Haiti Relief & Reconstruction Watch

Haiti Relief & Reconstruction Watch

Haiti: Relief and Reconstruction Watch is a blog that tracks multinational aid efforts in Haiti with an eye towards ensuring they are oriented towards the needs of the Haitian people, and that aid is not used to undermine Haitians' right to self-determination.

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.

And it’s not just the contractors who are profiting. The person tasked with coordinating USAID’s relief efforts in the aftermath of the earthquake has personally benefited from the “gold rush” for contracts. Bill Quigley and Amber Ramanauskas, in their article, “Seven Places Where Earthquake Money Did and Did Not Go” write:

Capitalizing on the disaster, Lewis Lucke, a high ranking USAID relief coordinator, met twice in his USAID capacity with the Haitian Prime Minister immediately after the quake. He then quit the agency and was hired for $30,000 a month by a Florida corporation Ashbritt (known already for its big no bid Katrina grants) and a prosperous Haitian partner to lobby for disaster contracts. Locke said “it became clear to us that if it was handled correctly the earthquake represented as much an opportunity as it did a calamity…” Ashbritt and its Haitian partner were soon granted a $10 million no bid contract. Lucke said he was instrumental in securing another $10 million contract from the World Bank and another smaller one from CHF International before their relationship ended.

UPDATE 1/05: The article has been edited slightly for accuracy.

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.

And it’s not just the contractors who are profiting. The person tasked with coordinating USAID’s relief efforts in the aftermath of the earthquake has personally benefited from the “gold rush” for contracts. Bill Quigley and Amber Ramanauskas, in their article, “Seven Places Where Earthquake Money Did and Did Not Go” write:

Capitalizing on the disaster, Lewis Lucke, a high ranking USAID relief coordinator, met twice in his USAID capacity with the Haitian Prime Minister immediately after the quake. He then quit the agency and was hired for $30,000 a month by a Florida corporation Ashbritt (known already for its big no bid Katrina grants) and a prosperous Haitian partner to lobby for disaster contracts. Locke said “it became clear to us that if it was handled correctly the earthquake represented as much an opportunity as it did a calamity…” Ashbritt and its Haitian partner were soon granted a $10 million no bid contract. Lucke said he was instrumental in securing another $10 million contract from the World Bank and another smaller one from CHF International before their relationship ended.

UPDATE 1/05: The article has been edited slightly for accuracy.

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:

  • Haitian workers earn less today than they did under the Duvalier dictatorship.
  • Over one-half the average daily wage is used up to pay for lunch and transportation costs to and from work.

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.

HGW also notes that

A recent study by the U.S.-based Solidarity Center, which is linked to the AFL-CIO trade union federation, determined that a “living wage” for a worker with two children is 749 dollars a month – almost five times the average monthly wage.

Pierre-Paul’s wage – about 150 dollars a month – is far from “living”. She can’t afford to send all her children to school. She can’t even afford to move out of the squalid camp.

Pierre-Paul’s boss, One World Apparel owner Charles Baker, admits that he doesn’t pay his workers enough.

“If a person is honest, it’s clear that it’s not enough,” Baker, a two-time presidential candidate, told HGW. “If I could give a worker 1,000 gourdes a day, I’d pay that. But the conditions in Haiti don’t permit us to pay 1,000 gourdes.”

But are factory owners such as Baker solely responsible for the low wages?

Baker and other factory owners claim they can’t pay more because of they did, their international clients – like Gildan Activewear, Hanes, Levis, GAP, Banana Republic, K-Mart and Wal-Mart – would pick up and move out. And so the Haitian government – with the full backing of the U.S. government, as recent Wikileaked cables revealed – remains the lowest wage in the hemisphere-wide “race to the bottom”.

“Yes, it’s a race to the bottom… if you count on it!” Baker said.

But investors and policy planners in both the Haitian government and outside it (such as Bill Clinton), do seem to be counting on it. Clinton and other influential figures gave strong backing to economic development proposals [PDF] put forward by economist Paul Collier even before the earthquake, with a strong emphasis on apparel production. But

Baker claims that low-wage, low-skilled assembly industries are temporary, and that they will be a big part of the Haitian economy for only about “10 or 15 years”.

“It’s a step. We’re going up the stairs and it’s one of the steps,” he said.

Haiti has been on the same step for almost 30 years. [See story #4]

Low wages are not the only part of the “race to the bottom” in labor flexibility that factory owners like Baker use to bid for contracts for major foreign retailers. HGW reports

In the meantime, Baker and other Haitian factory owners remain vehemently anti-union, according to workers like Pierre-Paul and according to a recent study by the United Nations-affiliated International Labor Association/Better Work programme.

In an April 2011, report, the Haiti branch of the agency noted, “very significant challenges related to the rights of workers to freely form, join, and participate in independent trade unions in this industry in Haiti.”

Indeed, five months later, about a week after textile workers in the capital registered a union, all five union leaders suddenly lost their jobs. Better Work recently ruled the factories should reinstate all union officers but as of Dec. 12, most of the owners had not complied.

In part two of their report, HGW describes how the planned industrial park could push people from farming to low-wage factory labor, in a very direct way:

The area chosen for the country’s new 243-hectare Caracol Industrial Park is near the coast, halfway between the northern cities of Cap- Haitien and Ounaminthe. It was recommended by a U.S.-based consulting firm hired by the Ministry of Economy and Finances (MEF), Koios Associates. Koios’s September 2010 study said the site was ideal, in part because the land was “devoid of habitation and intensive cultivation”.

Except it wasn’t quite “devoid”. The Caracol site was home to 300 farming plots.

“The place they chose to put the park is the most fertile area of the department,” farmer Renel Pierre explained to HGW. “In Chambert, they grow plantains, beans, manioc and other things. If, for city people, their ‘treasury’ is their savings account book, for peasants, their ‘treasury’ is this land.”

