GAO

United States General Accounting Office

Report to Congressional Committees

May 1999 WORLD BANK

Status of Grievance 

Process Reform

GAO/NSIAD-99-96

United States

General Accounting Office

Washington, D.C. 20548 Letr

Page 1 GAO/NSIAD-99-96 World Bank Grievance Procedure

GAO

National Security and 

International Affairs Division Letr

B-282152 Letter

May 13, 1999

The Honorable Mitch McConnell

Chairman

The Honorable Patrick Leahy

Ranking Minority Member

Subcommittee on Foreign Operations

Committee on Appropriations

United States Senate

The Honorable Sonny Callahan

Chairman

The Honorable Nancy Pelosi

Ranking Minority Member

Subcommittee on Foreign Operations, Export Financing

 and Related Programs

House of Representatives

In June 1998, in response to concerns about the fairness of its employee 

grievance process and as part of a broader effort to reform its human 

resource policies, the World Bank appointed an internal Grievance Process 

Review Committee.1

 The Review Committee was charged with examining 

the Bank’s grievance system and recommending changes to make the 

system more fair and credible. The Committee undertook a broad 

examination of the Bank’s existing system and possible alternatives.

In response to a requirement in the Omnibus Consolidated and Emergency 

Supplemental Appropriations Act, 1999,2

 this report analyzes (1) the 

Review Committee’s principal findings and recommendations and steps the 

Bank plans to take to implement these recommendations and (2) key issues 

that Bank management will face as it moves to implement these 

recommendations.

As an agency of the U.S. government, we have no authority to directly 

review World Bank operations. However, through the Department of the 

1This report uses the terms “World Bank” and “Bank” to refer to the World Bank Group of institutions. 

The World Bank Group is made up of the original “World Bank”—the International Bank for 

Reconstruction and Development—as well as the International Development Association, the 

International Finance Corporation, the Multilateral Investment Guarantee Agency, and the International 

Center for Settlement of Investment Disputes. These institutions share a single grievance system.

2

Pub. L. No. 105-277, 112 Stat. 2681-167 (Oct. 21, 1998).
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Treasury and the U.S. member of the Bank’s Board of Executive Directors, 

we obtained access to Bank staff and documents sufficient to complete our 

report.

Results in Brief The Review Committee found that the Bank’s grievance system over 

emphasized formal, adversarial approaches to dispute resolution; lacked 

sufficient independence from management influence; did not adequately 

protect grievants’ rights or hold managers accountable for complying with 

Bank rules regarding appropriate treatment of subordinates; and was not 

readily accessible to employees located away from the Bank’s Washington, 

D.C., headquarters. The Review Committee also concluded that individuals 

charged with implementing certain responsibilities within the system 

lacked necessary expertise.

The Review Committee prepared a plan of action, accepted by 

management in February 1999 and endorsed by the Board of Executive 

Directors’ Personnel Committee, that is designed to improve the system’s 

effectiveness and credibility. Based on our review of the plan and other 

alternatives considered by the Committee, we note that the measures 

recommended by the Committee refine and enhance but do not 

fundamentally alter the Bank’s grievance system. Among other things, the 

plan includes steps to (1) strengthen the system’s provisions for informal 

dispute resolution, (2) hire additional staff with skill in relevant areas like 

discrimination and employment law, (3) increase the system’s 

independence, (4) strengthen procedural safeguards for grievants, (5) hold 

managers accountable for complying with Bank rules regarding 

appropriate treatment of subordinates, and (6) expand access for 

field-based employees. The Review Committee also recommended 

creating a Conflict Resolution Network composed of Bank units with 

relevant responsibilities to provide a focal point for sustaining the Bank’s 

commitment to insuring that the new system functions as intended. The 

Network will report to the Office of the Bank’s President. The Committee 

decided against recommending more far-reaching changes, such as 

providing for independent arbitration of grievances, at this time.

The Review Committee identified a number of significant procedural and 

operational issues for others to address as implementation proceeds. The 

Bank must develop guidelines and regulations in several areas, train its 

staff to properly carry out their new responsibilities, and create a 

meaningful system for monitoring the system’s performance and 

recommending additional refinements as necessary. As the Bank has just 
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begun implementing the Committee’s recommendations, it is too early to 

assess their actual impact on the manner in which employee grievances are 

addressed. As the reforms are implemented, the performance of the Office 

of the President in supporting the new system’s independence and 

authority will be a key factor in determining success in creating a fairer and 

more credible system. As a member of the Executive Directors’ Personnel 

Committee, the U.S. Executive Director will have an opportunity to 

exercise direct oversight as the system comes into operation. We therefore 

recommend that the Secretary of the Treasury instruct the U.S. Executive 

Director to work with other members of the Personnel Committee to 

actively monitor the new system’s introduction, assess its performance, 

and introduce refinements as necessary.

Background The Bank’s grievance system is used to seek resolution of a wide variety of 

grievances, including complaints about compensation, performance 

evaluation, separation from employment, and supervisory harassment.

