess of $59 million. In addition, the audit found that a major program activity—the Mazar foods initiative—was behind schedule. This $40 million initiative to cultivate 10,000 hectares for a commercial farm was not finalized in time to take advantage of the summer planting season as initially planned.
The Inspector General has also found problems with Chemonics’ performance in Haiti. The AP reported at the time of the report:
And an audit this fall by US AID's Inspector General found that more than 70 percent of the funds given to the two largest U.S. contractors for a cash for work project in Haiti was spent on equipment and materials. As a result, just 8,000 Haitians a day were being hired by June, instead of the planned 25,000 a day, according to the IG.
Additionally, the IG noted that Chemonics was using cash-for-work programs to remove rubble from private lots, contrary to USAID policy. The report states:
[T]he audit team observed workers removing rubble from the lots of private residences next to two of the four Chemonics rubble removal sites visited during the audit. Chemonics officials later confirmed that it was clearing the residential lots in conjunction with a road renovation project. USAID program officials confirmed that there are no formal procedures for selecting private homes for clearance, that private homes do not meet USAID/OTI’s site selection criteria, and that the implementing partner had not notified USAID/OTI of the exceptions.
The most egregious part of the IG report, however, is that Chemonics and Development Alternatives International (DAI), another for-profit development firm, were operating in Haiti with no oversight. The IG report found that USAID/OTI had not conducted financial reviews of their implementing partners, concluding that “Although DAI and Chemonics were also expending millions of dollars rapidly on CFW [cash-for-work] programs in a high-risk environment, USAID/OTI had not yet performed these internal control reviews.”
The fact that these internal controls were not applied is especially troubling given information in the contract that Chemonics was operating under at the time. Specifically, the contract required that detailed financial information be provided.
On the same day as a high profile event laying the corner stone of “one of the largest and most modern” industrial parks in the Caribbean, an investigation by Better Work Haiti found "evidence of violations of freedom of association" at other Haitian textile factories. Alison Macgregor of the Montreal Gazette reports:
Gildan Activewear Inc. has ordered its Haitian subcontractor to reinstate four workers after an independent investigation concluded they were illegally fired in September because of their involvement with a local union.
The union members worked for the Genesis S.A. factory near the Portau-Prince [sic] airport. The tax-exempt plant, owned by the powerful Apaid family, produces almost exclusively for Gildan. The investigation found there was "evidence of violations of freedom of association" at the factory, Peter Iliopoulos, Gildan's senior vice-president (public and corporate affairs) said in an interview Tuesday.
[It is also worth noting that the workers’ reinstatement follows pressure from the International Labor Rights Forum, United Students Against Sweatshops, Workers Rights Consortium and other labor solidarity groups.]
Until this past September there was only one union in the Haitian garment sector, and none in Port-au-Prince. In September, the Sendika Ouvriye Takstil ak Abiman (SOTA) union was formed as a sector wide movement. On September 16, SOTA obtained registration from the Haitian Ministry of Labor and Social Affairs, yet as the Better Work investigation states:
Between 23 and 30 September 2011, six members of the Executive Committee of a new trade union formed by workers in the garment sector in Haiti (SOTA) were terminated by three factories in Port-au-Prince.
In each case, Better Work found that the “employer has not provided sufficient information to counter the allegations of anti-union discrimination”. The report suggests the re-hiring of those fired with back pay and concludes:
There is strong circumstantial evidence to demonstrate that the officers of the SOTA trade union were terminated based on their trade union affiliation. The fact that 6 out of 7 officers of the SOTA union were fired by three employers within two weeks of the registration of the union with the Ministry of Labor and Social Affairs strongly suggests an effort by employers to undermine the new union, and to curtail its growth before it had the opportunity to expand its membership.
With the garment industry heavily promoted by the Haitian government and international donors, it will be imperative to ensure that worker’s rights are respected and strengthened.
This is the second part of a series of posts analyzing USAID's increasing reliance on contractors and how this has affected efforts to provide greater oversight, implement procurement reform and improve the efficacy of U.S. aid. Part one is available here.
Procurement Reform – Moving Forward?
One primary aspect of USAID Forward is procurement reform. The goal is to “Increase use of reliable partner country systems and institutions”, strengthen local capacity by allocating more grants to local NGOs and increase the “percentage of total dollars through direct contracts with local private businesses.” The program also aims to “[d]ecrease both the number and/or dollar value of large indefinite quantity contracts” which have been labeled as “high risk”.
These reforms deserve to be supported, and there is some evidence that efforts are being made to implement them. The GAO report (discussed in the part one), for instance, acknowledges that procurement documents indicated, “whether those activities will be targeted at local firms or organizations or use traditional partners.”
