U.N. Fights to Maintain Food Aid for North Korea -- With the Communist Regime as Middle Man

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Published December 02, 2011

| FoxNews.com

Despite serious U.S. concerns about whether food aid programs to North Korea can be monitored adequately, the United Nations World Food Program (WFP) is pushing hard to keep afloat an emergency aid program to feed about 3.5 million starving or desperately hungry citizens, at the behest of the dictatorial Kim Jong Il regime.

It may be helping the Kim regime stay afloat, too, as “most” of the relief cargo, according to a WFP spokesperson, is getting shipped to North Korea from China aboard vessels owned by North Korea.

Just how much the Kim regime’s merchant marine is earning from the aid program is unclear. In response to questions from Fox News, a WFP spokesperson said that WFP contracted with many grain suppliers in China on a “cost and freight” basis, “which means the suppliers give us a price for the food, which includes delivery directly into [North Korean] ports, making their own transport arrangements.”

For that reason, the spokesperson said, it was “difficult” to calculate how much the North Koreans were charging for the shipping service.

The question of how — and how much — the Kim regime is able to exploit international aid programs aimed at the country’s malnourished and often starving citizens has been a touchy one for years — and is reflected in the fact that, among other things, WFP says its current aid program is the most closely monitored in its 15-year history in the insular communist nation.

Nonetheless, the Kim government has managed to install itself securely as a middleman in the relief supply chain—a fact first exposed by Fox News in 2009 during an earlier WFP relief operation, which also noted ocean transport charges for food aid that were far outside competitive international pricing.

Subsequently, a confidential WFP audit report noted numerous “lapses” and “anomalies” in WFP relief commodity management once the aid was on the ground.

Overall, current WFP grain shipments to North Korea, which make up about 85 percent of the food aid tonnage (and a little over 60 percent of the $131 million in food costs) originally planned for the most recent program, were budgeted at a rough average of $108 a ton for “external transport” to mainland North Korea. The trip from China to North Korea would normally represent only a small fraction of that cost.

Nonetheless, the overall budgeted WFP freight rates leave considerable room for profit on the last leg to North Korea. The budgeted average costs are a little less than double those for shipping grain from the Gulf of Mexico to Japan, North Korea’s nearest neighbor, as recorded by the U.S. Department of Agriculture earlier this month, and roughly double the USDA recorded rates for shipments from the same destination to China. The USDA shipping costs, however, are based on much bigger shipments than WFP is likely to muster, and therefore may benefit from economies of scale smaller relief shipments cannot match.

Click here for the USDA recorded rates.

But Kim’s fleet has far less to ship nowadays than the regime might have hoped: while WFP argues that the relief effort is the most carefully monitored in the food agency’s 15-year history in North Korea, a skeptical — and financially stressed — international community has handed over only about $65 million in funding, or roughly 30 percent of the projected $209.5 million cost. Moreover, at least $10 million of that total has come from other U.N. emergency funds.

The U.S. has contributed nothing, and the U.S. State Department declined to comment on the situation when queried by Fox News.

One result: at times only “a fraction” of the intended recipients, in the words of a WFP spokesperson, have been fed. The intended targets of the relief, WFP says, are “vulnerable groups,” including mothers and young children. Distribution of the food, according to a WFP spokesman, has been “almost entirely through institutions such as hospital pediatric wards, orphanages, baby homes kindergartens and schools.”

The donor reluctance is not likely to ease, due to the continued warlike rhetoric of the Kim regime and continued worries that the North Koreans are still actively involved in aiding Iran with its illegal nuclear weapons program, not to mention the atomic weapons North Korea is building for its own sake.

Nonetheless, the Kim regime may still be getting its hands on at least a trickle of the aid proceeds. According to WFP documents, the relief agency is also paying the North Korean regime a “fuel reimbursement levy” of $12.50 per metric ton for carrying relief supplies to their final destinations once the aid hits the ground. If only 30 percent of the food aid were delivered, that would amount to about $1,164,000.

So far as the food aid itself goes, WFP insists that it has gotten unprecedented concessions from the Kim regime for the relief effort, which resulted from a plea by the regime itself in January. According to a WFP spokesperson, these include “unprecedented” access to North Korean food markets to check diversion, random access to homes and institutions to inspect delivery, and the hiring of Korean speakers on WFP’s international staff, something long rejected by the Kim regime.

The North Korean government, however, is responsible for carrying out most of the logistics for moving the raw food aid — much of which is processed into food products in North Korean factories, through ports, storage facilities and various forms of transport to its beneficiaries. WFP says that for the first time it has been granted Internet connections to allow the use of the aid agency’s own commodity tracking software to follow the shipments.

Click here for the WFP program document.

“The government,” says a WFP spokesperson, “has respected all the conditions of the agreement.”

What the Kim regime hasn’t done is rein in any of the warlike rhetoric—and perhaps warlike activity—that have characterized its behavior since 2006, when it first exploded a crude nuclear device despite heavy international pressure.

Just last week, for example, the regime threatened yet again to cover South Korea’s presidential palace with a “sea of fire” as its southern neighbor conducted military exercises to mark the one-year anniversary of a North Korean artillery attack on a border island that left four South Koreans dead.

George Russell is executive editor of Fox News and can be found on Twitter@GeorgeRussell.

Click here for more stories by George Russell.

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http://www.foxnews.com/world/2011/12/01/un-fights-to-maintain-food-aid-to-north-korea-despite-us-concerns-about-program/