But last January, without notice, contractors put fences around 243 hectares, mostly lands that had been leased by peasant families from the state for decades. Most of the farmers have been paid for their lost crops, and many have been offered replacement land, but in less fertile areas.

Putting an industrial park – which will attract between 20,000 and 200,000 new residents – in the midst of a fertile area is not necessarily going to contribute to Haiti’s “sustainable development”, despite government claims to the contrary, economist [Camille] Chalmers notes. Haiti has gone from virtual food self-sufficiency three decades ago to importing over 60 percent of its food. Taking more land out of production will only increase that figure.

Further on, HGW reports that

Perhaps just as disturbing is the fact that the park is being set up in the middle of one of Haiti’s major watersheds. But, according to the Koios study, this is precisely the reason the site was chosen, because “it is capable of absorbing a large volume of treated water.”

Despite being slated to be home to Haiti’s first modern textile mill – which will be using toxic dyes – the Caracol park is being built only about five kilometres from the Caracol Bay, home to some of the country’s last mangrove forests and coral reefs.

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:

  • Haitian workers earn less today than they did under the Duvalier dictatorship.
  • Over one-half the average daily wage is used up to pay for lunch and transportation costs to and from work.

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.

HGW also notes that

A recent study by the U.S.-based Solidarity Center, which is linked to the AFL-CIO trade union federation, determined that a “living wage” for a worker with two children is 749 dollars a month – almost five times the average monthly wage.

Pierre-Paul’s wage – about 150 dollars a month – is far from “living”. She can’t afford to send all her children to school. She can’t even afford to move out of the squalid camp.

Pierre-Paul’s boss, One World Apparel owner Charles Baker, admits that he doesn’t pay his workers enough.

“If a person is honest, it’s clear that it’s not enough,” Baker, a two-time presidential candidate, told HGW. “If I could give a worker 1,000 gourdes a day, I’d pay that. But the conditions in Haiti don’t permit us to pay 1,000 gourdes.”

But are factory owners such as Baker solely responsible for the low wages?

Baker and other factory owners claim they can’t pay more because of they did, their international clients – like Gildan Activewear, Hanes, Levis, GAP, Banana Republic, K-Mart and Wal-Mart – would pick up and move out. And so the Haitian government – with the full backing of the U.S. government, as recent Wikileaked cables revealed – remains the lowest wage in the hemisphere-wide “race to the bottom”.

“Yes, it’s a race to the bottom… if you count on it!” Baker said.

But investors and policy planners in both the Haitian government and outside it (such as Bill Clinton), do seem to be counting on it. Clinton and other influential figures gave strong backing to economic development proposals [PDF] put forward by economist Paul Collier even before the earthquake, with a strong emphasis on apparel production. But

Baker claims that low-wage, low-skilled assembly industries are temporary, and that they will be a big part of the Haitian economy for only about “10 or 15 years”.

“It’s a step. We’re going up the stairs and it’s one of the steps,” he said.

Haiti has been on the same step for almost 30 years. [See story #4]

Low wages are not the only part of the “race to the bottom” in labor flexibility that factory owners like Baker use to bid for contracts for major foreign retailers. HGW reports

In the meantime, Baker and other Haitian factory owners remain vehemently anti-union, according to workers like Pierre-Paul and according to a recent study by the United Nations-affiliated International Labor Association/Better Work programme.

In an April 2011, report, the Haiti branch of the agency noted, “very significant challenges related to the rights of workers to freely form, join, and participate in independent trade unions in this industry in Haiti.”

Indeed, five months later, about a week after textile workers in the capital registered a union, all five union leaders suddenly lost their jobs. Better Work recently ruled the factories should reinstate all union officers but as of Dec. 12, most of the owners had not complied.

In part two of their report, HGW describes how the planned industrial park could push people from farming to low-wage factory labor, in a very direct way:

The area chosen for the country’s new 243-hectare Caracol Industrial Park is near the coast, halfway between the northern cities of Cap- Haitien and Ounaminthe. It was recommended by a U.S.-based consulting firm hired by the Ministry of Economy and Finances (MEF), Koios Associates. Koios’s September 2010 study said the site was ideal, in part because the land was “devoid of habitation and intensive cultivation”.

Except it wasn’t quite “devoid”. The Caracol site was home to 300 farming plots.

“The place they chose to put the park is the most fertile area of the department,” farmer Renel Pierre explained to HGW. “In Chambert, they grow plantains, beans, manioc and other things. If, for city people, their ‘treasury’ is their savings account book, for peasants, their ‘treasury’ is this land.”

But last January, without notice, contractors put fences around 243 hectares, mostly lands that had been leased by peasant families from the state for decades. Most of the farmers have been paid for their lost crops, and many have been offered replacement land, but in less fertile areas.

Putting an industrial park – which will attract between 20,000 and 200,000 new residents – in the midst of a fertile area is not necessarily going to contribute to Haiti’s “sustainable development”, despite government claims to the contrary, economist [Camille] Chalmers notes. Haiti has gone from virtual food self-sufficiency three decades ago to importing over 60 percent of its food. Taking more land out of production will only increase that figure.

Further on, HGW reports that

Perhaps just as disturbing is the fact that the park is being set up in the middle of one of Haiti’s major watersheds. But, according to the Koios study, this is precisely the reason the site was chosen, because “it is capable of absorbing a large volume of treated water.”

Despite being slated to be home to Haiti’s first modern textile mill – which will be using toxic dyes – the Caracol park is being built only about five kilometres from the Caracol Bay, home to some of the country’s last mangrove forests and coral reefs.

Yesterday, the Center for Economic and Policy Research (CEPR) released a statement calling on MINUSTAH to take responsibility for the cholera outbreak in Haiti that has already killed over 7,000. In the release, CEPR co-director Mark Weisbrot says, “This is a case of criminal negligence, and the UN, if it is to continue to be worthy of the respect of people around the world, must own up to the fact that it caused this problem.” Today, Weisbrot writes in The Guardian (UK):

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.

To read the rest of the article, click here. To see the article on the original website, click here.