Nevertheless, in Haiti, only .02 percent of contracts from USAID have gone directly to Haitian companies, while the largest contracts have gone to for-profit development contractors in the form of “high-risk” indefinite quantity contracts. The overwhelming majority of contracts have gone to companies in the Washington DC area (Beltway), as can be seen in Table I. The percentage that has gone to local firms in Haiti is even lower than USAID’s worldwide average, which over the past three years has been 0.63 percent. Through USAID Forward, the agency aims to reach 2 percent by fiscal year 2013.
Percent of Total
Source: FPDS, author’s calculations.
“But I think it's fair to say that USAID, our premier aid agency, has been decimated. You know, it has half the staff it used to have. It's turned into more of a contracting agency than an operational agency with the ability to deliver.” – Hillary Clinton, Senate Confirmation Hearing as Nominee for Secretary of State
This is the first part of a series of posts analyzing USAID's increasing reliance on contractors and how this has affected efforts to provide greater oversight, implement procurement reform and improve the efficacy of U.S. aid.
The United States Agency for International Development (USAID) has changed drastically over the past 20 years. Beginning in the early ‘90s and continuing through the 2000s, USAID saw its reliance on contractors increase drastically. From 1990 to 2008 USAID experienced a 40 percent decline in staff, from 3500 to 2200. Over the same period, funds under their responsibility skyrocketed. The American Academy for Diplomacy noted in a 2008 report that, “[i]mplementation of programs has shifted from Agency employees to contractors and grantees and USAID lacks the technical management capacity to provide effective oversight and management.” The Academy also noted that “USAID employs only five engineers worldwide, despite a growing number of activities in that sector.” However it was not just NGOs that benefited from the increased use of contracts and grants; the for-profit development industry has gained as well. From fiscal year 1996 to fiscal year 2005, “the share of funds awarded to for-profit contractors rose from 33 percent to 58 percent.” These companies, generally based in the greater Washington, DC area, have taken a leading role in U.S. foreign aid. In a 2008 Senate hearing on USAID, Senator Patrick Leahy stated (PDF):
USAID’s professional staff is a shadow of what it once was. We routinely hear that the reason USAID has become a check writing agency for a handful of big Washington contractors and NGOs is because you don’t have the staff to manage a larger number of smaller contracts and grants.
Sometimes these big contractors do a good job, although they charge an arm and a leg to do it. Other times they waste piles of money and accomplish next to nothing, although they are masters at writing glowing reports about what a good job they did.
Meanwhile, the small not-for-profit organizations are shut out of the process. This is bad not only for U.S. taxpayers but also for the countries that need our help.
With the election of Barack Obama and a change in the leadership of the State Department and USAID, this situation was supposed to change. Incoming USAID director Rajiv Shah announced the USAID Forward project, which aims to “change the way the Agency does business.” Additionally, in 2008 Congress appropriated funding for the Development Leadership Initiative that aimed to double USAID’s Foreign Service workforce by 2012, overturning the previous decades of declining staff. However both the USAID Forward program and the Development Leadership Initiative have not led to drastic changes on the ground as of yet, and potential funding cuts from Congress will only exacerbate the slow pace of reform.
The level of grant support is only marginally higher than in 2009, before the earthquake, while overall spending levels are actually below 2009 levels. Despite the billions pledged in aid, budget support for the Haitian government was lower in 2011 than it had been in 2009.
The January 12 earthquake, which caused an estimated $8 billion in damages, led the Haitian economy to contract by 5.5 percent in 2010. With the prospect of large reconstruction projects backed by donor pledges of $4.6 billion, the economy was expected to begin growing rapidly in 2011. The IMF projected growth of over 8.5 percent in their first review of Haiti’s economic program in May:
Real GDP is expected to grow by 8.6 percent, assuming concerted strong efforts by the authorities and the international community to speed up the reconstruction.
As we have written about previously, disbursements from donors have been slow to materialize, a problem only exacerbated by the five months it took to form a new government. In addition to the effects on the ground, over 550,000 still living in tarp shelters with little services, the slow pace of reconstruction is also slowing economic growth. Updated projections from the IMF now expect slower growth of 6 percent in 2011.
Surprisingly, given the immense needs, government spending contracted sharply in 2011 compared to 2010. In 2010, with substantial grant support (including direct budget support) from donors, government spending reached 27.5 percent of GDP. In 2011 expenditures were significantly lower at 19.7 percent of GDP as grants decreased by ten percentage points to just 7.5 percent of GDP in 2011. The level of grant support is only marginally higher than in 2009, before the earthquake, while overall spending levels are actually below 2009 levels. Despite the billions pledged in aid, budget support for the Haitian government was lower in 2011 than it had been in 2009. The decreased expenditure most drastically affected capital expenditures, which fell from 16 percent of GDP in 2010 to below 10 percent in 2011.
