Ministry for Foreign Affairs manages risks and addresses abuses in development cooperation

The Ministry for Foreign Affairs has revised its guidelines on addressing abuse and misuse. “Development cooperation is closely monitored and there are clear procedures for handling suspected abuses,” says Ramses Malaty, Director of the Unit for Administrative and Legal Development Cooperation Matters.

In recent years, much attention has been paid to risk management in development cooperation, both internationally and in Finland. A risk management policy for development cooperation, completed in 2021, and a recently published rule for dealing with misconduct of funds and abuse, including a code of conduct for addressing sexual abuse and harassment, have contributed to better monitoring and reporting practices in Finland.

Director of Unit Ramses Malaty answers questions about misuse of funds and abuse: 

How will the risk management policy and the rule combatting abuse change development cooperation practices?

“We have always assessed and anticipated risks, because preparing for them is the most effective way of ensuring that we can achieve our goals while preventing misconduct. But as the models for carrying out development cooperation have diversified, so have the risks. We therefore need continuous development in risk management – just like in other areas of society.

The 2021 risk management policy for development cooperation supports systematic risk recognition, assessment and management and makes risk management a more integral part of decision-making. These changes also help us develop our operations. The updated rule for addressing abuses clarifies procedures in situations where abuse or misuse is suspected or detected. The previous version of the rule was published in 2015.”

And what is new about the code of conduct on sexual abuse and harassment?

“The code of conduct brings together key issues, confirms the Ministry for Foreign Affairs practices and clarifies what we expect from our partners. It also seeks to raise awareness, both among the Ministry's staff and our partners, and improve the tools which we can use to prevent and address sexual abuse and harassment. Finland is also internationally committed to this work.”

Why should you prepare for misuse in development cooperation?

“Development cooperation is carried out in fragile countries and in places where the administration is often weak. In such environments, not all risks can be anticipated or managed even with the best possible preparation. However, it is essential that the risk analysis is carried out in the best possible way.

Development cooperation specifically aims to stabilise and strengthen societies and enable governments to look after the citizens. Better governance leaves no room for corruption or other misconduct.”

What are typical abuses?

“What has struck me as a major change in risk management in recent years is not only how both risks and abuses have diversified, but also how our ability to detect them has improved. In addition to financial misconduct, the cases may involve abuse of power, sexual abuse or harassment. Online scams are becoming all too common. 

In cases of financial irregularities, funds have typically been used in breach of agreements, for example for purchases, fees or travel expenses. Such cases may not involve fraud but simply lack of knowledge or poor accounting or reporting. Sometimes the funds may have been used for a good cause but not the one that was agreed on. From a legal point of view, however, it is clear that the money must be used as was agreed in the contracts and in the discretionary government grant decisions.”

How do you deal with cases of sexual abuse and harassment?

“Sexual abuse and harassment are forms of sexual and gender-based violence. When dealing with these cases, the rights, needs and safety of those who have experienced it are a priority. 

People who have been subjected to sexual abuse or harassment may be reluctant to report their experiences because they fear the shame or stigmatisation associated with the matter. It is therefore essential to put in place reliable reporting channels that ensure privacy. Sexual abuse and harassment are linked to gender inequality and unequal power relations. In order to prevent these, it is vital that we address any suspected cases and promote equality in general.”

What does the Foreign Ministry's zero tolerance of sexual abuse and harassment mean?

“Zero tolerance means that the Ministry for Foreign Affairs does not condone any sexual abuse or harassment by its employees or partners. It also means that the Ministry does not tolerate concealment, inappropriate handling or non-handling of such cases by any party that receives financing from the Ministry. However, zero tolerance does not mean that there will never be cases of sexual abuse or harassment.”

How does suspected misuse usually come to light?

“We receive information on suspected cases through regular project monitoring and oversight, for example during financial audits. In addition, cases may come to the Ministry's attention from cooperation partners or anonymous whistleblowers. Since 2014, the Ministry for Foreign Affairs has provided an online reporting platform where anyone can report suspected misuse of development cooperation funds.  

The new rule emphasises the obligation of all partners who receive funds to report their suspicions to the Ministry for Foreign Affairs. Public officials have a duty to monitor operations and take action as soon as suspicions of misconduct arise.

In recent years, we have identified 20 to 30 cases per year where Finnish funds have been misused. Our claims for recovery due to misuse of funds totalled 287,486 euros in 2022.” 

When someone has been found to misuse funds, what happens next?

“We always assess the extent of sanctions on a case-by-case basis. However, the principle is that any misused funds will be recovered. In addition, the Ministry may end the partnership or require better reporting from the partner. In the case of an offence punishable under the Finnish Criminal Code, such as embezzlement or sexual abuse, the Ministry informs the Finnish National Bureau of Investigation, which will be in charge of the investigation.”

Does the Ministry for Foreign Affairs openly publish information about abuses?

“Openness is one of the key principles of Finland's development cooperation. Citizens both in developing countries and in Finland have the right to know where and how funds are spent. This also applies to any detected irregularities. Transparency also helps us achieve our goals and reduces opportunities for misuse of funds.

When the Ministry publishes its financial statements, it provides figures on suspected irregularities and recovery decisions for the previous year. Communications are always considered on a case-by-case basis. Such factors as the extent or financial value of the misuse and its potential significance for society affect the consideration. Factors that support risk management and prevent new cases of misconduct would also be taken into account when we make decisions on the communications policy.”