Report on MDB Reform Commitments 

Consistent with Section 7082 of the Consolidated Appropriations Act, 2012 (P.L. 112-74), the 

Department of the Treasury is providing a report detailing the extent to which the World Bank, 

African Development Bank (AIDB) and Inter-American Development Bank (IDB) have 

continued to make progress in seven areas. 

The report highlights significant developments since submission of the last report. Beyond a 

broad set of updates, the key area of discussion for this report is a review of the IDB's general 

capital increase (GCI) reforms by the IDB's independent evaluator, the Office of Oversight and 

Evaluation (OVE). As part of the !DB's GCI agreement, the United States successfully 

advocated for a time-bound commitment for a comprehensive and independent review, which 

was completed earlier this year. Composed of22 separate reports, OVE's evaluation is an 

exhaustive and, we believe, fair assessment ofboth the implementation and effectiveness of the 

!DB's GCI reforms. 1 

We report on progress in seven areas. 

(1) Implementing specific reform commitments agreed to by the World Bank and the AjDB as 

described in the Pittsburgh Leaders' Statement issued at the Pittsburgh G20 Summit in 

September 2009 concerning sound finances, effective management and governance, 

transparency and accountability, focus on core mission, and results. 

The Pittsburgh Leaders' statement noted that "additional resources must be joined to key 

institutional reforms to ensure effectiveness; greater coordination and a clearer division of labor; 

an increased commitment to transparency, accountability, and good corporate governance; an 

increased capacity to innovate and achieve demonstrable results .... " 

Following this G-20 Summit, the shareholders ofthe World Bank, the AIDB and the IDB 

negotiated reform commitments consistent with the Leaders' statement, in conjunction with 

shareholders' commitments to provide additional resources. As discussed in this and previous 

reports, each MDB has undertaken robust implementation of and made substantial progress in 

these reform commitments since September 2009. 

World Bank: 

• Sound Finances: As reported previously, the World Bank adopted a new and 

significantly improved financial framework in 2010 requiring that major financial 

decisions take into account implications for the administrative budget, pricing ofloans, 

and net income transfers in a unified, comprehensive analysis. 

1 These reports can be found here: http://www.iadb.org/en/office-of-evaluation-and-oversight/mid-term-evaluationof-idb-9-commitments, 7990 .html 
Since the last report, the Board of Directors approved an administrative budget and 

transfers to the International Development Association (IDA)2 consistent with long-term 

capital adequacy. Bank management is also revising the model that it uses to make 

capital adequacy projections. The new model should reduce volatility in long-term 

capital projections. 

Effective Management and Governance: The Bank's comprehensive compensation and 

benefits review, which is examining how to use compensation to better provide 

incentives for exceptional performance, will run through Bank fiscal year 2014 (ending 

June 2014). Since the last report, the Human Resources Department has begun 

implementing changes to improve performance management at the Bank, including more 

regular assessments of performance. In addition, a new performance management 

system, building on the experience at the World Bank's private sector arm, the 

International Finance Corporation (IFC), was implemented bank-wide on July 1, 2013. 

Transparency and Accountability: Since the last report, an expanding number of Bank 

operations are receiving formal beneficiary feedback, consistent with a key commitment 

under the Bank's 2012 "Modernization Agenda." This fiscal year, 44 percent of the 

Bank's projects include a mechanism for beneficiary feedback during project 

implementation, up from 22 percent the year before. 

The Bank is also using a broader range of tools to share information and increase 

accountability. For example, a new "Goo-Results" tool allows for the sharing of social 

content and "before and after" pictures and videos of project locations. 3 This tool, which 

is currently being piloted in eight countries, allows faster tracking of the impact of Bank 

projects. Another interactive web tool called "On Track" enables citizens to provide 

feedback on the implementation of Bank projects in the form of suggestions, problems, 

and stories using SMS, Twitter, and the web. Finally, the "Mapping for Results" 

platform, which has been rolled out in Vietnam, Nepal, Bolivia, Rwanda, Georgia, and 

Kenya, now includes pictures, videos, audio, and stories about results that have been 

achieved. These tools rely on the Bank's new practice of geocoding project locations, an 

essential step in making the monitoring of progress faster and more accurate. 

In March 2013, the Bank hosted a forum on beneficiary feedback and citizen 

engagement. Approximately 150 people participated in the forum, which focused on how 

to advance the mainstreaming of citizen engagement and beneficiary feedback into Bank 

policies and operations. 

• Focus on Core Mission: Ahead of the 2013 World Bank-International Monetary Fund 

(Bank/Fund) Spring Meetings, the Bank reaffirmed its core mission of a world free of 

poverty by defining two specific goals as part of its new "Common Vision for the World 

Bank Group". This common vision (i) targets a reduction in the percentage of people 

2 IDA is the World Bank's entity that provides grants and highly concessionalloans to the poorest countries that are 

unable to borrow on international markets. 

3 Available at: http://maps.worldban.k.org/content/georesults#home 
living on less than US$ 1.25 a day to three percent by 2030 and (ii) promotes the income 

growth of the bottom 40 percent of the population in every country. These corporate 

goals are meant to guide the development of a unified strategy to focus Bank activities 

and resources on achieving its mission. Bank Management has indicated its intention to 

finalize the common vision by the 2013 Bank/Fund Annual Meetings in October 2013. 