As of early 1998, the Bank’s system for addressing employee grievances 

included

• counseling and informal dispute resolution through an ombudsman, 

racial and gender equity advisers, the Bank’s Human Resources Vice 

Presidential Unit, and the Bank Staff Association;

• investigation of alleged misconduct (including improper management 

action toward subordinates) by an Office of Professional Ethics;

• administrative review, by higher-level managers, of allegedly unfair or 

improper management actions toward subordinates;

• referral of disputes unresolved by administrative review to quasijudicial 

proceedings before an internal Appeals Committee;3 and

3

The Appeals Committee is composed of three groups of Bank staff. The first group is chosen by 

management in consultation with the Staff Association. The second is chosen by management alone, 

and the third by the Staff Association alone. Individual grievances are reviewed by three-member panels that include one representative from each group, with members of the first group serving as panel 

chairs.
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• referral of disputes unresolved by the Appeals Committee for final 

disposition by an Administrative Tribunal made up of jurists from Bank 

member countries.4

Under U.S. law, the Bank is immune from suits arising out of its internal 

operations, including employment relationships, unless the Bank decides 

to waive this immunity.5 The Bank acknowledges that, because this is the 

case, it bears a heightened obligation to ensure that its grievance process is 

fair and commands confidence among the staff. 

Aspects of the Bank’s system for addressing employee grievances have 

been revised and augmented on a number of occasions. However, prior to 

1998, the system as a whole had never been assessed. As part of a larger 

effort to reform its human resource policies, Bank management decided in 

early 1998 to conduct a broad review of the Bank’s grievance system. The 

Bank subsequently set up an internal Grievance Process Review 

Committee and charged it with reviewing the existing system and 

recommending changes to make it fairer and more credible. Senior Bank 

managers said that their decision to initiate this effort was prompted by an 

awareness that many employees did not trust the system to fairly address 

their grievances. Our conversations with grievants, as well as Bank staff 

surveys and other information we examined in conducting this study, 

confirmed that many employees lacked confidence in the existing system’s 

basic fairness. 

The Review Committee examined the operations of the Bank’s existing 

system and a wide range of possible actions. Among other things, the 

members of the Committee

• obtained detailed commentary on the Bank’s system and possible 

alternatives from a noted U.S. jurist with over 40 years of experience in 

civil litigation;

4The Administrative Tribunal—the final stage in the Bank’s grievance process—is composed of seven 

individuals, no two of whom may be nationals of the same country, who perform their duties on behalf 

of the Bank while also continuing in other positions. Tribunal members are appointed by the Bank’s 

Board of Executive Directors from a list of candidates submitted by the President of the Bank. 

According to the international agreement that established the Tribunal, candidates for membership 

must be “persons of high moral character and must posses the qualifications required for appointment 

to high judicial office or be jurisconsuls of recognized competence.”

5

See 22 U.S.C. sections 288-288d. See also Articles of Agreement of the International Bank for 

Reconstruction and Development, Article VII; and Mendaro v. World Bank, 717 F. 2d 610 (D.C. Cir. 

1983), holding that the Bank has not waived its immunity with respect to employment disputes.
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• commissioned a study of the grievance systems of several other 

international organizations;

• reviewed books and articles presenting current thought on best 

practices in formal and informal workplace dispute resolution, including 

descriptions of public and private sector systems recognized for 

employing effective procedures;

• obtained employee input through focus groups and a variety of other 

channels, some of which were confidential;

• solicited input from the Personnel Committee of the Bank’s Board of 

Executive Directors, which includes the U.S. Executive Director;6

 and

• submitted a draft of their report for review by a panel of three 

recognized experts on workplace dispute resolution—two from the 

United States and one from Denmark.

In conducting its work, the Review Committee found no single model that 

could be easily adapted to meet the Bank’s needs. Private companies and 

public institutions in the United States and other countries employ diverse 

approaches to workplace dispute resolution, and the national legal systems 

of Bank member countries differ in many key respects. For example, the 

rights and obligations inherent in the employer-employee relationship are 

defined differently in different countries, and legal systems employ 

different standards and approaches to guaranteeing that disputes are 

resolved in a fair and unbiased fashion. The Review Committee sought to 

draw from diverse sources to create a system that would function well in 

the Bank’s unique multicultural environment.

In January 1999, the Committee posted a revised version of its report on the 

Bank’s internal web site, invited Bank staff to offer comments, and 

obtained an endorsement of its recommendations from the Board of 

Executive Directors’ Personnel Committee. In February, the Review 

Committee reported that management had accepted its report without 

significant modification and that implementation had begun.

6

The U.S. Executive Director chaired the committee through the first 10 months of 1998 and continues 

to serve as a member.
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Reported 

Shortcomings, Bank’s 

Plan of Action, and Our 

Evaluation 

The World Bank’s Grievance Process Review Committee concluded that 

the Bank’s grievance system had a number of serious shortcomings and 

developed a number of recommendations designed to improve the system’s 

fairness and credibility. The measures proposed by the Committee refine 

and enhance, but do not fundamentally alter, the Bank’s system. Based on 

our discussions with individuals both inside and outside the Bank and our 

review of current literature on best practices in workplace dispute 

resolution, we believe that these measures may improve the system’s 

performance, but it is to early to assess their actual impact.