Yesterday, the Center for Economic and Policy Research (CEPR) released a statement calling on MINUSTAH to take responsibility for the cholera outbreak in Haiti that has already killed over 7,000. In the release, CEPR co-director Mark Weisbrot says, “This is a case of criminal negligence, and the UN, if it is to continue to be worthy of the respect of people around the world, must own up to the fact that it caused this problem.” Today, Weisbrot writes in The Guardian (UK):

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.

To read the rest of the article, click here. To see the article on the original website, click here.

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.

‘Unbearable’ Conditions

The Shelter Cluster strategy, developed soon after the earthquake, focused on two stages: an emergency phase lasting three months and then an interim phase which aimed to provide full coverage of transitional shelter within 12 months.

The evaluation notes the successful distribution of tarpaulins in the first four months; however, because the interim strategy was significantly delayed, the “shelter sector did not accurately measure follow up emergency shelter needs” or integrate “reinforcement/replacement actions” into a comprehensive strategy.

Additionally, while the Shelter Cluster reported shelter coverage of over 100 percent, HRRW noted at the time that this did not take into account gaps in coverage at certain locations, resulting in an estimated 232,130 people being without any sort of shelter five months after the earthquake.

The resulting conditions in the camps as the rainy season neared were untenable. It was found that “the protection against rainfall did not last long and they [emergency shelters] had no protection against winds or water (they flooded very often). Almost all the participants in the focus groups described the conditions of the emergency shelter solution as ‘infrahuman’, ‘unbearable’, or simply ‘very bad’.”

Additionally, the evaluation could find no documentation that “the decision to fix two tarpaulins per family as the main emergency shelter support is based upon the capacities of the population to complete the shelter solution,” and that in most cases agencies “did not take into consideration the family size when delivering the solution”.

“It did not matter if there were three or nine in a family, they gave everybody the same,” said one interviewee.

Confirming reports from the time that emergency shelter was often sub-standard and did little to provide protection both from the elements and from crime, the evaluation found that “some of the Sphere shelter standards indicators were not initially met” and that “site planning and design of emergency and interim shelter did not enhance protection or reduce the risks of gender-based violence, including sexual exploitation and abuse, by integrating aspects such as family-size shelters or partitioning shelters.”

Cost Overruns, Lack of Flexibility Prevent Durable Solutions

The evaluation found that international agencies focused on T-shelters to the detriment of other more cost-effective and efficient solutions and that despite the early indication that the goals for T-shelter coverage were unrealistic, agencies were too rigid in their plans and were either unable or unwilling to change tack. NGOs preferred to focus on T-shelters as they were more visible than rental support or repairing homes.

According to the report, the provision of shelter was based more on supply than demand, i.e. what the beneficiaries needed. For instance, the estimated number of T-shelters to be built (125,000) was based not on a needs assessment but rather on what shelter agencies had pledged to provide. The evaluation notes that decisions were made by agencies “based on their previous know-how, supposed ease of implementation, outcome control, liability concerns and/or visibility,” but not the actual needs of those affected. This became especially important as the provision of T-shelters became increasingly expensive and slow.

The original total cost of the all T-shelters was $187 million, with a time frame to complete distribution of just 12 months. In the end, the report finds that it will actually take over two years and cost $530 million and even then won’t cover the entire population’s needs, which have been revised upwards.

“The transitional shelter strategy could have been revised when it became obvious that goals and deadlines would not be met, resulting in a more comprehensive longer-term transitional shelter or permanent housing approach for part of the targeted population (for instance, a greater involvement in host families’ support and rental support could have lessened the burden to deliver transitional solutions), but shelter agencies’ programmes were not flexible enough, often because of their funding commitments, or could not easily be adapted on the field,” the report states.

The Shelter Cluster often left complimentary efforts such as rubble removal to other clusters and agencies, without realistically looking at their capabilities. Agencies involved in the Shelter Cluster alleged that donors were reluctant to fund rubble removal programs or had already earmarked funding for T-shelters. Additionally, the team found “agencies were also reluctant to spend their privately-raised funds on rubble clearance, for different reasons” including the lack of visibility of rubble removal efforts as compared to T-shelter construction.

As delays mounted, the T-shelters’ “added value progressively reduced, losing relevance and even acceptance with the local authorities and the affected population.” It is of little surprise then that in their consultations with local populations, the evaluation team found that “although they value the benefits of having been upgraded from the E-Shelter [Emergency Shelter], they feel the transitional solution does not meet their family needs.”

As international agencies stubbornly clung to the T-shelter, other more sustainable plans such as housing repair and rental support that may not have brought visibility to their organization’s work or were deemed too risky were side tracked.

While housing repairs were delayed, many Haitians have already moved back into severely damaged homes. A USAID-sponsored study found that over one million people were living in “extremely dangerous” houses, those marked yellow or red. The result is that nearly two years after the earthquake, durable solutions are still lacking.

“[T]he fact is that as of the end of 2010 (and may we say, up to date) there was no clear roadmap on what to do for permanent housing in the urban setting, no model or process had been outlined, no vision or guidance was in view, and most shelter agencies did not evaluate their real capacity to engage in housing repair,” the report states.

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.

‘Unbearable’ Conditions

The Shelter Cluster strategy, developed soon after the earthquake, focused on two stages: an emergency phase lasting three months and then an interim phase which aimed to provide full coverage of transitional shelter within 12 months.

The evaluation notes the successful distribution of tarpaulins in the first four months; however, because the interim strategy was significantly delayed, the “shelter sector did not accurately measure follow up emergency shelter needs” or integrate “reinforcement/replacement actions” into a comprehensive strategy.

Additionally, while the Shelter Cluster reported shelter coverage of over 100 percent, HRRW noted at the time that this did not take into account gaps in coverage at certain locations, resulting in an estimated 232,130 people being without any sort of shelter five months after the earthquake.

