Oil For Food Program Research Articles

This deserves a Huh?

Research methodology To complete this case, students will need to access financial statements from the Securities and Exchange Commission’s webpage. The links are provided. Students will also need to review the conceptual framework that is typically covered in Intermediate 1 to respond to question 5. Case overview/synopsis This case is based on the three financial statement restatements that Weatherford International Ltd. made over an approximately 18-month period. The restatements were due to a fraud committed by manipulating the income tax accrual in the financial statements. The manipulation used was to overstate the amount of income used to calculate the dividend exclusion and then use a relatively high tax rate to calculate the resulting tax benefit. The tax rate used for the fraud was substantially more than Weatherford’s effective tax rate (ETR), which was a prominent part of the company’s strategic growth plan. The tax senior with the external auditors who reviewed the entry made for the dividend exclusion captured the inconsistency with the comment that “This [the entry] deserves a huh?” The case is intended for students in Intermediate 2, where financial statement restatements and their effect on the company’s financial statements are typically covered. During the years covered in this case, Weatherford was also under investigation for violations of the Foreign Corrupt Practices Act (FCPA). Weatherford’s FCPA violations included multiple instances of bribery, the inappropriate use of volume discounts, improper payments and kickbacks in the United Nation’s Oil for Food program. Weatherford received the eighth-largest fine in the history of FCPA violations (at that time) of $152m. Weatherford’s FCPA investigation expanded, and the company paid another $100m in fines for violations of sanctions law and export control law. This case focuses only on the fraudulent manipulation of the financial statements through the tax accrual and does not delve into the other investigations. However, the linkage between those investigations and the fraud in this case is Weatherford’s nonexistent internal controls. Complexity academic level This case was designed to be used in Intermediate 2 financial accounting classes to highlight financial statement restatements and review the conceptual framework and materiality. The students who used the case did not have difficulty with the tax aspect of the case. However, most of the students had taken one tax class previously or concurrently. If students have not had any exposure to tax, the instructor might want to walk students through the tax aspects of the case.

Do Birds of a Feather Flock Together? Firm-level Evidence on Corruption and FDI

This paper examines the relationship between corruption and nonmarket strategy in a multinational context, using a unique dataset with accurate, firm-specific measures of corruption. The study first examines the effects of home country corruption on firms’ foreign investment location choice. We find that a firm’s home country corruption norm is related to where it invests abroad, but this effect exists only among multinational firms from clean countries. The study then moves beyond the institutional context to explore the rationale behind the heterogeneity among firms from the same home country in compliance with a host government’s bribery request. We propose that a firm’s bribery experience interacts with their home country corruption to affect its foreign investment location choice. Only bribery experience of firms from dirty countries is found to be related to the firms’ foreign location choice. In addition, firm- specific bribery experience is not found to be related to firm performance. Our study built a unique dataset using resources from the United Nation’s (UN) Oil-for-Food Program (OFFP)’s investigation information to conduct both country and firm-level analysis. This paper contributes to the strategy and international business literature by expanding the study of corruption from country level to micro level by connecting nonmarket capability through foreign bribery experience to home country corruption, and to the limited literature using OFFP as a unique data source to study firm behaviors.

Corporate social responsibility: action for peace and human rights

Corporations are powerful actors and standard bearers in the world community and are accountable for their deeds. The UN's Volcker Committee, investigating corruption in the UN Oil for Food Program, found that the Australian Wheat Board (AWB), and corporations from a number of countries, had illicit dealings with the Saddam regime of Iraq in contravention of the UN Security Council Resolutions. The Security Council is the primary executive authority for maintaining peace and security; its decisions have the force of law everywhere and are expected to be enforced. Breach of Council Resolutions undermines its authority and threatens peace. All members of the world order – government, corporate and individual – are required to uphold Council decisions.

RESIGNATION Scandal leads to departure of Innospec CEO Paul Jennings

The taint of scandal has led to the resignation of a CEO for the second time in four years at fuel additives and specialty chemicals firm Innospec. Paul W. Jennings suddenly resigned from the post on March 20. In a statement from Innospec, Jennings says an ongoing investigation by U.S. and British authorities into the firm’s involvement in the United Nations’ Oil for Food Program (OFFP) between 2001 and 2003 “has made it increasingly difficult for me to move the business forward as I would like.” OFFP allowed Iraq to sell oil for food and other humanitarian supplies after the 1990 Gulf War. But the program quickly devolved into a graft-generating nightmare in which government officials and others around the globe have been implicated. It’s not clear how Innospec, the world’s only manufacturer of the gasoline additive tetraethyllead, is involved. Jennings joined the firm as chief financial officer in 2002 and became CEO in 2005 ...

When Unilateralism Is Invisible: A Different Perspective on the Oil-for-Food Scandal

The United States has long had an ambivalent relation to multilateralism. This has been particularly evident in the claims made by the United States against the United Nations regarding the oil-for-food program. These accusations maintained that the UN has been corrupt and incompetent, and that the lack of accountability allowed Saddam Hussein to engage in extensive smuggling and kickbacks. Some of these claims turned out to be well grounded, but many were not. There was, in fact, an elaborate structure of monitoring and transparency for the program. Many of the claims made against “the United Nations” actually concerned decisions by the Security Council and its members, including the United States and the UK, not the Secretariat or the UN agencies. KEYWORDS: multilateralism, oil-for-food program (OFFP), accountability, Office of the Iraq Programme, Iraq.