Shortcomings in the System Identified shortcomings in the Bank’s grievance process included7

• overemphasis on formal, adversarial procedures as opposed to informal 

approaches to resolving disputes, such as mediation;

• lack of expertise and/or independence from management influence in 

Bank units with relevant responsibilities;

• lack of procedural safeguards to ensure that the Appeals Committee and 

other elements of the system proceed in a fair and equitable manner;

• relative ineffectiveness in addressing complaints of bias and 

harassment;

• limitations on redress for staff who are found to have been treated 

unfairly;

• lack of effective measures for holding managers accountable for their 

actions toward subordinates; and

• insufficient access for the approximately 2,600 employees who are 

located outside of the Bank’s Washington, D.C., headquarters.8

The Committee noted that employees often saw the system as neither fair 

nor credible and that this lack of confidence often deterred employees 

from attempting to use the system to resolve problems. Members of the 

Review Committee, as well the Bank’s Vice President for Human 

Resources, commented that restoring employee confidence in the 

system—and hence their willingness to use it—should be the reform 

effort’s ultimate objective.

7Grievants, members of Bank units with relevant responsibilities, and others with whom we spoke 

confirmed that these were the grievance system’s predominant shortcomings.

8

Approximately 8,300 employees work at Bank headquarters.
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Action Plan The Review Committee prepared a plan of action to address the major 

shortcomings that it identified. Among other things, the Committee 

recommended steps to increase the system’s capacity for informal dispute 

resolution (for example, mediation), enhance its independence, and 

strengthen procedural safeguards for grievants. The Committee’s overall 

objective was to encourage settlement of most disputes through relatively 

informal, and hence more expeditious means, while also increasing staff 

confidence in the more formal procedures applied to settle disputes that 

cannot be otherwise resolved.

Strengthening Capacity for 

Informal Dispute Resolution

The Review Committee concluded that the Bank’s system overemphasized 

formal approaches to dispute settlement while providing too little support 

for informal means of resolving workplace conflict. Experts in the field 

noted that grievance processes that are oriented toward formal dispute 

resolution force parties even to relatively simple disputes to invest 

substantial time and effort in complex adversarial proceedings. The 

Review Committee observed that, at the Bank, this orientation had 

discouraged many employees from attempting to seek redress and delayed 

resolution for those who had chosen to proceed.9

 In particular, the 

Committee found that administrative review—the process wherein 

employees can formally challenge adverse supervisory decisions by asking 

that they be reviewed by higher-level management within the same line of 

supervision—had proven ineffective.

In response to this finding, the Committee recommended eliminating 

administrative review while strengthening the system’s provisions for 

informal dispute resolution. Among other things, the Committee 

recommended expanding the ombudsman office from one to three staff 

members. In addition, the Committee recommended that the Bank 

introduce professionally facilitated mediation as a means of settling 

workplace disputes. The new mediation service would be managed by an 

individual with substantial experience in workplace dispute resolution and 

would provide access to a culturally diverse roster of external and internal 

mediators who would work to settle disputes in a confidential manner. The 

Committee intended these measures to bolster employees’ willingness to 

raise concerns, increase the number of disputes that are settled in an 

informal (and consequently less costly and more timely) manner, and, as a 

9

One case that we reviewed, for example, took more than 2-1/2 years to move from presentation for 

administrative review to a decision by the Administrative Tribunal. The Tribunal handed down its 

ruling more than 2 years after the grievant had been separated from service with the Bank.
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corollary, focus the Bank’s more formal mechanisms on comparatively 

difficult cases. Their actual impact—that is, their utility in reducing 

workplace conflict—will depend upon a variety of factors, including the 

expertise and functional independence of the people placed in the new 

positions.

Increasing Independence and 

Expertise in the System

The Review Committee raised a number of concerns related to the 

independence and relevant expertise held by units with significant 

responsibilities in the grievance system, including the Appeals Committee 

and the ombudsman.

The Appeals Committee is the Bank’s primary vehicle for providing 

grievants with a formal “day in court.” According to the Review Committee, 

the Appeals Committee has historically processed about 30 cases per year, 

on average. The Appeals Committee is composed of regular Bank 

employees—not legal professionals—who serve as panel members in 

addition to their other duties. According to Bank employees we 

interviewed, these individuals are frequently pressed for time. In addition, 

panel members must concern themselves with their own career prospects 

in the Bank. Some employees expressed concern that, as this is the case, 

panel members may not be entirely immune from worry about how their 

decisions on controversial grievances will be regarded by senior Bank 

management.

The Review Committee also noted that the ombudsman—traditionally a 

single-person operation—has generally lacked special expertise for dealing 

with the full range of problems that come to that office’s attention, 

especially harassment and discrimination. In addition, the Review 

Committee noted that placement of the Office of Professional Ethics and 

the Bank’s advisors on racial and gender equity under the authority of the 

Vice President for Human Resources had reduced employee confidence in 

these offices’ independence from management influence.10

In response to concern about the Appeals Committee, the Review 

Committee recommended enhancing this body’s professionalism by 

creating a new staff position—Executive Secretary to the Appeals 

Committee. This position would be filled by an expert in labor and 

employment law. He or she would serve as a nonvoting member of panels 

10In April 1998, the Office of Professional Ethics was removed from the operational control of the Vice 

President for Human Resources.
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hearing individual grievances, tasked with ensuring that procedural 

safeguards are in place and observed, and with ensuring consistency and 

continuity in panel deliberations and decision-making. The person 

occupying this position would report to the Office of the President.

It is unclear what value the new position will add to the process. The 

Appeals Committee already employs a legal professional who performs 

virtually all of the functions that are contemplated for the new position. 

The Review Committee made no specific recommendation for endowing 

the new position with a higher degree of authority or influence than the 

current incumbent already exercises over panel proceedings.