The resulting conditions in the camps as the rainy season neared were untenable. It was found that “the protection against rainfall did not last long and they [emergency shelters] had no protection against winds or water (they flooded very often). Almost all the participants in the focus groups described the conditions of the emergency shelter solution as ‘infrahuman’, ‘unbearable’, or simply ‘very bad’.”

Additionally, the evaluation could find no documentation that “the decision to fix two tarpaulins per family as the main emergency shelter support is based upon the capacities of the population to complete the shelter solution,” and that in most cases agencies “did not take into consideration the family size when delivering the solution”.

“It did not matter if there were three or nine in a family, they gave everybody the same,” said one interviewee.

Confirming reports from the time that emergency shelter was often sub-standard and did little to provide protection both from the elements and from crime, the evaluation found that “some of the Sphere shelter standards indicators were not initially met” and that “site planning and design of emergency and interim shelter did not enhance protection or reduce the risks of gender-based violence, including sexual exploitation and abuse, by integrating aspects such as family-size shelters or partitioning shelters.”

Cost Overruns, Lack of Flexibility Prevent Durable Solutions

The evaluation found that international agencies focused on T-shelters to the detriment of other more cost-effective and efficient solutions and that despite the early indication that the goals for T-shelter coverage were unrealistic, agencies were too rigid in their plans and were either unable or unwilling to change tack. NGOs preferred to focus on T-shelters as they were more visible than rental support or repairing homes.

According to the report, the provision of shelter was based more on supply than demand, i.e. what the beneficiaries needed. For instance, the estimated number of T-shelters to be built (125,000) was based not on a needs assessment but rather on what shelter agencies had pledged to provide. The evaluation notes that decisions were made by agencies “based on their previous know-how, supposed ease of implementation, outcome control, liability concerns and/or visibility,” but not the actual needs of those affected. This became especially important as the provision of T-shelters became increasingly expensive and slow.

The original total cost of the all T-shelters was $187 million, with a time frame to complete distribution of just 12 months. In the end, the report finds that it will actually take over two years and cost $530 million and even then won’t cover the entire population’s needs, which have been revised upwards.

“The transitional shelter strategy could have been revised when it became obvious that goals and deadlines would not be met, resulting in a more comprehensive longer-term transitional shelter or permanent housing approach for part of the targeted population (for instance, a greater involvement in host families’ support and rental support could have lessened the burden to deliver transitional solutions), but shelter agencies’ programmes were not flexible enough, often because of their funding commitments, or could not easily be adapted on the field,” the report states.

The Shelter Cluster often left complimentary efforts such as rubble removal to other clusters and agencies, without realistically looking at their capabilities. Agencies involved in the Shelter Cluster alleged that donors were reluctant to fund rubble removal programs or had already earmarked funding for T-shelters. Additionally, the team found “agencies were also reluctant to spend their privately-raised funds on rubble clearance, for different reasons” including the lack of visibility of rubble removal efforts as compared to T-shelter construction.

As delays mounted, the T-shelters’ “added value progressively reduced, losing relevance and even acceptance with the local authorities and the affected population.” It is of little surprise then that in their consultations with local populations, the evaluation team found that “although they value the benefits of having been upgraded from the E-Shelter [Emergency Shelter], they feel the transitional solution does not meet their family needs.”

As international agencies stubbornly clung to the T-shelter, other more sustainable plans such as housing repair and rental support that may not have brought visibility to their organization’s work or were deemed too risky were side tracked.

While housing repairs were delayed, many Haitians have already moved back into severely damaged homes. A USAID-sponsored study found that over one million people were living in “extremely dangerous” houses, those marked yellow or red. The result is that nearly two years after the earthquake, durable solutions are still lacking.

“[T]he fact is that as of the end of 2010 (and may we say, up to date) there was no clear roadmap on what to do for permanent housing in the urban setting, no model or process had been outlined, no vision or guidance was in view, and most shelter agencies did not evaluate their real capacity to engage in housing repair,” the report states.

MINUSTAH by the Numbers

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


Sources: 1. According to the United Nations there are currently 99,329 uniformed peacekeeping troops across the World. In Haiti there are 12,552. 2. MINUSTAH. 3. United Nations Peacekeeping. 4. United Nations Peacekeeping Fact Sheet. 5. IMF data and MINUSTAH. 6. IMF data and MINUSTAH. 7. The 2009/10 budget was $611,751,200, the 2010/11 budget was $853,827,400 and the 2011/2012 budget is $793,517,100. To reach the total since the earthquake, half of the 2009/10 total was added to the entire 2010/2011 total and to half of the 2011/2012 total. Data from UN Peacekeeping. 8. U.S. and Europe fight over cuts in peacekeeping, from Foreign Policy’s Turtle Bay blog. 9. UN Office of the Special Envoy for Haiti. 10. See 7 and 8, above. 11. According to the United Nations Office of Coordination of Humanitarian Affairs, $95 million has been contributed to the cholera appeal. 12. The cholera appeal is seeking $109 million, leaving a shortfall of $14 million. 13. Estimated cost of a cholera vaccination program covering the entire country is $40 million. 14. The cost of the pilot cholera vaccination program is about $870,000. 15. Ministère de la santé publique et de la population. 16. United Nations Office on Drugs and Crime. 17. United Nations Office on Drugs and Crime. 18. Institute for Justice and Democracy in Haiti. 19. Ministère de la santé publique et de la population. 20. Jake Johnston and Keane Bhatt, Not Doing Enough: Unnecessary Sickness and Death from Cholera in Haiti. CEPR. 21. The UN’s 2012 Humanitarian Appeal for Haiti is for $231 million. 22. UN peacekeepers to be deported from Haiti, UN Media. 23. Greg Grandin and Keane Bhatt, 10 Reasons Why the UN Occupation of Haiti Must End. The Nation. 24. Amy Lieberman, Haiti Cholera Case Raises Questions About U.N. Accountability. World Politics Review. 25. MINUSTAH 26. It is estimated that Haiti needs 20,000 trained police, they currently have around 10,000. 27. UN Office of the Special Envoy for Haiti. 28. Institute for Justice and Democracy in Haiti. 29. Jessica Desvarieux, TIME: At the Heart of Haiti’s Cholera Riots, Anger at the U.N. 30. Final Report of the Independent Panel of Experts on the Cholera Outbreak in Haiti. 31. The UN continues to deny responsibility. 32. MINUSTAH. 33. Gordon and Young, Columbia University. Although the headline reads “Survey Shows 60% of Haitians Support Troubled Peacekeeping Mission”, the data shows that 30% want immediate withdrawal, 10% want withdrawal within 6 months and an additional 25% want withdrawal within a year.