The Institute for Justice and Democracy in Haiti (IJDH) and Bureau des Avocats Internationaux (BAI) held a press conference today in New York regarding the complaint [PDF] they filed Thursday on behalf of 5,000 cholera victims seeking damages from the UN. The complaint states that
The cholera outbreak is directly attributable to the negligence, gross negligence, recklessness and deliberate indifference for the health and lives of Haiti’s citizens by the United Nations (“UN”) and its subsidiary, the United Nations Stabilization Mission in Haiti (“MINUSTAH”).
IJDH Director Brian Concannon explained on Democracy Now! this morning:
“We’re hoping that this is the case that’s too big to fail. That the evidence against the United Nations is so overwhelming here that the U.N. will have no choice but to finally take responsibility for its malfeasance.” “What we’re asking for, what our clients are asking for, is the U.N. and international community to step up and to give Haiti the sanitation infrastructure it needs to stop the epidemic."
The AP’s Trenton Daniel summed up the goals of the complaint in an article today:
Concannon said he hoped the U.N. mission would set up a tribunal to evaluate the claims filed on behalf of the cholera victims. He also said he hoped the U.N. force would fund and create a lifesaving program that would provide sanitation, potable water and medical treatment. He also said he wants a public apology.
“We’re obviously hoping that the U.N. will step up and do the right thing,” he said by telephone.
If that doesn’t happen, the group plans to file the claims in a Haitian court, he said.
As the complaint [PDF] notes, the UN has failed to provide Haitians with the mechanisms they need to seek redress that are required under the Status of Forces Agreement governing MINUSTAH’s legal status:
In addition to the problems of allocating food aid discussed in the previous post, another significant problem is the lack of local procurement, which can be more effective than importing in emergency situations. The U.S. government, which has begun a local and regional procurement pilot project, found in a 2009 study (PDF) that:
Local and regional purchase is an important tool, enabling food aid agencies to respond quickly to emergency food needs, both during and after food crises and disasters.
Local and regional purchase can be a timely and effective complement to in-kind food aid programs.
The pilot project is also “based on the view that local and regional purchase has potential value for strengthening and expanding commercial markets, stimulating local and regional production, and reducing emergency food aid requirements.” Yet thus far, the pilot project has only limited funds and was undertaken in just 12 countries in 2010 (only seven countries are benefactors of the program in 2011). Together the 12 country programs made up less than one percent of all U.S. food aid in Fiscal Year 2010.
After the earthquake, noting that Haiti has gone from producing nearly 50 percent of their annual rice consumption in 1988 to around 15 percent now, CEPR published a report on food aid that proposed “that international donors seeking to support Haiti’s agricultural sector and provide food to those in need could help Haiti become more self-sufficient by” using local procurement to purchase Haitian rice. According to the World Food Program Food Aid Information System, Haiti received over 110,000 metric tons (MT) of rice as food aid in FY2010, with the U.S. providing 57,000 MT of the total. According to the WFP, only about five percent of this came in the form of local procurement, despite the previously discussed advantages. Upon further review, however, even this low number is drastically overstated.
After the January earthquake, a number of donors and NGOs began large scale food distribution programs. Post earthquake surveys had found a large spike in food insecure households directly after the earthquake. A recent World Bank Policy Research Working Paper from Damien Échevin notes that three weeks after the earthquake “31% of the households were experiencing limited or severe food insecurity (22% and 9% respectively), that is a [sic] nearly double the food insecurity prevalence observed before the earthquake.” In a follow up survey four months later, the number of food insecure households had decreased, but only to 27 percent. Échevin concludes:
So, shortly after the earthquake, assistance programs allocation prove not to have been effective in targeting the most vulnerable people in the directly affected area. Five months after the earthquake, it appears that things had not really changed: although food assistance may have contributed to decrease the prevalence of food insecurity over the period, authorities still seemed unable to provide an efficient allocation of assistance programs…indeed, assistance also appeared to benefit less to families headed by women and less to households with disabled members, which is contradictory with an "optimal" targeting that would make those most vulnerable eligible for assistance in priority.
The World Bank report also has some interesting conclusions about Food-for-Work and Cash-for-Work plans:
When focusing of cash and food-for-work programs, we find that these programs are not specifically targeted at people who are most in need, be it because of their low level of subsistence or because of earthquake-related losses. Pre-earthquake participation to programs appears to be an important determinant of post-earthquake participation. What is more, cash-for-work is very rarely declared as the main source of household income.
The report provides some statistical backing to the first-hand accounts of the problems with food distribution in the immediate aftermath of the earthquake and with the problematic Cash-for-Work programs from USAID/OTI.