This strategy will build on the Bank's Modernization Agenda, launched in 2010, as well 

as the 2013 reforms in the IFC and Multilateral Investment Guarantee Agency (MIGA)4 

that focus on improved client and on-the-ground engagement. These efforts are leading 

all of the entities that comprise the World Bank Group- International Bank for 

Reconstruction and Development (IBRD)5

, IDA, IFC, and MIGA to work together more 

cohesively. 

• Results: The Bank's key tool for reporting results is the "Corporate Scorecard," 

introduced Bank-wide in fall2011. Its key objective is to provide information on the 

Bank's performance and efficiency, and on the results achieved jointly with Bank clients. 

The Corporate Scorecard uses indicators in four areas (or tiers) to track development 

results and Bank performance. Tier I indicators show progress in long-term development 

outcomes at a very high level (e.g., global/regional trends in health, education, and 

poverty levels). Tier II indicators show country-specific results, using data on human 

development, infrastructure, and access to services for the poor and the vulnerable. Tier 

III indictors show the effectiveness of the Bank's products and services in its client 

countries. Tier IV indicators are designed to capture the main dimensions of the Bank's 

organizational efficiency and modernization agenda to determine if it is becoming more 

responsive and accountable. 

Since the last GCI report, the first bi-annual discussion of the Bank's performance in 

generating development results based on the Corporate Scorecard was held among the 

Bank President and the Executive Directors in December 2012. 

The most recent Corporate Scorecard was published in March 2013. Examples of 

successful projects and results supported by the Bank include: 

• An increase by more than three-fold in the kilometers (from 10,740 to 36,354) of 

transmission lines constructed or rehabilitated between FY 2011 to FY 2012; 

• A near tripling in the number of pregnant women receiving antenatal care from 17 

million in FY 2011 to 50 million in FY 2012; and 

• A decrease in the time required for starting a business in countries where the Bank 

operates from 50 days in calendar year 2007 to 34 days in calendar year 2012. 

4 MIGA offers political risk insurance guarantees to help investors protect foreign direct investments against 

rolitical and non-commercial risks in developing countries. 

The IBRD provides commercial-grade or concessional fmancing to sovereign states to fund projects that seek to 

improve transportation and infrastructure, education, domestic policy, environmental consciousness, energy 

investments, healthcare, access to food and potable water, and access to improved sanitation. 
Key results on Bank performance and efficiency included: 

• An increase in the percentage of projects with satisfactory quality of design for 

investment lending operations from 76 percent in FY 2009 to 83 percent 

(compared to a target of90 percent) in FY 2012; and 

• A decrease in the average time to design and prepare a Bank-financed project 

from 16 months in FY 2008 to 14 months in FY 2012. 

African Development Bank (AtDB): 

• Sound Finances: As reported previously, the AtDB is moving towards an income 

management model that balances net income projections, administrative costs, loan 

charges and the notional lending program. The major credit rating agencies reaffirmed 

the Bank's prudent financial management with an AAA rating on long-term debt and an 

AA+ rating on subordinated debt in 2013.6 

• Effective Management and Governance: Recent improvements in the AtDB's risk 

management and anti-corruption agendas include: 

o Risk Management. The enterprise risk management dashboard, completed in 

December 2012, provides a comprehensive view of all the key risks faced by the 

institution (including credit, market, liquidity, and capital management risks), and 

highlights areas of concerns to be monitored. In addition, the Credit Risk 

Committee (CRC) became fully operational from the 3rd quarter of2012. It 

meets on a regular basis, generally weekly, and has strengthened the assessment 

of credit risk issues, particularly for private sector operations. The CRC also 

oversees country risk ratings/reviews, overall portfolio credit risk monitoring, and 

waivers. In addition, the AtDB has acquired an integrated platform to enhance 

and automate the credit risk process. 

o Anti-corruption. In December 2012, the AtDB Board approved the appointments 

of the new independent Sanctions Commissioner and the members of the 

Sanctions Appeal Board. The AtDB has updated its website to show the cross 

debarments with other multilateral development banks (MDBs) as part of its new 

cross debarment policy, introduced in 2012.7 In June 2012, the AtDB followed 

the World Bank and other MDBs in approving this new policy under which 

debarred firms are ineligible to participate in any MDB-financed contract. 

The United States also pressed the AtDB to delegate cases ofstaffmisconduct 

that do not constitute fraud or corruption to Human Resources personnel, enabling 

the Integrity and Anti-Corruption Department (IACD) to dedicate its time to 

6 The rating agency reports can be accessed at: http://www.afdb.org/enlabout-us/financial-informationlratings/ 

7 http:/ /www.afdb.org/ en/projects-and-operations/procurement/list -of-debarred-entities/ 
corruption cases. In February 2013, the Human Resources Committee considered 

a proposal to establish a new office that would be responsible for these cases of 

misconduct. In addition, the Board has taken steps to strengthen IACD by 

approving the creation of two separate divisions, a preventative division and an 

investigation division. 

• Transparency and Accountability: The AIDB continues to implement its new policy on 

disclosure and access to information, with the aim of strengthening the transparency and 

accountability of the AID B. In line with best practices across the MDBs, the new policy 

includes a shift from a "positive list" approach, in which disclosure is considered 

exceptional, to a presumption of disclosure, or "negative list" approach, in which 

disclosure is considered the norm. The policy sets deadlines for responding to requests 

for information and establishes an appeals process for requests that are denied. Since the 

last report, the AIDB has released detailed guidelines to staff and has begun an awareness 

campaign both within the AIDB and externally. There is also now an online process that 

helps individuals find documents and request items that do not appear on the AIDB 

website. 8 

• Focus on Core Mission: The AIDB began preparation of a new Long Term Strategy 

(LTS) in late 2011 and, after a thorough consultation process, the LTS was approved by 

the Board in April2013. The LTS articulates an overarching focus on inclusive and 

green growth. It consolidates the AfDB's successes in infrastructure, regional 

integration, governance, and private sector development, while striving to respond to the 

changing needs of a diverse continent that includes fragile states, newly emerging frontier 

markets, and North African nations in transition. The LTS is designed to make the AIDB 

more outcome-oriented. 

