#84, The G|O Briefing, February 3, 2022

This is an onsite, slightly edited republication of the complete G|O Briefing newsletter

Today in The Geneva Observer, a UN audit once again spots problems with the management of the Strategic Heritage Plan (SHP), the massive renovation of the UN Geneva campus. But sources close to the investigation tell The G|O that it’s not so much the weaknesses in the management of the project that worry them, but the real possibility that the planned CHF 836 million budget for the SHP might not be enough to complete the project by the end of 2024. “Where will [we] find the money to pay for the overrun, when the organization is already having problems in finding the money for the current budget?” wonders a UN insider fully familiar with the SHP project.

We focused last week on the potential disruptive impact for Geneva of sanctions against Vladimir Putin and his associates. We should have added an obvious point: In a city of diplomats, negotiators, and dealmakers, in the humanitarian and human rights capital of the world, the most obvious impact of the threat of war is the complete capture of this city’s conversation. International Geneva still goes about its usual business, but these days, it does so in a state of suspended attention. The current crisis has made the stakes even clearer. For sure, the West’s posture since the end of the Cold war may have been arrogant and misguided, but that hardly makes Vladimir Putin a leader to be admired. Unencumbered by mid-terms or presidential elections, by an investigative parliament or by an adversarial press, he’s entirely free to pursue his dangerous dream of remaking Russia as a new Soviet Union—what former German Foreign Minister Joschka Fischer calls his “imperial impulses” in his op-ed below. Such ambitions have far-reaching consequences for Europe, argues Fischer, “regardless of whether Europeans are willing to admit it.”

In Elsewhere in the Ecosystem, we jump into cyberspace—soon to become, we are told, the metaverse—with the Geneva Engage Awards. We applaud this year’s winners. Clapping emojis please, for real efforts at social engagement and transparency. Added to this year’s event, however, measuring International Geneva’s digital footprint looked like an exercise in digital navel-gazing with limited value.

-PHM

UN AUDIT WARNS OF POSSIBLE OVERRUNING COSTS IN THE RENOVATION OF THE UN IN GENEVA

BY JAMIL CHADE AND PHILIPPE MOTTAZ

The Strategic Heritage Plan (SHP), the ongoing renovation of the UN Geneva compound in Geneva, might run over its CHF 836,500,000 approved budget, reveals a December 2021 audit by the Office of Internal Oversight Services, Internal Audit Division (OIOS). The eleven-page document indicates that close to CHF 35 million of additional funds (about 4% of the budget) might be needed to complete the SHP project as it was initially conceived and approved by the UN General Assembly, back in 2015. The auditors also point to ongoing weaknesses in the project management—already spotted in previous audits, as The Geneva Observer reported at the time.

“The SHP budget is likely to be insufficient to meet the planned full scope of SHP,” the report states. Being part of the UN, the OIOS couches its conclusions in carefully worded language, but a source with full knowledge of the facts describes the situation to The Geneva Observer as “critical”. The auditors warn that should the SHP not meet all its objectives, “there would be a serious impact on UNOG’s operations, its use as a primary conferencing facility for Member States, and on its workforce’s ability to work effectively.” The audit was conducted from August to October 2021 and covers the period from January 2019 to June 2021.

Last November, while celebrating with great fanfare the opening of the new UN ‘H’ building (the crown jewel of the SHP project alongside the renovation of the historic Palais des Nations and the ‘E’ building), David McCuaig, project director for the SHP, told the press that the project was on budget. While the claim is true as regards the H, the latest OIOS audit sheds a slightly different light on the financial situation of the plan, noting that “the SHP Monthly Report for July 2021 states the Risk Management Consultant’s estimate of forecast out-turn […] at 80% confidence level.” In fact, in its July 2021 report, the Risk Management Consultants assessed the likelihood of completion within budget at around 16 percent—the potential cost overruns largely a result of the impact of COVID-19 on the project.

The OIOS audit also makes clear that there won’t be any easy fixes. According to the document, the situation “will require difficult decisions,” and “ultimately it may be necessary to descope the project to meet the originally approved budget.” However, “descoping or deferring part of the scope beyond the end of SHP could cause cost inefficiencies in the longer term which would outweigh cost savings in the short term,” explain the investigators.

A number of remedial measures to ensure the full completion of the plan within its initial budget avenues are being evaluated, but the audit limits itself to listing them, without further assessment: “Mitigations include developing cost-saving activities during and after the pre-construction services period, continuing to hold value engineering workshops and monitoring outputs, […] enabling changes to be valued clearly and quickly, avoiding design programme changes as far as possible, and tightly managing contingencies,” adding that “a lot of uncertainty on the budget will be eliminated once the last phase of the renovation is completed.”

The SHP consists of three phases. The first phase was the construction of the now completed H building, the second includes the renovation of the historic Palais des Nations, and the third phase will see the dismantling and renovation of the E building. This should be completed by the end of 2024.

The project is financed in part by an interest-free, refundable loan from the Swiss Government, for a maximum amount of CHF 400 million. Would the Swiss Government be willing to increase its funding to cover a cost overrun? Through a spokesperson, it tells the G|O that, while aware of the audit, the question is hypothetical as the SHP might still be completed within budget.

MANAGEMENT PROJECT NEEDS TO BE STRENGTHENED

The auditor’s remit was not to conduct a financial audit per se, but “to assess the adequacy and effectiveness of governance, risk management and control processes over the management of the SHP”—all things, they note in their conclusions that “should be strengthened.”

