PSEAH in IFIs: Progress, Gaps and the Road Ahead

IFIs are unique among international organisations in their financial leverage. MDBs’ multilateral outflows (concessional and non-concessional) to ODA-eligible countries over the last decade were roughly double those of the UN Development System⁷. This brings tremendous risks and exceptional opportunities for protecting from SEAH and preventing GBV more widely.

PSEAH falls under IFI safeguards, which may not always be an effective vehicle for leverage as they do not adequately address weak national frameworks and implementation capacity, the central developmental problem in E&S oversight (ODI, 2016b[3]) in public sector financing.  The 2018-24 wave of E&S framework updates by the World Bank, IDB, EBRD, IFAD, AfDB, and ADB reflected a growing effort to acknowledge the variability in national systems. However, as the E&S requirements create a separate set of rules that apply only to IFI projects. borrower governments have little incentive to strengthen their own frameworks for projects that are not funded by IFIs (ODI, 2016b[3]).

IFIs have the most significant financial leverage in negotiating national agreements with governments. A large influx of finance gives borrowers a powerful incentive to comply with IFIs’ conditions. This is where IFIs can leverage government commitments to create an environment that enables the prevention and response of SEAH (and GBV more widely). As momentum builds around intra-IFI collaboration and common standards such as CAPSEAH, incentives to align with IFI standards may grow further. The joint leverage of IFIs with respect to governments is one key asset for advancing this agenda.

It is important to frame leverage as a means of empowerment where finance serves as a catalyst for amplifying local innovation, rather than a means of coercion. The development of a project E&S management plan helps translate these commitments into concrete actions and capacity-building measures. In the private sector, financing arrangements with clients can play a similarly constructive role. They can establish commitments to SEAH protection that management programmes operationalise through concrete mitigation measures, monitoring requirements, and capacity-building within the enterprise. Ongoing supervision, due diligence and performance monitoring by the IFI and the linkage to legal covenants in loan agreements provide opportunities to incentivise clients to comply with expected SEAH protection measures.

By leading on this issue, IFIs can provide an entry point for other actors in the humanitarian development peace (HDP) nexus – including the UN – to advance PSEAH action. Private sector initiatives can also be powerful catalysts for change. In sum, IFIs have significant potential to drive positive change in national systems and the private sector and extend SEAH protection beyond IFI-financed projects when they pair their operations with policy dialogue (with national systems and industry bodies), and capacity-building support and private-sector innovation.

Ten IFIs first made a joint public commitment to address SEA and SH in 2018 at the Heads of MDBs Meeting at the Safeguarding Summit in London (Box 2.1). Their commitment to address PSEAH more credibly in their operations marked an important starting point.

At the October 2018 London Safeguarding Summit, the IFIs presented an update⁸ and reported on progress in implementing those principles through the Cross-Sector Safeguarding Steering Group annual reports.  The last update was published in 2024.⁹

In the 2019 OECD-DAC Recommendation on Ending SEAH, member states set expectations for operational policies, leadership, survivor-centred response, coordination and monitoring, evaluation and learning. The Recommendation embeds a survivor- and victim-centred approach as an overarching principle, requiring that survivors’ rights, safety, dignity and needs be placed at the centre of reporting, investigation and response systems. It also aims to drive organisational culture change and accountability by calling for clear codes of conduct, accessible complaints mechanisms, protection from retaliation, and systematic learning through monitoring and review. No IFI is an adherent to date, but it remains a significant Recommendations as DAC members are among the largest contributors to IFIs.¹⁰

In 2020, two years after the 2018 Joint Statement, IFIs established the MFI Working Group on Addressing Sexual Exploitation and Abuse and Sexual Harassment (SEA/SH), which brings together AfDB, ADB, AIIB, EBRD, EIB, IBRD, IFC, IFAD, IDB, IDB Invest, IsDB and MIGA. The World Bank plays a positive and lead role among the IFIs as several interviewees for this study pointed out, specifically mentioning the Bank’s chairmanship of the MFI SEAH Working Group.

Since November 2020, the working group has met quarterly, sharing knowledge, policies, tools and procedures.  In 2023, it launched a public website with guidance on SEA and SH for staff, partners, country stakeholders and clients.¹¹ Interviews highlighted its value as a community of practice for those dealing with SEAH in operations. This growing body of guidance and good practice demonstrates that IFIs are translating their 2018 commitments into operations and starting to do so collaboratively (e.g. the IFC-EBRD Good Practice Note for the private sector).¹²

In 2023-24 several IFIs represented the Development Banks on the steering committee to develop the Common Approach to Protection from Sexual Exploitation, Sexual Abuse, and Sexual Harassment (CAPSEAH Steering Committee, 2023[5]). CAPSEAH is designed to serve as “a guide to help people and organisations working in Humanitarian, Development and Peace and other settings align efforts to protect from SEAH” (Box 2.2.). While achieving official institutional endorsement guidance is often difficult (no IFI has endorsed it to date), several consider that they de facto align to it. EBRD’s 2024 Environmental and Social Policy (ESP) supports and aligns to it, and others have mentioned in interviews with MOPAN that they try to align policy and training to it in practice. Committing to this clear, aligned framework for PSEAH would be an opportunity for IFIs to define minimum standards for a survivor-centred approach.