The Review Committee also recommended that the Bank augment the 

ombudsman staff with two individuals holding expertise in specific areas of 

concern and replace administrative review with a professionally managed 

mediation service. Other Review Committee recommendations that were 

intended to address this concern included staffing the Office of 

Professional Ethics with trained investigators and having relevant elements 

of the system, including the Office of Professional Ethics and the Bank’s 

gender and racial equity advisers, report directly to the Office of the 

President.

Strengthening Procedural 

Safeguards

The Review Committee, as well as grievants and outside experts, identified 

a number of shortcomings in the procedures that the Office of Professional 

Ethics, the Appeals Committee, and the Administrative Tribunal employed. 

These sources said that these shortcomings reduced employee confidence 

that these elements of the system will conduct themselves in a fair and 

impartial manner. The Review Committee offered suggestions on how 

these procedural safeguards could be strengthened.

The Office of Professional Ethics. The Review Committee noted that many 

employees lacked confidence in the ability of the Office of Professional 

Ethics to conduct investigations in a manner that treats both accused 

parties and accusers fairly. In response, the Review Committee 

recommended that the Office establish clear rules and procedures to 

protect the rights of all parties and ensure that investigations are 

conducted fairly.

The Appeals Committee. The Review Committee agreed with other Bank 

employees and outside experts who observed that the Appeals Committee, 

though originally developed as a vehicle for informal peer review, is now 

expected to conduct proceedings that are essentially adversarial in 
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character. The Review Committee concluded that while the procedures 

followed by Appeals Committee panels may once have been adequate, they 

could no longer be regarded as providing sufficient procedural safeguards 

for the parties to disputes, especially grievants. Among other specific 

shortcomings cited by employees and noted by the Review Committee, 

panel chairs retained complete discretion with regard to calling and 

cross-examining witnesses, and witnesses did not testify under oath. The 

Review Committee confirmed the views of several grievants with whom we 

spoke who stated that, as a result, panel deliberations often proceeded on 

the basis of incomplete or biased information. The Review Committee also 

noted that grievants often experienced substantial delays in moving 

forward. Bank attorneys commonly filed detailed challenges to the 

Appeals Committee’s jurisdiction, and there was no deadline by which 

senior management was required to reply to panel recommendations.

In addition, the Staff Association, as well as grievants, pointed out that 

employees bringing complaints before Appeals Committee panels often felt 

overwhelmed by the enormity of the Bank as an opponent. These sources 

noted that this feeling may be exacerbated by rules that permit grievants to 

be accompanied by only one person—an adviser supplied by the Staff 

Association or the Appeals Committee, or an attorney—as they participate 

in panel hearings. Finally, some grievants objected to the fact that final 

authority to act on panel findings and recommendations lay with 

management—most often the Vice President for Human Resources. 

The Review Committee did not recommend making Appeals Committee 

decisions binding on management. However, it did recommend a number 

of procedural improvements, including 

• providing grievants with a formal role, along with management and the 

Appeals Committee itself, in determining the witnesses that will be 

called;

• explicitly recognizing the right of the parties to cross-examine 

witnesses;

• requiring witnesses to make a declaration of truthfulness before offering 

testimony;
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• reducing delays by limiting the Bank’s right to challenge the Appeals 

Committee’s jurisdiction11 and by requiring that Bank management act 

on recommended remedies within 60 days.12

The impact of these recommendations on Appeals Committee deliberations 

will depend to a large extent upon the manner in which they are adapted 

into the rules governing Appeals Committee operations, as well as the 

manner in which they are applied in practice. For example, as already 

noted, existing Appeals Committee rules vest the panel with the authority 

to decide which of the witnesses requested by the parties will be heard—

and the scope of each witness’ testimony. Beyond submitting lists of 

desired witnesses, the rules do not provide the parties to the case with a 

role in deciding who is permitted to testify, or the topics on which these 

witnesses will speak. However, the rules do establish standards for panel 

decisions on such matters. They state that the panel may “reasonably” limit 

the number of witnesses that appear and the scope of their testimony 

“when it is satisfied that sufficient evidence has been heard to disclose fully 

and fairly the facts related to the appeal.” It remains to be seen whether

the wording that is developed to replace this provision will substantially 

strengthen this standard, and whether, in practice, the revised language will 

provide grievants with a stronger hand in resolving questions on witness 

selection and testimony.

The Administrative Tribunal. The Committee noted employee concern that 

the Administrative Tribunal’s procedures did not provide its members with 

a full understanding of the matters at issue. Some employees and outside 

reviewers were particularly troubled that the Tribunal usually arrived at 

decisions without benefit of oral hearings.

The Tribunal is not an appeals court, as we understand the term in the 

United States. That is, it does not review the manner in which the Appeals 

Committee has handled the cases that are forwarded for Tribunal action, 

nor does it remand cases for rehearing before the Appeals Committee. 

Rather, it conducts its own independent review of the facts and arrives at 

11The Bank would continue to be allowed such challenges when the maximum time permitted 

employees for seeking redress after experiencing allegedly unfair or improper management actions had 

passed.

12To be more precise, the Review Committee recommended that Appeals Committee 

recommendations become binding if management did not respond within 60 days.
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its own decisions on the merits of each case. Unlike Appeals Committee 

recommendations, Tribunal decisions are binding on the Bank.

The Tribunal meets infrequently, for short periods of time. Although it has 

the right to hear oral testimony, it seldom does. According to its staff, the 

Tribunal has held oral hearings on two occasions since its founding in 1980. 

