World Bank underpins social and environmental risk with procurement rules

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The World Bank is using specific procurement framework measures to ensure efficiency and fairness.

Lead procurement specialist at the World Bank Tesfaalem Gebreiyesus has told an international conference that the bank has a proscribed methodology for managing projects with a high environmental and or social risk.

The World Bank’s procurement framework sets value for money, economy, integrity, efficiency and fairness as central to their outcomes, which has meant putting specific measures in place.

Procuring with environmental and social impact

Gebreiyesus explained: “Our procurement processes specify standard international contracts to be used for the project and we introduced specific measures to complement some aspects of the contracts to fit with the bank’s policies on things like metrics for environmental factors.

“For example, risk management has to cover our environmental framework, so in our contracts we require immediate notification of incidents or accidents that have, or are likely to have, significant adverse effect on the risk to the environment, affected communities, public and personnel.

“We also require supply chain companies to manage significant environmental and social risks in the supply of materials. These include measures against forced labour, child labour, safety issues and obtaining natural resource materials. And to reflect past experiences, we require them to have a code of conduct on the behaviour of their people.”

Disqualification for SEA/SH contractual non-compliance

The World Bank uses FIDIC international contracts that include provisions for many of these wider concerns, but the bank has specific measures for the disqualification of firms from procurement over past compliance issues.

These specific measures, which apply to works contracts under Projects assessed as high SEA/SH risk, include a two-year disqualification unless an arbitration awards in a contractor’s favour within the period.

The World Bank also sees a valuable role of DAAB as an independent and impartial body enhanced to include review of contractor’s compliance with its social and environmental contractual obligations during site visits/meetings, and referrals and deciding on contractor’s (any subcontractor) compliance to its contractual obligations

Gebreiyesus said: “We have particular needs set out in our procurement processes to reflect contract disqualification mechanisms. This applies to any contractor or subcontractor.”

Tesfaalem Gebreiyesus was speaking at the FIDIC International Contract Users’ Conference held in London on 30 November 2022 during a session examining multilateral development bank procurement.