• Results: The AIDB recently published its Annual Development Effectiveness Review 

(ADER), which assesses the AIDB's development impact by providing an overview of 

Africa's development trends and describing the AIDB's contributions to those results.9 

The AIDB is also reviewing its results measurement framework to ensure that it is 

measuring relevant variables. 

In addition to the ADER, the AIDB has published three thematic Development 

Effectiveness Reviews on governance, regional integration, and fragile states, which 

indicate that progress is being made both in project development and outcomes. For 

example, with regard to regional integration, AIDB financed projects have decreased wait 

times at ports from 31 days in 2005 to 26 in 2012. Also, the Governance Development 

8 Available at: htto://www.afdb.org/en/disclosure-and-access-to-infonnation/ 

9 Similar to the World Bank's Corporate Scorecard, the ADER uses four tiers: (1) level one measures Africa's 

overall development progress in nine areas, including growth, human development, and public service delivery; (2) 

level two presents the aggregate outputs of AIDB operations in the same nine areas, showing how the AfDB has 

contributed to Africa's development; (3) level three assesses how well the AIDB manages its portfolio of operations; 

and (4) level four describes how well the AIDB manages its institutional effectiveness, measured against progress in 

areas like decentralization and human resource management. 
Effectiveness Review concludes that the AfDB is helping some countries reduce the time 

to both start a business and pay taxes. 

The AfDB is implementing a new Results Reporting System that will provide a platform 

to track projects and results and build better results-based monitoring and management 

tools. 

(1) Implementing specific reform commitments agreed to by the /DB in Resolution AG-7110 

"Report on the Ninth General Capital Increase in the resources of the Inter-American 

Development Bank as approved by the Governors on July 11, 1010, including transfers of at 

least $100,000,000 annually to a grant facility for Haiti." 

As part of the GCI agreement, the United States successfully pressed for the inclusion of a 

comprehensive midterm review by the IDB' s independent Office of Evaluation and Oversight 

(OVE) of all agreed reforms. The breadth and depth of this commitment is unprecedented, and 

Treasury applied the full measure of our influence to achieve it. The scope of OVE' s review 

squarely addressed whether the reforms are on track to be completed under the agreed 

timeframes, and extended beyond implementation to consider the actual effectiveness of each 

reform. OVE's review proposed several mid-course corrections to improve the effectiveness of 

certain reforms, as outlined below. 

In December 2012, OVE completed the review and delivered 22 papers detailing progress on 

each reform to the IDB Board. 10 In each ofthe 22 evaluations, OVE provided recommendations 

on how to strengthen reform implementation. 

OVE's overall judgment was that the IDB had made significant progress in fully implementing 

nearly all of the agreed reforms, although OVE's review noted that some ofthese reforms had 

not been as effective as intended. Management responded constructively to OVE's findings, 

agreeing with most of the conclusions and recommendations. 

In terms ofreformsjudged to be highly effective, OVE's review highlighted changes in financial 

and risk management and information disclosure. OVE's review also praised !DB's progress in 

combating fraud and corruption, enhancing environmental and social safeguards and 

implementing the Development Effectiveness Framework. OVE's review negatively assessed 

the Independent Consultation and Investigation Mechanism (ICIM), the Macroeconomic 

Stability Assessments (MSAs) and the IDB's work on private sector development. Furthermore, 

OVE's review raised serious concerns about Haiti country programming, citing troubling 

implementation problems, cost overruns and delays. 

We provide more detail on the key findings from OVE's review below: 

• Financial and Risk Management: The Income Management Model (IMM) established a 

firm link between the !DB's loan charges and its administrative expenses. OVE's review 

10 All of these reports are publicly available on the IDB website at: 

http://www .iadb .org/ en/ office-of-evaluation-and-oversight/ ove-homepage. 15 56 .html 
confirmed that the IMM (along with other financial management reforms in the capital 

adequacy policy and the risk management framework) had been fully implemented and 

working as intended by creating budgetary discipline. OVE's review noted that the 

parameters imposed on the IMM were stricter than those at comparable institutions, and 

thus recommended that IDB management periodically review the mechanism to see if the 

IDB could stretch its balance sheet further without jeopardizing its AAA credit rating or 

its financial stability. 

• Information Disclosure: The GCI agreement required that the !DB's information 

disclosure policy be revised, and the new policy took effect on January 1, 2011. OVE's 

review concluded that the new and more expansive policy was a major step forward, and 

confirmed that it was broadly consistent with other MDBs. However, OVE's review 

criticized the policy's approach towards excluding "country specific information" (i.e., 

information that the country might consider to be confidential) as too accommodating, 

and recommended that this exception be narrowed significantly. IDB management 

agreed, and will bring forward a proposal to address this concern. 