The Tribunal has nearly always based its rulings on written submissions 

from the parties. These written submissions include an initial application 

by the grievant, followed in succession by (a) management’s answer to the 

application, (b) the grievant’s reply to the answer, (c) management’s 

rejoinder to the answer, and (d) additional written statements, if deemed 

necessary by the Tribunal.

In response to concern about the adequacy of the record employed by the 

Tribunal, the Committee recommended making transcripts of Appeals 

Committee hearings available whenever cases advance to the Tribunal.13

The Committee also recommended that the Tribunal consider the merits of 

holding oral hearings more frequently.

Improving the System’s Capacity 

for Addressing Bias and 

Harassment

The Bank’s staff rules and related materials state that bias and 

harassment—including sexual harassment—are contrary to Bank policy.14 

Nonetheless, the Review Committee noted that confidence in the system 

was particularly low among female employees and employees of African 

origin. For example, recent surveys found that only 1 in 10 female 

employees experiencing unwelcome sexual attention sought help from the 

resources the Bank had established for handling such problems and that 

fewer than 40 percent of employees regarded the Bank as serious about 

dealing with nationality discrimination.

The Review Committee proposed several measures that may help to 

improve the Bank’s capacity for addressing bias and harassment 

allegations. These include the expansion of the ombudsman office to 

include staff with appropriate skills and creation of a mediation service.

13In other cases, the Appeals Committee would continue its present practice of not creating full 

transcripts. Hearings would be taped in order to provide for creation of transcripts if required.

14In a 1994 policy statement, the Bank defined harassment, whether by peers or superiors, as “speech or 

conduct which unreasonably interferes with work or creates an intimidating, hostile or offensive work 

environment, whether on the basis of race, religion, color, gender, sexual orientation, national origin or 

other like factors.” 
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The Review Committee noted one particular provision that has limited 

access to the more formal portions of the Bank’s system for many staff 

experiencing bias or harassment. The rules and regulations governing the 

Appeals Committee specify that, to seek redress through the Committee, 

staff members must challenge specific adverse managerial decisions. 

These may include allegedly unfair decisions on such matters as 

performance evaluation, compensation, promotion, or separation from 

employment. However, staff experiencing bias or harassment may be 

unable to point to a specific adverse decision as a basis for seeking redress. 

Experts in this area note that workers alleging bias or harassment often 

base their complaints on more general allegations that their superiors have 

maintained a hostile work environment.

In response to this shortcoming, the Review Committee recommended that 

grievants be permitted direct access to the Appeals Committee without 

first going through any other process. We note that the Appeals 

Committee’s rules will also have to be changed to permit it to accept 

jurisdiction over cases where no specific adverse management decision has 

been cited.

Expanding the Committee’s jurisdiction to include broadly based 

allegations of harassment, without reference to specific adverse decisions, 

raises questions regarding the criteria that the Committee should apply in 

arriving at its decisions. In this connection, the Review Committee noted 

that the Bank is engaged in developing an improved, more comprehensive 

harassment policy and code of conduct. This effort may provide the 

Appeals Committee with an adequate basis for fairly addressing grievances 

of this type, provided that it includes clear criteria for assessing managers’ 

actions.

Expanding Redress for 

Successful Grievants

Grievants and other concerned Bank staff noted certain limitations in the 

remedies that have been provided for grievants obtaining favorable 

judgments from the Appeals Committee or the Administrative Tribunal.

First, the Appeals Committee has the authority to award successful 

grievants reasonable attorneys’ fees, but it has seldom done so. In more 

complex cases, grievants may incur substantial attorneys’ fees in obtaining 

a favorable ruling. Grievants argue that they should be reimbursed for 

these expenditures when the Bank is found to have been at fault. In 

response, the Review Committee recommended that the Appeals 

Committee make greater use of its authority to recommend award of 

reasonable attorneys’ fees to successful grievants. The actual impact of 
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this recommendation will depend not only on the Appeals Committee’s 

willingness to recommend such awards in appropriate cases but also on 

Bank management’s willingness to actually make such awards.

Second, terminated grievants have seldom been reinstated, even when 

found to have been unfairly treated. Since 1990, for example, the Bank has 

reinstated five individuals in response to Appeals Committee 

recommendations, while no one has been reinstated based on a favorable 

ruling by the Administrative Tribunal. The Review Committee’s report 

noted that reinstatement has rarely been provided, even when the Tribunal 

has found management guilty of “gross malfeasance.”

In lieu of reinstatement, Bank management has frequently opted to provide 

successful grievants with monetary compensation. When recommending 

reinstatement, the Tribunal is specifically required also to fix an amount of 

monetary compensation, up to 3 years net pay, that the Bank may decide to 

award instead.15 The Bank has opted for compensation in each of the 

seven cases since 1990 in which the Tribunal recommended reinstatement. 

During this same period, Bank management also elected to provide 

monetary settlements in two cases in which the Appeals Committee had 

recommended that reinstatement be considered. 

Concerned parties contend that the low likelihood of reinstatement as a 

remedy for unfair separation from employment is unacceptable, given the 

special circumstances attendant to employment in the World Bank. They 

point out that foreign nationals employed at the Bank’s Washington, D.C., 

headquarters remain in the United States only by virtue of their status as 

Bank employees. Unless they find employment with another international 

organization, such as the United Nations, they must leave the United States 

within 60 days.

