Donations from private individuals and companies to charities, NGOs, and relief agencies are given in good faith that the necessary supplies will arrive as planned, but is that always the case? For years, the media has reported on entire shipments of food and supplies, meant for refugees or the survivors of drought, natural disaster or wars, that have simply gone missing or misappropriated by corrupt government officials. What are some potential solutions for these issues?
The supply chain for donations has needed reform for quite a while. It appears that, of the funds that aren’t subjected to dilution through processing fees and administrative costs, at least 30% (often more) of what is donated is either mismanaged or stolen.1 A 2017 report in the BBC noted that approximately 50% of the supplies that had been donated for relief efforts in Nigeria were never delivered. Aid workers on the ground responded immediately to the Nigerian government’s position that it was merely a “diversion of relief materials” – offering a rebuttal that called the explanation a rewording for outright theft. When the BBC did a follow-up, they reported that relief aid food supplies were being sold by two government officials – officials who were later jailed.2
Blockchain technology can solve some of these issues by creating transparency and cooperation between various aid agencies. When records of the assets to be distributed and the means to deliver them are recorded on a tamper-proof blockchain, each agency that responds to a natural disaster, displacement of refugees, or acts-of-war crisis can immediately consult the records and speed up the distribution.3 On another note, the UN’s World Food Program’s (WFP) recent and very successful model of food supply to refugees that was put into place in Jordan depended on a blockchain-backed system of biometric scanning. These scans verified the identity of the people who were waiting for their weekly food ration, ensured that they were eligible to be receiving that food and kept the supplies out of the hands of those who might attempt to circumvent the system.
Furthermore, a 2016 report from the charity Mercy Corps addresses the benefits of using Distributed Ledger Technology (DLT) like blockchain to create records of goods and services that are readily available and resistant to corruption or alteration. The report notes that this technology is well-known in the banking industry, but as of the time of writing, it was still meeting resistance amongst those in NGOs and charities aimed at providing either emergency relief or development assistance. The report clearly states that these agencies are ready for a shake-up, ready to release the financial monopoly held by third-party intermediaries, ready to reduce the administrative costs that were once considered ‘normal’, and committed to turning part of their attention towards the benefits of using digital identity technology for relief aid. The issue of relief supplies that regularly go missing was also addressed in this report. The ability to track the types of containers that are used to ship relief supplies has been successfully demonstrated. This study notes that IBM and the shipping corporation Maersk were now able to routinely track goods through blockchain technology.4
If these methods were to be implemented immediately by all NGOs, charities, and relief agencies, it would create a more reliable supply chain and reduce the amount of missing or stolen materials.
- Cottrill, Ken (2018, Feb 16). Blockchain’s Mission To Rescue Food Aid From Corruption. Retrieved from https://www.chainbusinessinsights.com/insights-blog/blockchains-mission-to-rescue-food-aid-from-corruption
- ‘Half’ Nigeria food aid for Boko Haram victims not delivered. (2017, June 19) Retrieved from http://www.bbc.com/news/world-africa-40325043
- Rohr, Jeanette (2017, Nov. 14). Blockchain for Disaster Relief: Creating Trust Where It Matters Most. Retrieved from https://news.sap.com/blockchain-disaster-relief/
- A Revolution In Trust: Distributed Ledger Technology in Relief & Development. (n.d.) Retrieved from https://www.mercycorps.org/sites/default/files/Mercy-Corps-A-Revolution-in-Trust-Blockchain-May-2017_0.pdf