• Combating Fraud and Corruption: OVE's review found that the IDB has made 

substantial progress in combating fraud and corruption in IDB operations and promoting 

a high level of staff integrity within the IDB. Reforms have included strengthening the 

independence of the Office of Institutional Integrity, adopting an improved sanctions 

structure and finalizing a cross-debarment agreement with other MDBs. Under this 

policy, debarred firms are ineligible to participate in any MDB-financed contract. 

Further, ineligibility may extend to any finn or individual that directly or indirectly 

controls the debarred finn or any finn that the debarred finn directly or indirectly 

controls. Currently, the IDB website contains information on 164 firms and 134 

individuals sanctioned under its cross-debarment policy. This includes an additional 58 

firms and 14 individuals since the last GCI report. 11 

• Independent Consultation and Investigation Mechanism (ICIM): The ICIM is a 

mechanism through which people affected by IDB projects can register complaints about 

harm that they believe that they have suffered due to IDB projects as well as instances in 

which they believe that the IDB has not adhered to its policies. In its evaluation of the 

ICIM, OVE's review identified gaps in the original policy that have undermined the 

ICIM's effectiveness, particularly in terms of the respective roles and authorities (i.e., 

that there was an absence of clear accountability). OVE's review highlighted that these 

gaps had been exacerbated by tensions among personnel. In response to these concerns, 

the IDB Board appointed an interim director to oversee existing ICIM operations and 

personnel while the mechanism is under revision. An external consultant with expertise 

in this area will be hired to help the Board revise the mechanism. The IDB has 

committed to publicly consult with all interested stakeholders before a final ICIM 

structure is put in place, likely by end 2013. 

11 Available at: 

htto://www.iadb.org/en/topics/transparency/integrity-at-the-idb-group/sanctioned-fmns-andindividuals.l293.html 
• Macroeconomic Sustainability Assessment (MSA): In response to the GCI mandate to 

safeguard against lending into unsustainable environments, the IDB created a process 

under which the IDB undertakes rigorous assessments of all 26 borrowing member 

countries' macroeconomic frameworks and makes a determination on the sustainability 

of the macro policy environment. Under a finding of''unsustainable," new funding is 

automatically constrained unless the IDB Board overrides this constraint. OVE's review 

concluded that while the MSA process has been fully implemented, its effectiveness and 

utility are questionable. Specifically, OVE's review raised concerns about the cost to the 

IDB of conducting these assessments, the concentration of decision making with the 

Chief Economist, the duplication of the work already performed under the Independent 

Macroeconomic Assessments (IMA), and the ability of the MSA to limit effectively the 

risk to IDB resources. OVE's review recommended that the MSA process be replaced by 

more robust risk assessments, and strengthened and publicly disclosed IMAs. IDB 

management concurred with this recommendation. The IDB Board and management 

established a task force to review potential ways to improve the MSA process consistent 

with the GCI-9 mandate. Deliberations on a way forward will continue through the end 

of this year. 

• Private Sector Development: OVE's review found that, while the IDB has taken all the 

formal steps outlined in the GCI-9 to improve private sector operations, these steps have 

not been effective. OVE's review pointed to a lack of vision on the purpose of private 

sector lending in the IDB and insufficient coordination among its four private sector 

windows (despite management's efforts to enhance coordination). OVE's review 

recommended a complete restructuring of the !DB's private sector operations to improve 

development effectiveness and impact, as well as increase coordination both among the 

private sector windows and between the public and private sector programming. In 

response to OVE's review, IDB Governors instructed the IDB to undertake a thorough 

review of its private sector operations with the aim of improving effectiveness and 

efficiency. Management is working on a vision for the !DB's private sector operations as 

well as possible structural options to achieve increased coordination. 

• Haiti: The 'OVE review affirmed the importance of the $200 million per year transferred 

from the !DB's net income into the Haiti Grant Facility. However, the review concluded 

that pressure to disburse the total annual allotment has come at the expense of resultsbased programming and development effectiveness. While recognizing the enormous 

challenges of working in Haiti, OVE's review pointed to troubling implementation 

problems, cost overruns, and delays. The review argued that the pressure to disburse has 

led to a focus on large infrastructure and fast-disbursing projects, rather than on those 

projects that may have the most impact on poverty reduction or economic growth. 

OVE's review recommended that country programming should better match Haiti's 

absorptive capacity. Management disagreed with this assessment, arguing that 

programming is based on six clearly articulated policy priorities and is not a result of 

undue pressure to disburse the annual transfer of funds. The IDB Board has made clear 

its support for the annual transfers, while urging that country programming be improved 

to match Haiti's absorptive capacity. 
(3) Implementing procurement guidelines that maximize international competitive bidding in 

accordance with sound procurement practices, including transparency, competition, and costeffective results for borrowers. 

World Bank: 

The Bank launched the first ever comprehensive review of its procurement policies in May 2012 

to assess how these policies should be updated in light of an evolution in the Bank's lending 

portfolio, changes in global procurement practices, and development of capacity in some 

countries to manage procurement processes. While the Bank's procurement policies are 

comprehensive and have set the standard for other international institutions, there are claims that 

the policies are also extremely complex, proscriptive, and challenging to implement for many 

borrowers and Bank staff. The goal of the review is to develop a new set of procurement 

policies that are transparent, equitable and efficient, encourage competition, and strengthen 

borrower procurement processes and systems. 