The Review Committee noted the desirability of reinstatement being 

provided when justified but did not make any recommendations on this 

matter, given that “decisions on reinstatement ultimately rest with the 

[Bank] management.” It remains to be seen whether the Review 

Committee’s endorsement of the more frequent use of reinstatement as a 

remedial measure will have a substantial impact on future Bank actions. 

15The Tribunal may order the payment of higher amounts of compensation in “exceptional cases” where 

it believes such amounts are justified.
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We note that final authority for deciding whether to reinstate an employee 

rests with the President of the Bank.

Holding Managers Accountable The Review Committee reflected a concern expressed by many Bank 

employees when it observed that the system has not effectively held 

managers accountable for complying with the Bank’s rules regarding 

appropriate treatment of subordinates. Many employees view the Bank’s 

willingness to take action against managers who repeatedly violate the 

Bank’s commitment to fair treatment of employees as a key indicator of its 

sincerity in pursuing effective reforms. 

Several of the measures already discussed may help to address this 

problem. These include (1) clarifying the Bank’s standards and 

expectations regarding harassment, (2) strengthening the Office of 

Professional Ethics’ investigative procedures and personnel, and 

(3) expanding the Appeals Committee’s purview to include grievances that 

are not based on specific adverse managerial decisions.

The Review Committee also recommended that the Bank reinforce 

accountability by reporting Appeals Committee decisions that clearly 

indicate mismanagement to offending parties’ superiors, sanctioning 

managers who are found to have committed “serious or repeated” 

violations of staff rules, and advising Appeals Committee witnesses that 

knowingly making false statements would result in disciplinary action.

Finally, the Review Committee recommended that the Office of 

Professional Ethics, the ombudsman staff, and the Bank’s racial and gender 

equity advisers cooperate to develop a system for monitoring and reporting 

cases of harassment and discrimination. While potentially worthwhile, this 

recommendation may be particularly difficult to put into effect. If 

effectively implemented, the system envisioned by the Review Committee 

increases the likelihood that management-staff disputes will be addressed 

in forums—like the ombudsman’s office—whose continued effectiveness 

depends on maintenance of confidentiality. Outside experts noted that this 

simultaneous commitment to greater accountability and greater 

confidentiality presents those charged with implementing the new system 

with a major challenge—preserving an appropriate balance between the 

two commitments.

Ensuring Access for Field Staff The Review Committee noted that employees working outside of Bank 

headquarters have made relatively little use of the grievance system—at 

least partially because of the difficulties that they have faced in accessing 
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the various elements of the system, which have been located almost 

entirely within the Bank’s Washington, D.C., headquarters. The Review 

Committee made a number of recommendations for improving field staff 

access. These included

• providing access to the Office of Professional Ethics and the 

ombudsman office through secure, toll-free telephone lines;

• tasking the ombudsman staff with working to develop a network of local 

ombudsmen to serve field offices—possibly in cooperation with other 

international organizations;

• requiring that the manager of the proposed mediation service ensure 

that mediation is available to field offices; and

• equipping the Appeals Committee to conduct videoconferences with 

field offices. 

We note that providing most field offices with effective access will be quite 

challenging, given the fact that Bank employees are dispersed among more 

than 90 sites around the world. 

Key Implementation 

Issues

The Review Committee left management with a number of key issues that 

must be more fully addressed as implementation proceeds.

Outstanding Procedural 

Matters

As already noted, a number of procedural matters must be addressed 

before certain of the Review Committee’s recommendations can be fully 

implemented. Among other things, these matters include (1) completion of 

procedures to govern Office of Professional Ethics investigations and 

policies clarifying the Bank’s expectations regarding harassment and 

(2) clarification of the Appeals Committee’s jurisdiction, the role of its 

proposed additional legal staff member, and rules governing the selection 

of witnesses and the scope of their testimony.

Developing an Appropriate 

Training Program

The Review Committee recognized that appropriate, effective training for 

Bank employees, especially managers, is critical to the success of the 

reform initiative. In addition to informing employees about the new 

system, the Committee envisioned a training program that would provide 

Bank staff with improved ethics, conflict resolution, and communications 

skills, as well as increased sensitivity to cultural differences. Experts agree 
B-282152

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that effective training in these areas can reduce workplace conflict and 

facilitate early resolution of such disputes as may still arise.

To begin work in this area, the Review Committee recommended that a 

new unit be created within the Office of Professional Ethics charged 

specifically with promoting “corporate values and ethical behavior” among 

the staff. (The Office previously concentrated almost exclusively on 

conducting investigations.) The new head of the Office has already made 

some efforts in this direction, such as examining the Bank’s existing 

training portfolio to identify elements that can be expanded and/or 

strengthened. However, substantial work remains to be done to create the 

multifaceted, coordinated training program that the Review Committee 

envisioned.

The Review Committee noted that one important topic in this training 

program should be how to prepare and communicate meaningful 

performance evaluations. The President of the Bank highlighted the 

performance evaluation system as a critical area of concern. He noted that 

Bank managers have not, in practice, been required to provide candid and 

timely performance feedback to employees. The Bank’s Human Resources 

Vice Presidential Unit is currently engaged in introducing an improved 

performance appraisal system.

Monitoring and Refining the 

System

The Review Committee noted that in the past none of the units in the 

system collected meaningful information on its own performance. 