It is not the first time that the SHP project management has come under criticism from OIOS, and a UN insider admitted to the G|O that the inclusion of four concluding paragraphs under “Funding and expenditure controls” were beyond the scope of the audit and meant to “sound the alarm” about the SHP financial situation.

Contacted by the Geneva Observer and asked to comment on the report, an outside source familiar with the project expressed their surprise at the ratio between the management expenses of the project and the construction costs. “On average in Geneva, it is around 20/80. In the SHP case, the ratio is 40/60. Given these figures, it is surprising that the audit still finds shortcomings in the project’s management.”

UKRAINE AND THE FUTURE OF EUROPE

By Joschka Fischer*

What will happen when Russia’s deployment of troops along the Ukrainian border is complete? Will Russian President Vladimir Putin give the order to attack in his effort to deprive one of Russia’s neighbors – a sovereign state and a member of the United Nations and the Council of Europe – of its independence and force it back under the Kremlin’s yoke?

We still don’t know, but the facts overwhelmingly point to an impending war. Should that happen, the consequences for Europe would be profound, calling into question the European order and the principles – renunciation of violence, self-determination, the inviolability of borders, and territorial integrity – on which it has been based since the end of the Cold War.

Owing to violent aggression on Russia’s part, Europe would once again be divided into two spheres: a “Russian Europe” in the east and the Europe of the European Union and NATO in the western and central parts of the continent. Imperial interests would once again be set against those of democracies working together under a common rule of law.

Worse, because words, bonds, commitments, and treaties would no longer be trusted, there would be increased rearmament for self-protection and a complete reorganization of economic relations, particularly in the energy sector. Europe would no longer be able to risk the kind of economic dependencies that allow it to be blackmailed during crises. While a reorganization of economic relations would be costly for the EU, there would be no other option. The only alternative would be submission and surrender of Europe’s own principles.

At the heart of the current crisis is the fact that Russia, under Putin, has become a revisionist power. Not only is it no longer interested in maintaining the status quo; it is willing to threaten and even use military force to change the status quo in its favor.

If Europe were to submit to these imperial impulses, it would betray its most fundamental values and would have to renounce the way Europeans live and want to live. It would mean giving up all the progress for which the EU stands. The consequences are unthinkable, and thus entirely unacceptable.

Russia’s demands show precisely what is really at issue in the Ukrainian conflict. Putin wants NATO to abandon its open-door policy not only in Eastern Europe but also in Scandinavia (vis-à-vis the neutral EU member states Sweden and Finland). This is not about Russia’s supposed encirclement by NATO. It is about the restoration of the Russian empire and Putin’s existential fear of democracy taking root and spreading. At stake in the Ukrainian crisis is the right to self-determination – the prerogative of all sovereign countries to choose their own alliances.

Putin desperately wants to erase the humiliation of the Soviet Union’s demise and Russia’s historic loss of global power. In his view, the Russian empire must rise again and make itself known. This aspiration immediately involves Europe, because Russia has never been a global power without first becoming a hegemonic force in Europe. Today, Ukraine’s independence is on the chopping block. Tomorrow, it will be the other post-Soviet states; and after that, domination of Europe awaits. Europeans who know their history should be all too familiar with this pattern.

Given the implications of Putin’s agenda, one wonders what Europe is waiting for. What more needs to happen before Europeans wake up to the facts? If there was ever a time to put aside petty conflicts, it is now. The EU must become a power in its own right if its principles are to survive in a world of renewed great-power politics and geopolitical rivalry. Those principles are being directly threatened. When will it defend them?

To be sure, the importance of the US security guarantee in Europe is obvious under the current circumstances. But if transatlanticism is to endure, Europe itself must become stronger. That will require Germany – first and foremost – to rethink its role. It is and will remain Europe’s largest member state economically and demographically.

Given the magnitude of today’s threats, is a German domestic dispute about the promise of the former government to spend at least 2% of its GDP on defense really an issue anymore? Or is it now more important that the German government issue a clear and positive statement about its commitment to the support of Ukraine and defense of European principles? That would send a message that the Kremlin could not misunderstand. But time is running out.

Joschka Fischer, Germany’s foreign minister and vice chancellor from 1998 to 2005, was a leader of the German Green Party for almost 20 years.

Copyright: Project Syndicate, 2022.
www.project-syndicate.org

ELSEWHERE IN THE ECOSYSTEM

The Geneva Engage Awards recognize the best examples in digital outreach and social media engagement by International Geneva actors. The winners this year, in the three categories of IOs, Permanent Representations, and NGOs and Associations, were respectively the UNOG, the US Mission (and its new website), and GAVI (the Vaccine Alliance). In many of their acceptance speeches, the representatives highlighted the shift to online engagement due to the pandemic and the ongoing need for collaborative work.

The second part of the event asked 'How large is International Geneva’s global digital footprint?' To find out, researchers used search engine optimization (SEO) tools and tracked certain keywords—some, like ‘water’ or ‘flags’, without a clear and immediate connection to this city, as well as others with a more obvious link, like ‘peacemaking’. They were thus able to measure Geneva’s online visibility. Being quantitative indicators, however, hits and occurrences say little about substance; they don’t go into what international Geneva does, or how it does it. You can judge for yourself by watching the full event here. Wordle is here. ;-)

Today's Briefing: Philippe Mottaz - Jamil Chade

Editorial Assistance: Ciara O'Donoghue

Edited by: Dan Wheeler