In the initial phase of the review (May 2012- December 2012), the Bank conducted 

consultations with hundreds of stakeholders worldwide. Summaries of the consultations, along 

with additional background and analysis, are posted on the Bank's procurement review 

webpage. 12 The Bank also established an International Advisory Group on Procurement (IAGP) 

to advise on the procurement review. The IAGP is comprised of procurement experts from 

governments, international organizations and private companies. U.S. participants include 

Microsoft, General Electric, and the former Administrator for Federal Procurement Policy. U.S. 

government agencies participated in consultations with other stakeholders that the Bank hosted, 

and met separately with Bank staff to exchange views. Treasury briefed Hill staff on the 

outcomes of the initial phase. 

Following the initial phase of the review, the Bank circulated a draft framework for procurement 

to its Board. The framework includes a number of proposed improvements to the Bank's 

procurement policy, such as a more robust complaints mechanism for bidders, greater 

engagement by the Bank across the entire contract cycle, and a commitment to strengthen the 

capacity of both borrowing countries and Bank procurement staff. A key issue is how the Bank 

would assess the capacity of a borrower's procurement systems. Bank management is in the 

process of revising the framework paper, after which the Bank will undertake a second set of 

consultations with external stakeholders. 

AIDB: 

As noted in the previous GCI report, the AIDB approved and implemented a new cross debarment 

policy under its procurement guidelines in July 2012, bringing it in line with the other MOBs. 

Under this policy, sanctioned entities at any MDB are ineligible to bid on AIDB contracts and 

these entities will be published on the AIDB's external website. 

12 Available at: 

http://web.worldbank.org/WBSITE/EXTERNAUPROJECTS/PROCUREMENT/O .. contentMDK:23226925-pageP 

K:8427l-piPK:84287-theSitePK:84266,00.html 
In addition, the AfDB has expanded its efforts to help borrowing countries improve their 

procurement procedures. The AfDB undertook a review of the National Competitive Bidding 

procedures of most borrower countries to assess their quality. This review is helping the AIDB 

assist countries in pursuing procurement reform. In addition, more AfDB procurement 

specialists are being housed in field offices, allowing for closer supervision of procurement 

activities at the country level. Indices relating to procurement have improved in recent years, as 

procurement contracts are now being processed more quickly. For procurement of consulting 

services, the average time elapsed from receipt of the draft Request for Proposal (RFP) by the 

AfDB from the borrowers to the signing of the contract is about 296 days, down by 56 days from 

2010. For procurement of goods and works, the average time elapsed from receipt of the draft 

bidding documents by the AfDB from the borrowers to the signing of the contract is about 291 

days, a reduction of87 days from 2010. 

As noted in the previous GCI report, the IDB approved and implemented a new sanctions policy, 

bringing it in line with the other MDBs. This includes a cross-debarment policy, described 

above in Section 2 on OVE's review of the Bank's progress in combating fraud and corruption. 

(4) Implementing best practices for the protection ofwhistleblowers from retaliation, 

including best practices for legal burdens of proof, access to independent adjudicative bodies, 

results that eliminate the effects of retaliation, and statutes of limitation for reporting 

retaliation. 

World Bank: 

As noted in the previous GCI report, the World Bank's most recent whistleblower protection 

policy, issued in 2008, expanded the scope of protection for whistleblowers to be consistent with 

international best practice. 

Since the last report, the three units that deal with whistleblower retaliation have received the 

following cases, covering the period from July 1 to December 31, 2012: 

Office of Ethics and Business Conduct (EBC): EBC reports that it received three cases involving 

claims of retaliation in response to whistleblowing. One of the three cases is still open and being 

investigated. In the other two cases, the complaining staff member informed EBC investigators 

that they were not reporting a retaliation claim, but wanted guidance in case of retaliation by 

their supervisors in the future. EBC provided guidance to the staff member on steps that they 

could take in the case of retaliation. 

In EBC's annual report for 2011-12, the Bank published aggregate data on whistleblower 

retaliation cases received and resolved, and it plans to do so in future years. 

Peer Review Services (PRS): PRS reports that it received two cases involving claims of 

retaliation in response to whistleblowing. Both of these requests were resolved in the first 
quarter of2013. In one case, the PRS Panel dismissed the claim. In the other, the Panel found in 

favor of the staff member. Specifically in this case, the Panel concluded that, with respect to the 

retaliation claim, management failed to show by "clear and convincing evidence" that it would 

have undertaken the same employment actions (failing to provide the staff member with a work 

program and integrate her/him into the work of the department) absent the staff member's 

protected activity (raising concerns about unethical behavior by previous management). The 

Panel recommended compensation in the amount of six months' net salary. Management 

accepted the recommendation. 

Administrative Tribunal: The Tribunal neither received nor decided any whistleblower cases in 

the second half of2012. 

In addition to information provided by the units that deal with whistleblower retaliation, a total 

of 33 staff and consultants made protected disclosures to the Integrity Vice Presidency (INT) of 

alleged misconduct that falls within the framework of the Bank's Whistleblower Policy. No 

retaliation cases were filed with INT during that time. 

AtDB: 

As part of the ongoing reforms relating to the restructuring of the integrity function at the AtDB, 

the Integrity and Anti-Corruption Department (IACD) is conducting a comprehensive review of 

the 2007 Whistleblowing and Complaints Handling Policy. While the existing policy is broadly 

consistent with best practice, the review aims to further strengthen the mechanisms for 

combating corruption. 

Some areas in which the AtDB may seek to add clarity to the existing policy include: (i) 

reporting and confidentiality; (ii) statute oflimitations; (iii) protection ofwhistleblowers 

(internal and external); (iv) retaliation and standards of proof; (v) mechanisms for conciliation; 

and (vi) streamlined responsibilities. 

