World Bank uses DAABs to address Gender Based Violence

By Sam Thyne, Associate, Fenwick Elliott

Introduction

Dispute Adjudication Boards (“DABs”) have been a feature of the FIDIC suite of contracts since the 1995 Orange Book. In 2017, the DAB evolved to include a dispute avoidance function and was re-tooled as the Dispute Avoidance/Adjudication Board (“DAAB”). 

Whilst the focus of dispute boards is avoiding and resolving disputes that arise on a project, the World Bank has seen an opportunity to expand this role further, taking advantage of the dispute board’s unique position as an objective third party, with extensive experience of the contract. In this article, we discuss the World Bank’s recent initiative to use dispute boards to address gender based violence (“GBV”) occurring in, or stemming from, projects that the World Bank provides funding for. 

Background to initiative

The World Bank works extensively with developing countries in its aim of ending poverty and boosting prosperity, guided by the priorities of creating sustainable economic growth, investing in people, and building resilience. To this end, a core function of the World Bank’s work is providing low-interest loans, zero to low-interest credits, and grants to developing countries. These are provided to support a wide array of investments, including infrastructure projects. With these investments, the World Bank understandably exercises considerable oversight and mandates many aspects of the project, including procurement processes and the form of contract that the work is to be carried out under. 

While, by no means, an issue exclusive to developing countries, several World Bank funded projects have had funding cancelled due to the discovery of endemic GBV on, and stemming from, the projects. For instance, in 2015, the World Bank cancelled funding on a roading project in Uganda where numerous allegations of adverse environmental and social impacts stemming from the project’s construction works were made, including serious allegations of road workers’ sexual relations with minor girls in the community, and sexual harassment of female employees.1

Incidents such as these prompted the World Bank to form a GBV task force, to strengthen the institution’s response through its projects to issues involving sexual exploitation and abuse. The Task Force had nine months to:2

• Develop a set of actionable recommendations for the President and the Bank’s Management on ways to strengthen prevention, design, reporting and supervision interventions in World Bank Group operations, including infrastructure construction such as roads, energy, water and sanitation, slum upgrading and resettlement; and
• Identify effective ways for the World Bank to increase coordination with multiple stakeholders, locally, nationally and internationally, to prevent and respond to gender-based violence.

In reporting back, the Task Force made numerous recommendations, including that projects identified as high risk of sexual exploitation and abuse trigger a series of mandatory requirements. The requirements included a demonstration by bidders that they have the capacity to manage risks related to sexual exploitation and abuse, such as providing indications of appropriate technical capacity and key personnel. A further mandatory measure required hiring Third-Party Monitors to ensure provisions to prevent and respond to sexual exploitation and abuse are in place and functioning.3

Gender Based Violence

Gender Based Violence is an umbrella term which includes many harmful behaviours. The World Bank have focussed on addressing two behaviours that fall within this umbrella, Sexual Exploitation and Abuse (“SEA”) and Sexual Harassment (“SH”). These terms are defined (contractually in World Bank procurement documents) as:

• Sexual Exploitation and Abuse:
  • Sexual Exploitation - any actual or attempted abuse of position of vulnerability, differential power or trust, for sexual purposes, including, but not limited to, profiting monetarily, socially or politically from the sexual exploitation of another.
  • Sexual Abuse - the actual or threatened physical intrusion of a sexual nature, whether by force or under unequal or coercive conditions.
• Sexual Harassment:
  • Unwelcome sexual advances, requests for sexual favours, and other verbal or physical conduct of a sexual nature by the Contractor’s Personnel with other Contractor’s or Employer’s Personnel.

World Bank Approach

In order to implement the recommendations and address SEA/SH the World Bank have turned to a tried and tested tool within their tool kit by enhancing the DAAB found within the FIDIC standard form contract so that it can also serve as the third party monitor required by the Task Force. In November 2020, the World Bank announced an enhanced role for DAABs in monitoring contractors’ and subcontractors’ compliance with obligations to prevent SEA/SH.

The strategy makes use of the fact that the World Bank have required the use of dispute boards on projects ever since dispute boards were included in the 1999 FIDIC Contract suite. This is a policy which is set to continue with the 2017 FIDIC Contracts, which have been endorsed by the World Bank and which the World Bank have entered into a five-year arrangement with FIDIC to use.4 The World Bank now includes the 2017 Red Book in its Standard Procurement Documents, which incorporates the contract’s DAAB mechanism.