With due respect to Harper’s.

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


Sources: 1. According to the United Nations there are currently 99,329 uniformed peacekeeping troops across the World. In Haiti there are 12,552. 2. MINUSTAH. 3. United Nations Peacekeeping. 4. United Nations Peacekeeping Fact Sheet. 5. IMF data and MINUSTAH. 6. IMF data and MINUSTAH. 7. The 2009/10 budget was $611,751,200, the 2010/11 budget was $853,827,400 and the 2011/2012 budget is $793,517,100. To reach the total since the earthquake, half of the 2009/10 total was added to the entire 2010/2011 total and to half of the 2011/2012 total. Data from UN Peacekeeping. 8. U.S. and Europe fight over cuts in peacekeeping, from Foreign Policy’s Turtle Bay blog. 9. UN Office of the Special Envoy for Haiti. 10. See 7 and 8, above. 11. According to the United Nations Office of Coordination of Humanitarian Affairs, $95 million has been contributed to the cholera appeal. 12. The cholera appeal is seeking $109 million, leaving a shortfall of $14 million. 13. Estimated cost of a cholera vaccination program covering the entire country is $40 million. 14. The cost of the pilot cholera vaccination program is about $870,000. 15. Ministère de la santé publique et de la population. 16. United Nations Office on Drugs and Crime. 17. United Nations Office on Drugs and Crime. 18. Institute for Justice and Democracy in Haiti. 19. Ministère de la santé publique et de la population. 20. Jake Johnston and Keane Bhatt, Not Doing Enough: Unnecessary Sickness and Death from Cholera in Haiti. CEPR. 21. The UN’s 2012 Humanitarian Appeal for Haiti is for $231 million. 22. UN peacekeepers to be deported from Haiti, UN Media. 23. Greg Grandin and Keane Bhatt, 10 Reasons Why the UN Occupation of Haiti Must End. The Nation. 24. Amy Lieberman, Haiti Cholera Case Raises Questions About U.N. Accountability. World Politics Review. 25. MINUSTAH 26. It is estimated that Haiti needs 20,000 trained police, they currently have around 10,000. 27. UN Office of the Special Envoy for Haiti. 28. Institute for Justice and Democracy in Haiti. 29. Jessica Desvarieux, TIME: At the Heart of Haiti’s Cholera Riots, Anger at the U.N. 30. Final Report of the Independent Panel of Experts on the Cholera Outbreak in Haiti. 31. The UN continues to deny responsibility. 32. MINUSTAH. 33. Gordon and Young, Columbia University. Although the headline reads “Survey Shows 60% of Haitians Support Troubled Peacekeeping Mission”, the data shows that 30% want immediate withdrawal, 10% want withdrawal within 6 months and an additional 25% want withdrawal within a year.

With due respect to Harper’s.

CEPR research assistant and HRRW contributor Jake Johnston writes in The Hill’s Congress Blog today:

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).

Read the rest here. The full version with more background on the other partners in CRS is available here.

CEPR research assistant and HRRW contributor Jake Johnston writes in The Hill’s Congress Blog today:

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).

Read the rest here. The full version with more background on the other partners in CRS is available here.

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.

The Development Industrial Complex

As USAID’s staff has continually diminished, the reliance on for-profit contractors has increased drastically. Chemonics has been one of the largest benefactors of this phenomenon worldwide. In 2001, Chemonics received nearly $40 million in government contracts; by 2011, that number had risen to nearly $700 million. Despite the success, Chemonics and other for-profit contractors are clearly threatened by the rhetoric of reform that has come from USAID. Although it is clear that USAID Forward has not made a drastic difference in the behavior of USAID in Haiti, the plan is only a few years old, and is expected to take five years in total to fully implement. Preparing for the upcoming battle, for-profit development firms formed a lobbying entity this past July, the Coalition of International Development Companies (CIDC). Josh Rogin reported for The Cable at the time:

The firms involved are also members of other large coalitions of development advocacy organizations, but the CIDC is meant to focus on for-profit businesses that have a stake in development but until now haven’t felt the need to establish their own advocacy in a public and organized manner. 

Over the next few weeks, the CIDC is planning an extensive outreach to lawmakers and administration officials to make the argument that development is a crucial element of national security and economic prosperity. The member companies have so far committed about $300,000 to the effort and are also using their in house legislative staffs and communications staffs to help.

In another recognition of the need to be more public and do more outreach, the CIDC has hired the Podesta group to aid its public relations and media outreach effort.

[The Podesta Group, incidentally, was founded by Tony Podesta and his brother, former Clinton chief of staff John Podesta, who also headed President Obama’s transition team.]

In Haiti, firms belonging to CIDC have received over 70 percent of all contracts from USAID, the vast majority of which have gone to Chemonics. With the entrenched interests of large development companies, which are often staffed heavily with former USAID officials, it will take more than just rhetoric from USAID to significantly alter the way aid is administered.

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.

