EXCLUSIVE-EU temporarily holds back food aid in Somalia after UN records widespread theft

Credit: REUTERS/YVES HERMAN

By Gabriela Baczynska, Michelle Nichols, Aaron Ross and Emma Farge

UNITED NATIONS/NAIROBI/GENEVA, Sept 18 (Reuters) - The European Union executive has temporarily suspended funding for the World Food Programme (WFP) in Somalia, two senior EU officials told Reuters on Monday, after a U.N. investigation found widespread theft and misuse of aid, which had been meant to avert a famine.

The European Commission gave more than $7 million in aid to the WFP's operations in Somalia last year, a fraction of the more than $1 billion it received in total donations, according to U.N. data.

EU member states gave much more money on a bilateral basis. It was not immediately clear whether any would also suspend aid.

Balazs Ujvari, a spokesman for the European Commission, neither confirmed nor denied specifically a temporary suspension but said: "So far, the EU has not been informed by its UN partners of a financial impact on EU-funded projects.

"Nevertheless, we will continue to monitor the situation and abide by our zero-tolerance approach to fraud, corruption or misconduct," he said.

The WFP did not immediately respond to requests for comment.

One senior EU official said the decision was taken after the U.N. investigation concluded that landowners, local authorities, members of the security forces and humanitarian workers were all involved in stealing aid intended for vulnerable people.

This official, who spoke on condition of anonymity, said the aid would be restored after the WFP meets additional conditions, including on vetting of partners on the ground in Somalia. The second senior EU official confirmed that.

A third source, also an EU official, said the Commission was "cooperating actively with WFP to resolve systemic defects" but said no aid was suspended at this stage.

It cited internally displaced persons (IDPs) as saying they were coerced into paying up to half of the cash assistance they received to people in positions of power in the face of threats of eviction, arrest or de-registration from beneficiary lists.

Three months ago the WFP and the U.S. Agency for International Development (USAID) suspended food aid to neighboring Ethiopia in response to the widespread diversion of donations.

The European Commission contributes 10 million euros ($10.69 million) to Somalia and Ethiopia via the WFP, with the suspension covering part of that, according to one of the senior EU officials.

The United States is by far Somalia's biggest humanitarian donor. Last year, it contributed more than half of the $2.2 billion of funding that went to the humanitarian response there.

USAID spokesperson Jessica Jennings said in a statement that the United States was working to understand the extent of the diversion and was "already taking steps to protect beneficiaries and ensure taxpayer money is used to benefit vulnerable persons in Somalia, as intended."

An official at the agency, speaking on condition of anonymity, said the situations in Ethiopia and Somalia were different and USAID was not planning to pause food assistance in the latter.

The Somali Disaster Management Office, which coordinates the government's humanitarian response, said in a statement on Monday that Somali authorities were committed to investigating the U.N. report's findings, while noting that the current aid delivery systems operate "outside of the government channels."

Guterres' office did not immediately respond to requests for comment.

'WIDESPREAD AND SYSTEMIC'

Donors boosted funding to Somalia last year as humanitarian officials warned of a looming famine due to the Horn of Africa's worst drought in decades.

Famine was averted, according to official data, but as many as 43,000 people, half of them children under 5, died last year as a result of the drought, researchers have estimated.

The U.N. report did not attempt to quantify the amount of aid that was diverted but said its findings "suggest that post-delivery aid diversion in Somalia is widespread and systemic".

In all, investigators collected data from 55 IDP sites in Somalia and found aid diversion in all of them, the report said. Some 3.8 million people are displaced in Somalia – one of the highest rates in the world.

Since revelations of aid theft during a 2011 famine, humanitarian agencies have converted most of their assistance to cash-based transfers that have been presented by some officials as less vulnerable to corruption.

The U.N. report was the latest evidence showing that cash-based systems can be exploited too. It identified a variety of perpetrators, led by so-called "gatekeepers," powerful individuals from dominant local clans.

These gatekeepers leverage their influence over access to camp sites and food beneficiary lists to coerce payments out of IDPs, the report said.

Members of the security forces also play a role by intimidating and sometimes arresting people who refuse to pay, while some humanitarian workers collude with gatekeepers to pocket stolen funds, the report said.

While famine has been averted for now, the report warned that inadequate humanitarian funding could imperil fragile progress.

Aid budgets are under strain globally and to date only 36% of the $2.6 billion that the U.N. says is needed for Somalia's humanitarian response this year has been funded.

($1 = 0.9355 euros)

(Reporting by Gabriela Baczynska and Michelle Nichols at the United Nations, Aaron Ross in Nairobi, Emma Farge in Geneva; Additional reporting by Daphne Psaledakis and Joe Bavier; Editing by Howard Goller)

((gabriela.baczynska@thomsonreuters.com; +32 2 287 68 39))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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