Since the last GCI report, an investigation of an outstanding 2011 retaliation case was completed. 

That case had been filed by an AtDB staff member who complained of discrimination and 

marginalization from his/her department's management in retaliation for reporting corruption. 

As an interim measure, AtDB Management agreed to the staff member's request to be 

transferred to another department while the investigation was ongoing. The investigation of the 

alleged corruption that was reported by the whistleblower is ongoing. 

There have been no new complaints of retaliation under the whistleblowing policy since the last 

report. 

IACD is currently preparing its 2011 and 2012 annual reports, which will include, if applicable, 

data on receipt and resolution of whistleblowing complaints by the AfDB. 
As noted in the previous GCI report, the IDB issued a new whistleblower policy in mid-October 

2012 that incorporated the recommendations of the consulting firm Global Compliance, which 

was engaged at the urging of the United States to conduct a comprehensive review of the lOB's 

ethics, conduct, and grievance systems. 

In March 2013, the IDB amended the Statute of its Administrative Tribunal, which has 

jurisdiction over whistleblower cases. The revised provisions of this Statute incorporate most of 

the relevant recommendations made by Global Compliance. Key improvements relevant to 

whistleblower protection under the revised Statute include: 

• Increasing the statute oflimitations for claims from 90 to 120 days, consistent with best 

practice for international organizations, and permitting waivers of this statute of 

limitations for whistleblower cases; 

• Permitting interim relief in appropriate cases while claims are pending; 

• Allowing successful claimants to receive costs and attorneys' fees, while permitting 

tribunals to require that a claimant pay up to six months' salary for the lOB's costs and 

legal fees if the tribunal finds her/his case to be "malicious or abusive;" and 

• Eliminating the cap on damages in instances when IDB management determines that 

reinstatement or specific performance is not practicable or in the best interests of the 

IDB. 

In addition, on April I, 2013, the IDB issued its new policy on formal and informal mediation, 

which allows whistleblowers to take their complaint in the first instance to nonbinding mediation 

before an independent, external professional mediator. (If the mediation is unsuccessful, 

complainants can take their claims to the Administrative Tribunal.) 

The IDB reports that, in 2012, its Ethics Office received six requests from whistleblowers for 

protection from retaliation. For five of these requests, the Ethics Office has completed its 

investigations, which are due to be reviewed by the Ethics Committee later this year. The sixth 

request was determined, after investigation, not to involve any alleged retaliation, and was 

instead a conflict between an employee and supervisor that was referred to the Human Resources 

Department for resolution. 

The lOB Ethics Office's annual report for 2012 is still in progress. The IDB will be publishing 

aggregate data on whistleblower retaliation cases received and resolved for 2012 and in future 

years. 

(5) Requiring that each candidate for budget support or development policy loans provide an 

assessment of reforms needed to budgetary and procurement processes to encourage 

transparency, including budget publication and public scrutiny, prior to loan approvaL 
World Bank: 

As noted in the previous GCI report, the World Bank requires that, prior to seeking Board 

approval for a development policy loan (DPL), a borrowing country must submit to a review of 

its public financial management and procurement systems and, if necessary, commit to timebound actions to address deficiencies and help mitigate risks. In November 2012, the Bank 

released a report reviewing DPL performance in borrowing countries. The report concluded that 

a larger share ofDPL commitments went to countries with stronger fiduciary and governance 

environments. This was borne out in the data analyzed in the report, which found that between 

2005 and 2011, less than two percent of total development policy lending was provided to 

countries with low scores (2 or below), as measured by "quality of budgetary and financial 

management." 13 

AfDB: 

As noted in the previous GCI report, in 2012 the AfDB adopted a strengthened operational policy 

governing its budget support operations, including a provision requiring budget transparency as a 

condition for budget support. Before providing budget support, the AIDB requires that a country 

must have a satisfactory assessment against a four-pillar Fiduciary Risk Management Framework 

(budget, procurement, audit and reporting, and corruption) for a policy based operation, and 

against a full range of fiduciary assessments. 

In borrowers with weaker country systems, the AfDB considers budget support only if the 

country commits to an adequate program of reform in its public financial management and there 

is demonstrated evidence of progress. Loan conditions that require significant improvement in 

public financial management are used to help mitigate the fiduciary risks associated with budget 

support loans in these countries. 

As noted in the previous GCI report, the IDB adopted formal guidelines in April 2005 for the 

preparation and implementation ofbudget support operations (known at the IDB as policy-based 

loans). These guidelines require assessments of a borrowing country's public financial 

management systems and identification of steps needed to strengthen the borrowing country's 

national fiduciary systems. 

While these guidelines have not been updated, they are now de facto linked to a process 

approved in 2011 requiring the IDB Chief Economist's office to provide independent 

assessments of a country's macroeconomic sustainability (the aforementioned MSAs), including 

assessments of financial management and budget outlook. In the event that the MSA concludes 

that there is a strong likelihood of unsustainable macroeconomic conditions in a given country 

(e.g., poor financial outlook), the country could see net aggregate exposure frozen in the next 

13 This measure is one of the Bank's "country policy and institutional assessment" scores, which rate a range of a 

country's policies on a scale of 1 (low) to 6 (high). 
programming year. This process may change, however, given OVE's recommendations for 

revision of the MSA, as described in section (2) above. 

