ISS shops are owed millions and might stop food distribution

Post Date: Mar 27th, 2014 | Categories: Advocacy | COMMENT

Ten months exposing refugee slums since May 2013 didn’t accomplish what the food crisis did in six weeks. While less than one thousand refugees live in slums, over four thousand depend on food distributed by the seven shops appointed by ISS-HK.

Few doubt that fraudulent practices deduct 1/3 value from food allocated monthly to refugees, who are jailed for 15 months if arrested working. Yesterday a Srilankan refugee lady was remanded in custody without bail after being charged with working illegally when ISS-HK didn’t pay her rent for months.

Last night a mother SMSed, “ISS say food per month is worth $1200, but I see my food price have maybe only $900. 5kg rice $55, 1 can milk powder $72, 1 pack Vitasoy $16.90, 1 bottle oil $28, onion $7, tomato $7, potato $7, eggs $10, 1 pack instant noodle $11, 1 chicken $40, 1 fish $30. Total $284 x 3 collections = $852 only.”

The distressed mother continued, “Even after change food [a new system started in February] also still like that. My big baby 4 cans of milk powder $920 + 3 biscuit $30 + juice $69= total $1019. My small baby 3 can milk powder $900. We don’t have $1200 per month each [as per SWD instructions to ISS-HK].

If imprisonment of refugees arrested working is unavoidable, it follows that the government has a moral and constitutional duty to meet refugees’ basic needs in general – accommodation and food in particular.

Vision First is very concerned that the food crisis will escalate. Reliable sources inform that the 7 ISS shops will stop distributing food in April 2014. The shop owners claim that ISS-HK hasn’t paid them for four to five months.

On 14 February 2014, ISS-HK wrote to the Refugee Union, “… all food suppliers are paid by ISS Hong Kong according to the amount of food ordered and dispensed on an actual disbursement basis. Payments to ISS by the Administration are made according to a payment schedule specified in the service contract. Unused money of the service project would be clawed back to the Administration at the project completion.”

In 2013 it was reported that ISS-HK returned to SWD over 60 million dollars unused, i.e. clawed back. Apparently SWD advanced ISS-HK 60 million dollars more than it required on a disbursement basis. That alone might have been financially reckless. These facts raise some red flags:

  • ISS-HK operates on a disbursement basis, but in 2013 SWD overpaid ISS-HK about 60 million dollars;
  • ISS-HK distributes 4.8 million dollars in food a month, but shops claim to be owed 24 million dollars for the past 5 months;
  • ISS-HK distribute 4.8 million dollars in food a month, but 30% fails to reach refugees.

As the SWD-ISS Contract and accounting books remain strictly confidential, a certain degree of speculation is unavoidable. Given the investigation of ISS-HK, it is plausible that SWD froze to its rogue contractor in February.

This would explain why ISS-HK had no liquidity to pay the shops for food distributed in one month. The deepening crisis in March would then explain reimbursements stopped for two months. But why are the shops complaining about not being paid for four to five months?

  • Is it possible that ISS-HK didn’t pay millions of dollars to the shops on ‘an actual disbursement basis’?
  • Is it possible that ISS-HK didn’t pay millions of dollars to landlords on time?
  • Is it possible that ISS-HK didn’t pay millions of dollars owed refugees for utilities, cooking gas, toiletries and transportation?
  • If the SWD is not responsible for payment delays and failures, who is?
  • Could such payment issues mask serious improprieties?