Improving Operations for Sustainable Development
The World Bank’s Environmental and Social Framework
The Environmental and Social Framework (ESF), effective since October 1, 2018, enables client countries to better manage project risks and improve environmental and social outcomes. Through the framework, we help countries address a broad range of environmental and social issues and risks, including those related to climate change, biodiversity, occupational health and safety, and inclusion and protection of disadvantaged or vulnerable groups. The framework recognizes the importance of stakeholder engagement, transparency, and information disclosure. We also help strengthen countries’ national environmental and social management systems.
As of June 2022, the ESF applies to about 35 percent of our active IPF portfolio; based on earlier approval dates, the rest of the portfolio continues to apply our Safeguard Policies. We closely monitor ESF implementation in our operations. With its strong focus on environmental sustainability, climate-smart development, and social inclusion, the ESF has proven to be fit for purpose, withstanding the global challenges posed by COVID-19; fragility, conflict, and violence (FCV); and the climate crisis.
The World Bank Procurement Framework
The Bank’s Procurement Framework enables tailored procurement approaches for Investment Project Financing (IPF) operations, emphasizing sustainability and value for money in public procurement. It applies to projects with a concept note on or after July 1, 2016. In fiscal 2022, 65 percent of the Bank’s IPF portfolio, by awarded value, applied the framework. The rate of coverage increases as older projects close and new ones are approved; all procurement is expected to apply the framework by 2026.
In fiscal 2022, we completed a review of the framework to assess whether it has been implemented successfully. It found a profoundly positive impact on many aspects of procurement performance under Bank-financed IPF operations. Borrowing countries have significantly increased their procurement capacity, reforming their national procurement systems and public sectors. Supply markets are diversifying, resulting in increased competition. And 77 percent of the contracts by value over the past five years were with new market entrants, suggesting greater private sector confidence in the Bank’s procurement procedures.
We support socially responsible, gender-sensitive, and green procurement, which is essential for the implementation of the ESF. Innovations in procurement—such as the Hands-On Expanded Implementation Support (HEIS) modality and Bank-facilitated procurement—have played critical roles in our response to COVID-19, help us adapt to evolving operating environments and changing global supply chain dynamics while providing stepped-up support to countries.
Through HEIS, the Bank provides direct support to borrowing countries, especially in FCV environments. This has helped cut the average processing time of procurement actions by two-thirds, with even greater reductions in FCV environments. It has also increased transparency and enabled us to address complaints faster, with half of complaints in fiscal 2022 being addressed within 19 calendar days. All contract awards, including for contracts subject to post review, are now published on the UN Development Business and Bank websites.
HEIS also allowed for Bank-facilitated procurement (BFP), through which we can aggregate demand across countries and use our convening power to gain better market access, as well as leverage a stronger bargaining position with suppliers. Countries remain responsible for signing and entering into contracts, as well as logistics and administration, but they receive substantial Bank support as needed, including with needs assessments, delivery, and contract completion. We have used this approach to help countries rapidly procure essential medical supplies during the COVID-19 pandemic. In India, we helped procure 22,600 oxygen concentrators for $27 million at the height of the Delta variant. During April 2022 in Ukraine, we helped rapidly procure $31 million worth of medical equipment and supplies under contracts that were negotiated through BFP and approved by the government in six days.
Going forward, we will deepen implementation of the Procurement Framework by:
- Enhancing contract management support
- Providing additional training and HEIS to make greater use of rated-quality criteria and other advanced procurement methods
- Strengthening supply chain resilience and security
- Continuing to support countries’ public procurement reforms and capacity-building
- Implementing mandatory direct payment for all procurements in FCV environments
- Expanding the publication of beneficial owners of winning bidders to all internationally advertised contracts.
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 (SEA/SH). As of June 2022, 23 planned contracts worth $750 million are eligible to apply the SEA/SH disqualification mechanism, and one contract worth $24 million in Burkina Faso has been awarded and is under implementation.
Our standard procurement documents for works have specific qualifications and requirements that assess bidders’ capacities to prevent 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 subcontractors on the Code of Conduct; implementing mechanisms to address GBV complaints; adopting a framework for disciplinary measures; and retaining qualified personnel to help manage issues related to SEA/SH. 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.
We have discussed the disqualification mechanism extensively with industry groups, civil society, and development partners worldwide, both while it was being developed and since its launch. We have implemented a training program and are collaborating with professional associations to help mainstream GBV prevention and mitigation into industry practices.
Supporting shared development goals through trust funds
Trust funds and Financial Intermediary Funds (FIFs) are an important part of the Bank Group’s development assistance architecture. They complement the Bank Group’s core funding and activities by providing financial resources; and their flexibility and responsiveness help expand lending operations, generate new knowledge, and pilot new approaches.
At the end of fiscal 2022, $12.1 billion was held in trust funds and $27.9 billion in FIFs. Trust funds finance about two-thirds of the World Bank’s advisory services and analytics, with 74 percent ($14.8 billion) of total trust fund disbursements going to client countries over fiscal 2018–22. Of this amount, over $8.6 billion was disbursed to IDA and blend countries (countries that are eligible for IDA loans but also eligible for IBRD loans because they are financially creditworthy). Contributions to FIFs averaged $8.5 billion annually, while cash transfers to implementing entities remained steady, with an average annual transfer of $7.5 billion over the past five years.
The Bank’s trust fund reforms are consolidating a previously fragmented portfolio and reorienting it around fewer, larger, and more strategically aligned and prioritized Umbrella 2.0 Programs. These programs seek to promote good oversight, efficiency, and results reporting, and are developed in consultation with our development partners.
Across our thematic areas, including health, climate action, gender, social protection, jobs, and debt management, trust fund and FIF resources have disbursed $57.5 billion from fiscal 2018 to 2022, supporting the Bank Group’s goals of ending extreme poverty and promoting shared prosperity through greener, more inclusive, and more resilient development. Trust funds and FIFs are also supporting the response to COVID-19 and the war in Ukraine. As of the end of fiscal 2022, they have contributed $1.6 billion to immediate relief efforts and provided strategic support to countries as they work toward recovery from the pandemic, as well as $2.5 million to support Ukraine and refugees from the country.
Grievance Redress Service
The Grievance Redress Service (GRS) is an avenue for individuals and communities to submit complaints directly to the World Bank if they believe that a Bank-supported project has or is likely to have adverse effects on them, their community, or their environment. It was established in 2015 based on recommendations from an Independent Evaluation Group review of the Safeguard Policies. The GRS complements project-level grievance mechanisms overseen by country authorities and ensures that complaints received directly by the Bank are promptly addressed through sound and sustainable solutions.
In fiscal 2022, the GRS received 383 complaints. GRS cases cover a broad spectrum of issues, including harm to people’s livelihoods, adverse impacts on the environment, and community health and safety concerns. The GRS plays a key role in identifying trends and systemic issues from past cases to foster institutional learning and apply lessons learned to new and ongoing operations.