The Development Industrial Complex

As USAID’s staff has continually diminished, the reliance on for-profit contractors has increased drastically. Chemonics has been one of the largest benefactors of this phenomenon worldwide. In 2001, Chemonics received nearly $40 million in government contracts; by 2011, that number had risen to nearly $700 million. Despite the success, Chemonics and other for-profit contractors are clearly threatened by the rhetoric of reform that has come from USAID. Although it is clear that USAID Forward has not made a drastic difference in the behavior of USAID in Haiti, the plan is only a few years old, and is expected to take five years in total to fully implement. Preparing for the upcoming battle, for-profit development firms formed a lobbying entity this past July, the Coalition of International Development Companies (CIDC). Josh Rogin reported for The Cable at the time:

The firms involved are also members of other large coalitions of development advocacy organizations, but the CIDC is meant to focus on for-profit businesses that have a stake in development but until now haven’t felt the need to establish their own advocacy in a public and organized manner. 

Over the next few weeks, the CIDC is planning an extensive outreach to lawmakers and administration officials to make the argument that development is a crucial element of national security and economic prosperity. The member companies have so far committed about $300,000 to the effort and are also using their in house legislative staffs and communications staffs to help.

In another recognition of the need to be more public and do more outreach, the CIDC has hired the Podesta group to aid its public relations and media outreach effort.

[The Podesta Group, incidentally, was founded by Tony Podesta and his brother, former Clinton chief of staff John Podesta, who also headed President Obama’s transition team.]

In Haiti, firms belonging to CIDC have received over 70 percent of all contracts from USAID, the vast majority of which have gone to Chemonics. With the entrenched interests of large development companies, which are often staffed heavily with former USAID officials, it will take more than just rhetoric from USAID to significantly alter the way aid is administered.

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.

New Industrial Park Center of Economic Development Plan

The new industrial park, touted as “the largest single private investment in modern Haitian history”, is part of a larger effort to put textile manufacturing at the heart of Haiti’s economic development.  Haiti has duty-free access to the U.S. market through the HOPE program, and as Paul Collier explained in his influential 2009 report (PDF), “Due to its poverty and relatively unregulated labour market, Haiti has labour costs that are fully competitive with China, which is the global benchmark. Haitian labour is not only cheap it is of good quality.” Yet some question if below subsistence wages will be the answer to Haiti’s lack of jobs and enduring poverty. Macgregor previously reported:

In an April 2009, U.S. Secretary of State Hillary Clinton gave a speech at an Apaid family factory – the same family owns the Genesis factory – in which she praised the creation of new jobs in the industry, with wages at “two to three times the minimum wage.”

But Etienne [Yannick Etienne is the coordinator of Batay Ouvriye] said that in reality many of the factories take advantage of their workers. She said workers are often required to assemble an unrealistic number of garment pieces per day to earn a daily wage of 250 gourdes (about $6.30 Canadian). Since it is impossible to complete the work in a regular work-day, the workers, who are usually woman, end up working 12-to 13-hour shifts.

Even after working 12-13 hours shifts, the wages are generally below what could be considered a “living wage”. The AFL-CIO Solidarity Center released a study in March looking at the cost of living for factory workers in the SONAPI export processing zone near Port-au-Princes airport. The study found that for a single woman with two children, average monthly living expenses totaled $750. Assuming a 48-hour work week, that breaks down to about $29 a day.

The most recent Better Work report (PDF) on Haiti, published in October, found that garment factories were generally compliant with core labor standards on child labor, discrimination, forced labor and freedom of association and collective bargaining but found significant non-compliance in working conditions and operational safety and health. The report found that “Twenty-one out of 23 factories (91%) were found non-compliant in Minimum Wages.” The finding backs up what Etienne had said, as the report notes that much of the non-compliance has to do with an inability to meet production targets during a regular day. Only “an average of 22% of workers reach their targets and earn at least 250 Gourdes per day for ordinary hours of work,” the report found. The Nation reported in June on efforts by contractors, Haitian industrialists and the U.S. government to “block a minimum wage increase for Haitian assembly zone workers.”

Additionally, although the report did not note any non-compliance of freedom of association, with only one union it is hard to accurately report this metric. As Ansel Herz reported:

But the low non-compliance rate is potentially misleading. “Although no non-compliance findings are cited in the current report under Union Operations,” the report notes, there are “very significant challenges related to the rights of workers to freely form, join and participate in independent trade unions”.

“If you look at the reports, in Haiti there is only one unionised factory (in Ouanaminthe) out of 23 operating factories. In the factories in Port-au-Prince, there are no unions. We don’t have any evidence,” [Better Work Haiti’s director Richard] Lavallée said.

He explained that if a factory owner fires a person for trying to organise workers, it won’t be noted in the employee records reviewed by his team.

Asked if Better Work Haiti isn’t really measuring anything when it comes to conditions for labour organising, because there are almost no unions, Lavallée responded, “Exactly.”

Herz also spoke with Yasmine Shamsie, a Canadian scholar who has advocated for a different approach to the garment industry in Haiti. Shamsie notes that the new industrial park was “not conditional on allowing unions to organise that space”. Herz continues:

Her 2010 report for the Conflict Prevention and Peace Forum called for a “high-road approach” to the Haitian apparel industry’s expansion, including unionising workers and providing welfare programmes to raise their living standards.

She said she didn’t understand the “lack of interest” in that strategy from international donors. “To be frank, it’s a no-brainer,” Shamsie said. “You say you want to create employment and reduce poverty – then give workers the tools to advocate for better than poverty wages.”

The report is available here (PDF).

Update 12/01: Alison Macgregor reports this morning that Hanesbrands will urge the Multiwear factory to reinstate, with back pay, the employee who was fired this past September. A spokeman for the company told Macgregor, “We are sending our director of labour relations down to the faculty to review our global standards for suppliers”.

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.

New Industrial Park Center of Economic Development Plan

The new industrial park, touted as “the largest single private investment in modern Haitian history”, is part of a larger effort to put textile manufacturing at the heart of Haiti’s economic development.  Haiti has duty-free access to the U.S. market through the HOPE program, and as Paul Collier explained in his influential 2009 report (PDF), “Due to its poverty and relatively unregulated labour market, Haiti has labour costs that are fully competitive with China, which is the global benchmark. Haitian labour is not only cheap it is of good quality.” Yet some question if below subsistence wages will be the answer to Haiti’s lack of jobs and enduring poverty. Macgregor previously reported:

In an April 2009, U.S. Secretary of State Hillary Clinton gave a speech at an Apaid family factory – the same family owns the Genesis factory – in which she praised the creation of new jobs in the industry, with wages at “two to three times the minimum wage.”