This additional role for DAABs applies to projects which the World Bank assesses as having a high risk of SEA/SH, and which are procured using the World Bank’s Standard Procurement Documents after 1 January 2021. The contracts on these projects include specific SEA/SH prevention and response obligations. For instance, examples of the Contractor’s obligations include:

• Before mobilising to site, obtaining the Engineer’s “no objection” to the measures it proposes to manage environmental and social risks (including Code of Conduct);
• Ensuring that personnel are made aware of the Code of Conduct (which outlines examples of SEA and SH behaviours) and understand the consequences of engaging in prohibited behaviours;
• Requiring its subcontractors comply with the SEA/SH obligations and accept consequences (such as disqualification);
• Taking immediate action on personnel that breach the Code of Conduct, including by removing from site or works;
• Putting in place a mechanism for handling allegations of SEA and/or SH from the Contractor’s or Employer’s Personnel or any other person including third parties (“SEA/SH Response Mechanism”); 
• Informing its personnel of the mechanism at the time of engagement and providing details of the mechanism, in languages comprehensible to the Contractor’s Personnel, Employer’s Personnel, and the affected communities. These are to be displayed in easily accessible locations; and
• Delivering, on an ongoing basis, in a language/method that the recipients of the training can understand, training/ sensitisation on the prohibition of SEA and SH and application of the Code of Conduct.

The role of the standing DAAB, in respect of SEA/SH obligations will be to: 

• Undertake regular meetings and site visits to monitor compliance with SEA/SH prevention and response obligations (and other contractual requirements); and
• If a Contractor or Subcontractor’s non-compliance is referred to the DAAB, decide whether there has been a failure to comply with contractual SEA/SH obligations.

The DAAB will not be involved in determining the factual aspects or assessing the merits of any underlying SEA/SH allegation. In theory, it should operate much in the same way DAABs currently determine contractual compliance issues, such as whether notices are issued timeously. This may be of some importance to experienced DAAB members whose experience is primarily related to construction specific issues and who may not feel comfortable with the transition to assessing compliance with SEA/SH obligations.

The borrower or contractor may refer the DAAB decision to emergency arbitration or a full arbitration under ICC rules if they are dissatisfied by the DAAB’s decision. 

The World Bank will be notified of the DAAB decision by the borrower. If the DAAB has determined that the Contractor (and any Subcontractor) has failed to comply with its SEA/SH contractual obligations, the Bank will conduct a procedural review of the DAAB decision and may decide to disqualify the Contractor/Subcontractor from Bank-funded projects for a period of two years (unless the Contractor receives an arbitration award in its favour during this time).  

Conclusion

The new initiative introduced by the World Bank has undeniably laudable goals, and the adaptation of an existing and familiar tool to address the issue is sensible. However, it will be interesting to see how the initiative operates in practice.

Usually, DAAB members are sourced from practitioners with a background complementary to construction work; for instance, senior construction lawyers, engineers, or quantity surveyors. This pool of individuals is small, especially given pre-requisites such as having 10 years’ experience in contract administration/management and dispute resolution, out of which at least five years of experience as an arbitrator or adjudicator in construction related disputes. Further, the World Bank have understandably  indicated a preference for DAAB members on high GBV risk projects they fund to have extensive experience working in the developing world, preferably in Fragile Conflict Volatile (FCV) situations as well as experience reviewing Contractors’ performance against their social contractual obligations (preferably SEA/SH prevention contractual obligations). While the World Bank’s description of its ideal candidate can be understood given the gravity of what is at stake, there may only be a small number of individuals who satisfy such criteria.  

Finally, the decision to limit the implementation of the disqualification mechanism to High Risk projects may send the wrong message. GBV should not be tolerated on any project. Therefore whilst starting with High Risk projects sends a powerful message, perhaps this new approach ought to become a benchmark for every project.

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• 1. https://www.worldbank.org/en/news/press-release/2015/12/21/wb-statement-... [3]
• 2. World Bank Launches Global Task Force to Tackle Gender-Based Violence https://www.worldbank.org/en/news/press-release/2016/10/13/world-bank-la... [4]
• 3. Task Force Recommends Steps to Tackle Gender-Based Violence in World Bank-Supported Projects https://www.worldbank.org/en/news/press-release/2017/08/08/task-force-re... [5]
• 4. https://fidic.org/world-bank-signs-five-year-agreement-use-fidic-standar... [6]