Representatives of the Appeals Committee, for example, reported that their 

unit had not instituted effective means for obtaining structured feedback 

from grievants and managers about their experiences before the 

Committee. In addition, because the Bank’s system was not really an 

integrated structure but a set of uncoordinated mechanisms created at 

different times for different purposes, such data as had been collected 

could not be used for systemwide analyses. Because the system developed 

in this manner, the Review Committee observed that the Bank also lacked 

an effective institutional focal point for examining relevant information and 

taking such actions as may be indicated, including recommending 

refinements in the system.

The Review Committee concluded that the Bank should develop 

systemwide performance measures that can be used as a basis for 

monitoring the new system’s performance. Staff satisfaction would be the 

chief measure, along with accessibility and the cost and time required for 
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settling disputes. Substantial effort remains to be invested in 

operationalizing these concepts, designing data-gathering instruments, and 

creating databases so that meaningful information on the system’s 

performance (including the performance of each unit within it) can be 

effectively gathered, accessed, and analyzed.

In order to provide a focal point for a sustained commitment to improving 

the system, the Review Committee proposed creating a conflict resolution 

network comprised of all of the offices holding responsibility in this area. 

In addition to approving all proposed rules and procedures for the new 

system’s constituent elements, the network would be charged with 

monitoring the system’s performance, identifying emerging issues, and 

recommending additional refinements as necessary. The Review 

Committee recommended that the network continue to explore the 

introduction of other dispute settlement options, such as arbitration by 

external dispute resolution professionals, into the Bank’s system.16 The 

network would have an implementation coordinator who would oversee 

creation of the new system and a rotating chair that would report to the 

Office of the President on at least a quarterly basis. The Review Committee 

also proposed that the network share with the employees information on 

major trends and developments. However, the manner in which this 

network will actually operate remains to be determined.

The Review Committee recommended that key actors in the new system—

including the head of the Office of Professional Ethics and the Appeals 

Committee, the ombudsmen, and the chair of the conflict resolution 

network—report directly to the Office of the President. These 

recommendations highlighted the important role that this office should 

play in ensuring that the reformed system operates in a fair and 

independent manner, that managers are held accountable for their actions 

toward subordinates, and that refinements in the system are introduced as 

experience is gained through actual operations. 

To further ensure a sustained commitment to improving the system, the 

Committee also recommended that annual reviews be conducted during 

16Providing access to external arbitration is one of many options that are available for augmenting the 

independence and impartiality of the system. The Review Committee considered including arbitration 

among its recommendations. However, the Committee decided against making such a recommendation 

at this time, given that (a) substantial effort will already be required to implement the Committee’s 

other recommendations and (b) the real need for arbitration as a supplement to the new system can 

only be judged after the new system has been in operation for some time. 
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Page 19 GAO/NSIAD-99-96 World Bank Grievance Procedure

each of the next 3 years, with provisions for taking employee views into 

account, as well as commentary from outside experts and the Board of 

Executive Directors’ Personnel Committee. Substantial effort remains to 

be invested in planning and carrying out these reviews in a manner that 

ensures that they provide a meaningful basis for continued improvement in 

the system.

Evaluating the 

Administrative Tribunal

The Administrative Tribunal was not created by management but by an 

agreement among the Bank’s member countries. Thus, Bank management 

cannot mandate changes in Tribunal operations on its own initiative. Major 

changes can only be made by agreement among the member countries. 

The Committee recommended that the Tribunal itself reassess its own 

procedures, taking input from Bank management and staff into account. 

Whether the Tribunal follows this recommendation remains to be seen, as 

does the nature of the conclusions that such an assessment might reach.

Conclusions The Bank has acknowledged serious procedural and operational 

shortcomings in its grievance system and has prepared an action plan to 

address these shortcomings. 

As implementation has just begun, the extent to which the action plan will 

increase the fairness and credibility of the grievance system cannot be 

assessed at this time. A number of open issues remain to be addressed, 

including several procedural matters, development of an appropriate 

training program, and creation of an effective monitoring system. 

Sustained management commitment and support will be needed to resolve 

these issues. As the revised system comes on line the performance of the 

Office of the President in supporting the system’s independence and 

authority will be a key factor in determining its success. As a member of 

the Executive Directors’ Personnel Committee, the United States 

Executive Director will have an opportunity to exercise direct oversight as 

the new system comes into operation.

Recommendation To help ensure that the Bank achieves its ultimate goal of restoring 

employee confidence in the grievance system, we recommend that the 

Secretary of the Treasury instruct the U.S. Executive Director to work with 

other members of the Executive Directors’ Personnel Committee to 

actively monitor Bank efforts to implement the new system developed by 
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Page 20 GAO/NSIAD-99-96 World Bank Grievance Procedure

the Review Committee, assess its performance, and introduce additional 

refinements as needed.

One critical element in helping to ensure the success of the reforms 

adopted by the Bank is the collection of meaningful data on whether these 

reforms have made the system more fair and credible. These measurement 

criteria have yet to be developed. To help assure that the Bank’s goals are 

achieved, we recommend that the Secretary of the Treasury instruct the 

U.S. Executive Director to work with other members of the Personnel 

Committee to ensure that the Bank develops indicators that will provide an 

adequate basis for judging the reforms’ actual impact.