Most recently, in 2024, IFIs released the Joint Statement: Multilateral Development Banks United to End Violence Against Women.  In it, they committed to expanding programmes to eliminate violence in all aspects of their work.¹⁴ (Box 2.3).

IFIs give a range of reasons-- macroeconomic, business, ethical, compliance, and developmental – for addressing SEAH. From a macroeconomic perspective, GBV (including SEAH) undermines productivity and raises costs. In their joint statement to end violence against women, IFIs state that workplace harassment and violence against women costs the global economy an estimated USD 6 trillion each year .

From a business perspective, GBV undermines employee wellbeing and business productivity, a premise supported by a large body of literature (including (IFC, 2020i[8]) (European INstitute for Gender Equality, 2021[9]) (ODI, 2016a[10]) (Chadha, Kennedy and Duvvury, 2022[11])). Furthermore, it poses risks such as litigation, reputational damage, and difficulties in recruitment and retention. IFC’s Respectful Workplace Factsheet (2020j[12]) notes workplace bullying, harassment, and violence as drivers of higher costs. These can jeopardise performance and profitability of IFIs’ investments in turn. IFIs therefore have a financial incentive to ensure their clients prevent SEAH, to improve safety, morale, community relations, and investor confidence.

From a reputational perspective, erosion of public support threatens IFI’s license to operate and shareholder backing. They are incentivised to address SEAH as a means of preserving legitimacy and funding. ADB highlights risks associated with leaving SEAH unaddressed, including “a reduction in public support for international development assistance because of erosion of public confidence, reputational risks, and risks to projects being successfully implemented on time and on budget.” (ADB, 2023d, p. 6[13]). 

In interviews, IFIs frequently cite as a core responsibility the obligation not to cause, or contribute to, harm through the projects they finance. This “do no harm” or “avoid doing harm” principle, as some IFIs prefer to call it, includes preventing unintentional project-related risks of SEAH. Underlying the imperative is that SEAH constitutes a profound violation of fundamental human rights.

IFIs also address SEAH indirectly by addressing GBV, one of its biggest enablers. Preventing GBV is essential for achieving the development outcomes at the centre of IFI mandates. The agreements establishing AfDB, ADB and EBRD define their main purpose: “to contribute to sustainable economic development”.  GBV threatens survivors’ economic security by limiting opportunities for stable employment and increasing economic dependence on perpetrators. It can prevent adolescent girls from completing their education and gaining the skills needed to secure better livelihoods (CWEEE, 2020[14]). For pregnant women, such violence can have adverse effects on children’s health at birth (ADB, AfDB, AIIB, CDB, CEDB, EBRD, IDB, NDB, WBG, 2024[7]). The positive development impact of addressing GBV is often undervalued, as senior interviewees indicated, yet it strengthens local economies and the private sector.

Despite business arguments dominating the debate around PSEAH in IFIs, PSEAH is first and foremost a matter of fundamental human rights. It goes against the values of multilateral institutions. Victims see it as a matter of dignity, justice, and humanity. From the country’s perspective, it protects social stability and development gains. From a stakeholder perspective, it maintains trust, meeting obligations and ensuring the integrity of development finance.

IFIs differ from other organisations in their accountability for preventing and responding to PSEAH. They are accountable for PSEAH in two very different contexts.  Within their organisations, they address misconduct perpetrated by an employee, board official, or contractor and bear direct responsibility for assisting survivors — internal accountability. All IFIs have their own HR, compliance and/or ethics procedures to address these cases.

Externally, IFI accountability formally “starts and ends” with a financing or contractual relationship, according to our interviews. The financing agreements signed with clients — governments, private entities, or financial intermediaries — typically include covenants requiring signatories to implement E&S requirements and therefore to accept liability.

While the borrower is primarily responsible for assessing SEAH risks and implementing required measures, the IFI has a responsibility to foster compliance through supervision, technical assistance and follow up, and in the case of non-compliance, can consider taking legal remedies as appropriate. However, borrowing governments in lower- and middle-income, fragile and conflict-affected states — where international development finance institutions typically operate — commonly lack the capacity and resources to protect all citizens and to provide quality, multi-sectoral, survivor-centred support.

Where state capacity is limited, IFIs have an important responsibility for ensuring that clients have the capacity to implement operations that cause no harm and provide assistance where harm occurs. For IFIs, verifying that clients have systems and capacity in place to meet their obligations to prevent and respond to SEAH is therefore crucial for ensuring accountability. This due-diligence function is a central way in which IFIs can most effectively influence outcomes. Risk management plans are established to ensure that clients build up systems and capacity to prevent and respond to SEAH. When there are capacity gaps, many IFIs now advise, train, or work closely with clients, to strengthen prevention and response mechanisms.

Situations where accountability is complex can also arise in private sector lending involving intermediaries, co-operatives or co-investors. Interviewees noted that it remained unclear how to maintain sufficient leverage over operational accountability in these cases where IFIs are even further removed.