Greenpeace boat
A Dutch police boat passes the Greenpeace ship, the Rainbow Warrior, as it tries to prevent the Russian oil tanker Mikhail Ulyanov from entering the harbour of Rotterdam 1 May 2014.Reuters

An employee at Greenpeace has lost the environmental charity €3.8m (£3.8mn, $5.15mn) on foreign exchange management contracts, it has revealed ahead of the publishing of annual accounts.

The employee – who has since been sacked – was working as part of Greenpeace's international finance unit, which attempts to manage risks by using forex management instruments, but entered into a contract which "didn't follow internal processes".

Greenpeace has apologised to its donors and patrons, saying that no frontline charitable work will be impacted. Instead, the charity hopes to recoup the losses through scaling back on planned infrastructural investments over the next few years.

Mike Townsley, head of communications at Greenpeace, tells IBTimes UK that the charity is currently reviewing its use of financial instruments and that it has taken appropriate measures to ensure the breach isn't repeated.

"We've reviewed the process and the number of signatures it takes to get a contract out the door. We've doubled up on the sign off level. We've issued a very clear instruction that no such contracts are to be done while we review policy.

"It was acceptable within our international finance policy to use forex instruments but we've redoubled our diligence into how, where or when we'd do that, and we've not finished that. Whether we would exclusively never use that [instrument] again is an open question," he said.

It is common practice for an NGO of Greenpeace's size to use forex management instruments in order to avoid currency fluctuations. The charity is present in more than 40 countries and has a global budget of around €300m.

Its international finance unit, which IBTimes UK understands is composed of around eight individuals, typically manages its forex, investments, asset depreciation, reserves and payroll.

However, Townsley says that all of the investments are made into ethically-responsible areas, decided upon with the help of third-party advice.

The instrument responsible for the loss is a tool used for multi-currency conversion to and from the euro and it's understood that the rogue contract was entered into with a third-party broker in the final quarter of 2013.

"It is prudent not to keep all your money in one currency, you spread it out to manage or mitigate the risks. You see variation of fluctuations," Townsley said.

The charity believes that the employee was not attempting to attain any personal financial gain from the contract, was "acting in the best interest of the organisation" but made "a serious error of judgment".