But Etienne [Yannick Etienne is the coordinator of Batay Ouvriye] said that in reality many of the factories take advantage of their workers. She said workers are often required to assemble an unrealistic number of garment pieces per day to earn a daily wage of 250 gourdes (about $6.30 Canadian). Since it is impossible to complete the work in a regular work-day, the workers, who are usually woman, end up working 12-to 13-hour shifts.

Even after working 12-13 hours shifts, the wages are generally below what could be considered a “living wage”. The AFL-CIO Solidarity Center released a study in March looking at the cost of living for factory workers in the SONAPI export processing zone near Port-au-Princes airport. The study found that for a single woman with two children, average monthly living expenses totaled $750. Assuming a 48-hour work week, that breaks down to about $29 a day.

The most recent Better Work report (PDF) on Haiti, published in October, found that garment factories were generally compliant with core labor standards on child labor, discrimination, forced labor and freedom of association and collective bargaining but found significant non-compliance in working conditions and operational safety and health. The report found that “Twenty-one out of 23 factories (91%) were found non-compliant in Minimum Wages.” The finding backs up what Etienne had said, as the report notes that much of the non-compliance has to do with an inability to meet production targets during a regular day. Only “an average of 22% of workers reach their targets and earn at least 250 Gourdes per day for ordinary hours of work,” the report found. The Nation reported in June on efforts by contractors, Haitian industrialists and the U.S. government to “block a minimum wage increase for Haitian assembly zone workers.”

Additionally, although the report did not note any non-compliance of freedom of association, with only one union it is hard to accurately report this metric. As Ansel Herz reported:

But the low non-compliance rate is potentially misleading. “Although no non-compliance findings are cited in the current report under Union Operations,” the report notes, there are “very significant challenges related to the rights of workers to freely form, join and participate in independent trade unions”.

“If you look at the reports, in Haiti there is only one unionised factory (in Ouanaminthe) out of 23 operating factories. In the factories in Port-au-Prince, there are no unions. We don’t have any evidence,” [Better Work Haiti’s director Richard] Lavallée said.

He explained that if a factory owner fires a person for trying to organise workers, it won’t be noted in the employee records reviewed by his team.

Asked if Better Work Haiti isn’t really measuring anything when it comes to conditions for labour organising, because there are almost no unions, Lavallée responded, “Exactly.”

Herz also spoke with Yasmine Shamsie, a Canadian scholar who has advocated for a different approach to the garment industry in Haiti. Shamsie notes that the new industrial park was “not conditional on allowing unions to organise that space”. Herz continues:

Her 2010 report for the Conflict Prevention and Peace Forum called for a “high-road approach” to the Haitian apparel industry’s expansion, including unionising workers and providing welfare programmes to raise their living standards.

She said she didn’t understand the “lack of interest” in that strategy from international donors. “To be frank, it’s a no-brainer,” Shamsie said. “You say you want to create employment and reduce poverty – then give workers the tools to advocate for better than poverty wages.”

The report is available here (PDF).

Update 12/01: Alison Macgregor reports this morning that Hanesbrands will urge the Multiwear factory to reinstate, with back pay, the employee who was fired this past September. A spokeman for the company told Macgregor, “We are sending our director of labour relations down to the faculty to review our global standards for suppliers”.

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.

Table I.

Contractor Location

Amount Received

Percent of Total

Beltway

 $ 242,204,401

82.96

Haiti

 $           48,641

0.02

All Other

 $   49,691,198

17.02

Total

 $ 291,944,240

100

Source: FPDS, author’s calculations.

While USAID’s “implementing partners” are supposedly encouraged to increase their use of local subcontractors, USAID lacks the capability to actually track these metrics. On the USAID Forward website it states:

Unfortunately, the Agency does not have the systems in place to track sub-grants and sub-contracts so it is not possible to state precisely the number of partners or the percentage of USAID funds that flow to local nonprofit organizations (or, for that matter, to local private businesses) through these indirect arrangements.

Although the Agency admits to not having systems in place, the absence of this data is especially troublesome given that the contract with the largest benefactor of USAID funds, Chemonics, specifically requires information regarding subcontractors as well as weekly, monthly and annual expenditure reports. Chemonics has received an astonishing $167 million from USAID since the earthquake, over 60 percent of all USAID contracts awarded. A copy of a contract with Chemonics from January 2010, obtained by Relief and Reconstruction Watch, reveals that Chemonics is required to “track and report on the overall monthly commitments and disbursements for all activities and non-activity expenditures.” Further, the contract states that Chemonics “is required to provide a detailed budget and vouchers for all subcontractors.” There is even an activity database, which is a “means of supporting activity development, documentation, reports, financial tracking, and real-time monitoring and evaluation to inform ongoing programmatic decisions and management.”

One clear problem with these requirements is that Chemonics itself is largely responsible for providing oversight of their work. Regarding the activity database, Chemonics is responsible “for ensuring that the database contains accurate, complete, and up-to-date information.” Not only is the contractor solely responsible for providing accurate data, but they are also intimately involved in the overall evaluation process. The contract states that USAID and Chemonics “are expected to jointly develop a system of processes and tools for the monitoring and evaluation of the country program.”

Through USAID’s own admission, they lack the resources and capabilities to provide adequate oversight and accountability of their largest contractors. With little input from, or involvement with, Haitian entities, these contractors are accountable neither to their funders nor their intended beneficiaries.  Although the Forward initiative is a step in the right direction, until USAID can provide basic oversight of their contractors, there is little reason to believe the ambitious reform initiative will reap quick rewards.  

Next: Chemonic’s Track Record and the Development Indsutrial Complex.

Update 12/01: For more information on indefinite quantity contracts and how they function, see this analysis from the Haiti Justice Alliance.