(6) Making publicly available external and internal performance and financial audits of such 

institution's projects on the institution's Web site; 

WorldBanlc 

The Bank has continued to make its operational, project, and financial data open to all 

stakeholders. The projects and operations website offers detailed information on over 14,000 

lending projects and over 150 countries from 1947 onwards. These data are available via an 

Application Programming Interface {API) allowing for easy integration with other Bank products 

such as the World Bank Data Country Pages and the World Bank Finances Mobile App. 

During the second year of implementation of the Access to Information Policy, the number of 

documents available to the public increased by more than 12 percent, amounting to more than 

14,800 newly declassified documents. During FY 2012, there were more than 1.2 million visits 

to the Documents and Reports website; users viewed more than five million pages and 

downloaded more than 1.2 million files. The Bank's dedicated Access to Information website 

allows the public to directly search and browse more than 134,000 documents, including 63,000 

operational documents, more than 15,000 legal agreements, and more than 41,500 publications 

and research reports, among others. In FY 2012, the number of public access requests that came 

directly to Access to Information staff increased by 8.8 percent. Approximately 78 percent of 

these requestors received a comprehensive response within 20 working days. 

Since March 2013, the Bank has published information on its own administrative contracts. The 

Corporate Procurement Unit has made available on its public website a summary of its policies 

and procedures; copies of its standard contract terms and conditions; a guide to doing business 

with the Bank; its vendor eligibility policy; and a listing of current business opportunities, as 

well as all contract awards for contracts valued over $250,000. 14 The Bank is also promoting 

greater disclosure and monitoring of contracts at the country level through its leadership of the 

Open Contract initiative. 

Capturing the volume of information acquired from the external audits and then monitoring that 

data is time intensive and requires constant maintenance and up-to-date technology. To improve 

the quality and timeliness of the data captured by the external financial audits, the Bank is 

modifying the financial management platform to strengthen audit report monitoring and 

documentation. 

AfDB: 

As noted in the previous GCI report, the AfDB policy on access to information presumes 

disclosure, except for a short "negative list." This policy had been approved prior to the previous 

14 The World Bank vendor guide is available at: 

http:/ /siteresources. worldbank.org/EXTCORPPROCUREMENT /ResourcesN endorGuide.pdf 
GCI report, and came into effect in February 2013. In the Information Disclosure Handbook 

(also launched in February 2013), the AfDB makes specific reference to the disclosure of audited 

financial statements in the list of items to be posted on the website upon receipt from 

borrowers. 15 In addition, like its peers, the AfDB, also posts overview assessments of project 

performance on its web site. 

The IDB is in the final stages of implementing changes needed to fully harmonize its 

implementation guidelines for its Access to Information Policy (AlP) with those of its peers. 

These changes will allow for disclosure of the financial statements ofiDB projects, provided that 

the authorities of a country in which a project is undertaken do not object to their publication. If 

there is an objection, the country's authorities are responsible for providing redacted statements 

that provide financial information at a level acceptable to the IDB. These changes are reflected in 

amendments to the guidelines to the AlP that were adopted and shared with the IDB Board in 

February 2013, and are posted on the IDB website. 16 

Further, in August 2012, the IDB Board approved the IDB President's appointment of the 

members of the Access to Information external review panel, which will review appeals in which 

claimants seek to reverse decisions to withhold information. In 2012, the IDB established an 

office tasked specifically with implementing the AlP, which includes providing ongoing 

technical support to different IDB units. New actions taken to strengthen implementation of the 

AlP include: improvements to the external website; creation of document "classification 

instructions;" design of training programs for publishers; and introduction of coordination 

activities between various IDB units responsible for the AlP's implementation. 

As indicated earlier (See Information Disclosure under Question 2), OVE concluded that the 

!DB's new AlP policy was a major step forward, and confirmed that it was broadly consistent 

with other MDBs while expressing concerns that the exceptions policy to country specific 

information was overly broad. 

(7) Adopting policies concerning the World Bank's proposed Program for Results (P4R) to 

limit P4R to no more than 5 percent of annual World Bank lending as a pilot for a period of 

not less than two years; require that projects with potentially significant adverse social or 

environmental impacts and projects that affect indigenous peoples are either excluded from 

P4R or subject to the World Bank's own policies; require that at the close of the pilot there 

will be a thorough, independent evaluation, with input from civil society and the private sector, 

to provide guidance concerning next steps for the pilot; and fully staff the World Bank 

Group's Integrity Vice Presidency, with agreement from Borrowers on the World Bank's 

jurisdiction and authority to investigate allegations of fraud and corruption in any of the 

World Bank's lending programs including P4R; 

15 Available at: http://www.afdb.org/fileadminluploadslafdb/Documents/PolicyDocuments/DAI%20Staffl/o20Handbook.pdf 

16 Available at: http://www.iadb.org/en/about-us/access-to-informationlsimultaneous-disclosure,7305.html?#poli 
Since the launch of the Program for Results (P4R) instrument in January 2012, the Board has 

approved seven operations in five sectors, totaling $1 .03 billion in Bank commitments and 

leveraging another $1.4 billion in government and partner funding. Total funding falls well 

within the agreed upon five percent cap. None of these projects, which are detailed below, is a 

Category A project with significant adverse environmental impacts, as agreed when the Bank 

approved the P4R instrument. 

