Conflict Resolution Mechanisms in International Financial Organizations: Experiences and Collaborations in Broadening the Informal Process
| Author | Suresh Nanwani |
| DOI | http://doi.org/10.1111/1758-5899.12124 |
| Published date | 01 September 2014 |
| Date | 01 September 2014 |
Conflict Resolution Mechanisms in
International Financial Organizations:
Experiences and Collaborations in
Broadening the Informal Process
Suresh Nanwani
Asian Development Bank
Abstract
International financial organizations (IFOs) such as the World Bank and the International Monetary Fund, and regional
development banks, including the Asian Development Bank and the Inter-American Development Bank, are covered in
their charter provisions with immunity from judicial proceedings in national legal systems on employment matters.
Over the years, IFOs have found a practical way to deal with employment disputes and conflict resolution. Administra-
tive tribunals have been established to serve as judicial proceedings. Informal processes such as ombudsperson (also
referred to as ombuds) services have been provided by IFOs. In recent years, growing emphasis has been placed on
other informal processes such as mediation services. IFOs have collaborated with, and learned lessons from, other orga-
nizations including the United Nations, the International Ombudsman Association, multinational corporations and
national agencies to improve the delivery of informal processes.
The evolution and establishment of conflict
resolution mechanisms
International financial organizations (IFOs) such as the
multilateral development banks (MDBs)
1
and the Interna-
tional Monetary Fund (IMF) are covered in their charter
provisions with immunity from judicial proceedings in
national legal systems on employment matters. This did
not pose a problem in the early years of the World Bank
and the IMF, both established in 1944, because the num-
ber of employees was small. As early as 1960, the World
Bank had less than 1000 employees; the number at the
World Bank Group (WBG) today is more than 15,000.
However, over the years, it was found that there had to
be a practical way of dealing with employment disputes
between employees and the organization. Staff were pro-
vided with a two-tier formal process in settling employ-
ment disputes: a peer review appeals system followed by
an administrative tribunal of judges (independent from
management and appointed by the organization’s board
of directors) with judicial functions to provide damages.
The initial process of handling employment disputes was
through an internal appeals procedure; for example, at
the World Bank this conflict resolution mechanism was
established in 1977 to give staff a right of recourse to an
appeals committee. This committee was not a judicial
proceeding but a formal internal administrative proceed-
ing of a peer review system; committee members were
chosen among staff and made recommendations, with
decisions made by the president.
The formal process is distinct from the informal pro-
cess, which is the subject matter of this article. The for-
mal process relates to matters that are subject to
administrative or adjudicative procedures (such as an
appeals committee of staff members who serve as peer
reviewers, or an administrative tribunal that comprises
judges who settle employment disputes between
management and staff and provide remedies such as
damages). The informal process is marked by an absence
of adjudicative or administrative procedure, such as the
off-the-record communications of the ombudsperson or
the absence of decision-making power of the mediator
in the resolution of conflicts.
Among the IFOs, the World Bank was the first to estab-
lish a tribunal (the World Bank Administrative Tribunal
(WBAT)), in 1980. The other IFOs followed the World
Bank’s standard of an administrative tribunal for formal
resolution of employment disputes: the Inter-American
Development Bank (IADB) established its administrative
tribunal in 1981, with the Asian Development Bank (ADB)
following next in 1991, the IMF in 1994, the African
Development Bank (AfDB) in 1999, and the European
Global Policy (2014) 5:3 doi: 10.1111/1758-5899.12124 ©2014 University of Durham and John Wiley & Sons, Ltd.
Global Policy Volume 5 . Issue 3 . September 2014 381
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