Organizational challenges to international cooperation for literacy in UNESCO

The absolute priority given by UNESCO to the promotion of universal literacy is understood as a key policy driver shaping the Organization since its inception in 1946. Grounded in human rights, the commitment has taken concrete form in many and diverse ways, but it is as a shaper of ideas that UNESCO’s overall contribution is best judged. In particular, the Organization has persisted in its dual approach to universal literacy through both universal primary education and literacy learning opportunities through formal provision and non‐formal learning opportunities for adults and out‐of‐school youth. Although the latter strategy receded somewhat in prominence in the decade following the World Conference on Education for All (1990), recent years have seen an invigorated and broadly supported multi‐pronged approach to literacy emerge in the donor community, if not in UNESCO itself. A major policy shift in 2006 to abandon systematic and programmatic concern for literacy at UNESCO Headquarters comes as something of a surprise, given its historical leadership. The decision is analysed in the context of wider UN reforms, the impact of the United States’ return to UNESCO, and the implications for policy‐making, management and ethical administration arising for UNESCO following the Independent Committee’s report on its involvement in the UN–Iraq Oil for Food Programme.

Accountability and Global Governance: The Case of Iraq

This article explores issues concerning accountability and global governance by looking at three cases involving Iraq: the economic sanctions imposed by the Security Council; the operation of the Oil for Food Program; and the US-led occupation authority and its management of Iraqi funds. In all three cases the problems that emerge are rooted only in part in criminal acts or failures to meet legal responsibilities. The failures of accountability that took place in these cases included also abuses of power and forms of corruption that had been legitimated within legal institutional structures. An examination of these cases helps to illustrate what accountability can demand, as well as the kinds of diverse institutional arrangements that can undermine it. In the Oil for Food Program, there was corruption despite elaborate structures of oversight. In the case of the US-led occupation authority's management of Iraqi funds, the corruption was tied to systematic procedures that eliminated structures of oversight. I argue that the abuses that occurred in these cases were not due to a lack of understanding about what might bring greater integrity to the processes involved. Rather, they illustrate how well the structures of accountability and integrity were already understood, as evidenced in the systematic efforts to evade and compromise those structures.

Did Iraq Cheat the United Nations? Underpricing, Bribes, and the Oil for Food Program

From 1997 through 2003, the UN Oil for Food Program allowed Iraq to export oil for humanitarian supplies. We hypothesize that Iraq deliberately set the price of its oil below market prices to solicit bribes from oil buyers. By comparing the price gap between Iraqi oil and its close substitutes during the Program to the gap prior to the Program, we find evidence of significant underpricing. Our central estimate suggests that Iraq collected $1.3 billion in bribes from underpricing its oil, or 2 percent of oil revenues. Underpricing is higher during periods of high volatility in oil markets—when detection is more difficult—but declines after the UN limited Iraq's ability to set the price of its oil.

Iraq orders for Grundfos

Grundfos Pumps Northern Region, which has had sales responsibility for Iraq within the Grundfos world since the late 80’s, has secured a $1.5M order for immediate shipment. Consisting of pumping equipment to provide both breakdown/emergency clean water supply and infrastructure products for remote areas, the shipment is funded by the Oil for Food program. Grundfos has had a fully staffed sales & marketing office in Baghdad since Gulf War 1, providing millions of pounds of equipment to the country, in cooperation with the appropriate UN agency. This is only a short news story. Visit www.worldpumps.com for the latest pump industry news.

Trading with Iraq

Since the imposition of sanctions against Iraq pursuant to UN Resolution No. 661/ 1990, all types of trading with Iraq are restricted and are subject to UN procedures and the approval of the Sanction Committee, which was set up by the said Resolution. However, business generated by the large oil revenues of Iraq and the UN Oil for Food Programme is very substantial, and has raised considerable business interests as well as legal questions. In general, foreign companies may use or establish any of the following business entities to trade with Iraq, and would be advised to invest some time and money in order to identify the appropriate market structure suitable for their business with Iraq. With is purpose in mind, I shall attempt to present in this article an outline of the UN Oil for Food Programme first, and shall highlight the main aspects of the following types of business entities which a foreign company may consider using when trading with Iraq:

A multivariate method for estimating mortality rates among children under 5 years from health and social indicators in Iraq

Many reports on Iraq suggest that a rise in rates of death and disease have occurred since the Gulf War of January/February 1991 and the economic sanctions that followed it. Four preliminary models, based on unadjusted projections, were developed. A logistic regression model was then developed on the basis of six social variables in Iraq and comparable information from countries in the State of the World's Children report. Missing data were estimated for this model by a multiple imputation procedure. The final model depends on three socio-medical indicators: adult literacy, nutritional stunting of children under 5 years, and access to piped water. The model successfully predicted both the mortality rate in 1990, under stable conditions, and in 1991, following the Gulf War. For 1996, after 5 years of sanctions and prior to receipt of humanitarian food via the oil for food programme, this model shows mortality among children under 5 to have reached an estimated 87 per 1000, a rate last experienced more than 30 years ago. Accurate and timely estimates of mortality levels in developing countries are costly and require considerable methodological expertise. A rapid estimation technique like the one developed here may be a useful tool for quick and efficient estimation of mortality rates among under 5 year olds in countries where good mortality data are not routinely available. This is especially true for countries with complex humanitarian emergencies where information on mortality changes can guide interventions and the social stability to use standard demographic methods does not exist.