• Ethiopia: $100 million in performance-based assistance will be provided to improve the 

delivery and use of a comprehensive package of maternal and child health services. The 

Health Millennium Development Goals (MDG) Program will help to accelerate progress 

towards meeting the maternal health MDG, sustain the gains made in the child health 

MDG, and strengthen health systems in Ethiopia. Bank financing is being pooled with the 

MDG Performance Fund, comprised of nine development partners. In addition, technical 

support for strengthening monitoring and evaluation systems, especially for the annual 

rapid facility assessments, will be provided through a Bank administered Health Results 

Innovation Trust Fund grant. 

• Morocco: A $300 million loan will contribute towards the second phase of the $2.1 

billion Government of Morocco National Initiative for Human Development (INDH). 

The project finances income-generating activities, improved access to basic services, and 

key infrastructure in the poorest regions of Morocco. 

• Nepal: A $60 million loan to the Government ofNepal will support the Department of 

Roads' $147 million strategic roads network bridge program with the construction of a 

series of small bridges. The project supports the country's vision of providing safe, 

reliable and cost-effective bridges. It will maintain 89 bridges, many over 35 years old, 

complete major and minor maintenance on more than 300 bridges, and construct 121 new 

bridges. 

• Tanzania: $255 million in performance-based assistance will be provided to 18 (out of 

26) Urban Local Government Authorities in Tanzania to improve urban service delivery. 

Local governments will use grant proceeds to improve roads, public spaces for market 

and trade, and solid waste management, among other small-scale infrastructure. 

• Uganda: $150 million will be provided to improve the institutional performance of 

Program Local Governments to improve urban service delivery. The project includes: 

road rehabilitation and upgrading; urban solid and liquid waste management; water and 

sewerage extension to peri-urban areas, markets and abattoirs; and bus, truck, or taxi 

stands. 

• Uruguay: A $66 million loan supports the existing program to rehabilitate and maintain 

the national road infrastructure and improve public sector capacity to plan, regulate, and 

monitor transport and logistics services. The project supports the government's broader 

strategy of improving the quality of road infrastructure and increasing coverage. 
• Vietnam: $200 million in performance-based assistance will be provided to expand access 

to water supply and sanitation services to rural areas in eight Vietnamese provinces. As 

part of The National Target Program Project, this funding will provide safe clean water 

for 1. 7 million people and improved sanitation for 650,000 people living in eight 

provinces in the Red River Delta. The program will strengthen governance systems for 

results-based service delivery, as well as gender-based monitoring and reporting. 

• Kenya: $250 million in performance-based assistance will be provided to improve 

Kenya's social safety net program with cash transfers to the poorest and most vulnerable 

populations. The program will also support nearly 300,000 households who will receive 

bi-monthly payments of about $60. 

As noted in the previous GCI report, the Office of the Integrity Vice President's (INT's) Office 

has noted that the P4R Anti-Corruption Guidelines are incorporated in all P4R binding legal 

agreements. INT has also confirmed that the legal agreements provide it clear authority to 

investigate instances of fraud and corruption in these projects. Further, affected persons will also 

have redress under the World Bank's Inspection Panel. 

(8) Concerning the World Bank, strengthening the public availability of information 

regarding International Finance Corporation (IF C) subprojects when the IFC is funding a 

financial intermediary, including-(A) requiring that higher-risk subprojects comply with the 

relevant Performance Standard requirements; and (B) agreeing to periodically disclose on the 

IFC Web site a listing ofthe name, location, and sector of high-risk subprojects supported by 

IFC investments through private equity funds. 

IFC's primary focus in working with financial intermediaries (Fis)- including private equity 

funds -is to increase access to finance in ways that lead directly to poverty reduction and job 

creation. IFC seeks to work with entities that are socially and environmentally responsible and 

that share financial inclusion goals. 

All IFC projects go through a screening process for environmental and social issues, and the FI 

in which it is investing is required to have a satisfactory environmental and social management 

system in place. The IFC reviews the client environmental and social management system and, if 

needed, establishes an action plan to address any shortcomings. 

The updated IFC Sustainability Framework, which entered into effect in January 2012, also 

requires that higher-risk sub-projects (i.e., projects subsequently financed by the FI) also comply 

with its Performance Standards. In addition, the IFC has agreed to periodically disclose 

information on the name, location, and sectors of high-risk sub-projects that have been supported 

by the IFC under the updated Sustainability Framework through private equity funds, subject to 

regulatory constraints and market sensitivities. 

The timing of IFC disclosure of private equity fund sub-project depends on: 1) the date on which 

a commitment by the IFC is made to the private equity fund operations; 2) the timing of 

reporting by the private equity funds to the IFC; and 3) when each private equity fund actually 

invests in a high-risk subproject. 
The IFC typically gets written reporting from its private equity fund clients one year after 

commitment through an "Annual Monitoring Report." Once reporting begins, the IFC 

anticipates that each private equity fund's information on sub-projects will be updated annually. 

The IFC's Office of the Compliance Advisor/Ombudsman (CAO) recently conducted an audit of 

a sample of the IFC's FI investments. The audit found that the majority of the investments were 

in accordance with applicable environmental and social policies and procedures. In addition, the 

CAO noted that the increase since 2008 in staff resources and funding for environmental and 

social supervision in FI investments had a significant positive impact on the level and quality of 

client engagement and compliance. However, the audit also found that the IFC does not have a 

methodology for determining if its approach achieves the IFC's core objective of doing no harm 

or improving environmental and social outcomes at the sub-project level. IFC management is 

preparing an action plan to address the weaknesses uncovered in the CAO audit.