Improving Operations for Greater Impact
To better serve our clients and partners, we continuously work to improve our operations, policies, and processes. The aim is to become a more effective and efficient institution and to maximize our development impact.
The World Bank’s Environmental and Social Framework
Our Environmental and Social Framework came into effect on October 1, 2018, and as of April 2021, it applies to about 20 percent of our active investment project financing portfolio. Based on earlier approval dates, the rest of the portfolio continues to apply the Safeguard Policies. Through the framework, we are helping client countries address a wider range of environmental and social risks, including labor and working conditions and the inclusion and protection of disadvantaged or vulnerable groups. The framework has also enhanced transparency, with the disclosure of all relevant project documents including Stakeholder Engagement Plans (when prepared), which are publicly available online. Yet some challenges have emerged during the framework’s implementation. Client countries’ capacity, in particular, is crucial to its long-term success. We have undertaken efforts to provide training to countries, depending on the available financial and human resources, to help them build and strengthen their systems for managing environmental and social risks.
The COVID-19 pandemic has presented even more complex environmental and social risks for countries; concerns include health as well as worker and community protection. We have issued new guidance under the framework to help countries address these risks in their emergency response, including on medical waste management, the use of military and security forces, stakeholder engagement, and labor management procedures.
The World Bank Procurement Framework
The Bank’s Procurement Framework, in effect since 2016, helps client countries develop tailored procurement approaches for investment project financing operations. It focuses on market research, needs analysis, and risks to help countries meet their procurement needs, determine the best value for money, and ensure successful project implementation.
In recent years, we have updated our fiduciary and risk management implementation procedures under the framework to make these more flexible for emergency situations. Our responsive procurement procedures allow us to implement investment projects, including health projects related to COVID-19, while maintaining fiduciary standards. Over the past year, recognizing the complexity of pandemic-related supply chains, we used Hands-On Expanded Implementation Support (HEIS) and Bank-facilitated procurement (see box, page 88) to help clients quickly procure medical goods, personal protective equipment, and critical care supplies. In fiscal 2021, 102 projects used HEIS, including 71 projects supporting COVID-19 response efforts, and 33 used Bank-facilitated procurement.
Our Alternative Procurement Arrangements (APAs) allow procurement through other organizations, such as UN agencies, in situations of fragility, conflict, and violence. In Yemen, we have used APAs with the UN Office for Project Services to help supply electricity for 122 schools, 102 clinics, and 12 water wells. Under our COVID-19 Health Strategic Preparedness and Response Program, we streamlined our approaches with UN agencies, enabling $462 million in contracts with clients. In fiscal 2021, 27 projects involved APAs with UN agencies and other multilateral development banks.
The Procurement Framework applies to projects with a concept note on or after July 1, 2016. We closely monitor and evaluate the application of the framework at the project, country, regional, and global levels. In fiscal 2021, 55 percent of the Bank’s investment project portfolio (51 percent by dollar value) applied the framework. In fiscal 2021, we prior reviewed 1,130 contracts valued at about $7.7 billion. We also introduced a new online procurement post review system that enables us to carry out these reviews remotely.
Helping countries procure critical medical supplies and equipment during COVID-19
As the world came to terms with the scale and impact of the COVID-19 pandemic, countries struggled to procure urgently needed medical equipment and supplies, with much of the available global stock being sold to the highest bidders. Developing countries were disadvantaged by market conditions and at risk of being left behind, threatening their ability to respond to the crisis.
Bank-facilitated procurement seeks to address these gaps by helping client countries procure medical supplies and equipment more efficiently while minimizing the risks implicit in crisis situations. The process uses the existing HEIS mechanism, which helps open up markets while providing fiduciary assurance. The Bank facilitates the sourcing and selection of suppliers, negotiates the commercial and legal terms, and finalizes the contracts. Client countries then select the medical equipment they need from a range of suppliers and make their request to the Bank by submitting a registration of interest. These steps are now automated through an online catalog. Bank facilitation is only provided to credible and qualified suppliers.
