Greenpeace International update on strengthening financial management

On 15 June 2014, Greenpeace International posted an apology to supporters for these errors that led to the loss of €3.8 million. The manager who signed the contracts on behalf of Greenpeace no longer works for the organisation.

The incident was a serious breach of trust in Greenpeace and revealed the need for Greenpeace International to systematically improve its financial management, policies and practices. We have thoroughly investigated the incident, taken steps to ensure there will be no repetition and have strengthened our financial procedures across the board.

What investigations have been conducted?

Greenpeace International conducted a thorough internal audit and commissioned a number of independent external audits and investigations – outlined below – to review the circumstances of this incident and to make recommendations for actions to address the shortcomings.

1. An internal review of all relevant financial control protocols, procedures and policies was undertaken.
2. We commissioned KPMG to undertake an independent and augmented audit. This has been completed and Greenpeace International received a clear 'unqualified' audit (i.e. an audit in which no deficiencies were reported) for the financial year 2013.
3. The investigation agency Interseco (which took on the name Pinkerton on 1 July 2014, being part of an agency with 160 years of experience in risk management) was commissioned to investigate whether the individuals involved gained any personal benefit from the transactions. This investigation confirmed that there was no private benefit from the currency contracts.
4. A further review of how the decisions were arrived at was undertaken by the independent group Governance & Integrity, with the intention of identifying gaps in management and communications. The report recommended that Greenpeace International:
• develops a comprehensive currency risk strategy;
• reviews the competencies required of its financial personnel;
• improves communication with the chair of the Board Audit Committee;
• considers appointing an international financial director;
• develops an internal capability to both prevent and handle disciplinary offences and errors in practical judgement.
5. Mango, an independent organisation that specialises in working with non-governmental organisations in areas such as auditing and investigations, financial and internal control systems, was engaged. Mango:
• reviewed all the audits done to date and summarised the recommendations;
• assessed whether the foreign exchange errors had been adequately evaluated and responded to;
• synthesised the lessons from the incident;
• identified gaps and recommended further changes that focused on the competencies and skills of staff and leadership, policies and their enforcement, risk management and communications issues within Greenpeace International and the wider organisation.

What action has Greenpeace International taken?

We have undertaken a thorough overhaul of financial and management procedures to prevent any recurrence of such an incident and tightened up on financial management in general. Among the measures already implemented, we have:

1. brought in a new Global Finance Director with 20 years' experience in the financial management of international NGOs and whose main tasks are to manage the finance team and to develop a comprehensive currency risk strategy;
2. conducted a full review of all financial policies;
3. restructured our International Finance Unit;
4. ensured that that no financial instrument for managing foreign exchange transactions can be approved without explicit instruction by the Greenpeace International Board;
5. ensured there is a clear separation between authorisation and approval of payments;
6. included the Global Finance Director in the Greenpeace International Management Team.

Greenpeace International has introduced new procedures to prevent any unauthorised entry into foreign currency contracts. Other, more detailed, recommendations by Mango for further improvements in Greenpeace International's day-to-day financial control mechanisms will be fully implemented by the end of 2015.

The foreign currency contracts in question have now expired. The final loss was €3.0 million – an improvement of €800,000 since the start of 2014. During 2014, Greenpeace International made savings of €3.7 million by prioritising activities and cutting costs. The problem with foreign currency contracts did not take any money from frontline campaigning.

In summary, the seriousness of this financial error prompted a wholesale review and tightening of Greenpeace International's financial procedures to ensure robust financial management and a reinforcement of accountability.

Strict financial management is what every supporter has a right to expect. It is also essential for the future of Greenpeace as an organisation that safeguards its independence in conducting campaigns by neither seeking nor accepting financial contributions from governments or corporations.

Nonetheless, irrespective of the measures that we have taken, Greenpeace International's finances – like those of other international organisations – remain subject to fluctuations in the value of the currencies in which we operate. This is additionally the case because within the global Greenpeace organisation, it has been agreed that Greenpeace International shoulders the burden of currency fluctuations for the organisation as a whole.

We hope that the remedial efforts we have undertaken and our determination to continue campaigning for a green and peaceful world will win back the trust of any supporters whose faith in the organisation has been dented by this incident.

Greenpeace sincerely hopes to count upon your continued support.