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.

Table I.

Contractor Location

Amount Received

Percent of Total

Beltway

 $ 242,204,401

82.96

Haiti

 $           48,641

0.02

All Other

 $   49,691,198

17.02

Total

 $ 291,944,240

100

Source: FPDS, author’s calculations.

While USAID’s “implementing partners” are supposedly encouraged to increase their use of local subcontractors, USAID lacks the capability to actually track these metrics. On the USAID Forward website it states:

Unfortunately, the Agency does not have the systems in place to track sub-grants and sub-contracts so it is not possible to state precisely the number of partners or the percentage of USAID funds that flow to local nonprofit organizations (or, for that matter, to local private businesses) through these indirect arrangements.

Although the Agency admits to not having systems in place, the absence of this data is especially troublesome given that the contract with the largest benefactor of USAID funds, Chemonics, specifically requires information regarding subcontractors as well as weekly, monthly and annual expenditure reports. Chemonics has received an astonishing $167 million from USAID since the earthquake, over 60 percent of all USAID contracts awarded. A copy of a contract with Chemonics from January 2010, obtained by Relief and Reconstruction Watch, reveals that Chemonics is required to “track and report on the overall monthly commitments and disbursements for all activities and non-activity expenditures.” Further, the contract states that Chemonics “is required to provide a detailed budget and vouchers for all subcontractors.” There is even an activity database, which is a “means of supporting activity development, documentation, reports, financial tracking, and real-time monitoring and evaluation to inform ongoing programmatic decisions and management.”

One clear problem with these requirements is that Chemonics itself is largely responsible for providing oversight of their work. Regarding the activity database, Chemonics is responsible “for ensuring that the database contains accurate, complete, and up-to-date information.” Not only is the contractor solely responsible for providing accurate data, but they are also intimately involved in the overall evaluation process. The contract states that USAID and Chemonics “are expected to jointly develop a system of processes and tools for the monitoring and evaluation of the country program.”

Through USAID’s own admission, they lack the resources and capabilities to provide adequate oversight and accountability of their largest contractors. With little input from, or involvement with, Haitian entities, these contractors are accountable neither to their funders nor their intended beneficiaries.  Although the Forward initiative is a step in the right direction, until USAID can provide basic oversight of their contractors, there is little reason to believe the ambitious reform initiative will reap quick rewards.  

Next: Chemonic’s Track Record and the Development Indsutrial Complex.

Update 12/01: For more information on indefinite quantity contracts and how they function, see this analysis from the Haiti Justice Alliance.

“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.

Staffing Problems Lead to Delays in Reconstruction Efforts in Haiti

Trenton Daniel of the Associated Press reported last Thursday on a new Government Accountability Office (GAO) report on USAID’s efforts in Haiti. The report analyzed USAID and State Department infrastructure projects in Haiti, finding that out of $412 million that has been allocated, just $3 million or 0.8 percent has been spent. The GAO report blamed much of the delay in spending on problems with staffing. Daniel reports:

The report noted that 10 of the 17 U.S. government employees in Haiti left just after the quake, and there was no mechanism to quickly replace them or expand staff numbers. Remaining staff members were forced to take on duties outside their areas of expertise while it took months to fill the vacancies, the GAO said.

USAID does not expect to have all of their Foreign Service officers assigned to Haiti until February 2012, over two years after the earthquake. The lack of engineers employed by USAID mentioned earlier was also a limiting factor. The GAO report notes that:

USAID was unable to reassign U.S. direct-hire engineers from other missions around the world because USAID has few engineers worldwide, according to mission officials.

For example, the mission’s chief engineer, who is responsible for overseeing construction activities in the energy sector, arrived in April 2011, and an engineer overseeing the construction of health facilities arrived in May 2011.

The report also placed blame on the fact that, as the AP reports, “there was only one U.S. officer in Haiti authorized to award contracts of more than $3 million.” Yet while this may have delayed infrastructure contracts, it didn’t prevent a few for-profit development firms from securing large contracts for work in Haiti.

Next: “Procurement Reform – Moving Forward?”. Find out who has been receiving USAID contracts in Haiti and how efforts to increase oversight and accountability are progressing under the USAID Forward Initiative.

Update: This post has been edited slightly for clarity.

“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.

Staffing Problems Lead to Delays in Reconstruction Efforts in Haiti

Trenton Daniel of the Associated Press reported last Thursday on a new Government Accountability Office (GAO) report on USAID’s efforts in Haiti. The report analyzed USAID and State Department infrastructure projects in Haiti, finding that out of $412 million that has been allocated, just $3 million or 0.8 percent has been spent. The GAO report blamed much of the delay in spending on problems with staffing. Daniel reports:

The report noted that 10 of the 17 U.S. government employees in Haiti left just after the quake, and there was no mechanism to quickly replace them or expand staff numbers. Remaining staff members were forced to take on duties outside their areas of expertise while it took months to fill the vacancies, the GAO said.

USAID does not expect to have all of their Foreign Service officers assigned to Haiti until February 2012, over two years after the earthquake. The lack of engineers employed by USAID mentioned earlier was also a limiting factor. The GAO report notes that:

USAID was unable to reassign U.S. direct-hire engineers from other missions around the world because USAID has few engineers worldwide, according to mission officials.

For example, the mission’s chief engineer, who is responsible for overseeing construction activities in the energy sector, arrived in April 2011, and an engineer overseeing the construction of health facilities arrived in May 2011.

The report also placed blame on the fact that, as the AP reports, “there was only one U.S. officer in Haiti authorized to award contracts of more than $3 million.” Yet while this may have delayed infrastructure contracts, it didn’t prevent a few for-profit development firms from securing large contracts for work in Haiti.

Next: “Procurement Reform – Moving Forward?”. Find out who has been receiving USAID contracts in Haiti and how efforts to increase oversight and accountability are progressing under the USAID Forward Initiative.

Update: This post has been edited slightly for clarity.

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