Scope and 

Methodology

To understand the Bank’s grievance system, we reviewed the rules and 

regulations governing its operation and interviewed employees from all 

Bank units with substantial responsibilities in this area. These units 

included the Appeals Committee, the Administrative Tribunal, the Office of 

Professional Ethics, the vice-presidencies for Human Resources and Legal 

Affairs, the Senior Advisers for Racial and Gender Equity, and the 

ombudsman. We examined the Review Committee’s written conclusions 

regarding the system’s strengths and weaknesses, discussed these matters 

with staff from relevant Bank units, reviewed a number of grievance case 

histories, and interviewed grievants and their attorneys. We also reviewed 

the results of employee focus groups held to inform the Review 

Committee’s deliberations, as well as several reports that were prepared by 

outside experts at the Review Committee’s request.

To provide a firm basis for reviewing (a) proposed improvements and 

(b) measures for ensuring that these proposals are successfully 

implemented, we interviewed experts on workplace dispute resolution and 

reviewed written commentary on effective formal and informal workplace 

dispute resolution from a number of expert sources. These included the 

American Arbitration Association, the Society of Professionals in Dispute 

Resolution, and the American Bar Association. To further inform our 

review, we read written reports on the grievance systems employed by 

other international organizations and by private and public sector 

organizations in the United States, including U.S. provisions for 

adjudicating disputes of this type before federal and state courts.

We examined the Review Committee’s draft recommendations and 

discussed them with members of the Committee, including the 

co-chairmen and the head of the Staff Association; the President of the 
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Bank; heads of relevant Bank units; grievants; and outside experts, 

including those engaged by the Review Committee. 

We did our work in Washington, D.C., between October 1998 and February 

1999 in accordance with generally accepted government auditing 

standards.

Agency Comments and 

Our Response

The Department of the Treasury and the President of the World Bank 

provided written comments on a draft of this report. These comments are 

reprinted in appendixes I and II.

The Department of the Treasury stated that the report presents a fair and 

accurate assessment of the Bank’s grievance process and the Review 

Committee’s proposals. Treasury affirmed the commitment of Department 

staff and the U.S. Executive Director to monitoring Bank implementation 

of the recommended reforms to ensure that they have their intended effect. 

The President of the World Bank noted his personal commitment to 

ensuring that the recommended reforms result in a highly effective system 

for addressing employee grievances.

The President of the World Bank commented that, in his view, the report 

did not clearly convey a number of points that he considered important. 

Specifically, he stated that the report did not 

• recognize that the Bank’s grievance system reform effort—part of a 

broader effort at reforming the Bank’s human resource policies and 

practices—began well in advance of GAO’s review;

• capture the unique challenge of creating an effective system in an 

international organization composed of 181 member countries with 

widely varying dispute resolution practices;

• acknowledge the magnitude of the changes being made in the system, 

especially the substantial shift in emphasis toward settling disputes 

through informal, nonadversarial means; or

• mention that the experts consulted by the Bank viewed the system 

developed by the Review Committee as a “state of the art” model.

Our draft specifically stated that the Bank appointed a Grievance Process 

Review Committee in June of 1998, whereas our examination of the Review 

Committee’s findings and recommendations did not begin until October 

1998. The draft also acknowledged that the Bank’s decision to examine its 

grievance process grew out of a broader, ongoing effort to reform the 
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Page 22 GAO/NSIAD-99-96 World Bank Grievance Procedure

Bank’s human resource policies. The draft’s background section discussed 

the difficulties inherent in developing an approach to resolving workplace 

disputes that would function effectively in a multicultural environment 

such as the Bank’s. It also stated that the Bank’s reform plan included a 

wide variety of measures that were intended to strengthen the system in 

each area where shortcomings were identified. We began the discussion of 

these measures in our draft report with a description of the Review 

Committee’s recommendations for substantially strengthening the Bank’s 

capacity for informal dispute resolution.

Our draft also recognized that the Review Committee sought, through 

various means, to ensure that its final report to management would be in 

line with current professional thinking on best practices in workplace 

dispute resolution. In discussions with Bank staff and with GAO, the 

experts consulted by the Bank commented that the Review Committee had 

taken current best practices thinking into account in developing its 

recommendations, and that the Committee’s action plan provided the Bank 

with a sound basis for developing a fairer and more credible system. 

However, these experts also noted that no plan, however constituted, could 

be relied upon as certain to be satisfactory and that because this is the 

case, it is important that the Bank develop systems for effectively 

monitoring and refining the system as implementation proceeds.

We are providing copies of this report to the Honorable Robert E. Rubin, 

Secretary of the Treasury, and to Mr. James D. Wolfensohn, President of the 

World Bank. Copies will be made available to other interested parties upon 

request. 

Please contact me on (202) 512-4128 if you or your staff have any questions 

concerning this report. The major contributors to this report were Michael 

McAtee, Stephen Lord, and Mark Dowling.

Harold J. Johnson, Associate Director

International Relations and Trade Issues
Page 23 GAO/NSIAD-99-96 World Bank Grievance Procedure
Page 24 GAO/NSIAD-99-96 World Bank Grievance Procedure

Appendix I

Comments From the Department of the 

Treasury ApeInxdi
Page 25 GAO/NSIAD-99-96 World Bank Grievance Procedure

Appendix II

Comments From the World Bank ApeInxdi
Appendix II

Comments From the World Bank

(711389) Lret Page 26 GAO/NSIAD-99-96 World Bank Grievance Procedure
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