By facilitating the procurement process, we are able to aggregate demand across countries and use our convening power to gain better market access, as well as leverage a stronger bargaining position with suppliers. Client countries remain responsible for signing and entering into contracts, as well as logistics and administration, but they receive significant support from the Bank as needed, ranging from needs identification to delivery and contract completion.
As countries began responding to the pandemic, Bank-facilitated procurement helped them rapidly obtain needed supplies at favorable prices and negotiate agreements that offered broad value for money across a range of factors. These included product quality, pre-delivery inspections and testing, reasonable lead times, acceptable shipping terms, warranties, installation services, user training, and technical support.
Preventing gender-based violence in our operations
We remain committed to preventing and mitigating the risks of gender-based violence (GBV) in our operations. In November 2020, we became the first multilateral development bank to introduce a mechanism that can disqualify contractors for failing to comply with obligations related to GBV. Disqualified contractors will not be awarded a Bank-financed contract anywhere for two years, after which they will need to demonstrate that they meet our requirements for preventing GBV before competing for new contracts. This applies to large works contracts procured after January 1, 2021, that rated “high risk” for sexual exploitation, abuse, and harassment.
In addition, our standard procurement documents for works have added specific qualifications and requirements that assess bidders’ capacities to comply with conditions aimed at preventing GBV. These stipulate clear obligations for contractors to manage related risks that are within their control. They include declaring previous incidents leading to contract suspension or termination; adopting Codes of Conduct focused on GBV risks; training all workers and sub-contractors on the Code of Conduct; implementing mechanisms to address GBV complaints; adopting a framework for appropriate disciplinary measures; and retaining qualified personnel to help manage issues related to sexual exploitation, abuse, and harassment. Contractors are also expected to include additional commitments and obligations in their environmental and social management plans, which are linked to and flow from the impact assessments and management plans prepared for Bank projects.
Reforming trust funds for better coordination and results
Trust funds complement the Bank’s activities by providing financial resources and contributing to development knowledge. They support the global public goods agenda on key development challenges, including climate change, fragility, and pandemic preparedness and response. Amid the unprecedented challenges posed by COVID-19, both trust funds and financial intermediary funds (FIFs) have supported the Bank’s global response, bringing targeted relief to vulnerable communities around the world and extending the Bank’s reach.
The amount of Bank funds held in trust at the end of fiscal 2021 was $13.4 billion in trust funds and $26.0 billion in FIFs. Trust funds finance about two-thirds of the Bank’s advisory services and analytics, with roughly 72 percent ($13.3 billion) of total trust fund disbursements going to client countries over fiscal 2017-21. Of this amount, over $9.6 billion was disbursed to IDA and IBRD-IDA blend countries. Contributions to FIFs averaged $8.1 billion annually, while cash transfers to implementing entities remained relatively steady, with an average annual transfer of $7.0 billion over the past five years.
The IBRD-IDA trust fund reform aims to reduce fragmentation by consolidating the portfolio. It has identified 72 Umbrella 2.0 programs, which are designed to closely align with the Bank’s priorities and enhance complementarity with core resources, while giving management better oversight over their use. Management reviews the Bank’s portfolio of trust funds annually to move toward better coordinated and responsible fundraising. Eighty percent of contributions have been received under Umbrella 2.0 programs.
The Bank’s updated Trust Fund Policy, effective January 2021, reflects changes in trust fund practices and procedures over the past 12 years. It also supports ongoing reforms of trust funds and FIFs, particularly with its explicit reference to aid fragmentation when considering new funds.
Grievance Redress Service
The Grievance Redress Service (GRS) is an avenue for people and communities to submit complaints directly to the World Bank if they believe a Bank-financed project has adversely affected them or is likely to. It was established in 2015 based on recommendations from an Independent Evaluation Group review of the Safeguard Policies. The service complements project-level grievance mechanisms and ensures that complaints received at the corporate level are promptly and proactively addressed by fostering dialogue and identifying sustainable solutions.
In fiscal 2021, the GRS received 299 cases. Complaints cover a wide spectrum of grievances, including harm to people’s livelihoods, environmental degradation, and occupational health and safety concerns. Drawing on our experience as well as internal and external feedback, we regularly assess what works and what can be improved. Recent improvements include a new directive and a revised procedure, updated systems and processes, and expanded outreach.