UN ready to remove 19 Indian vendors from blacklist

"I don't think any Indian company has applied for reinstatement. But we would welcome applications for reinstatement from them as it adds to the competition," said Warren Sach, UN assistant secretary general in the Office of Central Support Services.

"One thing I will point out is India being a developing country, many of its products are the appropriate technology, well-tuned to the needs, since most of our deliveries are in any case going to developing countries," Sach told IANS in an interview.

Latest UN data shows that its total procurements in 2009 was worth $13.6 billion. India figured in the top three countries for supplies with $676 million, after the US and Switzerland.

Since 2008, 19 Indian companies had been suspended from the UN's vendor list and barred from applying for procurement contracts. While most of them were suspended under the oil-for-food programme, Satyam was terminated over allegations of improper invoicing.

The decision was taken after a panel led by former US Federal Reserve chief Paul Volcker said more than $1.5 billion had been paid as bribes by over 2,253 firms for Iraq's oil-for-food programme between 1996 and 2003.

Among them, the overwhelming majority were contracted directly by the Iraqis and around 100 of them "overlapped" with the UN list, Sach said. "That led to some suspensions. No region was exempt from being identified by the Volcker commission."

Out of this overlapping group, there were over a dozen companies registered in India, including Tata Group, Godrej and Boyce and Kirloskar Group. Sach said since the suspensions in 2008, the UN has started a process of reinstatement of several firms. "So far, we've had five-six companies reinstated."

The senior UN official also said the companies indicted under the oil-for-food scandal had not been under shadow for poor performance or delayed deliveries, but mainly since they had no choice but to participate in the process if they wanted a contract.

"By and large people will say, if they read the Volcker report, that these companies who supplied humanitarian goods to the government of Iraq had no option but to participate in what was as per the terms of the scheme."

It basically required overbilling so that the officials could their get their share. Going forward, Sach said the process towards reinstatement will involve getting certified by a third party that the company has put in place an anti-corruption programme that is high on ethics, apart from a proper governance structure.

Besides the oil-for-food scandal, three other Indian companies were also suspended for violation of contracts - PCP International, Satyam and state-run telecom consultancy firm TCIL.

In the case of PCP and TCIL, an Indian official on deputation to the UN, Sanjaya Bahel, was jailed for eight years for showing undue favours. In the case of Satyam, the contracts were suspended a year after founder Ramalinga Raju admitted to fraud in 2009.

Satyam is now part of the Mahindra group. "We are quite prepared under the new structure that they (Satyam) have to have a look at what their guarantees are and their ethical processes. We cannot discriminate against a particular company or a country of supply," said Sach.

He said the agency was also encouraging more Indian companies to register with them and bid for contracts. The UN procurement division has also started a series of seminars in this regard, targeting Delhi, Chennai, Bangalore and Mumbai to begin with.